TIDMTYT
RNS Number : 3062H
Toyota Motor Corporation
24 March 2020
[Reference Translation]
March 24, 2020
To Whom It May Concern
Toyota Motor Corporation
NTT Corporation
Notice of Execution of Memorandum of Understanding Concerning a
Business and Capital Alliance
between NTT Corporation and Toyota Motor Corporation
Toyota Motor Corporation ("Toyota") and NTT Corporation ("NTT")
announce that they entered into a memorandum of understanding
concerning a business and capital alliance (the "Alliance") upon
approving a resolution at meetings of their respective Board of
Directors today. The purpose of the memorandum of understanding is
to build a long-term and continuous cooperative relationship that
enables the commercialization of smart city businesses, with each
company being a core partner to share the same values and promote
social development, with the aim of realizing smart cities, which
continue to evolve in accordance with the needs of residents.
1. Purpose of the Alliance and Business Overview
In the automotive market, the automotive industry itself is
undergoing a major transformation due to the complex combination of
diversifying market needs, tightening environmental and safety
regulations, the sophistication of advanced technologies, entrance
by other industries, and the diversification of the mobility
business, etc.
Meanwhile, in the telecommunications market, the use of various
digital services is advancing due to the rapid development of cloud
services, IoT, big data, AI, etc. Digital transformation (Note 1),
which can make better-directed innovation a reality by analyzing
and utilizing the data accumulated through the use of these
services, is advancing worldwide.
As stated in the "Toyota and NTT Agree to Collaborate on ICT
(Note 2) Platform R&D for Connected Cars (Note 3)-Collaboration
seeks to establish technologies for the creation of a Smart
Mobility Society" announced on March 27, 2017, the two companies
have been collaborating in the connected car field. However, in
response to these changes in the business environment, the two
companies believe that it is necessary not only to seek to further
strengthen the business foundations that they have been cultivating
to date, but also, by further building the cooperative relations
between them, to engage in the creation of new value that enables
sustainable growth.
In particular, the two companies have initiated activities
related to smart cities, which can solve various issues by
improving the efficiency and sophistication of functions and
services in cities and regions through the utilization of advanced
technologies and create new value, including comfort and
convenience, and which they view as being an important area of
focus in the future.
On January 7, 2020 (local time: January 6, 2020), Toyota
announced the outline of a project to build a prototype city
connecting all kinds of goods and services that support people's
lives, at CES 2020 held in Las Vegas, Nevada, U.S.A. The project
will use the soon-to-be former site of the Higashi Fuji Plant of
Toyota Motor East Japan, Inc. (in Susono City, Shizuoka
Prefecture), which is scheduled to close at the end of 2020, to
move verification initiatives forward in coordination with various
partner companies and researchers toward the creation of a new
city. Toyota named this city "Woven City" and is promoting efforts
to make smart cities a reality.
Meanwhile, the NTT Group(NTT and its affiliates; hereinafter the
same shall apply) is collaborating with Fukuoka, Sapporo, Yokohama,
Chiba and other local governments as well as companies to solve
various city and community issues. Under the smart city initiative
in Las Vegas, announced in December 2018, various collected data
becomes the property of Las Vegas City, and by utilizing the most
advanced AI, IoT, and ICT resource management technologies, the
city is able to quickly detect, analyze, and predict incidents and
accidents, and to optimally manage ICT resources, and the NTT Group
is promoting initiatives for deployment of such practices in other
cities. In addition, in July 2019, the NTT Group established NTT
Urban Solutions, Inc., which promotes smart urban development by
utilizing ICT technologies in the utilization of NTT-owned real
estate. Furthermore, in June 2019, the NTT Group established NTT
Anode Energy Corporation, which promotes business in the smart
energy (Note 4) field, which is an important component of smart
cities. Through these projects, the NTT Group is promoting
initiatives to realize smart cities by making the most of the
assets of the NTT Group.
