[Translation] November 7, 2012 Company name Sapporo Holdings Limited Representative Tsutomu Kamijo President and Representative Director Securities code 2501 Listed on Tokyo Stock Exchange Sapporo Securities Exchange Inquiries Tatsuya Komatsu Director, Corporate Communication Department Tel.: +81 3-5423-7407 Notice Concerning Disposal of Treasury Stock through Third-party Allotment to a Consolidated Subsidiary (Acquisition of a Parent Company s Shares by a Subsidiary, Pursuant to Article 800 of the Companies Act of Japan) for the Purpose of Reorganization of the Foods and Soft Drinks Business of the Sapporo Group, a Company Split (Absorption-type Split) of a Consolidated Subsidiary, and Absorption-type Mergers Among Consolidated Subsidiaries As already reported in our press release dated October 3, 2012, Sapporo Holdings Limited (the Company ) plans to conduct reorganization ( Reorganization ) through absorption-type mergers among its consolidated subsidiaries in the Foods and Soft Drinks Business of the Sapporo Group on January 1, 2013, as the effective date. In addition to the absorption-type mergers among its consolidated subsidiaries, we hereby announce that, at the Board of Directors meeting held today, we resolved a policy to dispose of treasury stock by means of third-party allotment for the purpose of the Reorganization ( Disposal of Treasury Stock ) and conduct an absorption-type company split ( Absorption-type Split ). As the Absorption-type Split is a simplified-absorption-type company split in which the whole owned subsidiary will become a successor company, some disclosure items and details are omitted in this press release. In addition, as already reported in our press release dated October 3, 2012, we are also pleased to announce that the schedule of the absorption-type mergers among the consolidated subsidiaries and the allocation of merger considerations have been determined in the respective merger parties. I. Details of the Reorganization 1. Purpose of the Reorganization As we already publicly announced, the Sapporo Group plans to conduct the following three absorption-type mergers among the consolidated subsidiaries in the Foods and Soft Drinks Business of the Sapporo Group with the aim of realizing a domestically and internationally competitive food value creation group : Absorption-type merger between Pokka Corporation ( Pokka ) (surviving company) and Hokkaido Pokka Corporation ( Hokkaido Pokka ) (extinct company) Absorption-type merger between POKKA SAPPORO FOOD & BEVERAGE LTD. ( Pokka Sapporo ) (surviving company) and Pokka (extinct company) Absorption-type merger between Pokka Sapporo (surviving company) and Sapporo Beverage Co., Ltd. ( Sapporo Beverage ) (extinct company) In addition, in order to keep Pokka Sapporo (surviving company) as a wholly owned subsidiary after the completion of the three mergers, the Company plans to conduct an absorption-type merger (forward triangular merger) between Pokka Sapporo and Pokka, where shares of common stock of the Company, being as a parent company owning whole shares of common stock of Pokka Sapporo, will be allocated to the shareholders of Pokka (extinct company) in exchange for all of the issued and outstanding shares thereof. As part of the Reorganization processes, prior to the absorption-type merger (forward triangular merger) between Pokka Sapporo and Pokka, the Company intends to distribute shares of its treasury stock (0.46 % of the total number of shares issued and outstanding of the Company) to Pokka Sapporo as an allottee, and also to transfer any and all portion of the shares of common stock of Pokka owned by the Company to Pokka Sapporo, with the effect of the Absorption-type Split on December 27, 2012. For reference, the overall image of the Reorganization is as shown below. 1
(i) Disposal of Treasury Stock of the Company - Treasury stock of the Company is distributed to Pokka Sapporo as an allottee. (ii) Absorption-type Split - Any and all portion of the shares of common stock of Pokka owned by the Company are transferred to Pokka Sapporo. - Pokka Sapporo issues one share of common stock and allocates the whole shares to the Company. (iii) Absorption-type Merger - Absorption-type merger between Pokka (surviving company) and Hokkaido Pokka (extinct company) (iv) Absorption-type Merger - Absorption-type merger between Pokka Sapporo (surviving company) and Pokka (extinct company) - Shares of common stock of the Company are allocated to the shareholders of Pokka (v) Absorption-type Merger - Absorption-type merger between Pokka Sapporo (surviving company) and Sapporo Beverage (extinct company) - Pokka Sapporo issues one share of common stock and allocates the whole shares to the Company. (vi) After the completion of the