Press Release

NISSUi Letter

Back to Press Release IndexNovember 21, 2006

Merger Resulting from the Restructuring of the Nissui Frozen Food Storing Business

Please be informed that Nippon Suisan Kaisha, Ltd. (“Nissui”) resolved at its meeting of the Board of Directors held on November 21, 2006, effective as of April 1, 2007, to merge  Nissui’s 100% owned subsidiaries, Tobu Reizo Shokuhin Co., Ltd. (Tobu Reizo Shokuhin) and Seibu Reizo Shokuhin Co., Ltd. (Seibu Reizo Shokuhin) with Tobu Reizo Shokuhin as the surviving company, and to restructure the Nissui Group’s frozen food storing business by spinning-off its frozen food storing divisions to Tobu Reizo Shokuhin as the successor company.

1. Purpose of organizational restructuring
By consolidating its frozen food storing divisions and practicing uniform management, Nissui hopes to realize effective use of each company’s functions and expertise, and achieve a lower cost of operations.  Through the ensuing enhancement of its competitiveness and efforts to broaden its customer base by gaining regional customers as well as customers operating over wide areas, Nissui aims to expand and stabilize earnings from operations. 

2. Details of organizational restructuring

  1) Merger of Seibu Reizo Shokuhin and Tobu Reizo Shokuhin into Tobu Reizo Shokuhin
  2) Corporate spin-off of Nissui’s frozen food storing business to Tobu Reizo Shokuhin
  3) Allocation of all shares to be issued by Tobu Reizo Shokuhin to Nissui as the parent company in conjunction with the merger and corporate spin-off

3. Summary of corporate spin-off

  1) Schedule of corporate spin-off (tentative)
  • Board of directors meeting to approve the spin-off:
    November 21, 2006
  • Conclusion of corporate spin-off agreement:
    November 21, 2006
  • General meeting of shareholders to approve the corporate spin-off agreement:
    According to the provisions of Article 784, Paragraph 3 of the Company Law, approval of the corporate spin-off agreement does not require a resolution by shareholders in a general meeting.
  • Execution of corporate spin-off:
    April 1, 2007 (tentative)
  • Registration of corporate spin-off:
    April 2, 2007 (tentative)
  2) Method of spin-off
   
I. Method of spin-off
  Nissui will split-off a portion of its operations and Tobu Reizo Shokuhin, a Nissui’s 100% owned subsidiary, will be the successor company as per an assimilative-divisive reorganization (simplified divisive reorganization).
II. Reason for adopting the above method
  The method was adopted because the frozen food storing business is an important segment of the Group, and this method afforded greater maneuverability for the transfer of operations.
  3) Allotment of shares
    All shares to be issued by Tobu Reizo Shokuhin will be allocated to Nissui.
  4) Corporate spin-off cash payment
    No cash payment will be made for the corporate spin-off.
  5) Rights and obligations to be transferred to the successor company
    All rights and obligations of Nissui incidental to the operation of the frozen food storing business shall be transferred to Tobu Reizo Shokuhin on the day prior to the date of the corporate spin-off.
  6) Prospects of honoring debt
    It has been determined that all debts incurred by Nissui and Tobu Reizo Shokuhin that will become due after the corporate spin-off is executed will responsibly be honored.


4. Summary of the merger of Nissui’s consolidated subsidiaries

  1) Schedule of merger (tentative)
  • Conclusion of merger agreement:
    November 21, 2006
  • Extraordinary meeting of shareholders to approve the merger:
    November 27, 2006 (tentative)
  • Execution of merger:
    April 1, 2007 (tentative)
  • Registration of merger:
    April 2, 2007 (tentative)
  2) Method of merger
    Merger by absorption, whereby Tobu Reizo Shokuhin will be the surviving company and Seibu Reizo Shokuhin will be dissolved.

