March 28, 2018
Company name: Mizuho Financial Group, Inc.
Representative: Yasuhiro Sato, President & Group CEO
Location of head office: 1–5–5, Otemachi, Chiyoda–ku, Tokyo
Code No.: 8411 (on the First Section of the Tokyo Stock Exchange)
Notice regarding Execution of Agreement concerning the Integration of Trust Banks Specializing in Asset Administration Services (Joint Share Transfer) and regarding Change of Subsidiary
Mizuho Financial Group, Inc. (President & Group CEO: Yasuhiro Sato) hereby announces that our consolidated subsidiary, Trust & Custody Services Bank, Ltd. (President & CEO: Akira Moriwaki, "TCSB"), at its board of directors meeting held today, has resolved to execute, and has executed, with Japan Trustee Services Bank, Ltd. (Representative Director and President: Yasuo Kuwana, "JTSB"), a management integration agreement (the "Integration Agreement") to carry out a management integration through incorporating a holding company by joint share transfer (the "Integration"); further, we announce that we expect a change of subsidiary as a result of the execution of the Integration Agreement.
The applications to and approvals from the regulatory authorities are conditions precedent to the Integration.
Ⅰ. Overview of the Integration
1. Purpose of the Integration
Since its establishment in 2001, TCSB, in addition to trust services, engages in a wide range of businesses, such as comprehensive securities management outsourcing services to life insurers, and custody services, and holds assets under custody and administration of JPY 384 trillion (as of December 31, 2017), which consist of entrusted assets and assets managed under custody agreements, etc..
Since its establishment in 2000, JTSB, operating primarily in trust services (acting as a trustee when tasked with re–entrustment from trust banks), has expanded its assets under custody and administration, and holds entrusted assets of JPY 276 trillion (as of December 31, 2017).
The purpose of the Integration is to contribute to further growth in the domestic securities settlement market and the enhancement of the domestic investment chain through realizing more stable and higher quality operations and strengthening its system development capabilities by concentrating TCSB's and JTSB's managerial resources and know–how in relation to their asset administration services and seeking the benefit of scale.
The integrated company will realize the enhancement of business operations by strengthening operational systems and developing human resources specializing in asset administration services and fulfill its social mission to support securities settlement infrastructure in Japan, applying its advanced expertise to a wide range of businesses, including trust services, information integration services, custody services, and comprehensive securities management outsourcing services to life insurers, and aims to be the top trust bank specializing in asset administration services in Japan to meet a wide variety of customer needs in asset administration services.
2. Integration Structure
In the Integration, for step one, TCSB and JTSB will incorporate "JTC Holdings, Ltd." ("JTC Holdings"), a holding company whose shareholders are TCSB's and JTSB's existing shareholders, by implementing the joint share transfer (the "Share Transfer"), and TCSB and JTSB will become wholly–owned subsidiaries of JTC Holdings. For step two, around 2021, the integrated company will be launched by implementing an absorption–type merger of JTC Holdings, TCSB, and JTSB.
Allotment (share transfer ratio) in relation to the Share Transfer is as below.
As a result of the Share Transfer, for 1 share of TCSB's common stock, 1.02 shares of JTC Holdings' common stock; and for 1 share of JTSB's common stock, 1 share of JTC Holdings' common stock will be allotted and issued to the shareholders, respectively. The number of new shares issued by JTC Holdings as a result of the Share Transfer is 2,040,000 shares.
We will further discuss the integrated company's corporate name, the surviving company, and other details, and will make announcements once the details have been determined. In addition, the applications to and approvals from the regulatory authorities are conditions precedent to the establishment of the structure regarding the Integration.
3. Calculation Basis of the Allotment in Relation to the Share Transfer
When considering the number of allotted shares of JTC Holdings used as the consideration for the Share Transfer, TCSB calculated the share transfer ratio based on the respective future business plans and financial statements of TCSB and JTSB, and, as a result of the repeated serious discussions with JTSB referring to the calculation result, TCSB has found that the share transfer ratio stated in 2. above is reasonable and not detrimental to the shareholders' interests; and has subsequently agreed with JTSB as above.
4. Integration Timetable (scheduled)
March 28, 2018
Execution of the Integration Agreement
by May 31, 2018
Resolution of the Share Transfer plan at the respective board of directors meetings of TCSB and JTSB (scheduled)
by June 30, 2018
Resolution of the Share Transfer plan at the respective shareholders meetings of TCSB and JTSB (scheduled)
October 1, 2018
Incorporation date of JTC Holdings (effective date) (scheduled)
around 2021
Launch of the integrated company through the merger of JTC Holdings, TCSB, and JTSB (scheduled)
5. Overview of the Companies Involved in the Share Transfer (as of December 31, 2017)
6. Overview of the Holding Company to be Newly Established through the Share Transfer
Ⅱ. Change of Subsidiary
1. Reason for the Change
TCSB and JTSB have entered into the Integration Agreement to implement the Share Transfer as set forth in "I. Overview of the Integration, 2. Integration Structure" above, and to incorporate JTC Holdings, whose shareholders are existing shareholders of TCSB and JTSB, which companies will each become a wholly–owned subsidiary of JTC Holdings. As a result, JTC Holdings will be our equity–method affiliate, and TCSB will no longer be our subsidiary.
2. Method of Change
A holding company will be incorporated through joint share transfer.
3. Overview of the Subsidiary Subject to Change, and the Counterparty to the Share Transfer
An overview of TCSB, the subsidiary subject to the change, and JTSB, the counterparty to the Share Transfer, is as set forth in "I. Overview of the Integration, 5. Overview of the Companies Involved in the Share Transfer (as of December 31, 2017)" above.
4. Timetable of the Change
March 28, 2018
Execution of the Integration Agreement
by May 31, 2018
Resolution of the Share Transfer plan at the respective board of directors meetings of TCSB and JTSB (scheduled)
by June 30, 2018
Resolution of the Share Transfer plan at the respective shareholders meetings of TCSB and JTSB (scheduled)
October 1, 2018
Incorporation date of JTC Holdings (date of change) (scheduled)
Ⅲ. Future Outlook
As a result of the Integration, TCSB will no longer be our consolidated subsidiary, and JTC Holdings, the holding company, will be our equity–method affiliate. The impact of the Integration on our performance is currently being examined carefully, and will be disclosed as necessary once the examination is completed.
End