Sept. 30, 2016
To Whom it May Concern:
Company

Coca-Cola West Co., Ltd.
Representative
Tamio Yoshimatsu
Director and President( T S E / F S E
C o d e2 5 7 9 )Director/Senior Exec.Officer,
Inquiries
Yasunori Koga
Representative

Planning & Finance Division（TEL 092-641-8774）
Com pany Coca- Col a Ea st Japan Co. , Lt d.
Representative Representative
Calin Dragan
Director and CEO( T S EC o d e2 5 8 0 )Director, Head of
Inquiries
Naruhiko Kawamoto
Corporate Administration（TEL 03-5575-3749）

Announcement Regarding Proposed Integration and Share Exchange Agreement between
Coca-Cola West Co., Ltd. and Coca-Cola East Japan Co., Ltd., and Shift to Holding Company
Structure through Company Split, Change of Trade Name and Partial Amendment of Articles
of Incorporation of Coca-Cola West Co., Ltd.
Integrated Company to be Named Coca-Cola Bottlers Japan Inc.

Coca-Cola West Co., Ltd. (head office: Fukuoka City, Fukuoka Prefecture; hereinafter referred to as “CCW”)
and Coca-Cola East Japan Co., Ltd. (head office: Minato-ku, Tokyo; hereinafter referred to as “CCEJ”) havebeen engaged in discussions and deliberations regarding a potential business integration in the spirit of equal
partnership, based on the “Announcement of Memorandum of Understanding Regarding Business Integration”
released on April 26, 2016. As a result of these discussions, both companies have agreed to integrate theirbusinesses (hereinafter referred to as the “Business Integration”) through a combination of a share exchange
and absorption-type company split with April 1, 2017 as the expected effective date (hereinafter referred to as
the “Effective Date”). The Coca-Cola Company (hereinafter, “TCCC”) also expressed its support of thisbusiness integration as the franchisor of Coca-Cola branded products in Japan.

The name of the newly established company as a result of this business integration will be Coca-Cola Bottlers
Japan Inc. (hereinafter referred to as the “CCBJI”) with its registered address in Fukuoka and headquarters
located in Tokyo. The CCBJI is approximately 1 trillion yen in revenue based on 2015 financial results of
CCW and CCEJ, and to become the world’s 3rd largest Coca-Cola bottler in terms of revenue. CCBJI willcontinue to proceed on a path of business transformation, building on the previous efforts of CCW and CCEJ,
with a focus on serving customers and consumers better, developing employee capabilities, and promoting
community-focused initiatives.

1Mr. Tamio Yoshimatsu (hereinafter “Mr. Yoshimatsu”), current Representative Director and President of CCW, is
expected to be appointed as the Representative Director and President of CCBJI and CCEJ will nominate asecond Representative Director. This will be Mr. Vikas Tiku (hereinafter “Mr. Tiku”) who will be nominated as
Representative Director, CFO and General Manager of Transformation. Mr. Tiku, currently CFO for Asia
Pacific of TCCC and a director who is not an Audit and Supervisory Committee member of CCW, is expected tostep down from both of his current positions and will be seconded to join CCEJ. He will lead the integration
preparation efforts of the two companies until the Effective Date.

CCBJI will reflect the best from community-based Japanese bottlers as well as the global best practices of the
Coca-Cola system. In line with this principle, CCW, CCEJ and TCCC will have balanced representation on
CCBJI’s Board of Directors, with nine directors including two Representative Directors. An integration Steering
Committee led by the presidents of CCW, CCEJ and Coca-Cola (Japan) Company (hereinafter “CCJC”) will beestablished to lead the integration effort, make strategic decisions regarding CCBJI’s business plan, optimalgroup structure, and the realization, timing and approach of integration synergies in order to focus on achieving
sustainable growth for CCBJI and the Coca-Cola system in Japan. Mr. Tiku will participate in the Integration
Steering Committee as General Manager of Transformation. The integration is expected to deliver costsynergies of 20 billion yen over the next three years (based on income before adjustment of taxes, etc.),
pending validation by the Integration Steering Committee. Members of the integration planning team will also
represent a balance of representation from CCW and CCEJ.

The Business Integration is subject to approval at the general meetings of shareholders of both companies, theapproval of relevant governmental authorities, and other conditions.

I. Background, Objective, etc. of the Business Integration
1. Background and objective of integration

CCW was established in 1960 as Nichibei Inryo Co., Ltd. (later changed to Kitakyushu Coca-Cola BottlingCo., Ltd.) as a Coca-Cola bottler based mainly in the Northern Kyushu area and went on to integrate withfive other bottlers beginning in 1999. It currently serves 22 prefectures across the regions of Kinki,
Chugoku, Shikoku, and Kyushu, representing a total population of 45 million. CCW’s sales volumes
represent approximately 35% of total Coca-Cola branded products sold in Japan.

CCEJ was established in July 2013, through a business integration of four Coca-Cola bottlers in the Kanto
and Tokai regions, including the former Tokyo Coca-Cola Bottling Company, the first Coca-Cola bottler inJapan, founded in 1956. In April 2015, Sendai Coca-Cola Bottling Co., Ltd. was also merged with CCEJ,
expanding its sales territories to the South Tohoku, Kanto, and Tokai regions, including Tokyo and 15
prefectures, and representing a population of approximately 66 million. CCEJ’s sales volumes represent
approximately 51% of total Coca-Cola branded products sold in Japan.

2

In the Japanese soft drinks industry, the requirement of customers and consumers have continued to
evolve, with a challenging business environment driven by fierce competition among the industry players.

The two companies had been reinforcing ties as entities belonging to the Coca-Cola system in Japan in thearea of sales, manufacturing and procurement, and have recently been involved in discussions to proceedwith a business integration to grasp new business opportunities and realize sustainable growth amidst a
tough business environment. Both companies have now reached the conclusion that integration will allow
the building of a stronger business foundation and increase value for all stakeholders—including
consumers, customers, suppliers, shareholders and employees of the two entities—by delivering synergies,
concentrating the know-how accumulated in both entities, for example, customer-centric sales andmarketing activities as well as improvement of production efficiency in manufacturing, and creating an
operating structure as the third largest Coca-Cola bottler in the world in terms of revenue, enabling us torespond with speed to the increasingly competitive market.

