The press releases on this website are provided for historical reference purposes only. Please note that certain information may have changed since the date of release.
January 28, 2003
Agreement to Make CIS Corporation a Wholly-Owned Subsidiary of Sony Corporation
Subsequent Merger with Existing Sony's Information System Subsidiary Planned
At their respective Board of Directors' Meetings held today, Sony Corporation ("Sony") and CIS Corporation ("CIS") have approved a decision to make CIS a wholly-owned subsidiary of Sony through a stock for stock exchange agreement. After obtaining approval at the CIS Shareholders' Meeting scheduled for March 27, 2003, it is planned to implement the stock for stock exchange on May 1, 2003. The intention is to then merge CIS with Sony's existing information system subsidiary, Sony Information System Solutions Inc. ("SISS"), to create a new company. The new company is targeted to begin operations in July 2003.
Sony is currently accelerating its drive to construct a global information system platform through a supply chain that applies advanced IT and the reform of processes for production, sales and accounting. SISS has been at the center of these efforts with the construction and maintenance of information systems and the provision of infrastructure services. However, as the need for the creation of a global information system platform has grown, key processes (information system planning, design as well as project management) require strengthening. The plan for CIS to become a wholly-owned subsidiary of Sony and the subsequent merger with SISS is intended to focus resources and enhance productivity in these areas. This will allow the creation of an advanced system platform for the entire Sony group as well as cutting information system costs groupwide. The idea is to promote a "System on Demand" service model which integrates all elements from network infrastructure to applications by applying sophisticated broadband technology.
CIS was founded in 1988 and has gained a reputation as a "Global IT Evangelist" introducing advanced IT methodology as a part of management innovation in Japan. The company rapidly built up expertise in system consulting and integration and made an OTC listing in June 2000. Since July 2001, when it formed a joint company with Sony for management and information consulting (GENCIS Consulting Inc.) CIS has developed partnerships with Sony and SISS. With the new agreement, CIS will now become a full member of the Sony Group and will be able to participate in the most advanced ongoing projects. This will give it an opportunity to maximize the skills and experience it has acquired and to develop a new level of high-quality consulting services.
Sony and CIS will then work toward the merger of SISS and CIS. The new company will combine skills and resources to create an integrated global information system platform for the entire Sony Group and to generate further efficiencies. The new company will also expand its existing IT consulting business.
CIS President Osamu Todaka is scheduled to become Representative Director and President of the new company. SISS President Kazuro Sato is scheduled to become Representative Director and Vice President of the new company.
1. Conditions of stock for stock exchange, etc.
(1) Stock for stock exchange schedule
(2) Stock for stock exchange ratio
Sony retained Morgan Stanley Japan Limited, and CIS retained Nomura Securities Co., Ltd. for advice on the analysis of the stock for stock exchange ratio and other relevant matters. Based on such advice and other considerations, Sony and CIS negotiated and came to the following agreement regarding the stock for stock exchange ratio.
Note that if there are any material changes in any of the various conditions upon which the stock for stock exchange ratio shown below was determined, Sony and CIS may decide to change the said ratio.
The CIS board of directors today resolved to cancel 5,000 shares of CIS treasury stock before the stock for stock exchange takes place. The stock for stock exchange ratio shown below has been calculated based on the number of CIS shares that will remain outstanding after the cancellation of treasury stock.
2. Summary of Parties
The above date for Sony and CIS are as of September 30, 2002 and June 30, 2002 respectively.
(15) Business results for the three most recent years (unit: millions of yen)
1.Sony split its shares at a ratio of two shares for each share on May 19, 2000.
2.CIS split its shares at the ratio of two shares for each share on October 20, 2000, and at the ratio of ten shares for each share on August 1, 2001.
3. Circumstances after stock for stock exchange