スクウェア・エニックス・ホールディングス（9684） – Execution of Share Transfer Agreement with Change to Subsidiaries (Divestiture of Select Overseas Studios & IP)

May 2, 2022 C o m p a n y : SQUARE ENIX HOLDINGS CO., LTD. Representative: Yosuke Matsuda, President & Representative Director Company code: 9684 (Tokyo Stock Exchange, Prime Market) C o n t a c t : Takashi Kiryu, Chief Strategy Officer T e l e p h o n e : (03) 5292-8000 Execution of Share Transfer Agreement with Change to Subsidiaries (Divestiture of Select Overseas Studios & IP) SQUARE ENIX HOLDINGS CO., LTD. (the “Company”) today signed a share transfer agreement with Sweden-based Embracer Group AB concerning the divestiture of select overseas studios and IP (the “Transaction”). The Company’s primary assets to be divested in the Transaction are group subsidiaries such as CRYSTAL DYNAMICS, INC.; EIDOS INTERACTIVE CORP. and IP such as TOMB RAIDER, Deus Ex, Thief, and Legacy of Kain. At the Company Board of Directors meeting held on 27 April, 2022, the Board resolved to entrust Representative Director Yosuke Matsuda with the right of final decision. All conditions having being met, the share transfer agreement was concluded today. 1. Purpose of the Transaction The Transaction will assist the Company in adapting to the changes underway in the global business environment by establishing a more efficient allocation of resources, which will enhance corporate value by accelerating growth in the Company’s core businesses in the digital entertainment domain. In addition, the Transaction enables the launch of new businesses by moving forward with investments in fields including blockchain, AI, and the cloud. The move is based on the policy of business structure optimization that the Company set forth under the medium-term business strategy unveiled on May 13, 2021. The Transaction will also provide an opportunity to better align our overseas publishing function with our organization in Tokyo, revisit the current governance structure and associated reporting lines, and advance integrated group management with the goal of maximizing the worldwide revenue generated from future titles launched by the group’s studios in Japan and abroad. Going forward, the Company’s development function will comprise its studios in Japan, Square Enix External Studios, and Square Enix Collective. The Company’s overseas studios will continue to publish franchises such as JUST CAUSE, OUTRIDERS, and Life is Strange. 2. Primary companies, IP to be divested a. Primary companies to be divested (1) (2) Company name Headquartered CRYSTAL DYNAMICS, INC. 1400A Seaport Boulevard, Suite 300 Redwood City, California 94063 USA Rogers Philip Timo, Director (3) Name and title of representative Business description Planning and development of entertainment products (4) Stated capital (5) (6) Established (7) Major shareholder & US$40 million July 8, 1992 Eidos, Inc., 100％ (8) shareholding ratio Relationships between parties Capital relationship Personal relationship Business relationship Applicability to related parties The Company indirectly owns 100% of the shares outstanding in Crystal Dynamics, Inc.. Not applicable Plans and develops content for publication by group subsidiaries Crystal Dynamics, Inc. is a third-generation subsidiary of the Company. (9) Business and financial performance over the most recent three years (USD$’000) March 2021 March 2020 March 2019 Fiscal year Total equity Total assets Equity per share (USD$) Revenue Operating income Ordinary income Net income Earnings per share (USD$) Dividend per share (USD$) (144) 19,000 (1.44) 66,923 2,856 2,202 2,148 21.48 ― 2,410 17,927 24.10 81,144 3,465 2,681 2,554 25.54 ― 5,750 22,889 57.50 92,277 3,876 3,592 3,340 33.40 ― (1) (2) (3) (4) Company name Location EIDOS INTERACTIVE CORP. 400 De Maisonneuve Boulevard West, 6th Floor, Montreal QC H3A 1L4, Canada Rogers Philip Timo, Director Name and title of representative Business description Planning and development of entertainment products Stated capital (5) Established (6) (7) Major shareholder & (8) shareholding ratio Relationships between parties (Development studios: Eidos-Montréal, Square Enix Montréal) CAN$6.2 million March 5, 2007 Square Enix Ltd., 100％ Capital relationship Personal relationship Business relationship Applicability to related parties The Company indirectly owns 100% of the shares outstanding in Eidos Interactive Corp.. Not applicable Plans and develops content for publication by group subsidiaries. EIDOS INTERACTIVE CORP. is a second-generation subsidiary of the Company. (9) Business and financial performance over the most recent three years (CAN$’000) Fiscal year March 2019 March 2020 March 2021 share Total equity Total assets Equity per (CAN$) Revenue Operating income Ordinary income Net income Earnings per share (CAN$) Dividend per share (CAN$) 28,491 64,841 45.95 73,203 2,963 3,112 5,318 8.58 ― 29,550 96,484 47.66 75,635 3,270 1,954 1,059 1.71 ― 30,198 88,373 48.71 99,857 4,079 3,072 647 1.04 ― b. Primary IP to be divested TOMB RAIDER, Deus Ex, Thief, and Legacy of Kain franchises, among others 3. Profile of counterparty to the Stock Transfer (1) (2) (3) (4) Company name Headquartered Name and title of representative Business description Stated capital (5) Established (6) Total equity (7) (8) Total assets (9) Major shareholder & shareholding ratio (as of end-March 2021) Embracer Group AB Älvgatan 1 Karlstad Sweden Lars Wingefors, Co-founder & Group CEO Embracer Group is the parent company of businesses developing and publishing PC, console, mobile and board games and other related media for the global gaming and entertainment market 1.3 million Swedish Krone 2011 27,165 million Swedish Krone (as of end-March 2021) 33,752 million Swedish Krone (as of end-March 2021) Lars Wingefors AB S3D Media Inc. Swedbank Robur Fonder Canada Pension 9.07% 5.94% 28.39% 5.94% Plan Investment Board Capital relationship Not applicable Not applicable Personal relationship Business relationship Applicability related parties Not applicable Not applicable to (10) Relationships between parties and after the transfer 4. Number of shares to be transferred, number of shares owned and ratio of voting rights before Company Name (1) Number of shares owned before transfer (2) Number of to be shares transferred (3) Number of after shares transfer CRYSTAL DYNAMICS,INC. EIDOS INTERACTIVE CORP. 100,000 shares (Number of voting rights: 100,000) (Ratio of voting rights: 100%) 100,000 shares (Number of voting rights: 100,000) － shares (Number of voting rights: －) (Ratio of voting rights: －%) 620,000 shares (Number of voting rights: 620,000) (Ratio of voting rights: 100%) 620,000 shares (Number of voting rights: 620,000) － shares (Number of voting rights: －) (Ratio of voting rights: －%) *The transfer price is $US 300mil. 5. Transaction schedule Board of Directors resolution (*1) Conclusion of share transfer agreement Date of share transfer(*2) April 27, 2022 May 2, 2022 Expected to be complete during July and September, 2022. *1: The Company Board of Directors resolved to entrust the final approval of the Transaction to Company Representative Director Yosuke Matsuda. *2: The transaction is subject to various regulatory and other external approvals. 6. Future outlook The Company is currently assessing how the Transaction might impact its earnings for the fiscal year ending March 2023 and will make an immediate announcement should any information warranting disclosure be identified. Advisors Goldman Sachs Japan Co., Ltd., and Skadden, Arps, Slate, Meagher & Flom LLP acted as financial advisor and legal counsel to the Company on this transaction, respectively End