Through the business integration, CCBJI will pursue a strategy of combining topline growth with aggressive
realization of cost synergies and productivity for bottom line delivery, while building and enhancing
capabilities to become a world-class Japanese bottler. CCBJI is expected to generate 20 billion yen ofsynergies (based on income before adjustment of taxes, etc.) over the course of three years, by leveraging
the strengths of the two entities’ community-based commercial operations, together with greater costcompetitiveness in supply chain, transformed business processes, optimal human resource allocation andan overall review of how we operate as a Coca-Cola system in Japan.

CCBJI will continue to focus more than ever on community-based business activities and social
contribution efforts in order to work in harmony with and succeed together with the local community.

We are confident that this business integration will accelerate the transformation of the Coca-Cola system
in Japan and contribute to the development of the entire beverage industry by increasing our competitive
advantage in the beverage market.

2. Overview and scheme of the business integration
The business integration will be executed through the following method.
Pursuant to the resolution of the Board of Directors meetings held today, CCW and CCEJ concluded, as oftoday, the integration agreement (hereinafter referred to as the “Integration Agreement”) and the shareexchange agreement (hereinafter referred to as the “Share Exchange Agreement”) regarding the Share
Exchange (“hereinafter referred to as the “Share Exchange”) with CCW as the sole parent company and
CCEJ as the wholly-owned subsidiary in Share Exchange.

Furthermore, CCW will execute anabsorption-type company split (hereinafter referred to as the “Company Split”) that transfers the rights andobligations of all of CCW’s businesses (hereinafter referred to as the “Business”) other than its groupmanagement/administration operations and the management of its assets to a new wholly-owned
subsidiary named as New CCW Establishment Preparation Co., Ltd.(hereinafter “New CCW”), in order for
3

CCW to shift to a holding company structure in relation to the business integration. This holding company
will change its name to CCBJI and continue trading under the securities code of the previous CCW (2579).
New CCW and CCEJ will be subsidiaries of CCBJI.

CCEJ’s common shares will be delisted from the first section of the Tokyo Stock Exchange (hereinafter“TSE”) as of March 29, 2017 (last date of transaction will be March 28), ahead of the Effective Date of the
Share Exchange (April 1, 2017 (scheduled)).

(１) Structure of the integration
Now
Establish New
CCW

Establish new CCW as a wholly-owned subsidiary of CCW.
Share Exchange

Share Exchange with CCW as sole parent company and CCEJ as wholly-owned
subsidiary in Share Exchange.
Company split

Absorption-type split transaction, with CCW as the splitting stock company and New
CCW as the succeeding stock company, subject to the entry into force of the Share
Exchange.
(Note) CCW maintains ownership of Q’sai Co., Ltd.

4

After execution

Change CCW’s trade name to CCBJI, and change New CCW’s trade name to“Coca-Cola West Co., Ltd.” The change of trade name to CCBJI is an integral part ofthis integration by using holding company structures and implemented
simultaneously with the Share Exchange.
(Note) In addition to New CCW and CCEJ, Q’sai is also included as subsidiary of
CCBJI.

(２) Changes to CCW’s trade name and amendments to the Articles of Incorporation
CCW will change its trade name on the Effective Date and perform necessary amendments to the
Articles of Incorporation subject to the entry into force of the Company Split as well as amendment of
its Articles of Incorporation as a holding company.
New CCW’s trade name will be “Coca-Cola West Co., Ltd.” as of the Effective Date
Matters regarding amendments to CCW’s Articles of Incorporation including the trade name change
are expected to be resolved at its Annual General Shareholders’ Meeting scheduled at the end of
March, 2017.

(３) Electing Directors
The number of directors of CCBJI as of the Effective Date will be nine, including Directors serving on
the audit and supervisory committee. CCW, CCEJ and TCCC will have balanced representation on
CCBJI’s Board of Directors. The nominations for nine directors assuming board of director of CCBJI
as of the Effective Date, including two Representative Directors, Mr. Yoshimatsu, current
Representative Director and President of CCW and Mr. Tiku, currently TCCC’s CFO for Asia Pacificand a director who is not an Audit and Supervisory Committee member of CCW, will be resolved at
the Annual General Shareholders’ Meeting scheduled at the end of March 2017. Candidates for
Director other than Mr. Yoshimatsu and Mr. Tiku (including Directors serving as Audit and Supervisory
Committee members) will be announced as soon as they are finalized.

３．Scheduled dates with regard to the integration *dates will be updated per Aota-san’s version
Conclusion of the MOU

April 26, 2016

BOD for approval of the Integration Agreement, the Share
Exchange Agreement, establishment of New CCW and
Absorption-Type Company Split Agreement
Conclusion of Integration Agreement, Share Exchange
Agreement

September 30, 2016

Establishment of New CCW

October 27, 2016 (scheduled)

Conclusion of Absorption-Type Company Split Agreement
regarding the company split

October 31, 2016 (scheduled)

5

September 30, 2016

Annual General Shareholders’ Meeting (CCW)

End of March, 2017 (scheduled)

Annual General Shareholders’ Meeting (CCEJ)

End of March, 2017 (scheduled)

Final date of transaction (CCEJ)

March 28, 2017 (scheduled)

Date of delisting (CCEJ)

March 29, 2017 (scheduled)

Effective date of Share Exchange

April 1, 2017 (scheduled)

Effective date of company split (CCW)

April 1, 2017 (scheduled)

Date of trade name change (CCW)

April 1, 2017 (scheduled)

４．Structure etc. after the integration(１) Location
The registered address of CCBJI will be Higashi-ku, Fukuoka City, Fukuoka Prefecture and theheadquarters will be located in Tokyo.

(２) Governance Structure
CCBJI will be a company with an audit and supervisory committee.

(３) Board of Directors
The Board of Directors of CCBJI will consist of a total of 9 directors, including 4 directors serving on
the audit and supervisory committee.