Reorganization Shareholders of Pokka 1.17% Pokka Hokkaido Pokka 98.83% (iv) (Allocation of the Company's Common Stock) Shareholders of Pokka 1.17% (iii) Pokka 98.83% Hokkaido Pokka Sapporo Holdings (i) (ii) Pokka Sapporo Sapporo Holding Pokka Sapporo (iv) (v) Sapporo Holding Sapporo Beverage Sapporo Beverage Pokka Sapporo 2. Schedule of Reorganization (i) Disposal Date of Treasury Stock December 21, 2012 (ii) Effective Date of Absorption-type Split December 27, 2012 (iii) Effective Date of Absorption-type Merger (Pokka, Hokkaido Pokka) January 1, 2013 (iv) Effective Date of Absorption-type Merger (Pokka Sapporo, Pokka) January 1, 2013 (v) Effective Date of Absorption-type Merger (Pokka Sapporo, Sapporo Beverage) January 1, 2013 2
II. Disposal of Treasury Stock 1. Overview of Disposal of Treasury Stock 1. Disposal Date Friday, December 21, 2012 2. Number of Shares Disposed Common stock: 1,828,260 shares 3. Disposal Value 225/share 4. Funds Procured 411,358,500 5. Subscription or Disposal Method Disposal by means of third-party allotment 6. Allottee POKKA SAPPORO FOOD & BEVERAGE LTD. 7. Other Number of shares of treasury stock: 583,171 shares (This is a number of shares of treasury stock of the Company after the Disposal of Treasury Stock. Note that the number does not include the purchase and sale of fractional unit share on and after July 1, 2012.) 2. Purpose of and Reason for Disposal The Disposal of Treasury Stock is intended by the Company to make Pokka Sapporo, an allottee and fully owned subsidiary of the Company, acquire the Company s common stock to be utilized as considerations in exchange for the receipt of Pokka common stock for the purpose of executing the absorption-type merger between Pokka Sapporo (surviving company) and Pokka (extinct company) that is a consolidated subsidiary of the Company and will become a subsidiary of Pokka Sapporo, effective on December 27, 2012. For details of the Reorganization including the absorption-type merger, please see I. Details of the Reorganization, 1. Purpose of the Reorganization. Pokka Sapporo s acquisition of shares of common stock of the Company through such transaction falls under the acquisition of a parent company s shares by a subsidiary pursuant to Article 800 of the Companies Act of Japan. 3. Amount of Funds Procured from the Disposal of Treasury Stock (i) Total Disposal Amount 411,358,500 (ii) Estimated Amount of Issue and Other Expenses (iii) Estimated Net Disposal Amount 411,358,500 Note: Estimated Amount of Issue and Other Expenses is omitted, as there are no expenses relevant to the Disposal of Treasury Stock. 4. Specific Use of Funds Procured The fund procured would be fully used for the repayment of long-term bank loans, and the repayments are scheduled by the end of December 2012. The funds will be managed in the Company s bank account until the funds are used for any of the above purposes. 5. Perspective on Reasonableness of Use of Funds The disposal of treasury stock is to make Pokka Sapporo acquire the Company s common stock to be utilized as considerations in exchange for the receipt of Pokka common stock for the purpose of executing the absorption-type merger between Pokka Sapporo and Pokka, as outlined in 2. Purpose of and Reason for Disposal above, and not for procuring funds. However, the Company plans to use the funds procured for the repayment of loans, as outlined in 4. Specific Use of Funds Procured above. Therefore, the Company believes the use of the fund should be reasonable. 6. Reasonableness of Disposal Terms and Conditions (1) Basis and details for calculating the disposal amount The disposal value is 225 yen per share (rounded down to the nearest whole yen), which is the average closing price of the Company s shares on the Tokyo Stock Exchange for the most recent one (1) month for the period from October 7, 2012 to November 6, 2012 (which is the day immediately prior to the day on which the resolution for the Disposal of Treasury Stock was passed at the Board of Directors meeting). The reason why the Company has selected the average closing price of the Company s shares for the most recent one (1) month until just before the resolution is as follows: the Company considers that the above average closing price is more fair than the average closing prices for the most recent three (3) or six (6) months just before the resolution, taking into consideration of fluctuations in stock price of the Company, and it is more close to the resolution date. In addition, the Company also believes it reasonable to determine the disposal value as an average for a certain period immediately prior to the resolution date rather than to 3
