Today, Nippon Telegraph and Telephone Corporation (headquartered in Chiyoda-ku, Tokyo; Jun Sawada, President & CEO; hereinafter referred to as "NTT") and Tokyo Century Corporation (headquartered in Chiyoda-ku, Tokyo; Shunichi Asada, President & CEO ; hereinafter referred to as "Tokyo Century") agreed to form a capital and business tie-up. Based on this tie-up, the two companies will strive to expand their leasing and financing business and their business in growth fields, by fusing their strengths and pursuing collaboration.

Information

1. Background and objective

As announced in "Your Value Partner 2025," its medium-term management plan, NTT is making full use of the human, technical, and asset resources of the NTT Group in promoting collaborative projects with various service suppliers and the B2B2X model to support digital transformation (DX) among service suppliers. Through these activities, it is aiming for contribution to the building of a "smart world."

Since its merger in April 2009, Tokyo Century has been pursuing reform for a shift away from business revolving around financing, in a free management environment not bound by restrictions. It is striving to develop feasible business based on co-creation with first-rate partners, and to expand its new business domains. At the same time, it aspires to an ongoing creation of new financial and other services assisting the solution of social issues as a business company with financial functions, and to the construction of a both high-quality and solid business portfolio.

NTT and Tokyo Century have had a relationship of collaboration thus far as well. For example, the two launched Nippon Car Solutions Co., Ltd. by integration of their auto-leasing operations in 2005 and fostered its growth into one of the top auto service companies in the industry. The conclusion of the agreement today resulted from mutual consultation between the two with a view to further reinforcing their relationship. NTT has a solid customer base inside and outside Japan, and is in possession of a globally recognized brand, human resource power, and research and development capabilities that are among the best in the world. Tokyo Century has excellent capabilities of asset valuation and management, and provides both flexible and diverse services in financial and other fields. They reached a shared perspective that forming a capital and business tie-up, fusing their strengths, and promoting collaboration would help to heighten the corporate value of their respective companies.

2. Outline of approaches

(1) Description of the tie-up

As a first step in their capital and business tie-up, NTT and Tokyo Century decided to spin off part of the leasing business and global business of NTT Finance Corporation (headquartered in Minato-ku, Tokyo; Yoshikiyo Sakai, President; hereinafter referred to as NTT Finance), the core financial company in the NTT Group, and establish it as a joint venture of the three companies NTT, NTT Finance, and Tokyo Century, in order to bolster and augment their leasing and financial business in Japan and other countries.
In specific terms, the new company established by NTT Finance (NTT TC Leasing Co., Ltd (planned)) will first succeed to part of the leasing business and global business of NTT Finance by the method of absorption-type split upon spin-off, and then Tokyo Century will transform the new company into a joint venture by acquiring shares in it. To ensure that the NTT Group and Tokyo Century have the same level of interest in the new company, Tokyo Century intends to acquire shares equivalent to 50 percent of the total number of outstanding shares.
The two sides will endeavor to heighten the corporate value of the new company by fusing the credibility and research and development powers of the NTT Group, the leasing business capabilities nurtured by NTT Finance, and, Tokyo Century's know-how in the area of financial and other service solutions and its ability to provide them. At the same time, they are going to take approaches to effective use of the assets of the NTT Group.

In addition, NTT and Tokyo Century are going to make efforts to create new business by fusing their respective strengths in the business domains where they are both active. At present, the two are beginning detailed studies in the global, real estate, and environment & energy fields. They are also going to examine the prospects for collaboration, in forms such as joint development of asset business, in growth fields including digitization and the Internet of Things (IoT).

For promotion of the tie-up, NTT is planning to acquire 12,302,800 shares of Tokyo Century's common stock (10 percent of the total outstanding shares after the aforementioned third-party allocation implemented by Tokyo Century) by underwriting part of the allocation.

(2) Other matters

NTT is planning to transform NTT Finance (in which NTT currently holds 92.17 percent of the stock) into a wholly-owned subsidiary after part of its leasing and global businesses is split off, and to make it into a supplier of functions in the areas of billing and group financing to the NTT Group. Thereafter, it intends to acquire NTT Finance's stock in the new company from NTT Finance, and to hold 40 percent of the total number of outstanding shares of the new company's stock.

3. Outline of the concerned companies

(1) Outline of NTT

①Name	Nippon Telegraph and Telephone Corporation
②Address	1-5-1 Otemachi, Chiyoda-ku, Tokyo
③Representative Director	Jun Sawada, President & CEO
④Business	Formulation of management strategy for the whole NTT Group and promotion of basic research and development
⑤Paid-in capital	JPY937,950,000,000
⑥Date of establishment	April 1, 1985

(2) Outline of Tokyo Century

①Name	Tokyo Century Corporation
②Address	3 Kanda-neribeicho, Chiyoda-ku, Tokyo
③Representative Director	Shunichi Asada, President & CEO
④Business	Leasing, installment sales, and operating loans, and other business
⑤Paid-in capital	JPY34,231,000,000
⑥Date of establishment	July 1, 1969

(3) Outline of NTT Finance

①Name	NTT Finance Corporation
②Address	1-2-70 Konan, Minato-ku, Tokyo
③Representative Director	Yoshikiyo Sakai, President
④Business	Leasing, global business, financing, credit card business, and billing
⑤Paid-in capital	JPY16,770,000,000
⑥Date of establishment	April 11, 1985

(4) Outline of the new company

①Name	NTT TC Leasing Co., Ltd (planned)
②Address	1-2-70 Konan, Minato-ku, Tokyo
③Representative Directors	Akihiko Okada, Chairman (planned) Akihiro Naruse, President (planned)
④Business	Leasing and global business
⑤Paid-in capital	JPY10,000,000,000 (planned)
⑥Date of establishment	Late February 2020 (planned)
⑦Holding rates	NTT Group - 50% (NTT - 40%, NTT Finance - 10%), Tokyo Century ? 50%