Ⅱ．The Share Exchange
１．Overview of the Share Exchange(１) Date of the Share Exchange
Please see “I. Background and Objective of the Integration and Other Matters 3. Scheduled dates
with regard to the integration” above.

(２) Method of Share Exchange
Shares will be exchanged with CCW as the sole parent company and CCEJ as the wholly-owned
subsidiary of the Share Exchange. Holders of CCEJ common share will receive CCW’s commonshares.
The effectuation of this Share Exchange is subject to approval at the Annual General Shareholders’Meeting of CCW and CCEJ respectively, scheduled at the end of March 2017.

(３) Allotment in the Share Exchange

Allotment in the Share Exchange
6

ＣＣＷ

ＣＣＥＪ

1

0.75

(Note 1) Ratio of allotment in the Share Exchange (hereinafter “Share Exchange Ratio”)
0.75 share of CCEJ’s common stock will be allotted to one common share of CCW. However, CCEJ
shares owned by CCW (18,576 shares (as of June 30, 2016) will not be subject to the allotment in the
Share Exchange.
The Share Exchange Ratio may be modified in case of circumstances that occur or are discovered that
may have significant impact on the calculation of the Share Exchange Ratio above upon discussion andagreement by both parties.
(Note 2) The number of CCW’s new shares to be issued upon the Share Exchange (Scheduled)
Number of shares to be newly issued upon the Share Exchange: 95,118,264 of commons stock(planned)
The number of shares described above has been calculated based on CCEJ’s issued shares(127,680,144 shares), CCEJ’s treasury shares (837,216 shares), and CCEJ shares owned by CCW(18,576 shares) all as of June 30, 2016.
Moreover, the actual number of shares described above to be issued by CCW may fluctuate as CCEJ
will accept exercise of all share acquisition rights issued by CCEJ even or after the date of execution of
the Integration Agreement as described in (4) below and plans to retire all treasury shares to be in
CCEJ’s possession (including shares to be acquired by CCEJ in response to the demand fromdissenting shareholders to purchase shares as per Article 785 of the Companies Act, the rights of thedissenting shareholders exercised in relation to the Share Exchange) up to the time immediately prior towhen CCW will acquire all of CCEJ’s issued shares through the Share Exchange.
(Note 3) Treatment of fractional shares
The following options are available to shareholders in possession of odd lots of CCW shares as a resultof the Share Exchange:
1. Demanding purchase of odd lots (sale of shares less than 100)
Allows the shareholder to demand CCW to purchase the shareholder’s holdings of CCW’s odd
lots based on the rule stipulated in Article 192, Clause 1 of the Companies Act.
2. Adding to holdings of shares less than 1 unit (purchase to constitute 100 shares)
Allows the shareholder, except for the case where CCW does not have treasury shares in number
subject to the demand by the shareholder, to demand CCW to sell its shares to the shareholder sothat the CCW shares in the possession of the shareholder constitute 1 unit (100 shares) by adding
to the odd lots based on rules stipulated in Article 194, Clause 1, of the Companies Act.
(Note 4) Treatment of shares less than 1 share
Shareholders to be allotted CCW shares that do not constitute 1 share as a result of the Share Exchange
shall be paid the amount equivalent to the share of less than 1 share and will not receive allocation ofshares in accordance with Article 234 of the Companies Act or other relevant laws and ordinances.

(４) Treatment of share acquisition rights and bonds with share acquisition rights as a result of the Share
Exchange

CCEJ, at its own expense, may acquire all the issued share acquisition rights upon the consent fromthe holders of the share acquisition rights. (However, the acquisition price of one share acquisitionright shall be below the value calculated by following method: market value of one CCEJ commonshare multiplied by 100, minus JPY 100.) CCEJ may also elect to accept the exercise of all shareacquisition rights by the holders of the share acquisition rights in accordance with the provisions of
the relevant Issuance Guidelines for Share Acquisition Rights. Any share acquisition rights that are
not acquired by CCEJ as described above and are not exercised by the holders by the final date of7the exercise period described in Issuance Guidelines for Share Acquisition Rights or by the date
immediately before the Effective Date, whichever is earlier, will be acquired free of charge and retired
by CCEJ, as stipulated in the Issuance Guidelines for Share Acquisition Rights and the relevantallotment agreement between CCEJ and the holders by the date immediately before the Effective
Date.

(５) Distribution of surplus
The shareholders or registered pledgees of shares of either entity recorded or entered in the final
shareholders register of December 31, 2016, are scheduled to receive payment of year-end dividend
subject to resolution by the respective Annual General Shareholders’ Meeting.

2. Rationale etc. regarding allotment details of the Share Exchange(１) Rationale and reason for allotment
In order to secure fairness and validity in the analysis of the Share Exchange Ratio used in the
Share Exchange, described above in Ⅱ．１．
（３）
“Allocation content of the share exchange,” it
was decided that CCW and CCEJ would each request a third party independent of either entity toanalyze the share exchange ratio. CCW chose SMBC Nikko Securities Inc. (hereinafter, “SMBC
Nikko Securities”) and CCEJ chose JPMorgan Securities Japan Co., Ltd. (hereinafter, “J.P. Morgan”)
as their respective third-party financial advisor.
Each party requested its respective third-party financial advisor to calculate the Share Exchange
Ratio to be used in the Share Exchange, and by referencing the said results said analysis and in lightof due diligence results, etc., proceeded with careful negotiations and discussions regarding theShare Exchange Ratio with comprehensive consideration for the financial status, status of assets,
future outlook, etc., and reached a final consensus on the validity of the Share Exchange Ratio. The
Share Exchange Ratio was finalized and agreed to at the respective Board of Directors meetings
held today.

(２) Matters of analysis(i) Names of the financial advisors and relationships with both companies
CCW’s financial advisor, SMBC Nikko Securities, and CCEJ’s financial advisor, J.P. Morgan, are both
independent of CCW and CCEJ, are not related parties of CCW or CCEJ, and do not have any
significant vested interest worthy of indication with regard to the Share Exchange.

