Announcement of Absorption of Subsidiary in Accordance with Reorganization of Group Business

 
TIDMSON 
 
 

  Announcement of Absorption of Subsidiary in Accordance with Reorganization of Group Business 
 

  Sony Corporation ("Sony") today announced that it plans to implement reorganization as of April 1, 2010, to strengthen the network business within the Sony Group, in the form set forth below: 
 

  (1) Sony Computer Entertainment Inc., a wholly-owned subsidiary of Sony, will change its trade name to SNE Platform Inc. ("SNEP") and transfer certain of its business, mainly consisting of the planning, development, manufacturing and sales of home-use/portable game consoles and software, to a new subsidiary (the trade name of which will be Sony Computer Entertainment Inc.) to be established by company split. 
 

  (2) Sony will merge with SNEP (which, post transfer, will primarily engage in the planning, development and operational business concerning the platforms and services for the network business). 
 

  1. Purpose of the merger 
 

  As part of the reorganization related to the network services business within the Sony Group, Sony will aim to efficiently operate and further strengthen its business through integration of some portions of the network services business of Sony and Sony Computer Entertainment Inc. 
 

  2. Conditions of the merger 
 
(1)   Schedule of the merger 
      Approval by the representative 
      corporate executive officer     February 24, 2010 
      Execution of merger agreement   February 24, 2010 
      Effective date of merger        April 1, 2010 (scheduled) 
 
 

  * Sony and SNEP will perform the merger without obtaining approval of the merger agreement by its shareholders pursuant to the provisions related to the small-scale merger set forth in Paragraph 3 of Article 796 and the summary form merger set forth in Paragraph 1 of Article 784 of the Japanese Companies Act. 
 

  (2) Method of the merger 
 

  Sony will absorb SNEP and become the surviving company; SNEP will subsequently be dissolved. 
 

  (3) Details of the allotment upon the merger 
 

  As Sony owns all shares of SNEP, there will be no issuance of new shares, increase of share capital or cash payment upon the merger. 
 

  (4) Treatment of stock acquisition rights and bonds with stock acquisition rights of absorbed company 
 

  SNEP has not issued any stock acquisition rights or bonds with stock acquisition rights. 
 