determine the value at a specific date prior to the resolution, because it can eliminate temporary stock price fluctuations or other special factors. Therefore the Company believes that the disposal value is highly objective and reasonable as a reliable calculation base. The disposal value of 225 yen represents (i) a 1.8 % premium on the closing price (221 yen) of the Company s shares as of the day immediately prior to the date of disposal resolution (November 6, 2012), (ii) a 0.9 % premium on the average closing price (223 yen) of the Company s shares for the most recent three (3) months (for the period from August 7, 2012 to November 6, 2012), and (iii) a 4.4 % discount below the average closing price (235 yen) of the Company s shares for the most recent six (6) months (for the period from May 7, 2012 to November 6, 2012). The Company therefore believes that the above disposal value of 225 yen is not especially favorable for any of those periods, namely, the closing price as of the day immediately prior to the date of disposal resolution, the average closing price for the most recent one (1) month, that for the most recent three (3) months, and that for the most recent six (6) months. The Company believes that the basis for calculating the disposal value described above complies with the Guidelines of Treatment concerning Capital Increase by Third-Party Allotment stipulated by the Japan Securities Dealers Association. In addition, all of four (4) Corporate Auditors (including two (2) Outside Corporate Auditors) expressed that the disposal value was not an amount especially favorable to the allottee. (2) Basis for believing that the number of shares being disposed of and the level of share dilution are reasonable The total number of shares of treasury stock to be disposed of is 1,828,260 shares, and the share dilution ratio as against the total number of shares issued of the Company (393,971,493 shares) will be 0.46 % (the ratio as against the total number of voting rights of the Company (387,747 rights as of June 30, 2012) will be 0.47 %). Therefore, the Company believes that the extent of share dilution and its effect on the secondary market will be insignificant. In addition, the Company believes that the Disposal of Treasury Stock will further increase enterprise value because it will promote the integration of three consolidated subsidiaries in Foods and Soft Drinks Business of the Sapporo Group into Pokka Sapporo, an allottee, and enable the Company to keep Pokka Sapporo as a wholly owned subsidiary for the purpose of promoting efficient management of Foods and Soft Drinks Business of the Sapporo Group and taking flexible and timely measures tailored to business environmental changes. The Company therefore decided that the number of shares to be disposed of and the extent of share dilution are reasonable. 7. Reason for Selecting Allottee (1) Overview of Allottee of Treasury Stock of the Company 1. Company name POKKA SAPPORO FOOD & BEVERAGE LTD. 2. Head office 2-29, Sakae 4-chome, Naka-ku, Nagoya, Aichi 3. Representatives Masatoshi Hori, President and Representative Director 4. Outline of businesses Beverage & food businesses, Restaurant business, Confectionery business, Logistics business, etc. 5. Capital 10 million 6. Date of Establishment March 30, 2012 7. Number of Shares Issued 200 shares and Outstanding 8. Fiscal year-end December 31 9. Major Shareholders and Shareholding ratios Sapporo Holdings Limited: 10. Relationship between the Parties Capital Relationships The Company owns 200 shares of common stock ( of the total shares issued and outstanding). Personal Relationships One (1) director of the Company concurrently serves as a director of the allottee. One (1) group executive officer of the Company also serves as a representative director of the allottee. In addition, two (2) employees of the Company concurrently serve as directors of the allottee, and one (1) employee of the Company serves as a corporate auditor of the allottee. Transactional Relationships Situation regarding Related Parties The Company and the allottee have a business management agreement. The allottee is a wholly-owned subsidiary of the Company and, therefore, falls under the category of related parties. 4