(ii) Overview of the analysis(SMBC Nikko Securities)
SMBC Nikko Securities has adopted the market value method (September 29, 2016 will be thereference date, average closing prices of one month and three month periods prior to the referencedate, as well as the average closing prices of the period from August 15, 2016, which is the business8

day immediately after the Second Quarter Earnings Release of FY2016 for both entities, up to thereference date) in light of the fact that CCW is listed on TSE and the Fukuoka Stock Exchange(hereinafter, “FSE”) and CCEJ on TSE, thus each has a market value. SMBC Nikko Securities has
adopted the discounted cash flow method (hereinafter, “DCF method”) in order to reflect the status of
future business activities in the computation.
Moreover, the share exchange ratio report by SMBC Nikko Securities was created to serve as
reference information for CCW to determine the Share Exchange Ratio and does not represent its
views on the fairness of the Share Exchange Ratio agreed to and finalized between the two entities.
Below are the computation results of the number of CCW’s common shares to be allotted for eachcommon share of CCEJ based on each valuation method.
Adopted method

Share Exchange Ratio computation result

Market value

0.74 ～ 0.78

DCF

0.67 ～ 0.85

In principle, SMBC Nikko Securities has taken the information provided from the two entities as wellas publicly disclosed information as provided in computing the Share Exchange Ratio, and assumed
that such documents and information, etc., are all accurate and complete, and have not conductedindependent studies on their accuracy or completeness. SMBC Nikko Securities has not conductedindependent evaluations, appraisals or valuations of the assets and liabilities (including contingent
liabilities) of the two entities nor their affiliates, including individual analysis and evaluation of each
asset or liability, and has not requested any third party to perform appraisals or valuations thereof.
Additionally, it is assumed that the financial forecasts of the two entities have been rationally preparedby their respective senior management, based on the best predictions and judgment possible at thistime. The Share Exchange Ratio computation by SMBC Nikko Securities is based on informationand economic conditions current as of September 29, 2016.
Consequently, CCW’s business plan from FY2016 to FY2025, which SMBC Nikko Securities used
as one of its computation assumptions in the DCF method, includes business years with significant
earnings fluctuations. Specifically, in FY2016 ending in December 2016, 43.7% operating income
growth is estimated year-on-year due to robust growth of the soft drink business and improvement ofbusiness quality, and in FY2017 ending in December 2016, significant growth is expected year-onyear due to the one-time impact of extraordinary losses, etc., from the Kumamoto Earthquake.
CCEJ’s business plan from FY2016 to FY2025 which SMBC Nikko Securities used as the basis for
its computation using DCF method also includes business years with major fluctuations. Specifically,
considerable earnings growth is expected year-on-year in FY2016 and FY2019 as a result of
streamlining mainly in the supply chain area such as manufacturing and logistics/distribution and cost
reduction efforts, as well as the realization of investment returns, etc.

(J. P. Morgan)
J.P. Morgan performed an average share price analysis on the common stock of CCW and CCEJ, as
well as a comparable companies analysis and a discounted cash flow (“DCF”) analysis based on
9publicly available information pertaining to CCW and CCEJ, forecasts pertaining to CCEJ preparedand furnished to J.P. Morgan by the management of CCEJ, and forecasts pertaining to CCW
prepared by the management of CCW and adjusted by the management of CCEJ. The ranges of the
Share Exchange Ratio for the Share Exchange based on each method are as indicated below. The
ranges of the Share Exchange Ratio below show the range of the number of shares of the CCW
common stock to be allotted for each share of common stock of CCEJ.
In performing the average share price analysis, J.P. Morgan used September 29, 2016 as the basedate (“Base Date”) and reviewed the per share closing price trading data of the common stock of
CCW and CCEJ on the Base Date and the average daily closing share prices of CCW and CCEJ on
the Tokyo Stock Exchange (“TSE”) for one-month, three-month and six-month periods ending on theBase Date.
The business plan of CCW for fiscal years ending December 2016 to December 2025 which served
as the basis for J.P. Morgan’s DCF analysis did not have any fiscal year with an expected substantial
earnings increase or decrease. On the other hand, the business plan of CCEJ for fiscal years ending
December 2016 to December 2025 which served as the basis for J.P. Morgan’s DCF analysis
included fiscal years with an expected substantial earnings increase. Specifically, the earnings forfiscal years ending December 2016 and December 2019 are expected to increase substantially on a
year-on-year basis, due to, among other things, improved efficiency in the field of supply chain suchas manufacturing, logistics and delivery as well as cost reduction and investment effects.
Analysis Method

Range of the Share Exchange Ratio

1

Average Share Price Analysis

0.70 ～ 0.80

2

DCF Analysis

0.69 ～ 0.80

3Comparable Companies Analysis

0.55 ～ 0.70

J.P. Morgan delivered to the Board of Directors of CCEJ a written opinion dated September 29, 2016
that, as of such date, and based on and subject to the factors and assumptions set forth in thatwritten opinion, the Share Exchange Ratio in the Share Exchange was fair, from a financial point ofview, to the holders of common stock of CCEJ (other than CCW and its subsidiaries and affiliates).
The written opinion was provided solely for the benefit of the Board of Directors of CCEJ inconnection with its analysis of the Share Exchange and for reference purposes in performing suchanalysis. The written opinion does not constitute a recommendation to any shareholder of CCEJ as
to how such shareholder should vote with respect to the Share Exchange or any other matter.
In giving its opinion and conducting analyses with respect to the Share Exchange Ratio, which was
the basis for the written opinion, J.P. Morgan has relied upon and assumed the accuracy andcompleteness of all information that was publicly available or was furnished to or discussed with J.P.
Morgan by CCEJ and CCW or otherwise reviewed by or for J.P. Morgan, and J.P. Morgan has notindependently verified (nor has it assumed responsibility or liability for independently verifying) any
such information or its accuracy or completeness. J.P. Morgan has not conducted or been provided
with any valuation or appraisal of any assets or liabilities, nor has it evaluated the solvency of CCEJ
or CCW under any laws relating to bankruptcy, insolvency or similar matters. In relying on financial
analyses and forecasts provided to J.P. Morgan or derived therefrom, J.P. Morgan has assumed that10

