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Yamaha to Realign Its Music Entertainment Businesses |
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The Board of Directors of Yamaha Corporation (Head Office: 10-1, Nakazawa-cho, Hamamatsu, Shizuoka; President: Shuji Ito; Hereinafter: Yamaha) made the decision at its meeting held on March 20, 2007, to conduct an organizational realignment of the music entertainment businesses of the Yamaha Group to facilitate the expansion of the activities going forward.
- Yamaha will establish a management company for its music entertainment businesses by splitting off certain division into the new company.
- Certain of Yamaha’s music entertainment businesses will be continued by subsidiaries by splitting off and absorption and through split-offs into newly established companies.
- Each of the companies engaging in music entertainment businesses will be made subsidiaries of the management company through exchanges of shares with the subsidiaries.
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| 1. Objectives of the Realignment |
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As one of the world’s leading producers of musical instruments, Yamaha develops and sells a wide range of instruments and operates music schools in Japan and other countries, while also engaging in music entertainment related businesses. In Japan, since the 1960s, Yamaha has sponsored “Light music contests”, “Popular song contests”, “Teen’s music festival”, music festivals for teenagers, and other events to provide amateur music lovers with opportunities to perform in public. Other music entertainment related businesses include the publication of sheet music and scores, magazines, and other printed matter; distribution of ring tone and true tone content for mobile phones; development of “Players’ Ohkoku” (Players’ Kingdom), a Website housed on an Internet SNS (social network service) that enables amateur musicians to broadcast their performances via the Web; and a record company with well-known artists, such as Miyuki Nakajima, under contract.
The objective of the upcoming realignment will be to enable Yamaha to manage these various music entertainment related businesses, which are now conducted by various divisions within Yamaha and other Group companies, more efficiently and flexibly by bringing together such activities as providing support for amateur musicians; finding, nurturing, and supporting the creative work of music artist; and supplying creative works to the market through various media. Under the new organization that will emerge from the realignment, Yamaha will be well positioned to offer comprehensive services and products related to all aspects of “music,” including performance, recording labeling/publishing, and listening. Developing music entertainment related activities in this way will enable Yamaha to deliver the joy and pleasure that music has to offer to a broader range of customers by creating an even larger musical community comprising artists, amateur musicians, and listeners as well as play an important role in expanding the market for music entertainment.
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| 2. Outline of the Scheme for Realigning the Operating Structure of the Music Entertainment Businesses |
| (1) |
The activities of the Yamaha division responsible for managing the Digital Content Business Division and consolidated subsidiary Yamaha Music Communications Inc. (YMC), will be continued within Yamaha Music Entertainment Holdings Inc. (YMEH), which will be newly established with the shares of YMC. |
| (2) |
The operations of Yamaha’s mobile phone and PC music distribution unit within the Digital Content Business Division will be split off, absorbed, and continued by consolidated subsidiary Yamaha Music Media Corporation (YMM). In addition, the music artist management and label unit of the Digital Content Business Division will be split off and continued in a newly established company, Yamaha A and R Inc. (YAR). |
| (3) |
The music publishing business of YMM will be split off and continued under a newly established company, Yamaha Music Publishing Inc. (YMP). YMM will then transfer all the shares of YMP that it receives as consideration for its music publication business to Yamaha as a dividend paid from retained earnings. |
| (4) |
YMEH will become the sole owner of the outstanding shares of YMM, YMP, and YAR through an exchange of shares. |
| (5) |
YMEH is scheduled to establish a subsidiary, provisionally named Yamaha Music Development Inc., in 2008. |
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| 3. Summary of the Split-Offs |
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| (1) |
Schedule for the Split-Offs |
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| March 20, 2007 |
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Holding of a directors’ meeting to approve the plan for the establishment of YMEH and related split-offs, the contract for splitting off and absorbing YMM, and the establishment of YAR and related split-offs. |
| March 20, 2007 |
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Signing of a contract for the split-off and absorption of the music distribution business into YMM. |
| June 1, 2007 |
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Scheduled date for the split-offs (Date of effectiveness) |
