April 7, 2017

Sony Corporation

Announcement of Company Split (Small-scale Company Split)

from Sony Corporation into Tohoku Murata Manufacturing Co., Ltd.

in connection with the Transfer of Battery Business

Sony Corporation (“Sony”) today announced that it will transfer certain rights and obligations related to a part of Sony’s battery business to Tohoku Murata Manufacturing Co., Ltd. (“TMM”), a wholly-owned subsidiary of Sony, by an “absorption-type company split”, as set forth below.  This company split is a step in the process of the transfer of the Sony Group’s battery business to the Murata Group announced on October 31, 2016 in the press release entitled “Murata Manufacturing and Sony Sign Definitive Agreement for the Transfer of Battery Business”.

Certain information is omitted from this announcement since this is an absorption-type company split with Sony’s wholly-owned subsidiary.  In conjunction with the company split, Sony Energy Devices Corporation, a wholly-owned subsidiary of Sony, will also transfer certain rights and obligations related to a part of its battery business to TMM by an “absorption-type company split”.

 

1.	Purpose of the company split
	The purpose of this company split is to transfer to TMM certain rights and obligations (as set forth in the company split agreement) related to a part of Sony’s battery business, as part of the process of the transfer of the Sony Group’s battery business to the Murata Group.
2.	Summary of the company split
(1)	Schedule of the company split
	Approval of the company split agreement
	(by the representative corporate executive officer)         April 7, 2017
	Execution of the company split agreement                       April 7, 2017
	Effective date of the company split                                   July 1, 2017 (scheduled)

(2)	Method of the company split
	The method of the contemplated company split is an absorption-type company split between Sony (as the splitting company) and TMM (as the successor company).
(3)	Details of consideration allotted upon the company split
	TMM will issue 1 share of common stock of TMM to Sony upon the completion of the contemplated company split for the assets, liabilities, agreements and other rights and obligations transferred to TMM.

(4)	Treatment of stock acquisition rights and bonds with stock acquisition rights of the absorbed company
	There will be no changes to the treatment of stock acquisition rights or bonds with stock acquisition rights of Sony upon the completion of the contemplated company split.
(5)	Increase or decrease of share capital upon the company split
	There will be no increase or decrease of share capital of Sony upon the contemplated company split.
(6)	Rights and obligations to be succeeded by the successor company
	TMM, as the successor company, will succeed to certain rights and obligations related to a part of Sony’s battery business, as set forth in the company split agreement.
(7)	Expectation on the performance capabilities of each party’s obligations
	Sony expects that the contemplated company split will have no material impact on the ability of TMM to perform its obligations that become due after the effective date of the contemplated company split.
3.	Summary of both parties (The numbers shown below are as of March 31, 2016 for Sony and December 9, 2016 for TMM)
(1)	Summary of both parties

 

 

Note:

Since Sony prepares its consolidated financial statements in accordance with accounting principles generally accepted in the United States, “total equity”, “income before income taxes”, “net income attributable to Sony’s stockholders” and “net income attributable to Sony’s stockholders per share of common stock” are stated in place of “Net assets”, “Ordinary income”, “Net income” and “Net income per share”, respectively.

(2)	Summary of business subject to the company split
a.	Business subject to the company split
	A part of Sony’s battery business
b.	Operating results of the business transferred by the company split for the fiscal year ended March 31, 2016
	Net sales:                                        ¥ 165,000 million
	Gross Profit on Sales:                   ¥ 1,700 million
	Operating Income (negative):     ¥ (4,200 million)
c.	Assets and liabilities to be succeeded upon the company split (as of December 31, 2016)

	Assets:                                           ¥ 17,749 million
	Liabilities:                                       ¥ 2,991 million
4.	Status after the company split
	There will be no changes in the trade name, the location of the head office, the title and name of representatives, the business (excluding the business transferred by the contemplated company split), the stated capital or fiscal year-end of Sony upon the completion of the contemplated company split. Upon the completion of the contemplated company split, TMM plans to increase its stated capital to ¥ 100 million. There will be no changes in the trade name, the location of the head office, the title and name of representatives, the business (excluding the business transferred by the contemplated company split), or fiscal year-end of TMM upon the completion of the contemplated company split.
5.	Outlook
	No material impact on Sony’s consolidated financial results is anticipated as a result of the completion of the contemplated company split. Sony plans to transfer all of the common stock of TMM to Murata Manufacturing Co., Ltd. after the completion of the contemplated company split.

 

(For reference)   Sony’s consolidated financial forecast for the fiscal year ended March 31, 2017, which was announced on February 2, 2017, and its consolidated financial results for the fiscal year ended March 31, 2016.

 

(Yen in millions)