Notes: 1. As of November 7, 2012 2. The allottee was established on March 30, 2012 and has no financial results available for the most recent fiscal year. 3. The allottee is a wholly-owned subsidiary of the Company. The Company defined the following Basic Policy against Anti-Social Organizations by the resolution of the Board of Directors meeting in order to ensure a group-wide commitment to the policy: (i) The Sapporo Group sticks to the code of conduct that it will completely eliminate any connection with anti-social forces and groups who threaten the order and safety of the civil society. (ii) Under the Basic Policy against Anti-Social Organizations, the Company defined the department addressing measures against anti-social forces and groups, and appointed person(s) responsible for rejecting unreasonable demands for the purpose of gathering information and to tighten control over the group while improving and enhancing its framework to avoid anti-social forces and groups and bolstering cooperation with the police, anti-gang organizations, lawyers and other external professional groups. The Company affirms that the allottee and its officers do not have any relationships with anti-social forces, and the Company has submitted a written confirmation thereof to the Tokyo Stock Exchange and Sapporo Securities Exchange. (2) Reason for selecting the allottee The Sapporo Group established Pokka Sapporo on March 30, 2012 as a company to promote the integration of consolidated subsidiaries in Foods and Soft Drinks Business of the Sapporo Group with the aim of realizing a domestically and internationally competitive food value creation group. For that purpose, the Sapporo Group determined to conduct the following three absorption-type mergers, with effect on January 1, 2013. Absorption-type merger between Pokka and Hokkaido Pokka Absorption-type merger between Pokka Sapporo and Pokka Absorption-type merger between Pokka Sapporo and Sapporo Beverage In addition, in order to keep Pokka Sapporo, a surviving company after the above three absorption-type mergers, as a wholly owned subsidiary, the Company selected Pokka Sapporo as an allottee of the treasury stock of the Company through absorption-type merger between Pokka Sapporo and Pokka at the share exchange ratio of 1:15.55 (one share of Pokka held by the shareholders (excluding Pokka Sapporo) of Pokka (extinct company) in exchange of 15.55 shares of common stock of the Company, a parent owning shares of Pokka Sapporo). (3) Allottee s policy on holding shares The allottee of the Company s treasury stock will use the number of the Company s shares to be allotted as consideration for the absorption-type merger between Pokka Sapporo and Pokka. The Company will obtain from the allottee a written pledge specifying that: (i) for a period of two (2) years from the allotment date, if the allottee assigns all or some of those shares, the allottee will report in writing to the Company on the details of the assignment, and (ii) the allottee consents to the fact that the Company will report the details of the report to the Tokyo Stock Exchange and the Sapporo Securities Exchange and the fact that the details of the report will be made available for public inspection, and the Company will obtain a pledge from the allottee to that effect. (4) Confirmed facts regarding existence of assets necessary for payment by the allottee The allottee is a wholly owned subsidiary of the Company. Pursuant to the Sapporo Group Finance Rules, the Company plans to lend cash necessary for the payment to the allottee by the payment date of the Disposal of Treasury Stock. The Company has confirmed that the allottee potentially holds enough cash for the repayment of the above loan in the light of net sales, total assets and net assets of the allottee after the completion of the Reorganization. 5
8. Major Shareholders and Shareholding Ratio after Disposal of Treasury Stock Before Disposal (as of June 30, 2012) The Master Trust Bank of Japan, Ltd. (Trust Account) 4.88% Japan Trustee Services Bank, Ltd. (Trust Account) 4.63% Nippon Life Insurance Company 3.13% Mizuho Trust and Banking Co., Ltd., re-trusted to Trust & Custody Services Bank, Ltd., as 3.10% retirement benefit trust assets. Meiji Yasuda Life Insurance Company 2.65% The Norinchukin Bank 2.38% Mizuho Corporate Bank, Ltd. 2.21% Marubeni Corporation 2.09% Taisei Corporation 1.78% Government of Singapore Investment Corporation Pte Ltd. 1.42% (Standing Proxy: Custody Operations, Tokyo Branch, the Hongkong and Shanghai Banking Corporation Limited) Notes: 1. The shareholding ratios are the ratios of the number of shares held to the total number of shares issued. 2. The above details are based on the record of shareholders as of June 30, 2012. 3. Because the shares to be disposed of this time are not expected to be held for a long time, these shares are not presented in the major shareholders and shareholding ratios after the disposal of the treasury stock. 4. 12,212 thousand shares held by Mizuho Trust and Banking Co., Ltd, re-trusted to Trust & Custody Services Bank, Ltd. as retirement benefit trust assets, represents retirement benefit trust assets re-trusted by Mizuho Trust & Banking Co., Ltd. to Trust & Custody Services Bank. The voting rights are retained by Mizuho Trust and Banking Co., Ltd. Other than the shares listed above, Mizuho Trust and Banking Co., Ltd. holds 4,162 thousand shares. In total, Mizuho Trust and Banking Co., Ltd. holds 16,374 thousand shares of the Company s common stock. 