Z Holdings and LINE to Combine with Equal Spirit November 18, 2019 - PowerPoint PPT Presentation

Security Code ： 4689 Z Holdings and LINE to Combine with Equal Spirit November 18, 2019

Our Vision Provide the Best User Experience in Japan World-leading AI Tech Company Based in Japan and Asia 1

Our Business Model Maximize user actions with the power of AI No.1 No.1 # of Users # of Corporate Clients Matching needs through AI Conversion No.1 Payment E-Commerce O2O Advertising 2

Best Combination with Complementary Product and Service Portfolios Wide Reach Deep Engagement Largest Media Service Largest Communication Service User Base 67.4 mil people * 82.0 mil people * MAU MAU *Source: Nielsen “TOPS OF 2018: DIGITAL IN JAPAN”, *Source:2019/12 3Q Earnings Report Top 10 internet services in Japan 2018 Media SNS E-Commerce Fintech Advertising Messenger Service Base * Services listed above show our major services (not covering all the services) 3

4 Major Pillars for Synergy Strategies Marketing Business Expansion in User Base New Business ／ Fintech Business System Development 4

Marketing Business Scale Expansion and New Business Opportunities Further strengthen market position in Accelerate initiatives in domestic Internet Ads Market Integrated Marketing Solution Sales Promotion 30% 22% • One-stop brand new service combining from advertisement to sales promotion, bringing consumers 319.5 (¥B) CY2018 from online into the real-world to make purchases in （ CY2018 ） physical stores Internet Ads Market 8% （ Media Fee ） Official Account 1,448 (¥B) 108.2 (¥B) • Convey various types of targeted information to multiple （ CY2018 ） users that is not possible through email or social media promotions Source ： Dentsu “Advertising Expenditures in Japan (2018)” 5

Expansion in User Base Giant leap in transaction value by integration of LINE users and ZHD’s E-Commerce services Expansion of E-Commerce Business MAU 82.0 mil people Massive Referral Traffic 6

Fintech Business Maximize the Base and Develop Pillars for Fintech Business Security ／ FX Bank Insurance Credit Card Line Bank Preparatory Corp No. of cumulative No. of cumulative registered users registered users Base 20.0 mil 36.9 mil （ As of Nov. 17 th 2019 ） （ As of Sep. 30 th 2019 ） 7

New Business ／ System Development Accelerate and strengthen AI development fundamental base of all service line-up AI Base Resources (Engineers) Know-How (Experience) * Services listed above show our major services (not covering all the services) 8

Accelerating the Mid-Long Term Growth Japan/Asia based AI Tech Company Creating the Future by enhancing group synergies Consolidated Revenue of No.1 AI Tech Company in Approx. 1.2 (¥T) Japan and Asia 207.1 (¥B) （ Jan. 2018 ～ Dec. 2018 ） 954.7 (¥B) （ Apr. 2018 ～ Mar. 2019 ） FY18 将来 Future 9

Post-Merger Corporate Governance Valuing Corporate Governance with Equal Spirit in Conformity with the Principles of the CG Code Internal Directors Independent Outside Directors Z Holdings Z Holdings Corp. Z Holdings Corp. President and CEO Director Kentaro Kawabe Takao Ozawa LINE LINE Corp. LINE Corp. President and CEO Director and CWO Takeshi Idezawa Jungho Shin 10

Leadership at New Z Holdings President, Representative Director Representative Director and Co-CEO and Co-CEO Kentaro Kawabe Takeshi Idezawa 11

Post-Merger Corporate Structure (Planned) Consolidated （ telecom ） ＜ Governance ＞ 50% 50% ■ Internal Directors ： 6 ‐ ZHD ： 3 ‐ LINE ： 3 JV Other Shareholders ■ Independent Outside Directors ： 4 Listed on the New 1 st Section of TSE 12

Transaction Structure Summary Current Structure Step1 LINE to be unlisted through TOB Cash Cash 27.4% → 0 % 55.4 % 44.6 % 27.4 % 72.6 % Minority Minority Minority Shareholders Shareholders Shareholders LINE Shares LINE Shares Listed Minority Shareholders Listed *The structure is partially omitted or simplified *The procedure may be changed within the scope of the purpose of this merger and with the agreement of all parties concerned 13

Transaction Structure Summary Step ２ Step3 Z Holdings Shares owned by SBKK to be transferred to LINE Share exchange and LINE Business to be integrated under Z Holdings 50% 50% Consolidated LINE Shares or Cash JV （ old LINE ） Private ZHD Shares ZHD Shares Private Minority Shareholders 0% → 45 % （ LINE Business ） Minority Shareholders Listed Listed • Exchange Ratio (Z Holdings) 1 ： 11.75 (LINE) • Based on the ratio, number of outstanding shares will increase from 4.8 Transaction billion shares to 7.7 billion shares *The structure is partially omitted or simplified Summary ̶ All incremental shares are issued to JV *The procedure may be changed within the scope of the purpose of this merger and ̶ No. of treasury shares to be allocated is undecided with the agreement of all parties concerned 14

Timeline (Planned) Oct. 2020 Now end of 2019 - beginning of 2020 (Target) Jan. 2020 - Sep. 2020 Announcement Signing of DA Close (MOU) Various applications/examination/procedures • Anti-Trust Law （ Japan/Korea/Taiwan/U.S. etc. ） • Corporate Reorganization; TOB 15