[Japan]LINE and Nomura Sign MOU to Consider Financial Business Alliance

2018.03.28 Corporate Announcement

TOKYO – March 28, 2018 – LINE Corporation ("LINE") and Nomura Holdings, Inc. ("Nomura") announced today that the two companies have executed a memorandum of understanding (the "MOU") as outlined below in order to begin considering a financial business alliance (the "Planned Alliance") focused on the securities business.

 

As a part of the Planned Alliance, the companies have agreed to consider establishing a joint venture company (the "JV Company") either under LINE and Nomura directly, or through their respective subsidiaries or affiliates. Through the JV Company, the companies aim to offer remote securities brokerage and remote securities investment consultation services over the LINE platform to the asset-building demographic.

 

The MOU outlines the general plan over how the companies will approach their consideration of the Planned Alliance and other essential matters. The establishment of the JV Company and actual implementation of the Planned Alliance will be conditioned upon an evaluation of the effects of the Planned Alliance, receiving authorizations from relevant agencies, receiving approvals from each company's organizations, a contract that sets forth the finalized details as agreed upon pertaining to the establishment and operation of the JV Company (the "Final Agreement"), and the execution of other agreements necessary to the Planned Alliance. The companies plan to execute the Final Agreement and determine the operational structure of the JV Company by the end of May 2018, and will make announcements promptly if any matters for disclosure arise.

 

1.Background and Purpose of the MOU

Nomura is a leading financial services group with a strong global franchise. The firm’s mission is to contribute to an affluent society through its expertise in the capital markets. Nomura aims to become the most trusted partner for its clients.

LINE, operating under its corporate mission of "Closing the Distance," provides its over 73 million monthly active users in Japan with high value-added services as the company moves forward with its all-inclusive Smart Portal strategy, through which the LINE messaging app serves as a gateway that seamlessly connects users to people, information, services, companies, and brands.

 

As LINE has begun expanding into the financial services business, the companies have entered the MOU to provide new financial solutions to address the latent need for financial services, with a focus on asset building for the existing users on the LINE platform, by leveraging the rich user base and the exceptional user interface and experience (UI/UX)* that LINE offers, combined with Nomura’s expertise in the financial business.

 

2.Joint Venture Company Overview

(1) Name (tentative): LINE Securities Corporation 

(2) Location:To be determined

(3) Representative:To be determined (two in total; one representative to be nominated by each company)

(4) Business:Offer remote securities brokerage and remote securities investment consultation services to the asset-building demographic

(5) Capital:To be determined

(6) Planned date of establishment:To be established May 2018 (tentative)

(7) Shareholding ratio:Line 51%, Nomura 49% (subject to further discussion between the two companies)

 

3.LINE Corporation Overview

(1) Name: LINE Corporation

(2) Location:JR Shinjuku Miraina Tower 23F, 4-1-6 Shinjuku, Shinjuku-ku, Tokyo

(3) Representative:Takeshi Idezawa, Representative Director, President, Chief Executive Officer

(4) Business:Provision and operation of the LINE messaging app and content and services made available on the LINE platform, in addition to other web service businesses and AI businesses

(5) Capital:JPY 92,369 million (as of December 31, 2017)

(6) Date of establishment:September 4, 2000

(7) Number of employees:1,716 (non-consolidated; as of October 31, 2017)

(8) Revenue:167,147 million yen (for the fiscal year ending December 31, 2017, calculated in accordance with IFRS)

 

4.Nomura Holdings, Inc. Overview

(1) Name: Nomura Holdings, Inc.

(2) Location:1-9-1 Nihonbashi, Chuo-ku, Tokyo

(3) Representative:Koji Nagai, President and Group CEO

(5) Business:Holding company

(5) Capital:JPY 594,493 million (as of September 30, 2017)

(6) Date of establishment:December 25, 1925

(7) Number of employees:28,857 (consolidated; as of September 30, 2017)

(8) Net revenue (after finance costs): 1,403,197 million yen (consolidated; for the fiscal year ending March 31, 2017; calculated in accordance with U.S. GAAP)

 

5.Future Projections

The effects of the Planned Alliance on the LINE and Nomura's respective consolidated earnings are undetermined at this point in time. However, the companies will promptly issue an announcement if the possibility of a material impact arises in the future.

 

* "User interface" (UI) means the appearance and design of a service, including the fonts, images, and design. "User experience" (UX) means the feeling of usability, reliability, and sense of comfort that a user feels through interacting with and otherwise experiencing the UI. UI/UX design is a design that has been created to prioritize the ease of use for those who use the service.