  3. Summary of Parties (numbers shown below are those as of March 31, 2009 or for the fiscal year ended March 31, 2009) 
 
(1)    Trade name                 Sony Corporation(Surviving          SNE 
                                  Company)                            Platform Inc.(Absorbed 
                                                                      Company) (Note 1) 
=------------------------------------------------------------------------------------------------------ 
(2)    Business                   Manufacture and sale                Planning, development 
                                  ofelectronic and                    andoperational 
                                  electrical machinesand              business concerningthe 
                                  equipment                           platforms and services 
                                                                      for thenetwork 
                                                                      business (Note 1) 
=------------------------------------------------------------------------------------------------------ 
(3)    Date ofincorporation       May 7, 1946                         November 16, 1993 
=------------------------------------------------------------------------------------------------------ 
(4)    Location of head office    7-1, Konan 1-chome,                 6-21, Minamiaoyama 
                                  Minato-ku,Tokyo                     2-chome,Minato-ku, 
                                                                      Tokyo 
=------------------------------------------------------------------------------------------------------ 
(5)    Title                      Howard                              Kazuo 
       and name ofRepresentative  StringerRepresentative              HiraiRepresentative 
                                  CorporateExecutive  Officer         Director 
=------------------------------------------------------------------------------------------------------ 
(6)    Stated capital             ¥ 630,765 million                   ¥ 1,933 million 
=------------------------------------------------------------------------------------------------------ 
(7)    Number of sharesissued     1,004,535,364 shares                38,500 shares 
=------------------------------------------------------------------------------------------------------ 
(8)    Fiscal year-end            March 31                            March 31 
=------------------------------------------------------------------------------------------------------ 
(9)    Major shareholders         1 Moxley & Company          11.81% 
=------------------------------------------------------------------------------------------------------ 
       and shareholding           2 Japan Trustee 
                                  Services Bank, 
=------------------------------------------------------------------------------------------------------ 
       ratios                     Ltd. (Trust Account)        6.74% 
=------------------------------------------------------------------------------------------------------ 
                                  3 Japan Trustee Services 
                                  Bank, Ltd. 
=------------------------------------------------------------------------------------------------------ 
                                  (Trust Account 4G)          6.08%   Sony Corporation             100% 
=------------------------------------------------------------------------------------------------------ 
                                  4. The Master Trust Bank 
                                  of Japan, Ltd. 
=------------------------------------------------------------------------------------------------------ 
                                  (Trust Account) 
=------------------------------------------------------------------------------------------------------ 
                                                              5.04% 
=------------------------------------------------------------------------------------------------------ 
                                  5 State Street 
                                  Bank and Trust 
=------------------------------------------------------------------------------------------------------ 
                                  Company                     2.68% 
=------------------------------------------------------------------------------------------------------ 
(10)   Net assets                 ¥ 2,964,653 million                 ¥ 
                                  (consolidated)                      (10,472 
                                                                      million)(non-consolidated 
                                                                      ) (Note 1) 
=------------------------------------------------------------------------------------------------------ 
(11)   Total assets               ¥                                   ¥ 
                                  12,013,511                          209,907 
                                  million(consolidated)               million(non-consolidated) 
                                                                      (Note 1) 
=------------------------------------------------------------------------------------------------------ 
(12)   Net assets pershare        ¥ 2,954.25 (consolidated)           -- 
=------------------------------------------------------------------------------------------------------ 
(13)   Net sales                  ¥ 7,729,993 million                 ¥ 
                                  (consolidated)                      985,066 
                                                                      million(non-consolidated) 
                                                                      (Note 1) 
=------------------------------------------------------------------------------------------------------ 
(14)   Operating income (loss)    ¥ (227,783 million)                 ¥ 
                                  (consolidated)                      37,459 
                                                                      million(non-consolidated) 
                                                                      (Note 1) 
=------------------------------------------------------------------------------------------------------ 
(15)   Ordinary income (loss)     ¥                                   ¥ 
                                  (174,955                            28,235 
                                  million)                            million(non-consolidated) 
                                  (consolidated)(Note                 (Note 1) 
                                  2) 
=------------------------------------------------------------------------------------------------------ 
(16)   Net income (loss)          ¥ (98,938 million)                  ¥ 
                                  (consolidated)                      9,550 
                                                                      million(non-consolidated) 
                                                                      (Note 1) 
=------------------------------------------------------------------------------------------------------ 
(17)   Net income (loss)          ¥ (98.59) (consolidated)            ¥ 
       per share                                                      248,064.62(non-consolidated) 
                                                                      (Note 1) 
=------------------------------------------------------------------------------------------------------ 
=------------------------------------------------------------------------------------------------------ 
 
 

  Note 1: Upon the company split described in the introductory paragraph above, SNEP will become a corporation primarily engaging in the planning, development and operational business concerning platforms and services for the network business. This merger will be between SNEP and Sony after SNEP completes such company split. The net sales of the business (relating to the company primarily engaged in the planning, development and operational business concerning the platforms and services for the network business), which will be succeeded by Sony in accordance with the merger as of April 1, 2010, is ¥1,526 million for the fiscal year ended March 31, 2009. 
 

  Note 2: Since Sony prepares its consolidated financial statements in accordance with accounting principles generally accepted in the United States, income (loss) before income taxes is stated in place of ordinary income (loss). 
 

  4. Circumstances after the merger 
 

  There will be no change in the trade name, the location of the head office, the title and name of representatives, the business, the stated capital and fiscal year-end of Sony upon the merger. 
 

  5. Outlook 
 

  No material impact on Sony's consolidated financial results is anticipated in connection with this merger.