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Monday 22 December, 2014

Sony Corp

Announcing the Start of a Logistics Joint Venture

Announcing the Start of a Logistics Joint Venture

Sony Corporation

December 22, 2014

For Immediate Release

MITSUI-SOKO HOLDINGS Co., Ltd.
Sony Corporation

Announcing the Start of a Logistics Joint Venture

MITSUI-SOKO HOLDINGS Co., Ltd. (“Mitsui-Soko”, together with its consolidated subsidiaries, “Mitsui-Soko Group”) and Sony Corporation (“Sony”, together with its consolidated subsidiaries, “Sony Group”) today announced that they have concluded definitive agreements pursuant to which Sony Group will accept capital investments from Mitsui-Soko into the logistics business that Sony operates in Japan, Thailand, and Malaysia through its subsidiaries, thereby starting a joint venture (the “Transaction”). The joint venture will continue to provide distribution services for Sony, as well as cultivate additional business by meeting third-party demand for distribution services.

Through the Transaction, Sony is aiming to enhance the quality of distribution services for its electronics businesses and to further increase its cost competitiveness, while Mitsui-Soko is aiming to increase its corporate value by offering new platform-based services.

The summary of the Transaction is as follows:

(1) Sony Group will relocate its logistics operations in Thailand and Malaysia under the umbrella of Sony Supply Chain Solutions, Inc. (“SSCS-J”), which currently operates Sony’s logistics operations in Japan, Internal Procurement Office (“IPO”) operations and Customer Service (“CS”) operations. To achieve this, Sony will conduct the following transactions:

  1. SSCS-J will acquire all of the shares of Sony Supply Chain Solutions (Thailand) Ltd. (“SSCS-T”), a subsidiary of Sony that operates its logistics operations in Thailand; and
  2. SSCS-J will establish a new company in Malaysia (“New Malaysia Company”) and Sony Supply Chain Solutions (Malaysia) Sdn. Bhd. (“SSCS-M”), a consolidated subsidiary of Sony that operates its logistics operations and IPO operations in Malaysia, will transfer its logistics business to New Malaysia Company.

(2) After relocating the IPO and CS operations currently in SSCS-J to different organizations within Sony Group, 66% of the shares of SSCS-J, whose sole function at this point will then become running logistics operations, will be transferred from Sony to Mitsui-Soko. As a result, SSCS-J will become a company that operates a logistics joint venture between Mitsui-Soko and Sony.

After the Transaction, Sony will hold 34% and Mitsui-Soko will hold 66% of the shares in SSCS-J.

As consideration for the (i) acquisition of SSCS-T shares by SSCS-J, (ii) transfer of the SSCS-M logistics business to New Malaysia Company, and (iii) acquisition by Mitsui-Soko of 66% of the shares of SSCS-J, Sony Group will receive a total of approximately 18,000 million yen from Mitsui-Soko Group.

Sony Group possesses global distribution services for its electronics businesses as well as human resources with a wealth of experience outside of Japan. To further enhance the competitive ability of its distribution operations, Sony Group is allying with Mitsui-Soko as a strategic partner in the Transaction. The Transaction will permit Sony Group to benefit from and utilize, through the joint venture, Mitsui-Soko Group’s sales network and extensive knowledge of and experience in the distribution industry. These should enable Sony Group to maintain and enhance the quality of distribution services for its electronics businesses and to further increase its cost competitiveness.

Mitsui-Soko Group developed its medium-term management plan “MOVE 2013” in order to speed up growth of the entire group and realize its business strategies. The plan identifies development and deployment of platform-based services as a central business policy, along with the concentration of investments mainly in the Asia-Pacific sector. The Transaction should permit Mitsui-Soko to benefit from and utilize Sony Group’s experienced human resources and global distribution services framework, including Sony Group’s experience in closely coordinating distribution and production plans. These should enable Mitsui-Soko to establish platform-based services that take the entire supply chain – from the procurement of components to manufacture to sales – into consideration and, with these, to aim to expand direct sales of its distribution business.

The Transaction is scheduled to be completed in April 2015, subject to the receipt of necessary regulatory approvals. Due to this timetable, the Transaction has no impact on the consolidated financial results forecast for the current fiscal year for either Sony or Mitsui-Soko. Impacts on the consolidated financial results for the next fiscal year are currently under evaluation.

Basic information about the companies that will operate the joint venture (at a scheduled completion date of the Transaction)

 

Item

 

Japan (SSCS-J)

 

Thailand (SSCS-T)

 

Malaysia (New Malaysia Company)

Corporate name

To be decided upon
through deliberation by
Sony and Mitsui-Soko

To be decided upon
through deliberation by
Sony and Mitsui-Soko

To be decided upon
through deliberation by
Sony and Mitsui-Soko

Head office

31-1 Nishi-gotanda
1-chome, Shinagawa-ku,
Tokyo

2126 Kromadit Building,
5th Floor, New Petchburi
Road, Bangkapi, Huay
Kwang, Bangkok 10310,
Thailand

Lot 524, Jalan P10/10,
43650 Bandar Baru Bangi,
Selangor D.E., Malaysia

Representative

Seiichi Kawasaki

To be decided upon
through deliberation by
Sony and Mitsui-Soko

To be decided upon
through deliberation by
Sony and Mitsui-Soko

Business outline

Logistics operations

Logistics operations

Logistics operations

Stated capital

1,550 million yen

12.2 million Thai baht

To be decided upon
through deliberation by
Sony and Mitsui-Soko

Date established

February 1962

December 1989

To be decided upon
through deliberation by
Sony and Mitsui-Soko

Major shareholders
and shareholding ratio

Mitsui-Soko

 

66%

Japan (SSCS-J)

 

49%

Japan (SSCS-J)

 

100%

Sony

 

34%

 

Relationship with
Mitsui-Soko

There are no applicable
capital or personnel
relationships. There is an
ordinary transactional
relationship with affiliated
companies of the
purchaser, Mitsui-Soko,
but this sum is negligible.