5. An overview of the companies concerned is explained on the Attachment.
6. Details of the divisions to be included in the spin-off

  1) Details of the frozen food storing division
    Frozen food storing of marine products, agriculture and livestock, and frozen foods
  2) Financial results of the frozen food storing division for the fiscal year ending March 31, 2006 
   
  Financial results for frozen food storing division (A) Financial results for Nissui as of March 31, 2006 (B) Percentage
(A/B)
Sales 3,278 million yen 331,771 million yen 1.0%
Operating income 566 million yen 3,327 million yen 17.0%
Ordinary income 336 million yen 5,720 million yen 5.9%
  3) Accounts and amounts of assets and liabilities to be transferred (data as of March 31, 2006)
   
Assets Liabilities
Account title Book value Account title Book value
Current assets 406 million yen Liabilities 8,150 million yen
Fixed assets 7,744 million yen
Total 8,150 million yen Total 8,150 million yen

7. Business status of Nissui after organizational restructuring
  1) Trade name, lines of business, address of the head office, corporate representative, capital, and fiscal year end
    The items listed in the Attachment: Overview of the Companies Concerned will not be affected.
  2) Total assets
    Total assets will decrease by the amount equivalent to the assets that will be acquired by Tobu Reizo Shokuhin.
  3) Effects on financial results
   
I. Effects on consolidated results
  Tobu Reizo Shokuhin and Seibu Reizo Shokuhin are 100% owned subsidiaries of Nissui, therefore the consolidated results will not be affected.
II. Effects on non-consolidated results
  Compared to results prior to the corporate spin-off, net sales and operating income for the fiscal year ending March 31, 2008 are expected to decrease by approximately 3,500 million yen and 700 million yen, respectively.


8. Overview of the successor company resulting from organizational restructuring  

  1) Successor company resulting from the corporate spin-off; surviving company resulting from the merger (tentative)
   
  As of March 31, 2006 From April 1, 2007 (see Note)
1. Trade name Tobu Reizo Shokuhin Co., Ltd. Scheduled to change to Nissui Logistics Co., Ltd. (tentative)
2. Main business Frozen food storing Frozen food storing
3. Date of establishment August 10, 1979 August 10, 1979
4. Head office 559-6 Kitano-machi, Hachioji-shi, Tokyo Change to Minato-ku, Tokyo
5. Representative Jiro Mizukami, president Ichiu Mitarai, president
6. Capital 124 million yen 2,000 million yen (tentative)
7. Total number of shares issued and outstanding 204,000 shares 4,000,000 shares (tentative)
(all 3,796,000 shares of common stock to be issued in conjunction with the corporate spin-off and merger will be allocated)
8. Shareholders’ equity 1,417 million yen 4,450 million yen (tentative)
9. Total assets 4,006 million yen 18,000 million yen
10. End of fiscal year March 31 March 31
11. Number of employees 172 About 360
12. Major business contacts Nippon Suisan Kaisha, Ltd.
K.R.S. Corporation		 Nippon Suisan Kaisha, Ltd.
K.R.S. Corporation
K-TEION FOODS CO., LTD.
13. Shareholders and shareholding ratio 100% owned by Nippon Suisan Kaisha, Ltd. 100% owned by Nippon Suisan Kaisha, Ltd.

(Note) Data refers to the details of Tobu Reizo Shokuhin after merger with Seibu Reizo Shokuhin and after the succession resulting from the corporate spin-off.
     
  2) Management to be appointed to the successor company resulting from the corporate spin-off and merger
    Representative director, chairman and executive officer: Jiro Mizukami (currently, president and CEO, Tobu Reizo Shokuhin Co., Ltd.)
Representative director, president and executive officer: Ichiu Mitarai (currently, director and general manager of the Logistics Dept., Nippon Suisan Kaisha, Ltd.)Director, senior executive officer: Tadanori Isayama (currently, president and CEO, Seibu Reizo Shokuhin Co., Ltd.)