5. Other than the shares listed above, Mizuho Corporate Bank, Ltd. holds 4,702 thousand shares as trust assets entrusted to Mizuho Trust & Banking Co., Ltd. In total, Mizuho Corporate Bank, Ltd. holds 13,400 thousand shares of the Company s common stock. 6. On June 17, 2010, a Large Shareholding Report (Change in Shareholding) was submitted to the Kanto Finance Bureau by Mizuho Corporate Bank, Ltd. and four (4) joint holders. However, as the Company could not confirm the actual number of shares as of June 30, 2012, the number of shares listed above is based on the record of shareholders. The detail of the Large Shareholding Report is as shown below. Name of Shareholders Location Number of Shares Held (thousand shares) Percentage of Shares Held (%) Mizuho Corporate Bank, Ltd. and 1-3-3, Marunouchi, Chiyoda-ku, 40,910 10.38 four (4) joint holders Tokyo 7. Sumitomo Mitsui Trust Holdings, Inc. submitted a copy of a Large Shareholding Report dated April 18, 2012 and reported the holding status as stated below. However, the Company could not confirm the actual number of shares as of June 30, 2012. The detail of the Large Shareholding Report is as shown below. Name of Shareholders Sumitomo Mitsui Trust Bank, Limited and two (2) joint holders Location 1-4-1, Marunouchi, Chiyoda-ku, Tokyo Number of Shares Held (thousand shares) Percentage of Shares Held (%) 17,184 4.36 9. Matters concerning Procedures in the Code of Corporate Conduct The Disposal of Treasury Stock does not require the acquisition of an opinion from an independent third party or require procedures for confirming the intent of shareholders, which are provided for under Article 432 of the Securities Listing Regulations of the Tokyo Stock Exchange and Rule 2 of the Code of Corporate Conduct by Sapporo Securities Exchange, because (i) the dilution ratio is less than 25% and (ii) the disposal does not involve a change in controlling shareholders. 6
10. Status of Business Results and Equity Finance for the Last Three Years (1) Business results for the last three years (Consolidated Basis) (Millions of yen) December 31, 2009 December 31, 2010 December 31, 2011 Consolidated Net Sales 387,534 389,244 454,099 Consolidated Operating Income 12,895 15,403 18,883 Consolidated Ordinary Income 10,725 14,328 16,807 Consolidated Net Income 4,535 10,772 3,164 Consolidated Net Income Per 11.57 27.50 8.08 Share (yen) Dividends Per Share (yen) 7.00 7.00 7.00 Consolidated Net Assets Per Share (yen) 302.16 319.32 314.87 Note: As stated in the Financial Result for the Three Months Ended March 31, 2012 Consolidated, the Company changed its accounting method (Method of accounting for sale) from the first quarter of the fiscal year ending December 31, 2012 and applied the new method retroactively to enable period-over-period comparisons and analysis. Therefore, the Company s consolidated net sales should be retroactively adjusted to 449,452 million for the fiscal year ended December 31, 2011. However, the figure in the above table is the value before the retroactive application. (2) Current status of the number of shares issued and outstanding and the number of potential shares (as of October 31, 2012) Number of shares issued Ratio to shares issued Number of Shares issued and outstanding 393,971,493 shares 100.0% Note: The Company has no potential shares outstanding. (3) Recent status of Stock Price (i) Over the last three years December 31, 2009 December 31, 2010 Open 560 513 370 High 648 555 391 Low 290 312 257 Close 509 368 291 December 31, 2011 (Yen) (ii) Over the last six months (Yen) May June July August September October Open 280 234 258 244 224 218 High 280 258 268 244 225 234 Low 231 228 233 223 205 215 Close 235 256 247 223 218 223 (iii) Stock price on the business day immediately prior to the date of the resolution to conduct the disposal (Yen) November 6, 2012 Open 222 High 222 Low 220 Close 221 (4) Status of equity finance for the last three years Not applicable 7
