Vodafone Group Plc ("Vodafone") jointly announced today in Tokyo together with J-Phone Communications Co. Ltd. ("J-Phone Communications"), J-Phone East Co. Ltd. ("J-Phone East"), J-Phone Central Co. Ltd. ("J-Phone Central"), J-Phone West Co. Ltd. ("J-Phone West") and JAPAN TELECOM, that the boards of the four J-Phone companies have agreed to the merger of their companies, creating a new unified structure for J-Phone's operations in Japan.
The ongoing merged entity will be J-Phone Communications, to be renamed J-Phone Co., Ltd. ("J-Phone Co") after completion of the merger.
The merger agreement is subject to shareholder approval and certain regulatory approvals. EGMs for each of J-Phone East, J-Phone Central, J-Phone West and J-Phone Communications are scheduled to take place on 10 September. The merger is expected to close on 1 November 2001.
This re-organisation from the current structure of a holding company and three regional operating companies to a single company structure will enable faster decision making processes, increased efficiency, stronger management focus and improved competitiveness in the Japanese market.
The merger ratio is as follows:
- J-Phone East shareholders will receive 0.566 shares of J-Phone Communications for each 1 share of J-Phone East held
- J-Phone Central shareholders will receive 0.470 shares of J-Phone Communications for each 1 share of J-Phone Central held
- J-Phone West shareholders will receive 0.470 shares of J-Phone Communications for each 1 share of J-Phone West held
Upon completion of the merger, J-Phone Communications will issue 279,836.66 par common shares (50,000JPY face value per share) and allocate them to the J-Phone East, J-Phone Central and J-Phone West shareholders on the register as of one day before the merger date, at the above ratios.
Following the merger, JAPAN TELECOM will hold 45.05% of J-Phone Co, Vodafone will hold 39.67% and other shareholders will hold 15.28%. Vodafone's total economic interest in J-Phone Co remains at approximately 60%, as it will hold 20.3% indirectly through its 45.0% stake in JAPAN TELECOM in addition to its direct holding.
Vodafone has nominated the new President ("Shacho") of J-Phone Co, who will be Darryl E Green, currently President of Asia Global Crossing Japan. He will be responsible for the overall management and operational performance of the company, including the supervision of all operational activities. Vodafone will also appoint the Director of Marketing and Sales and the Director of Financial Management (both of whom will be Executive Board Members). This will enhance the delivery to J-Phone Co of the synergy benefits accruing from its membership of the Vodafone Group.
Vodafone will ultimately be appointing 6 out of a total of 13 members of the Executive Board.
Mr. Koichi Sakata, Chairman of JAPAN TELECOM, said:
"I am fully convinced that this integration is the key to a smoother approach towards the launch of next generation mobile phone services. It will contribute to propelling J-Phone into a strong second position in the Japanese market, thereby establishing a firm rivalry against NTT DoCoMo."
Sir Christopher Gent, Chief Executive of Vodafone said: "I am very pleased that the consolidation of the J-Phone Group is taking place as I believe that this is an essential step to strengthen further our competitive position in the Japanese market. This merger will create a stronger national competitor and promises to generate significant synergy benefits and efficiency gains.
Vodafone's nomination of Darryl Green, who has lived in Japan forover 15 years, is fluent in Japanese and has substantial experience in the telecoms industry, as the new President of J-Phone signals our determination to enhance the performance of J-Phone and ensure that the synergies resulting from our 60% economic interest are fully realised."
For further information contact:
Vodafone Group Plc
Tim Brown, Group Corporate Affairs Director
Melissa Stimpson, Head of Group Investor Relations
Darren Jones, Senior Investor Relations Manager
Telephone: +44 (0) 1635 673 310
Tavistock Communications
Lulu Bridges/Sarah Landgrebe
Telephone: +44 (0) 20 7600 2288