Execution of the Basic Agreement for the Management Integration



Execution of the Basic Agreement

for the Management Integration


October 15, 2015 (Thu.)


FamilyMart Co., Ltd.

President

Isamu Nakayama

UNY Group Holdings Co., Ltd.

President

Norio Sako

Summary of the Basic Agreement


Transaction

Structure

  • Same structure as the announcement on March 10, 2015

  • FamilyMart and UNY Group to merge and form new HD

  • FamilyMart and CKS to form new CVS company


    Merger Ratio

  • HQ: HD and CVS (Tokyo), GMS (Inazawa City, Aichi)



  • Allot 0.138 FamilyMart shares to 1 UNY Group HD share




    Integrated

    Business Plan

  • Set business plan for 5 years from the Management Integration

  • Agreed framework of key strategies to achieve the

    business plan



    Preparation

  • Form new preparation framework

  • Discuss and determine key issues, including management

    structure and CVS brand

  • Early restructuring of unprofitable stores

Financial Impact


Current Period (ending Feb 2016)

Pro Forma (within 5 years)

FamilyMart

UNY Group

HD

Total

New Company

Group Revenues

in Japan


¥2.0tn


¥1.8tn


¥3.8tn


¥5tn or larger

Operating Income (Consolidated)


¥46.9bn


¥21.0bn


¥67.9bn


¥100.0bn or larger

Net Income (Consolidated)


¥21.0bn


¥1.5bn


¥22.5tn


¥60.0bn or larger

ROE

(Consolidated)


7.5%


0.5%


--


12% or larger

Stores (CVS, GMS, SM in Japan)


11,930 stores


6,712 stores


18,642 stores

20,000 or more

stores

Stores (CVS, GMS in Overseas)


5,960 stores


4 stores


5,964 stores

10,000 or more

stores


Notes: Financial numbers for the fiscal year ending February 2016.

Expected number of stores as at the end of February 2016, including area franchise stores.

Post-Integration Approaches



CVS

  • Integration of CVS brands

  • Enhanced procurement

  • Enhanced product development

  • Integration of infrastructure (e.g. distribution centers)

  • Integration of IT systems



    GMS / SM

  • Focus on Tokai and Kanto area

  • Utilization of procurement and service of the CVS business

  • Development of new store format


    Others

  • Cooperation in E-Commerce



  • Further utilization of business footprint / formation of new business model


Furthermore, implement fundamental restructuring, including divestiture of unprofitable stores, to maximize profitability

Discussions for the Management Integration


  • Form an Integration Committee

    (instead of current Integration Preparation Committee)

  • Other considerations

    • Group principles

    • Company / group name

    • CVS brand (to be unified)

    • Board / management structure

    • HR

Envisioned Timeline


Execution of the Basic Agreement

October 15, 2015 (Today)


Execution of absorption-type merger agreement and absorption-type demerger agreement


By April 2016 (Scheduled)

AGM (FamilyMart and UNY Group HD) to approve the absorption-type merger and absorption-type demerger


May 26, 2016 (Scheduled)

Last trading day (UNY Group HD)

August 26, 2016 (Scheduled)

Delisting (UNY Group HD)

August 29, 2016 (Scheduled)

Closing /

Effective date of the absorption-type merger and absorption-type demerger


September 2016 (Scheduled)


'Leading Global Retail Group in Japan'



This presentation has been prepared only for the purpose of informing the public of the Management Integration. This has not been prepared for soliciting sales or purchases of shares or other securities of FamilyMart or UNY Group HD. This presentation includes forward-looking statements. These forward-looking statements contain forecasts, plans or predictions, actual results of which may differ materially from any forward-looking statements contained herein due to trends in the Japanese economy, competition from competitors, progress in the execution of business plans, increase in raw material prices, personnel expenses or property rents among other factors.

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