China Animation Characters Company Limited (SEHK:1566) entered into a share purchase agreement to acquire 85.1% stake in Sega Live Creation Inc. from Sega Sammy Holdings Inc. (TSE:6460) for ¥600 million on October 31, 2016. Under the terms of transaction, China Animation Characters will acquire 851 shares of Sega Live Creation. Post completion, Sega Live Creation Inc. from Sega Sammy Holdings Inc. will operate as a subsidiary of China Animation Characters Company Limited. For the year ended March 31, 2016, Sega Live Creation Inc. reported net assets of ¥1.439 billion, total assets of ¥5.87 billion, net sales of ¥6.01 billion, operating loss of ¥344 million and net income of ¥52 million. The transaction is subject to approval of the Board of Directors of Sega Live Creation, submission of resignation letters of seller-side officers to Sega Live Creation to the effect that they will resign from the position of a Director or a statutory auditor of Sega Live Creation, the lessors to certain proprietary lease agreements have consented to the acquisition and consented to continue the contractual relationship with Sega Live Creation, completion of the restructuring by Sega Live Creation, all necessary approvals by the shareholders of China Animation Characters in respect of the transactions, no approval, no-action letter or waiting period must be outstanding in connection with any competition authority. An independent Board committee comprising Directors of China Animation Characters Company has been formed to advise shareholders on the transaction. The resolution of the Board of Directors meeting and conclusion of share transfer agreement is scheduled to be on October 31, 2016. The expected date of transfer is January 1, 2017. The deal has been approved by independent committee of Board of China Animation Characters Company. The transaction can be terminated if not closed by February 28, 2017. Lego Corporate Finance Limited acted as financial advisor and Crowe Horwath (HK) CPA Limited and Deloitte Touche Tohmatsu Hong Kong SAR acted as accountants for China Animation Characters Company Limited. Li, Francis of Squire Patton Boggs acted as the legal advisor to China Animation Characters Company Limited (SEHK:1566).

China Animation Characters Company Limited (SEHK:1566) completed acquisition of 85.1% stake in Sega Live Creation Inc. from Sega Sammy Holdings Inc. (TSE:6460) on January 1, 2017.