There are no applicable
capital or personnel
relationships. There is an
ordinary transactional
relationship with affiliated
companies of the
purchaser, Mitsui-Soko,
but this sum is negligible.

There are no applicable
capital or personnel
relationships.

Operating performance and financial condition of logistics business for the last 3 years
Settlement term   March 31, 2012   March 31, 2013   March 31, 2014
  Sales 33,954 million yen 27,493 million yen 27,867 million yen
  Operating income 1,314 million yen 1,357 million yen 1,423 million yen

*The above figures were derived on a simple additive basis from the figures for the logistics operations of SSCS-J, SSCS-T, and SSCS-M, and are not necessarily indicative of or intended to represent the results that would have been achieved had the Transaction been consummated at the beginning of the year ending March 31, 2012 or that may be achieved in the future. In addition, financial statements for the logistics operations in isolation are not created, so only the figures for which disclosure is possible – sales and operating income – are listed here.

Basic information about Sony (as of March 31, 2014)

(1)

 

Corporate name

 

Sony Corporation

(2)

Head office

7-1 Konan 1-chome, Minato-ku, Tokyo

(3)

Name and title of
representative

President and CEO, Representative Corporate Executive Officer Kazuo
Hirai

(4)

Business outline

Manufacture and sale of electronic and electrical machines and equipment

(5)

Stated capital

646,654 million yen

(6)

Date established

May 7, 1946

(7)

Net assets

2,783,141 million yen (consolidated)

(8)

Total assets

15,333,720 million yen (consolidated)

(9)

 

Major shareholders
and shareholding ratio

 

Moxley and Co. LLC

 

9.00%

The Bank of New York Mellon SA/NV10

4.59%

The Master Trust Bank of Japan, Ltd. (Trust Account)

4.28%

Japan Trustee Services Bank, Ltd. (Trust Account)

3.99%

State Street Bank and Trust Company

1.80%

Japan Trustee Services Bank, Ltd. (Trust Account 6)

1.09%

Japan Trustee Services Bank, Ltd. (Trust Account 5)

1.09%

State Street Bank West Client-Treaty

1.08%

Japan Trustee Services Bank, Ltd. (Trust Account 3)

1.08%

Japan Trustee Services Bank, Ltd. (Trust Account 2)

1.08%

(10)

Relationship with the purchaser

There are no applicable capital, personnel, or transactional relationships, or
related parties.


Basic information about Mitsui-Soko (as of March 31, 2014)

(1)   Corporate name  

MITSUI-SOKO Co., Ltd. (changed its corporate name to “MITSUI-SOKO
HOLDINGS Co., Ltd.” on October 1, 2014)

(2) Head office 20-1 Nishi-shimbashi 3-chome, Minato-ku, Tokyo
(3) Name and title of representative President and CEO Kei Fujioka
(4) Business outline Warehousing Business

Seaport Operations Business

Global Flow Business

Global Express Business

Logistics System Business

BPO Business

Real Estate Business

Other Businesses

(5) Stated capital 11,100 million yen
(6) Date established October 11, 1909
(7) Net assets 65,936 million yen (consolidated)
(8) Total assets 220,728 million yen (consolidated)

(9)

Major shareholders
and shareholding ratio

Japan Trustee Services Bank, Ltd. (Trust Account)

 

6.87%

Mitsui Life Insurance Co., Ltd.

6.31%

Mitsui Sumitomo Insurance Co., Ltd.

5.63%

NORTHERN TRUST CO.

   

(AVFC) RE 15PCT TREATY ACCOUNT

4.74%

Sumitomo Mitsui Banking Corporation

2.80%

RBC ISB A/C DUB NON RESIDENT-TREATY RATE

2.53%

Credit Suisse Securities (Europe) Ltd.

PB Omnibus Client Account

2.42%

The Master Trust Bank of Japan, Ltd. (Trust Account)

2.40%

Takenaka Corporation

2.00%

Mitsui-Soko Group Employee Stock Ownership Plan

1.88%

(10) Relationship with the seller

There are no applicable capital, personnel, or transactional relationships, or
related parties.

Details of (i) the number of shares of the company, which will become subsidiary of Mitsui-Soko, acquired by Mitsui-Soko, (ii) acquisition cost, and (iii) ownership of shares before and after the share transfer

(1)  

Ownership of shares
before transfer

 

0 shares
(Ownership percentage: 0%)

(2)

Number of shares
acquired

2,046,000 common shares of SSCS-J
(3)

Aggregate payment
through This
Transaction

Approximately 18,000 million yen (includes compensation for acquisition by
SSCS-J of the shares of SSCS-T and for receipt by New Malaysia
Company of the logistics business of SSCS-M)

(4)

Ownership of shares
after transfer

2,046,000 shares
(Ownership percentage: 66%)


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