Announcement Regarding the Company Split (Simplified Absorption-Type Company Split) with a Consolidated Subsidiary

January 28,2022

KDDI Corporation

We would like to announce that, at a meeting of the board of directors held on January 28, 2022, the Company resolved to cause KDDI SmartDrone Inc. (the "Successor Preparatory Company"), which is the Company's consolidated subsidiary (wholly owned subsidiary), to succeed to the drone business (the "Business"), by way of absorption-type company split, as follows, setting April 1, 2022 as the effective date (to be decided) (the "Company Split"), and that the Company plans to execute the Absorption-type Company Split Agreement with the Successor Preparatory Company on February 8, 2022.

Furthermore, because the Company Split is a simplified absorption-type company split, in which the Business is caused to be succeeded to by the Company's wholly owned subsidiary, the disclosure of part of the matters and details to be disclosed is omitted

1. Purpose of the Company Split

In recent years, expectations have been rising for using drones as a solution for social issues. In addition, the drone business environment is changing due in part to the updating of legal systems. Amid this situation, we need to provide new value to customers by offering drone services using 4G LTE and 5G. To this end, we decided to establish the Successor Prepatory Company and cause the company to succeed the Business through the Company Split. KDDI began initiatives aimed at commercializing drones in 2016. By controling drones using 4G LTE and other mobile telecommunications technologies, we have built up services that realize safe remote and long-distance flights. Currently, in the inspection, distribution, monitoring, and measurement fields, we offer services and are working to build a portfolio of new drone uses through pilot tests. The Successor Prepatory Company will succeed the Business on April 1, 2022 and will aim to realize new drone-based businesses and provide dynamic drone services to meet customer needs in various fields.

2. Summary of the Company Split

• (1)

  Schedule of the Company Split

  • Date of resolution by the board of directors of the Company:

    January 28, 2022

  • Date of resolution by the board of directors of Successor Preparatory Company:

    February 8, 2022 (to be decided)

  • Date of execution of the Company Split agreement:

    February 8, 2022 (to be decided)

  • Date of Company Split (effective date):

    April 1, 2022 (to be decided)

  • Note:

    Because the Company Split consists of both a simplified company split as provided in Article 784, paragraph (2) of the Companies Act for the Company, which is the splitting company, and a simplified company split as provided in Article 796, paragraph (1) of the Companies Act for Successor Preparatory Company, which is the succeeding company, the Company and Successor Preparatory Company will not hold a shareholders' meeting to obtain approval for the company split agreement.

• (2)

  Method of the Company Split

  This is an absorption-type split with KDDI as the company to be split and Successor Preparatory Company as the company absorbing the operations to be split off.

• (3)

  Details of the Allocation relating to the Company Split

  No allocation of shares or other payment will be made for the Company Split.

• (4)

  Treatment regarding Share Options and Bonds with Share Options Associated with the Company Split

  KDDI has not issued any share options or bonds with share options.

• (5)

  Stated Capital Increased or Decreased due to the Company Split

  There will be no increase or decrease in the Company's stated capital due to the Company Split.

• (6)

  Rights and Obligations Succeeded to by the Succeeding Company

  In conjunction with the Company Split, among the rights and obligations from contracts that the Company holds in relation to the Business as of the time immediately before the Company Split becomes effective, KDDI will succeed to those provided in the Company Split Agreement.

• (7)

  Prospect of Fulfillment of Obligations

  We have determined that there will be no impediment to the fulfillment of obligations payable by Successor Preparatory Company, on or after the effective date of the Company Split.

3. Outline of the Companies Involved in the Company Split (Splitting Company is as of the end of March 2021, Succeeding Company is as of January 27, 2022)

(10) Financial Condition and Business Results for the Latest three Year

• Note:

  Due to its newly founded status, no results for operating revenue or other items are provided for KDDI SmartDrone Inc.

4. Outline of the Splitting Business Sectors

• (1)

  Details of Business of the Splitting Sectors

  KDDI's drone business

• (2)

  Business Results of the Splitting Sectors

  Operating revenue: ¥863 million (fiscal year ended March 31, 2021)

• (3)

  Items and Book Values of the Splitting Assets and Liabilities

  (Unit: millions of yen)

  Assets		Liabilities
  Items	Book values	Items	Book values
  Assets	2,008	Liabilities	0
  Total	2,008	Total	0

  • Note:

    Because the amounts stated above were as of December 31, 2021, the amounts of assests and liabilities to be actually split may differ.

5. Status after the Company Split

There will be no change in the name, location, position or name of the representative, business, stated capital, or fiscal term of KDDI following the Company Split.

6. Future Outlook

The impact of the Company Split on KDDI's consolidated operating results will be minor because it is a corporate split in which KDDI and its wholly owned subsidiary form a business company.

(Reference) Forecast of consolidated financial results for the current fiscal year and consolidated financial results for the previous fiscal year (million yen)

• The information contained in the articles is current at the time of publication.
  Products, service fees, service content and specifications, contact information, and other details are subject to change without notice.

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