News ReleaseThree F and Lawson sign a letter of intent to form a capital and business alliance.
TOKYO, JAPAN, 11 27, 2015
Lawson, Inc. and Three F Co., Ltd. signed a letter of intent on November 27, 2015 to form a capital and business alliance, and are now planning concrete discussions to determine how the new cooperation will develop going forward.
1. Motivation for the alliance
Lawson and Three F decided to sign a letter of intent to form a capital and business alliance that will complement both companies’ individual efforts to stay abreast of significant changes in the convenience store environment, and further strengthen their business management structures.
We aim to use the letter of intent to build a strong strategic partnership and boost the competitiveness of our convenience store operations. While Lawson and Three F will maintain independent management and keep their individual corporate brands and culture, we plan to conduct joint product development, procurement and promotional campaigns, and also share information that might boost management efficiency.
Under the letter of intent, Lawson is likely to purchase a portion of Three F outstanding ordinary shares. Following concrete discussions, the two companies expect to be in a position to sign a final capital and business alliance agreement in late December 2015.
2. The nature of the alliance
- (1) Capital alliance
Both companies agree that Lawson will purchase up to 5% of Three F outstanding common stock from existing stockholders. - (2) Business alliance
While Lawson and Three F will maintain independent management and keep their individual corporate brands and culture, the two companies undertake to explore concrete ways, within the current legal framework, in which they could conduct joint product development, procurement and promotional campaigns, and also share information that could boost management efficiency. The two companies will determine the concrete nature and content of the business alliance through various small, sectional meetings.
3. Overview of Three F Co., Ltd. and Lawson, Inc.
(1) Three F Co., Ltd.
| (1) Company name | Three F Co., Ltd. | ||
| (2) Business location | 17 Nihon-odori, Naka-ku, Yokohama-city, Kanagawa | ||
| (3) Name and title of representative director | Katsutoshi Nakai, President, Representative Director (558 stores in Tokyo and other prefectures at the end of February 2015) |
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| (4) Main areas of business operation | Operation and support for franchisees of Thee F convenience stores | ||
| (5) Capital | 1,396 million yen | ||
| (6) Established | February 10, 1981 | ||
| (7) Major shareholders and shareholdings (as of February 28, 2015) | JMK Mizuho Co., Ltd. Junji Kikuchi Kyoko Nakai Mizue Usami Three F Co., Ltd. Mizuho Bank, Ltd. Three F Employee Shareholding Association Katsutoshi Nakai Mizuho Kikuchi The Bank of Tokyo-Mitsubishi UFJ, Ltd. |
35.06% 4.99% 4.11% 3.42% 1.71% 1.41% 1.38% 1.38% 1.31% 1.16% |
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| (8) Existing relationship with Lawson, Inc. | Capital | No significant relationship | |
| Personal | No significant relationship | ||
| Business | No significant relationship | ||
| Other | No significant relationship | ||
| (9) Recent overview of Three F Co., Ltd. consolidated corporate results and financial position (Millions of yen) | |||
| Financial period | Year to February 2013 |
Year to February 2014 |
Year to February 2015 |
| Net assets | 5,212 | 4,015 | 3,998 |
| Total assets | 16,099 | 14,340 | 15,802 |
| Net assets per share (Yen) | 668.02 | 509.64 | 514.27 |
| Total operating revenue | 24,397 | 22,434 | 20,990 |
| Operating profit | 53 | 168 | △353 |
| Recurring profit | 116 | 215 | △305 |
| Net profit | △509 | △1,153 | 54 |
| Net earnings per share (Yen) | △67.20 | △152.30 | 7.23 |
| Dividend per share (Yen) | 8.00 | 3.00 | 3.00 |
(2) Lawson, Inc.
| (1) Company name | Lawson, Inc. | ||
| (2) Business location | 1-11-2 Osaki, Shinagawa-ku, Tokyo | ||
| (3) Name and title of representative director | Genichi Tamatsuka, President and CEO, Representative Director |
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| (4) Main areas of business operation | Development of the Lawson convenience store franchise chain(12,276 stores across Japan at end February 2015) | ||
| (5) Capital | 58,506 million yen | ||
| (6) Established | April 15, 1975 | ||
| (7) Major shareholders and shareholdings (as of February 28, 2015) | Mitsubishi Corporation The Master Trust Bank of Japan, Ltd. (Trust account) Japan Trustee Services Bank, Ltd. (Trust account) NTT DOCOMO, INC. Nomura Securities Co., Ltd JP MORGAN CHASE BANK 380055 MELLON BANK, N.A. AS AGENT FOR ITS CLIENT MELLON OMNIBUS US PENSION BBH FOR MATTHEWS ASIAN GROWTH AND INCOME FUND National Mutual Insurance Federation of Agricultural Cooperatives Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. |
31.99% 2.68% 2.63% 2.09% 1.86% 1.47% 1.38% 1.27% 1.26% 1.05% |
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| (8) Existing relationship with Three F Co., Ltd. | Capital | No significant relationship | |
| Personal | No significant relationship | ||
| Business | No significant relationship | ||
| Other | No significant relationship | ||
| (9) Recent overview of Lawson, Inc. consolidated corporate results and financial position(Millions of yen) | |||
| Financial period | Year to end February 2013 |
Year to end February 2014 |
Year to end February 2015 |
| Net assets | 230,181 | 250,497 | 263,797 |
| Total assets | 579,809 | 620,992 | 764,614 |
| Net assets per share (Yen) | 2,267.17 | 2,455.25 | 2,561.25 |
| Net sales (all stores) | 1,906,547 | 1,945,394 | 1,961,983 |
| Operating profit | 66,246 | 68,126 | 70,482 |
| Recurring profit | 65,926 | 68,880 | 71,714 |
| Net profit | 33,182 | 37,965 | 32,686 |
| Net earnings per share (Yen) | 332.20 | 380.04 | 327.08 |
| Dividend per share (Yen) | 200.00 | 220.00 | 240.00 |
4. Tentative schedule for forming the capital and business alliance
(1) Sign letter of intent regarding pending business alliance November 27, 2015
(2) Sign contract for capital and business alliance Late December 2015 (tentative)
5. Future outlook
The impact of any alliance on Lawson’s consolidated business performance for the business year ending February 28, 2016 is as yet unclear, but we commit to disclose any significant relevant information as soon as its likely impact can be ascertained.