11. Summary of Disposal 1.Type and Number of Shares Common stock: 1,828,260 shares Disposed 2. Disposal Value 225/share 3. Total Disposal Amount 411,358,500 4. Disposal Method Disposal by means of third-party allotment 5. Application Period Monday, December 17, 2012 Wednesday, December 19, 2012 6. Payment Date Friday, December 21, 2012 7. Allottee and Number of Shares POKKA SAPPORO FOOD & BEVERAGE LTD.: 1,828,260 shares Disposed 8. Other Each of the above items is subject to the condition that the filing under the Financial Instruments and Exchange Law becomes effective. III. Absorption-type Split 1. Outline of the Absorption-type Split (1) Schedule of the Absorption-type Split November 7, 2012 Resolution by the Board of Directors Regarding the Absorption-type Split (the Company; Pokka Sapporo) November 7, 2012 Conclusion of Absorption-type Split Agreement November 30, 2012 Shareholders meeting for the approval of Absorption-type Split Agreement (Pokka Sapporo) December 27, 2012 Effective Date of Absorption-type Split (planned) Note: Since the Absorption-type Split is a simplified absorption-type split for the Company, a splitting company, the Absorption-type Split will be conducted without the approval of the Shareholders meeting. (2) Method of the Absorption-type Split This will be an Absorption-type split in which the Company will be the splitting company and Pokka Sapporo, a wholly-owned subsidiary of the Company, will be the successor company. (3) Allotment of Shares Relating to the Absorption-type Split Pokka Sapporo (successor company) shall issue one (1) share of common stock and allocate the whole shares to the Company (splitting company) as a consideration of succeeding to the rights and obligations of the splitting company in the Absorption-type Split. (4) Action to be Taken at the Absorption-type Split with regard to Stock Acquisition Rights and Convertible Bonds Not applicable (5) Amount of Increase or Decrease in Capital Stock as a Result of the Absorption-type Split There will be no change in the capital stock of the Company as a result of the Absorption-type Split. The amount of capital surplus (other capital surplus) of Pokka Sapporo will be increased by 35,238 million yen as a result of the Absorption-type Split. (6) Rights and Obligations to be Assumed by the Successor Company As a result of the Absorption-type Split, Pokka Sapporo (successor company) will succeed the following assets, rights and obligations from the Company: 1. All and any shares of Pokka s common stock held by the Company (9,963,489 shares); 2. Contractual status of the agreement regarding holding and management of the stock set forth in 1 above (excluding employment agreement); and 3. In addition to the above, all and any rights and obligations pertaining to the stock set forth in 1 above 8
(7) Forecast for Performance of Obligations It is expected that the obligations of Pokka Sapporo (successor company) will be fulfilled on and after the effective date of the Absorption-type Split. 2. Overview of the party in Absorption-type Split (as of September 30, 2012) Splitting Company 1. Company name Sapporo Holdings Limited 2. Head office 20-1, Ebisu 4-chome, Shibuya-ku, Tokyo 3. Representatives Tsutomu Kamijo, President and Representative Director 4. Outline of businesses Development and management of Group management strategy 5. Capital 53,886 million 6. Date of Establishment September 1, 1949 7. Number of Shares Issued and Outstanding 393,971,493 shares 8. Fiscal year-end December 31 9. Major Shareholders and Shareholding ratios The Master Trust Bank of Japan, Ltd. (Trust Account): 4.88% Japan Trustee Services Bank, Ltd. (Trust Account): 4.63% Nippon Life Insurance Company: 3.13% Mizuho Trust and Banking Co., Ltd., re-trusted to Trust & Custody Services Bank, Ltd., as retirement benefit trust assets: 3.10% Meiji Yasuda Life Insurance Company: 2.65% 10 Operating results and financial position for the previous fiscal year Fiscal year-end December 2011 Consolidated Net Assets 124,775 million Consolidated Total Assets 550,784 million Consolidated Net Assets 314.87 Per Share (Yen) Consolidated Net Sales 454,099 million Consolidated Operating Income 18,883 million Consolidated Ordinary Income 16,807 million Consolidated Net Income 3,164 million Consolidated Net Income 8.08 Per Share (Yen) Notes: 1. The overview of Pokka Sapporo (successor company) is stated in II. Disposal of Treasury Stock, 7. Reason for Selecting Allottee and (1) Overview of Allottee of Treasury Stock of the Company. 2. As stated in the Financial Result for the Three Months Ended March 31, 2012 Consolidated, the Company changed its accounting method (Method of accounting for sale) from the first quarter of the fiscal year ending December 31, 2012 and applied the new method retroactively to enable period-over-period comparisons and analysis. Therefore, the Company s consolidated net sales should be retroactively adjusted to 449,452 million for the fiscal year ended December 31, 2011. However, the figure in the above table is the value before the retroactive application. 3. Overview of Business Division Subject to Absorption-type Split (1) Outline of business subject to Absorption-type split Part of holding and management of the stock conducted by the Company (2) Assets and amount subject to Absorption-type split Assets and amount subject to Absorption-type split to be transferred from the Company to Pokka Sapporo are as follows: Assets subject to Absorption-type split Amount subject to Absorption-type split Pokka Common Stock 9,963,489 shares 35,238 million Note: Assets and amount subject to the Absorption-type split are calculated on the basis of Balance Sheets of the Company as of September 30, 2012 in consideration of changes that occurred until November 7, 2012. The actual amount might differ from the above amount. 9