they have been reasonably prepared based on assumptions reflecting the best currently available
estimates and judgments by management as to the expected future results of operations andfinancial condition of CCEJ and CCW to which such analyses or forecasts relate, and based on theassessments of the management of CCEJ as to the relative likelihood of achieving the futurefinancial results reflected in the forecasts of CCW prepared by the management of CCW as well as
the forecasts of CCW prepared by the management of CCW and adjusted by the management of
CCEJ, we have relied on such adjusted forecasts of CCW. J.P. Morgan expressed no view as tosuch analyses or forecasts or the assumptions on which they were based. J.P. Morgan has also
assumed that the Share Exchange and the other transactions contemplated by the Share Exchange
Agreement and the Integration Agreement (together, the “Agreements”) will qualify as a tax-freereorganization for Japanese tax purposes and will be consummated as described in the Agreements,
and that the definitive Agreements will not differ in any material respects from the drafts thereof
furnished to J.P. Morgan. J.P. Morgan has also assumed that the representations and warranties
made by CCEJ and CCW in the Agreements and the related agreements are and will be true andcorrect in all respects material to J.P. Morgan’s analysis and that CCEJ will have no exposure under
any indemnification obligations contained within the Agreements or the related agreements in any
amount material to J.P. Morgan’s analysis. J.P. Morgan is not a legal, regulatory, tax or accounting
expert and relied on the assessments made by advisors to CCEJ with respect to such issues. J.P.
Morgan further assumed that all material governmental, regulatory or other consents and approvals
necessary for the consummation of the Share Exchange would be obtained without any adverse
effect on CCEJ or CCW or on the contemplated benefits of the Share Exchange.
The opinion and analyses of J.P. Morgan with respect to the Share Exchange Ratio, which was thebasis for the written opinion provided by J.P. Morgan, were necessarily based on economic, market
and other conditions as in effect on, and the information made available to J.P. Morgan as of
September 29, 2016. It should be understood that subsequent developments may affect the opinion
and that J.P. Morgan does not have any obligation to update, revise, or reaffirm such analyses andopinion. The written opinion was limited to the fairness, from a financial point of view, to the holders ofcommon stock of CCEJ (other than CCW and its subsidiaries and affiliates) of the Share Exchange
Ratio in the proposed Share Exchange and J.P. Morgan expressed no opinion as to the fairness ofany consideration to be paid in connection with the Share Exchange to the holders of any other classof securities, creditors or other constituencies of CCEJ or as to the underlying decision by CCEJ toengage in the Share Exchange. Furthermore, J.P. Morgan expressed no opinion with respect to theamount or nature of any compensation to any officers, directors, or employees of any party to the
Share Exchange, or any class of such persons relative to the Share Exchange Ratio applicable to theholders of common stock of CCEJ in the Share Exchange or with respect to the fairness of any suchcompensation. J.P. Morgan expressed no opinion as to the price at which common stock of CCEJ
or CCW will trade at any future time.
The forecasts for CCEJ and CCW furnished to J.P. Morgan by CCEJ were prepared by the
managements of CCEJ and CCW. Further, J.P. Morgan relied on forecasts for CCW as adjusted by
the management of CCEJ in giving its opinion and conducting analyses with respect to the Share
Exchange Ratio. Neither CCEJ nor CCW publicly discloses internal management forecasts provided
to J.P. Morgan in connection with J.P. Morgan’s analysis of the Share Exchange, and such forecasts
were not prepared with a view toward public disclosure. These forecasts were based on numerous
variables and assumptions that are inherently uncertain and may be beyond the control ofmanagement, including, without limitation, factors related to general economic and competitive11

conditions and prevailing interest rates. Accordingly, actual results could vary significantly from those
set forth in these forecasts.
The foregoing summary of the results of the analysis of the Share Exchange Ratio and the summaryof the method of such analysis does not purport to be a complete description of the analyses or data
presented by J.P. Morgan. The preparation of a fairness opinion is a complex process and is notnecessarily susceptible to partial analysis or summary description. J.P. Morgan believes that its
analyses must be considered as a whole and that selecting portions of the foregoing summary andthese analyses, without considering all of its analyses as a whole, could create an incomplete view ofthe processes underlying the analyses and its opinion. In providing its opinion, J.P. Morgan did not
attribute particular weight to any specific analyses or factors considered by it and did not form a viewas to whether any individual analysis or factor (positive or negative), considered in isolation,
supported or failed to support its opinion. Rather, J.P. Morgan considered the totality of the factors
and analyses performed in providing its opinion. None of the selected companies reviewed as
described in the above analysis as a comparison is identical to CCEJ or CCW or any of theirrespective operating units or subsidiaries. However, the companies selected were chosen because
they are publicly traded companies with businesses that, for purposes of J.P. Morgan’s analysis, may
be considered similar to those of CCEJ and CCW, as the case may be. The analyses necessarily
involve complex considerations and judgments concerning differences in financial and businesscharacteristics of the companies involved and other factors that could affect the companies
compared to CCEJ and CCW.
J.P. Morgan has acted as financial advisor to CCEJ with respect to the proposed Share Exchange
and will receive a fee from CCEJ for its services, a substantial portion of which will become payable
only if the proposed Share Exchange is consummated. In addition, CCEJ has agreed to indemnify
J.P. Morgan against certain liabilities arising out of its engagement. During the two years preceding
the date of the written opinion, J.P. Morgan and its affiliates have not provided any other material
financial advisory services, commercial banking services or investment banking services to CCEJ or
CCW. In addition, J.P. Morgan and its affiliates hold, on a proprietary basis, less than 1% of theoutstanding common stock of each of CCEJ and CCW. In the ordinary course of the businesses of
J.P. Morgan and its affiliates, J.P. Morgan and its affiliates may actively trade the debt and equity
securities or other financial instruments (including derivatives, bank loans or other obligations) issued
by CCEJ or CCW for its own account or for the accounts of customers and, accordingly, J.P. Morgan
may at any time hold long or short positions in such securities or other financial instruments.
(３) Prospects and reasons for delisting
As a result of the Share Exchange, CCEJ will become a wholly-owned subsidiary of the holding company
as of the effective date (April 1, 2017), and CCEJ’s common shares are expected to be delisted according
to the delisting standards of the first section of TSE as of March 29, 2017.
After delisting, CCEJ’s common shares will no longer be able to be traded on TSE, however, CCW’scommon shares allocated to CCEJ’s shareholders through the Share Exchange are listed on the firstsection of TSE and FSE, and are available for transaction at the Financial Instruments Exchange on orafter the effective date of the Share Exchange.
Accordingly, we believe that liquidity of shares will be provided to CCEJ shareholders who own 100 or
more shares of CCEJ’s common stock and who receive 100 or more shares of CCW (= 1 unit) through12

