October 13, 2005
KDDI Corp.
Tokyo Electric Power Co.
POWEREDCOM Inc.
KDDI Corp. (represented by President and Chairman Tadashi Onodera,
hereinafter referred to as "KDDI)") and Tokyo Electric Power Co.
(represented by President Tsunehisa Katsumata, hereinafter referred to
as "TEPCO") have decided today to form a comprehensive alliance in
telecommunications services with an aim to compete against the NTT Group,
and reached a basic agreement on the merger between KDDI and POWEREDCOM
Inc. (represented by President and CEO Shigeru Nakane, hereinafter
referred to as "POWEREDCOM") and on the provision of integrated services
in the FTTH business of KDDI and TEPCO.
Under this comprehensive alliance, KDDI and the TEPCO Group will integrate
their telecommunications-related management resources with an aim to form
a stronger telecommunications service group, and win in the intensifying
competition in the telecommunications market and provide customers with
services of the highest level by realizing the convergence of
telecommunications services and energy services (FMC + E: convergence of
fixed and mobile communications + energy),(Note) removing the walls between
different lines of business.
Moreover, the alliance aims to meet the expectations of Japan's people and
society and fully contribute to the development of economy and society by
forming as early as possible a business group that is strong enough to
compete against the NTT Group.
Note: FMC + E stands for Fixed Mobile Convergence + Energy, i.e., the
integrated services of fixed-line communications, mobile phone
and energy.
1.Merger between KDDI and POWEREDCOM
KDDI and POWEREDCOM are slated to merge on January 1, 2006, with KDDI as
the existing company.
POWEREDCOM is a leading company that boasts the largest share in the
wide-area Ethernet service market that is expected to rapidly expand from
now on in the corporate fixed-line data communications market where
competition is very keen.
As an integrated common carrier, on the other hand, KDDI is fully
prepared to meet the needs of corporate customers, including fixed-line
communications services, international communications services, and mobile
phone services. KDDI will try to improve customer satisfaction by further
improving services and customer convenience through the merger.
After the merger, one managing officer is scheduled to be assigned to
KDDI from POWEREDCOM (on the day of the merger). One member of the board
is scheduled to be sent to KDDI from TEPCO (at the time of the general
meeting of stockholders in 2006).
The stocks of the subsidiaries, etc. owned by POWEREDCOM (Dream Train
Internet Inc., Familynet Japan Corp., Fusion Communications Corp. and At
Tokyo Corp.) are scheduled to be transferred by the day of the merger to
TEPCO or a third party or third parties based on TEPCO's policy.
2.Alliance in FTTH Business
KDDI and TEPCO plan to integrate KDDI's CDN(Note) for video distribution
services and TEPCO's high-quality fiber-optic networks within this year to
combine together the telecommunications services now being provided
respectively by KDDI and TEPCO, and provide integrated services that are
highly marketable and price competitive.
KDDI and TEPCO have also agreed that: KDDI would bear part of the funds
to be invested by TEPCO in equipment and facilities for the planned
integrated services; and the two companies would start specific discussions
about consolidation or joint undertaking through the separation of their
respective business units as the form of alliance in the FTTH business in
the future.
KDDI and TEPCO will continue to build a strong alliance and try to improve
customer satisfaction based on the improvement of services and customer
convenience.
Note:CDN stands for Contents Delivery Network, i.e., a contents
distribution network suited for distribution of videos and audios
by using IP technology, large capacity lines, etc.
This press release may include statements about future prospects in some
cases, in addition to statements about facts in the past. Such statements
about future prospects include known and unknown risks, and uncertain and
other factors. It should be noted that, because of such factors, the
achievements, business activities, business development or financial
standing in the future, which are mentioned explicitly or implicitly in
the statements about future prospects, may be far different from the
realities in some cases.
(Reference 1)
 |
(Reference 2) Outline of Merger
(1) Schedule of Merger
Meeting of board of directors to authorize the basic agreement:
October 13, 2005
Conclusion of the basic agreement: October 13, 2005
Meeting of board of directors to authorize the merger agreement:
November 2005 (scheduled)
Conclusion of the merger agreement: November 2005 (scheduled)
General shareholders meeting to authorize the merger agreement
(POWEREDCOM): November 2005
*As this merger comes under the
short-form merger stipulated by
Article 413.3.1 of Commercial Law,
KDDI as the merging company does not
hold a general meeting of
shareholders for authorization of the
merger agreement.
Date of the merger: January 1, 2006 (scheduled)
Date of registration of the merger: early January 2006 (scheduled)
If uncontrollable circumstances should happen in the process of proceeding
with procedures from now on, the above-mentioned scheduled may be changed
upon consultation by the three parties concerned.
(2) Form of Merger
As for the merger between KDDI and POWEREDCOM, KDDI will be the existing
company.
(3) Merger Ratio
 |
(4) Preparation for Merger
To smoothly and speedily promote the merger operations, KDDI and POWEREDCOM
form their merger preparation committee that is chaired by Masahiro Yamamoto
(Executive Vice President and Member of the Board of KDDI).
(5) Outline of KDDI and POWEREDCOM
 |
|