[Attachment]

Overview of Companies Concerned    (As of March 31, 2006)
1. Trade name Nippon Suisan Kaisha, Ltd.
(Spin-off company)		 Tobu Reizo Shokuhin Co., Ltd. (successor company of corporate spin-off, surviving company of merger) Seibu Reizo Shokuhin Co., Ltd. (non-surviving company)
2. Main business Marine products Frozen food storing Frozen food storing
3. Date of establishment March 31, 1943 August 10, 1979 April 28, 1978
4. Head office 2-6-2 Otemachi, Chiyoda-ku, Tokyo 559-6 Kitano-machi, Hachioji-shi, Tokyo 6-10-7 Hakozaki-futo, Higashi-ku, Fukuoka-shi, Fukuoka
5. Representative Naoya Kakizoe Jiro Mizukami Tadanori Isayama
6. Capital 23,729 million yen 124 million yen 450 million yen
7. Number of shares issued and outstanding 277,210,000 shares 204,000 shares 900,000 shares
8. Shareholders’ equity 77,734 million yen 1,417 million yen 1,212 million yen
9. Total assets 250,905 million yen 4,006 million yen 5,876 million yen
10. End of fiscal year March 31 March 31 March 31
11. Number of employees 1,174 172 129
12. Major business contacts Food Service Network Co., Ltd., AEON Co., Ltd., Daisui Co., Ltd. Nippon Suisan Kaisha, Ltd.
K.R.S. Corporation		 Nippon Suisan Kaisha, Ltd.
13. Major shareholders / shareholding ratio The Master Trust Bank of Japan, Ltd. 7.4%
Japan Trustee Services Bank, Ltd. 6.3%
Mizuho Corporate Bank, Ltd. 4.9%
Sompo Japan Insurance, Inc. 3.7%
Mochida Pharmaceutical Co., Ltd. 2,8%		 Nippon Suisan Kaisha, Ltd. 100% Nippon Suisan Kaisha, Ltd.
100%
14. Main financing banks Mizuho Corporate Bank, Ltd. Mizuho Corporate Bank, Ltd. Mizuho Corporate Bank, Ltd.
15. Relationship of companies involved Capital :
Tobu Reizo Shokuhin Co., Ltd. and Seibu Reizo Shokuhin Co., Ltd. are 100% owned subsidiaries of Nissui.
Personnel :
Nissui is sending directors to Tobu Reizo Shokuhin Co., Ltd. and Seibu Reizo Shokuhin Co., Ltd.
Business :
Nissui is the main customer of Tobu Reizo Shokuhin Co., Ltd. and Seibu Reizo Shokuhin Co., Ltd.

16. Financial results for the past three years                                                                      
(Unit: million yen)
  Nippon Suisan Kaisha, Ltd. Tobu Reizo Shokuhin Co., Ltd.
Fiscal year FY 2004 ending March FY 2005 ending March FY 2006 ending March FY 2004 ending March EY 2005 ending March FY 2006 ending March
Sales 321,915 321,434 331,771 3,878 4,017 4,694
Operating income 1,334 4,495 3,327 402 389 514
Ordinary income 1,044 5,500 5,720 362 408 548
Net income 1,871 3,256 5,047 198 285 334
Net income per share (yen) 6.58 11.48 17.96 925.98 1,344.46 1,593.68
Dividend per share (yen) 5.00 6.00 7.00 90.00 485.00 200.00
Shareholders’ equity per share (yen) 233.89 244.10 280.80 4,583.10 5,844.26 6,943.72

  Seibu Reizo Shokuhin Co., Ltd.
Fiscal year FY 2004 ending March FY 2005 ending March FY 2006 ending March
Sales 3,392 3,446 3,462
Operating income 306 496 684
Ordinary income 271 454 648
Net income 216 372 368
Net income per share (yen) 240.57 405.98 401.27
Dividend per share (yen) 0.00 100.00 120.00
Shareholders’ equity per share (yen) 696.10 1,086.66 1,347.19
For information, contact
Nippon Suisan Kaisha, Ltd.
Public Relations & Investor Relations Department
email: nissui_web@nissui.co.jp
Personal Information Protection Policy Basic Information Security Policy Site Policy Contact Us