allotment as a result of the Share Exchange, despite there being a possibility that they will be allotted somecommon stock of less than one unit according to the number of shares held, because they will remain
capable of trading shares constituting one unit or more on the first section of TSE and FSE. On the other
hand, CCEJ shareholders who own less than 100 shares of CCEJ’s common stock will receive less than
100 shares of CCW common stock through allotment become holders of shares less than one share of
CCW as a result of the Share Exchange. Such fractional shares cannot be sold at the Financial
Instruments Exchange; however, those shareholders to be in possession of fractional shares are eligible to
make use of CCW’s programs to purchase the fractional shares or to sell the fractional shares so that they
add up to 1 unit, as requested by the shareholder. Please refer to “II.1. (3) (Note:3) Treatment of fractional
shares” above for details. For details on the treatment of shares less than 1 share as a result of the Share
Exchange, please refer to ““II.1. (3) (Note: 4) Treatment of shares less than 1 share”.

(４) Measures to ensure fairness(i) Report from a third-party
In order to ensure fairness/validity of the Share Exchange Ratio of the Share Exchange, CCW
received a Share Exchange Ratio Report of the Share Exchange from SMBC Nikko Securities, athird-party organization. CCW has not received a Fairness Opinion from the third-party organization,
SMBC Nikko Securities, stating the financial validity of the Share Exchange Ratio for CCW.
In order to ensure fairness/validity of the Share Exchange Ratio for the Share Exchange, CCEJ
received a valuation report regarding the Share Exchange Ratio as well as a Fairness Opinion
dated September 29, 2016 from the third-party organization, J.P. Morgan, stating that, as of suchdate, and based on and subject to the factors and assumptions set forth in that written opinion, theShare Exchange Ratio in the Share Exchange was fair, from a financial point of view, to the holdersof common stock of CCEJ (other than CCW and its subsidiaries and affiliates).
(ii) Advice from external legal office
CCW has received legal advice on the execution of due diligence and the administrative
processes of the Business Integration from Mori, Hamada & Matsumoto, as legal advisor to CCW
for the Business Integration.
CCEJ has received legal advice on the execution of due diligence and the administrative
processes of the Business Integration from Anderson, Mori & Tomotsune, as legal advisor to CCEJ
for the Business Integration.
(５) Measures to prevent conflict of interest
Mr. Tiku, Director of CCW not serving as Audit and Supervisory Committee member, has notbeen involved in the discussion and resolution of the Share Exchange nor negotiation/discussion of
the Share Exchange, as he has been concurrently serving TCCC’s CFO for Asia Pacific, and will beseconded to CCEJ.
13

Mr. Irial Finan, Director of CCEJ, has not been involved in the discussion and resolution of the
Share Exchange nor negotiation/discussion of the Share Exchange, as he has been concurrently
serving an executive vice president of TCCC which has 100% of issued shares of European
Refreshments, Inc., CCEJ’s top shareholder.

14

３．Outline of parties to the Share Exchange(１) Organizational outline (as of the end of June, 2016)
Trade nameLocation

Coca-Cola West Co., Ltd.

Coca-Cola East Japan Co., Ltd.

7-9-66 Hakozaki, Higashi-ku, Fukuoka
City, Fukuoka Prefecture

6-1-20 Akasaka, Minato-ku, Tokyo

Representative

Representative Director & President

Representative Director, President &Title/Name

Tamio Yoshimatsu

CEO Calin Dragan

Description ofBusiness

Production and sale of beverages/foods Production and sale of beverages

Capital15,231MM yen

6,499MM yen

Foundation

Dec. 20, 1960

June 29, 2001

Shares Issued

111,125,714 shares

127,680,144 shares

Accounting Term

Dec. 31

Dec. 31

1,637 persons (Non-consolidated)

4,433 persons (Non-consolidated)

8,778 persons (Consolidated)

8,212 persons (Consolidated)

Companies, general consumers, etc. in

Companies, general consumers, etc. in

No. of Employees
Principal Customers

Japan
Main Financing Banks The Nishi-Nippon City Bank, Ltd.

Japan
The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Sumitomo Mitsui Trust Bank, Limited

Mitsubishi UFJ Trust and Banking

The Bank of Fukuoka, Ltd.

Corporation

Sumitomo Mitsui Banking Corporation

Mizuho Bank, Ltd.

Mizuho Bank, Ltd.

Sumitomo Mitsui Banking Corporation

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Sumitomo Mitsui Trust Bank, Limited
The 77 Bank, Ltd.

Major Shareholders
and Shareholding
Ratio

Ricoh Co., Ltd.

15.37％ European Refreshments

16.13％The New Technology

4.76％ Coca-Cola (Japan)

13.05％Development Foundation

Company Limited

Satsuma Shuzo Co., Ltd.

4.23％ Sensyusha Co., Ltd.

4.26％

MCA Holdings CO., LTD.

3.97％ Toyo Seikan Group

4.01％

Holdings, Ltd.
Coca-Cola Holdings West

3.67％ State Street Bank and Trust

Japan, Inc.

2.74％

Company

Relationships between
the concerned parties
Capital relationship
Personal
relationship
Businessrelationship
Related party
relationship

CCW owns 20,511 shares (including 1,935 shares indirectly owns) of CCEJ shares(0.02% of issued shares).
N/A
Sale/purchase transactions between CCW and CCEJ
N/A

15

(２) Consolidated Financial Results of the last 3 years
Coca-Cola West Co., Ltd.
Fiscal Year

FY2013

FY2014Coca-Cola East Japan Co., Ltd.