4. Status of the Company after Absorption-type Split There will be no changes in company name, head office, title and name of the representative, outline of business, capital and fiscal year-end of the Company. 5. Status of Successor Company after Absorption-type Split After the completion of the Absorption-type Split, Pokka Sapporo (successor company) plans to conduct absorption-type mergers between Pokka Sapporo and Pokka and between Pokka Sapporo and Sapporo Beverage with effect on January 1, 2013. The status of Pokka Sapporo as of January 1, 2013 (planned) is stated in IV. Decisions on the Respective Absorption-type Mergers among Consolidated Subsidiaries in Foods and Soft Drinks Business, (4) Status of Surviving Company after the Mergers. IV. Decisions on the Respective Absorption-type Mergers among Consolidated Subsidiaries in Foods and Soft Drinks Business Referring to the absorption-type mergers among the consolidated subsidiaries in the Foods and Soft Drinks Business as reported in the press release dated October 3, 2012, matters determined by the merger parties after the announcement date are listed as below. (1) Absorption-type merger between Pokka (surviving company) and Hokkaido Pokka (extinct company) (i) Schedule of Absorption-type merger Resolution by the Board of Directors October 30, 2012 (Pokka) November 7, 2012 (Hokkaido Pokka) Date of contract of the merger agreement November 7, 2012 Scheduled date of the merger (effective date) January 1, 2013 (planned) Note: Since the absorption-type merger constitutes a simplified absorption-type merger for Pokka as the surviving company, and a short-form absorption-type merger for Hokkaido Pokka as the extinct company, respectively, it is not required to obtain the approval of the Shareholders meeting in each company. (ii) Allocation of Merger Considerations In conducting the absorption-type merger, Pokka (surviving company) will not distribute cash, stock or other means to the shareholders of Hokkaido Pokka (extinct company) in exchange for the receipt of Hokkaido Pokka common stock. (iii) Overview of the Merger Parties (as of November 7, 2012) Surviving company Extinct company 1. Company name Pokka Corporation Hokkaido Pokka Corporation 2. Head office 2-29, Sakae 4-chome, Naka-ku, Nagoya, Aichi 2-30, Higashisapporo 6-jo 1-chome, Shiraishi-ku, Sapporo, Hokkaido 3. Representatives Akifumi Ito, President and Representative Director Yoshiho Murata, President and Representative Director 4. Outline of businesses Manufacture and sales of beverages Sales of soft drinks and foods and foods; Procurement/sales, etc. 5. Capital 2,525 million 58 million 6. Fiscal year-end March 31 March 31 7. Shareholder Sapporo Holdings Limited: 98.8%; Others: 1.2% Pokka Corporation: (2) Absorption-type merger between Pokka Sapporo (surviving company) and Pokka (extinct company) (i) Absorption-type merger Resolution by the Board of Directors October 30, 2012 (Pokka) November 7, 2012 (Pokka Sapporo) Date of contract of the merger agreement November 7, 2012 Resolution by the general meeting of shareholders November 30, 2012 (Pokka Sapporo) Scheduled date of the merger (effective date) January 1, 2013 (planned) Note: Since the absorption-type merger is likely to constitute a short-form absorption-type merger for Pokka 10
as the extinct company, Pokka plans to conduct the absorption-type merger without obtaining the approval of the Shareholders meeting. This absorption-type merger shall become effective upon fulfillment of the condition of the absorption-type merger between Pokka and Hokkaido Pokka as set forth in (1) above. (ii) Allocation of Merger Considerations In conducting the absorption-type merger between Pokka Sapporo and Pokka, Pokka Sapporo, a surviving company, allocate the Company s common stock to the shareholders (excluding Pokka Sapporo) of Pokka (extinct company) in consideration of Pokka common stock at the share exchange ratio of 1: 15.55 (one share of Pokka common stock in exchange of 15.55 shares of common stock of the Company). For the purpose of calculating the above share exchange ratio, the Company verified the validity of using historical acquisition values by the Company as the stock value of Pokka based on the evaluative consequences achieved from a third-party assessment agency independent from the Company and the respective