Amid these efforts, in order to maximize the impact of
issue-solving and the addition of value enabled by transforming
cities into smart cities and to improve regional and national
strength, Toyota and NTT came to the conclusion that it is
necessary not only for each company to engage in its own projects
but also for both companies to work closely in jointly building and
operating the "Smart City Platform" (details of which can be found
below) as a core foundation for realizing smart cities and
introducing it in various cities in Japan and worldwide. Therefore,
the two companies have decided to enter into a business and capital
alliance.
The two companies will jointly build for smart cities the "Smart
City Platform" that will offer value to all domains, from people,
cars and houses, to everyday life, business, infrastructure and
public services related to residents, businesses, local
governments, etc. As a precedent model, it will first be
implemented in the Higashi-Fuji area of Susono City, Shizuoka
Prefecture (Woven City) and in the Shinagawa area in Minato-ku,
Tokyo (a part of the NTT block in front of Shinagawa Station), and
will then be introduced to other cities in succession.
In the future, Toyota and NTT will aim for further growth
through the enhancement of the competitiveness of smart cities and
the development of a sustainable society.
(Note 1): Realising accumulation of various data and utilization
of data in management, and creating new business models and
transforming existing businesses, by using ICT tools
(Note 2): Information and Communication Technology
(Note 3): Cars connected online that can exchange information.
They can receive various services and can also function as social
sensors.
(Note 4): Improving energy efficiency, taking measures against
global warming and utilizing renewable energy technologies,
improving disaster resistance (resilience), and optimally managing
local energies supply and demand, by utilizing ICT .
Smart City Platform Overview
As a secure base for providing value to residents, businesses,
local governments, etc., the Smart City Platform is to consist of
smart-city data management and information distribution (Note 5), a
digital twin based on such data (urban development simulation)
(Note 6), and peripheral functions (Note 7).
It is also to consist of a "platform of platforms" as a platform
for individual smart cities and as a platform for linking with
other smart city platforms.
(Note 5): Functions for conducting data collection,
accumulation, processing , analysis, and visualization, and for
serving as interface s for use of services, etc.
(Note 6): Functions for reproducing actual cities in a virtual
space in real time and providing feedback of the trial results,
etc.
(Note 7): Function s of networks, linking with various devices
and hardware, and linking with various services, other systems, and
other platforms, etc.
2. Overview of Investment in the Alliance
Toyota and NTT, as partners that share the same values and aim
to develop society, will acquire each other's shares in accordance
with the memorandum of understanding and as described below, in
order to establish a long-term and continuous cooperative
relationship that enables the commercialization of smart city
businesses, and in order to raise funds to research and develop,
plan, design, construct, and implement the "Smart City Platform"
and jointly promote the operation of smart cities, which continue
to evolve in accordance with the needs of residents.
Toyota shall hold 80,775,400shares of NTT's common stock (with
the percentage to the total number of issued shares being roughly
2.07% and the total amount of shares acquired being valued at
roughly two hundred billion yen) by way of the disposition of NTT
treasury stock through the third party allotment of shares
conducted by NTT.
Furthermore, NTT shall hold 29,730,900 shares of Toyota's common
stock (with the percentage to the total number of issued shares
being roughly 0.90% and the total amount of shares acquired being
valued at roughly two hundred billion yen) by way of the
disposition of Toyota treasury stock through the third party
allotment of shares conducted by Toyota. (For details of the third
party allotment of NTT to Toyota and of Toyota to NTT, please refer
to the "Notice Concerning Disposal of Treasury Stock by Way of
Third-Party Allotment" announced today by NTT and the "Notice
Concerning Disposition of Treasury Stock by Way of Third-party
Allotment" announced today by Toyota.)
3. Schedule
1) Date of execution Tuesday, March 24, 2020
of the memorandum
of understanding
2) Share acquisition Thursday, April 9, 2020
date (payment date)
--- --------------------- ------------------------
4. Future Outlook
Toyota and NTT understand that the Alliance will not have a
material impact on the consolidated accounts of both companies for
the foreseeable future.
End
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END
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