FY2015FY2013

FY2014FY2015Net Asset

257,936

254,150

260,878

216,191

213,754

230,945

Total Asset

374,418

337,260

378,105

314,490342,672

371,771

Net Assets per Share (yen)2,359.82

2,325.19

2,386.81

1,785.92

1,764.07

1,817.67

Net Sales Revenue

431,711424,406

440,476

372,792523,299563,162

Operating Income

15,927

11,00814,262

7,581

9,356

10,791

Ordinary profit

16,606

10,60913,723

7,732

9,606

10,411

13,625

4,482

9,970

11,582

3,434

5,354

128.15

41.07

91.35

139.70

28.37

42.70

41

41

41

32

32

32

Profit attributable toowners of the parent
Net Income per Share(yen)
Dividend per Share (yen)(Unit: MM yen. Excl. those under special notation.)

III. Company Split
1. Outline of the company split(１) Scheduled dates of the Company Split
Please see “I. Background and Objective, etc. of the Business Integration, 3. Scheduled dates withregard to the Business Integration”.

(２) Method of the Company Split
Absorption-type company split with CCW as the splitting company and new CCW as the
succeeding company. This is subject to approval of the General Shareholders Meeting of CCW to
be held at the end of March 2017.

(３) Allocation details in relation to the Company Split
There will be no allocation of shares or other compensation by new CCW in the course of theCompany Split.

(４) Treatment of share acquisition rights and bonds with share acquisition rights in relation to theCompany Split
N/A(５) Capital increase/decrease as a result of the Company Split
N/A(６) Rights and obligations succeeded by the succeeding company
New CCW will succeed assets, liabilities, contractual status and other rights and obligations of all of
CCW’s business other than its group management/administration operations and the management of
its assets. Real estate and share of Q’Sai Co., Ltd. owned by CCW shall not be transferred to New
16

CCW. Liabilities will be succeeded through the cumulative assumption of debt.
(７) Expected fulfillment of obligations
It is assumed that there will be no issues with the expected fulfillment of obligations to be fulfilled by
CCW and new CCW on or after the Effective Date upon the Company Split.

2. Outline of parties to the Company Split
For outline of CCW, the splitting company in the Company Split, please refer to “II. The Share Exchange
３. Outline of parties to the Share Exchange” above.
Below is the outline of new CCW, a succeeding company in the Company Split to be established.
（１）

Name

New CCW Establishment Preparation Co., Ltd.

（２）

Location

7-9-66 Hakozaki, Higashi-ku, Fukuoka City, Fukuoka Prefecture（３）

Representative Title/Name

Representative Director & President Tamio Yoshimatsu（４）

Description of Business

Production and sale of beverages/foods（５）

Capital100MM yen

（６）

Foundation

October 27, 2016 (planned)（７）

Shares Issued

One share（８）

Accounting Term

Dec. 31（９）

Major Shareholders andCoca-Cola West Co., Ltd. 100％

Shareholding Ratio（10）

Relationships between the

Capital

To be established as the wholly-owned subsidiary ofconcerned parties

relationship

CCW.

Personnel

Directors will be dispatched from CCW.

relationship
Business

No business with CCW since it is not yet in operation.

relationship

3. Outline of business units to be split(１) Description of business by the business unit to be split
All CCW business excluding group management/administration operations and management ofassets.

(２) Business performance of the business unit to be split (FY2015)(Unit: MMyen)

Net Sales Revenue

Business Unit

Absorbed company

Ratio

(a)

Non-consolidated (b)(a/b)

370,510

370,510100％

Operating Income

7,869

7,869

100％

Ordinary Profit

10,692

10,692

100％(３) Asset/liability titles and book value subject to the split (As of June 30, 2016)(Unit: MM

yen)
Asset
Item

Liabilities
Book Value

Title
17

Book Value

Current Assets

129,210

Current Liabilities

57,427

Fixed Assets

99,467

Fixed Liabilities

3,006

Total

228,677

Total

60,433

IV. Changes to trade name and partial amendments to the Articles of Incorporation
１. Reason for the change
As of the Effective Date, amendments will be made to parts of the Articles of Incorporation of CCW, suchas the trade name and business purpose etc., (the trade name of New CCW Establishment Preparation
Co., Ltd. will be changed to Coca-Cola West Co., Ltd.) as a result of the shift to a holding company
structure due to the Business Integration, on the condition that the agenda items regarding the Share
Exchange and the Company Split are approved at the General Shareholders Meeting of CCW to be heldend of March, 2017.
Also, the trade name of New CCW Establishment Preparation Co., Ltd. shall be changed to Coca-Cola
West Co., Ltd. as of the Effective Date.
Summary of amendments to the Articles of Incorporation of CCW.
*Please refer to Japanese document for the full list of amendments.
Article 1. Trade Name

Change trade name from Coca-Cola West Company, Limited to CocaCola Bottlers Japan Inc.

Article 2. Objective

Add clause for holding company

Article 6. Maximum Number of

Change maximum number of shares to be issued from 270 million

Shares to be issued

shares to 500 million shares

Article 20. Number of Directors

Change maximum number of directors from 15 to 10.

Article 28. Limitation of Liability of

Add cause to waive liability of directors

The Directors
Supplemental Provision

Change of date of referring agreement to use Coca-Cola as trade name

2. Scheduled date of change
April 1, 2017

Ⅴ．Status after the Business Integration
１．Status of the listed company (holding company) after the Business Integration (planned)
（１）

Name

（２）

Coca-Cola Bottlers Japan Inc.
(Registered head office) 7-9-66 Hakozaki, Higashi-ku, Fukuoka

Location

City, Fukuoka Prefecture(Headquarters) Tokyo（３）

Representative
Title/Name（４）

Representative Director & President Tamio Yoshimatsu
Representative Director, CFO& General Manager ofTransformation Vikas Tiku

Description ofGroupmanagement/administration

Businessmanagement of assets（５）

Capital15,231 MM yen（６）

Accounting Term

Dec. 31（７）

Net Asset

Not yet finalized（８）

Total Asset

Not yet finalized
18

operations

and

the

（９）
Major Shareholders
and Shareholding
Ratio(planned)

Ricoh Co., Ltd.