merger parties. In addition, with regard to the stock value of the Company for calculating the share exchange ratio, the Company determined the allocation value of the Company s common stock per share of Pokka common stock through discussion among the Company and the respective merger parties, and the parties agreed to the average closing price of the Company s shares on the Tokyo Stock Exchange for the most recent one (1) month for the period from October 7, 2012 to November 6, 2012 (which is the day immediately prior to the day on which the resolution for the disposal of treasury stock was passed at the board of directors meeting) on the basis of the calculation method stated in II. Disposal of Treasury Stock, 6. Reasonableness of Disposal Terms and Conditions, (1) Basis and details for calculating the disposal amount. (iii) Overview of the Merger Parties (as of November 7, 2012) Surviving company Extinct company 1. Company name POKKA SAPPORO FOOD & Pokka Corporation BEVERAGE LTD. 2. Head office 2-29, Sakae 4-chome, Naka-ku, Nagoya, Aichi 2-29, Sakae 4-chome, Naka-ku, Nagoya, Aichi 3. Representatives Masatoshi Hori, President and Representative Director Akifumi Ito, President and Representative Director 4. Outline of businesses Beverage & food businesses, Restaurant business, Confectionery business, Manufacture and sales of beverages and foods; Procurement/sales, etc. Logistics business, etc. 5. Capital 10 million 2,525 million 6. Fiscal year-end December 31 March 31 7. Shareholder Sapporo Holdings Limited: Sapporo Holdings Limited: 98.8%; Others: 1.2% (3) Absorption-type merger between Pokka Sapporo (surviving company) and Sapporo Beverage (extinct company) (i) Absorption-type merger Resolution by the Board of Directors November 7, 2012 (Sapporo Beverage) November 7, 2012 (Pokka Sapporo) Date of contract of the merger agreement November 7, 2012 Resolution by the general meeting of shareholders November 30, 2012 (Sapporo Beverage) November 30, 2012 (Pokka Sapporo) Scheduled date of the merger (effective date) January 1, 2013 (planned) (ii) Allocation of Merger Considerations In conducting the absorption-type merger between Pokka Sapporo and Sapporo Beverage, Pokka Sapporo (surviving company), issues one share of common stock to the shareholders of Sapporo Beverage (extinct company), and allocates the whole shares to the Company, only shareholder of Sapporo Beverage. 11
(iii) Overview of the Merger Parties (as of November 7, 2012) Surviving company Extinct company 1. Company name POKKA SAPPORO FOOD & Sapporo Beverage Co., Ltd. BEVERAGE LTD. 2. Head office 2-29, Sakae 4-chome, Naka-ku, Nagoya, Aichi 20-1, Ebisu 4-chome, Shibuya-ku, Tokyo 3. Representatives Masatoshi Hori, President and Representative Director Masatoshi Hori, President and Representative Director 4. Outline of businesses Beverage & food businesses, Restaurant business, Confectionery Manufacture and sales of soft drinks, etc. business, Logistics business, etc. 5. Capital 10 million 5,421 million 6. Fiscal year-end December 31 December 31 7. Shareholder Sapporo Holdings Limited: Sapporo Holdings Limited: (4) Status of Surviving Company after the Mergers (from January 1, 2013) (planned) Surviving company 1. Company name POKKA SAPPORO FOOD & BEVERAGE LTD. 2. Head office 2-29, Sakae 4-chome, Naka-ku, Nagoya, Aichi 3. Representatives Masatoshi Hori, President and Representative Director 4. Outline of businesses Beverage & food businesses, Restaurant business, Confectionery business, Logistics business, etc. 5. Capital 5,431 million 6. Fiscal year-end December 31 V. Future Outlook The impact on the consolidated operating results due to the Disposal of Treasury Stock, Absorption-type Split and absorption-type mergers among the consolidated subsidiaries will be insignificant. (Reference) Forecast of Consolidated Earnings for the Year Ending December 31, 2012 (announced on August 7, 2012) and Actual Consolidated Results for the year Ended December 31, 2011 (Millions of yen) Year ending December 31, 2012 (Forecast) Consolidated net sales Consolidated operating income Consolidated ordinary income Consolidated net income 493,000 16,000 13,000 3,600 454,099 18,883 16,807 3,164 December 31,2011 Note: As stated in the Financial Result for the Three Months Ended March 31, 2012 Consolidated, the Company changed its accounting method (Method of accounting for sale) from the first quarter of the fiscal year ending December 31, 2012 and applied the new method retroactively to enable period-over-period comparisons and analysis. Therefore, the Company s consolidated net sales should be retroactively adjusted to 449,452 million for the fiscal year ended December 31, 2011. However, the figure in the above table is the value before the retroactive application. 12