Aeon Kyushu to absorb Joyful Sun, forgive debt in strategic merger

Aeon Kyushu Corporation has decided to merge with its wholly-owned subsidiary, Joyful Sun Co., Ltd., effective March 1, 2026. This absorption-type merger will see Aeon Kyushu as the surviving company, with Joyful Sun being dissolved. As part of the preparations, Aeon Kyushu will forgive a portion of its short-term loan claims against Joyful Sun, amounting to an upper limit of 700 million yen, on February 27, 2026. This debt forgiveness aims to resolve Joyful Sun's over-indebtedness, which had arisen despite receiving debt relief from its former parent company by June 30, 2025.

The merger is classified as a short-form merger under Article 796, Paragraph 2 of Japan's Companies Act, meaning it will proceed without the need for approval at Aeon Kyushu's shareholders' meeting. No new shares will be issued, nor will any cash be exchanged in connection with this merger. Aeon Kyushu anticipates that the debt forgiveness will result in a special loss in its individual and consolidated financial results for the fiscal year ending February 2026. The impact on Aeon Kyushu’s consolidated performance is expected to be minor due to Joyful Sun being a wholly-owned subsidiary.