8.36%

European Refreshments

7.57%

Coca-Cola (Japan) Company

6.12%

Japan Trustee Service Bank, Ltd. (Trust Account)

2.66%

The New Technology Development Foundation

2.59%

2. Accounting treatment overview
As the Share Exchange falls under the category of “acquisition” in “Accounting Standard for Business
Combinations”, the purchase method will be applied with CCW as the acquiring entity. Goodwill (or profit
on negative goodwill) may be incurred as a result of the Share Exchange, however, the value has yet to be
finalized at this time.

3. Future outlook
CCW, CCEJ and CCJC will establish an Integration Steering Committee, led by the presidents of CCW,
CCEJ and CCJC, to make decisions on strategies focusing on achieving sustainable growth of CCBJI and
the Coca-Cola system in Japan such as CCBJI’s business plan, optimal group structure, the realization
timing and approach of integration synergies. The integration is expected to deliver cost synergies of 20
billion yen (based on net annual income before adjustment for taxes) over the next three years, pending
validation by the Integration Steering Committee. Members of the integration planning team will also
represent a balance of representation from CCW and CCEJ. Any new information to be disclosed pursuant
to the review shall be released immediately.
As the Business Integration is scheduled to become effective as of April 1, 2017, the impact of theBusiness Integration on CCW and CCEJ’s business performance this year is expected to be minimal.
Moreover, the business forecast for FY2017 following the Business Integration shall be disclosed as soon
as it is finalized.

4. Matters regarding transaction etc. with majority shareholders
N/A(Ref) Consolidated earnings forecast and previous year results
CCW (released on August 12, 2016)(unit: MM yen)
Net Profit

Net Sales
Revenue

Attributable to the
Operating Income

Ordinary Profit

shareholders of
the Parent
Company

Earnings forecast（FY2016）
Previous year results（FY2015）460,200

20,50018,80010,800440,476

14,262

13,7239,970

CCEJ (released on September 9, 2016)
Net Sales
Revenue(unit: MM yen)
Operating Income

19

Ordinary Profit

Net Profit
Attributable to theshareholders of
the Parent
Company

Earnings forecast
573,400
18,00017,80010,500（FY2016）
Previous year results
563,162
10,791
10,411
5,354（FY2015）
In conjunction with its business integration (“Business Integration”) with Coca-Cola East Japan Co., Ltd.
(“CCEJ”), Coca-Cola West Co., Ltd. (“CCW”) may be required to submit Form F-4 as registration to the U.S.
Securities and Exchange Commission (“SEC”). In such a case, the prospectus and other documentation will
be included as part of Form F-4. Once Form F-4 is submitted and is made effective, the prospectus submitted
as part of Form F-4 is expected to be sent to CCEJ’s shareholders in the U.S., prior to the General
Shareholders’ Meeting where the voting will be held to approve the Business Integration. If Form F-4 must be
submitted, the Form and prospectus will include valuable information related to both parties, the Business
Integration, and other relevant data. We request that the U.S. shareholders, to which the said prospectus shallbe distributed, carefully read through Form F-4, which may be submitted to SEC with respect to the Business
Integration, the prospectus, and other documents, prior to exercising the voting rights for the Business
Integration at the General Shareholders’ Meeting. All documentation submitted to SEC with respect to theBusiness Integration will be disclosed free of charge on SEC’s homepage (www.sec.gov). In addition, such
documentation may be sent by post upon request free of charge. Please contact the person below if you wish
to apply for the documentation to be sent by post:
Company Name： Coca-Cola West Co., Ltd.
Address： 7-9-66, Hakozaki, Higashi-ku, Fukuoka-shi, Fukuoka, Japan, 812-8650
Person in charge： Masakiyo Uike, Finance Department
Tell： +81-92-641-8585 Email：masakiyo-uike@ccwest.co.jp
This document includes information that may be applicable to the “descriptions pertaining to future assumptions”
with respect to the success of failure of the Business Integration between Coca-Cola West Co., Ltd. and CocaCola East Japan Co., Ltd. in addition to the outcomes thereof. Except for the facts in the past or at present,
the information provided herein may be applicable to the descriptions pertaining to future assumptions. The
descriptions pertaining to future assumptions are based on the preconditions and decisions made by bothparties according to the information made available at present and therefore contain known and/or unknown
risks and uncertainties. Due to these factors, the future business performance, business results, and financial
conditions of both or either party (or the group after the integration) expressed or implied in the descriptions of
future assumptions may produce significantly different outcomes from the content provided herein. Please
note that neither party assumes no obligation to update or make public the descriptions pertaining to futureassumptions after the date hereof. We request investors to refer to the disclosures that may be made by bothparties (or the group after the integration) as to the announcement in Japan in the future and documents
submitted to SEC.
The above-mentioned risks, uncertainties, and other factors include, but not limited to, the following items:(１) If and any case should considerable difficulty in the business integration of CCW and CCEJ arise(２) Relationship between the holding company and TCCC/CCJC after the business integration(３) Possibility of negative impact to the holding company’s financial results due to damage to brands
caused by products quality issues(４) Impact on products demand of the holding company cause by heightening of the health consciousness
among consumers(５) Changes in the market environment, including change in competitive environment and customer
relationships with major customers(６) Unfavorable climate change for soft drinks sales(７) Fierce competition in health care/skin care business(８) Fluctuation in economic conditions both domestically and globally(９) The possibilities of incurring compliance expenses due to changes in respective laws, regulations andstandards as well as further tightening of current regulations, etc. applicable to the holding company(１０) The possibility of deleting and/or embezzlement of personal information and confidential information
caused by malfunction of IT system, cyber accidents and/or any other reasons20

(１１) The possibility of force majeure, or man made disasters which may trigger negative impact toemployees, offices and major facilities and IT systems of the holding company(１２) The possibility of water shortage

21