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| (Note) |
The establishment of the new companies and the split-offs will be conducted by the Company without the approval of a shareholders’ meeting, as specified in Article 804-1 of Japan’s Company Law, based on Article 805 of the Company Law. In addition, the split-off and absorption involved in the realignment will be conducted by the Company without the approval of a shareholders’ meeting, as specified in Article 783-1 of the Company Law, based on Article 784-3 of the Company Law. |
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| (2) |
Methods for the Split-Off |
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| (a) |
With Yamaha as the company to establish a new company and split off a division, YMEH will be established as a new company and receive the division to be split off from Yamaha. |
| (b) |
With Yamaha as the company that will split off a division that will be absorbed, the operations of the division to be split off will be absorbed by existing company YMM. |
| (c) |
With Yamaha as the company to establish a new company and split off a division, YAR will be established as a new company and receive the division to be split off from Yamaha. |
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| (3) |
Reduction in Capital due to the Split-Offs |
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There will be no reduction in capital as a result of the establishment of new companies and the split-offs or as a result of the split-offs and absorption(hereinafter referred to as the current realignment). |
| (4) |
Treatment of Rights to Purchase New Shares and Bonds with Rights to Purchase New Shares |
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The Company has not issued any rights to purchase new shares or bonds with rights to purchase new shares. |
| (5) |
Continuation of Rights and Duties |
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YMEH (a newly established company that will receive a division split off from Yamaha), YMM (which will absorb a division split off from Yamaha), and YAR (a newly established company that will receive a division split off from Yamaha) will each receive the assets and contractual rights and obligations that Yamaha deems necessary for the continued operation of the business being transferred, and they will receive all rights and continue to perform all duties associated therewith. |
| (6) |
Outlook for Performance of Obligations |
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Yamaha’s judgment is that the Company itself, the newly established companies receiving divisions that have been split off from the Company, and the company absorbing divisions split off from the Company will be able to meet their respective obligations. |
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| 4. Outline of the Companies at the Time of the Split-Offs |
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| 5. Outline of the Business Divisions that Will Be Continued as a Result of the Current Realignment |
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| (1) |
Lines of business of the division to be split off and continued |
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YMEH
Division responsible for managing the Digital Content Business Division |
YMM
Mobile phone and PC content distribution business of the Digital Content Business Division |
YAR
Music artist management and label business of the Digital Content Business Division |
| (2) |
Performance of the divisions to be split off and continued |
| - |
Sales (¥ million) |
| - |
Percent of consolidated sales (%) |
| (As of March 31, 2006) |
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| (3) |
Assets and liabilities to be transferred with the divisions being split off and continued |
| - |
Current assets |
| - |
Fixed assets |
| - |
Current liabilities |
| - |
Long-term liabilities |
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| ¥959 million |
| ¥6 million |
| ¥0 |
¥0 |
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| 6. Yamaha Group following the Corporate Split-Offs and the Outlook for the Impact on Performance of the Split-Offs |
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| (1) |
As a result of these corporate split-offs, the Company’s name, its address, representative, capital, and date for annual closing of accounts will remain unchanged. |
| (2) |
The corporate split-offs described above belong to the category of jointly controlled transactions and will have no impact on consolidated performance. In addition, the impact on Yamaha’s accounts will not be material. The corporate split-offs and exchanges of shares to take place among subsidiaries in parallel with the current realignment or following this realignment are also jointly controlled transactions and have no impact on consolidated performance. |
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| For reference |
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Information on other subsidiaries may be found in Attachment 2, and a diagram of the music entertainment business organization following the realignment may be found in Attachment 3. |
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For further information, please contact
Yamaha Corporation
Public Relations Division,
Public & Investor Relations Group
TEL. +81-3-5488-6601
FAX. +81-3-5488-5060
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