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

May 13,2022

KDDI Corporation

At the Board of Directors meeting held on May 13, 2022, KDDI decided to split off its management business and its functions of planning, formulation and advancement of the business strategies for its subsidiary [1] (the "Subsidiary") related to KDDI's digital transformation (DX) support business for corporate customers into a consolidated subsidiary (wholly owned subsidiary) KDDI Digital Divergence Holdings Corporation (the "Shareholder Preparatory Company") through an absorption-type corporate split, with a planned effective date of July 1, 2022. KDDI also decided to split off part of its agile development and maintenance business into a consolidated subsidiary (wholly owned subsidiary) KDDI Agile Development Center Corporation (the "Business Preparatory Company") through an absorption-type corporate split (the "Company Split"), with a planned effective date of July 1, 2022. Plans call for an absorption-type company split agreement creating the Shareholder Preparatory Company and the Business Preparatory Company (the "Preparatory Companies") to be concluded with each company on May 17, 2022.
A portion of the disclosure-related matters and content have been omitted because it is a simplified absorption-type company split where the business will be split off into wholly owned subsidiaries of KDDI.

1. Purpose of the Company Split

KDDI has engaged in efforts for supporting customers in business reform and in DX to use communications (5G and IoT) and digital measures to solve social issues.
In the Company Split, we will split the above businesses into the Shareholder Preparatory Company, our consolidated subsidiary, to build a DX-only structure, thereby strengthening collaboration within our group and including more diverse employees in the team. This will bolster our support in helping customers adapt quickly to rapid changes in the business landscape, ultimately leading to the growth of our own businesses.

2. Summary of the Company Split

• (1)

  Schedule of the Company Split

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

    May 13, 2022

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

    May 17, 2022 (scheduled date)

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

    May 17, 2022 (scheduled date)

  • Date of execution of the Company Split agreement:

    May 17, 2022 (scheduled date)

  • Date of Company Split (effective date):

    July 1, 2022 (scheduled date)

• (2)

  Method of the Company Split

  This is an absorption-type split with KDDI as the company to be split and each of the Preparatory Companies 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 Companies

  Upon the Company Split, the Shareholder Preparatory Company will succeed to KDDI's functions of planning, formulation and advancement of the business strategies for the Subsidiary; and the Shareholder Preparatory Company will succeed to what is defined in the absorption-type company split agreement among KDDI's management business for the Subsidiary including managing the Subsidiary's assets, and among assets (including stock in the Business Preparatory Company, iret, KDDI Web Communications, and Scrum Inc. Japan), liabilities, and other rights, obligations, and contractual statuses retained by KDDI and related to the management business in question immediately before the Company Split becomes effective.
  Upon the Company Split, the Business Preparatory company will succeed to some of KDDI's business in agile development and maintenance; and the Business Preparatory Company will succeed to what is defined in the absorption-type company split agreement among the assets, liabilities, and other rights, obligations, and contractual statuses retained by KDDI and related to this development business in question immediately before the Company Split becomes effective.

• (7)

  Prospect of Fulfillment of Obligations

  We have determined that there will be no impediment to the fulfillment of obligations payable by Preparatory Companies, 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 March 31, 2022, Succeeding Company is as of May 12, 2022 at the time of establishment)

(10) Financial Condition and Business Results for the Previous Consolidated Fiscal Year and the Previous Business Year

• Note:

  Because no immediately preceding fiscal year exists for the Preparatory Companies, we have only included balance sheet items as of the date of their establishment.

4. Outline of the Splitting Business Sectors

• (1)

  Details of Business of the Splitting Sectors

  • Split off into the Shareholder Preparatory Company
    Management business including functions for the planning, formulation, and advancement of the business strategies of the Subsidiary, and asset management for the Subsidiary
  • Split off into the Business Preparatory Company
    Part of the agile development business and maintenance business

• (2)

  Business Results of the Splitting Sectors

  • Split off into the Shareholder Preparatory Company
    No operating revenue in the business within the splitting department
  • Split off into the Business Preparatory Company
    No operating revenue in the business within the splitting department, as the contracts between KDDI and customers are not related to the business of the splitting department and are not succeeded to the Business Preparatory Company through this Company Split.

• (3)

  Items and Book Values of the Splitting Assets and Liabilities

  • Split off into the Shareholder Preparatory Company

    (Unit: millions of yen)

    Assets		Liabilities
    Items	Book values	Items	Book values
    Assets	19,783	Liabilities	-

  • Split off into the Business Preparatory Company

    (Unit: millions of yen)

    Assets		Liabilities
    Items	Book values	Items	Book values
    Assets	45	Liabilities	-

• Note:

  The amounts above are valid as of March 31, 2022, and the actual split amounts of assets and liabilities may vary from the stated numbers.

5. Status After the Company Split

After the Company Split, there will be no change in the name, head office location, position or name of the representative, business, stated capital, or fiscal term of KDDI, the Shareholder Preparatory Company, or the Business Preparatory Company, as a result of 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 subsidiaries form business companies.

• [1]

  iret, Inc., KDDI Web Communications Inc., Scrum Inc. Japan, and KDDI Agile Development Center Corporation

• 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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