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Nov. 27, 2009Print(PDF/73KB)Related Business

Notice of Restructuring (Company Split) of the Company's Non-pharmaceutical Operations

Dainippon Sumitomo Pharma Co., Ltd. (the "Company") passed a resolution, in the meeting of its board of directors held on November 27, 2009, on the plan to implement the company split of the Company's non-pharmaceutical operations, specifically Animal Health Products business and Food & Speciality Products business (the "Business") respectively, and transfer the former to a company which will be incorporated hereafter and the latter to Gokyo Trading Co., Ltd.
("Gokyo"), which is the Company's consolidated subsidiary (the "Company Split").

Through the restructuring of the Business and fostering structural improvement, the Company aims to further strengthen these two operations and thereby increase the Company's group business power. Details are described as below:

I. The Company Split of the Animal Health Products Business (Incorporation-type Company Split)

1. Purpose of the Company Split

Through the spin off of Animal Health Products business and the transition thereof to the stand-alone basis, while maintaining or rather reinforcing close relations with the Company's R&D sector, by which more latitude of the business management liberalization will be given, the management responsibility of this particular business will be further clarified and the decision-making process will be simplified for higher efficiency, aiming at further increase of profitability. The new company is intended to become a leading company specializing in animal health business, realizing managerial decision-making and business development systems more responsive to changes in customer, market and business environment based on a productive agile business management structure with cost-effective operations.

2. Outline of the Company Split

(1) Schedule

January 21, 2010 (planned): Approval of the Company Split Plan by the board of directors
July 1, 2010 (planned): Date of the Company Split (the effective date)
July 1, 2010 (planned): Date of registration of the incorporation of the new company

This Company Split shall be implemented without obtaining the approval thereof by a resolution of a shareholders meeting, pursuant to the provision of Article 805 of the Companies Act of Japan.

(2) Company Split Method
An incorporation-type company split(a simple company split), in which the Company shall be the splitting company and the new company shall be the succeeding company.

(3) Share Allotments
All the common shares to be issued by the new company upon the Company Split shall be allotted to the Company. The number of shares to be issued will be announced as soon as decided

(4) Treatment of Share Options, etc.
The Company has issued neither any share options nor bonds with share options.

(5) Decrease in Capital, etc., Due to the Company Split
There will be no decrease in capital, etc. of the Company due to the Company Split.

(6) Rights and Obligations to be Succeeded by the Succeeding Company
The new company shall succeed to the assets, liabilities, status under contracts (except for employment contracts) related to the Animal Health Products business of the Company and all other rights and obligations thereof to the extent specified by the Company Split Plan. As regards succession to the obligations, it will be carried out by an assumption of obligations without exempting the Company therefrom.

(7) Prospect for Fulfillment of Obligations
The Company has concluded that there will be no problems regarding the certainty of fulfilling the obligations to be borne by the Company and the new company after the Company Split.

3. Summary of the Company Involved in the Company Split (as of March 31, 2009)

(1) Name Dainippon Sumitomo Pharma (Splitting Company)
(2) Head Office 6-8, Doshomachi 2-Chome, Chuo-ku, Osaka
(3) Representative Masayo Tada, President and Chief Executive Officer
(4) Business Manufacture, sale/purchase, and import/export of pharmaceuticals, veterinary products, food additives, industrial chemicals, and other chemical products, etc.
(5) Capital 22,400 million yen
(6) Established May 1897
(7) Outstanding Shares 397,900,154 shares
(8) Fiscal Year-End March 31
(9) Number of Employees 4,787 (consolidated )
(10) Major Clients MEDIPAL HOLDINGS CORPORATION
Alfresa Corporation
(11) Major Financing Banks Sumitomo Mitsui Banking Corporation
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
(12) Major Shareholders and Shareholding Ratio Sumitomo Chemical Co., Ltd. 50.12%
Inabata & Co., Ltd. 6.86%
The Master Trust Bank of Japan, Ltd.(Trust Account) 4.17%
Nippon Life Insurance Company 2.65%
Japan Trustee Services Bank, Ltd (Trust account) 2.56%
Note:The details of the new company have not yet been determined, and will be announced later upon such determination.

4. Operating Results for the Last Three (3) Years of the Company Involved in the Company Split (Consolidated Basis)

(Unit: million yen)

Dainippon Sumitomo Pharma (Splitting Company)
Fiscal Years EndedMarch 31, 2007March 31, 2008March 31, 2009
Net Assets 306,012 318,277 324,495
Total Assets 382,535 399,790 391,294
Net Assets per Share (yen) 767.52 800.63 816.49
Net Sales 261,213 263,992 264,037
Operating Profit 45,554 39,813 31,166
Recurring Profit 43,181 37,657 31,395
Net Profit of the Current
Fiscal Year
22,605 25,591 19,987
Net Profit of the Current
Fiscal Year per Share (yen)
56.86 64.39 50.30
Dividends per Share (yen) 14.00 18.00 18.00

5. Summary of the Business Division to be Split Off

(1)Description of the Business of the Division to be Split Off
Sales, purchase, export and import of drugs for animal, feeds, feed additives and medical devices for animal

(2)Operating Results of the Division to be Split Off

(Unit: million yen)

March 31,2009
The Division to be Split Off
(a)
March 31,2009
The Company
(unconsolidated basis)
(b)
Ratio (a/b)
Net Sales 29,648 248,433 11.9%

(3) Items and Amounts of Assets and Liabilities to be Split Off
To be announced as soon as decided.

6. Status of the Company after the Company Split

(1) There will be no change to the company name, description of business, location of the head office, representative, capital, and fiscal year.

(2)Outlook
No major impact is expected on the Company's consolidated operating results.

II. The Company Split of the Food & Speciality Products Business with the transfer thereof to Gokyo (Absorption-type Company Split)

1. Purpose of the Company Split

The Company Split is implemented, whereby integrating the Company's R & D and marketing functions into Gokyo, a trading company, mainly handling foods and chemical products, aiming to be a completely new corporation that maximizes synergy effects for expanding the existing business functions in the field of foods and chemicals through the transaction where R&D and marketing functions will be integrated and strengthened up to a highly sophisticated and competitive level. The new company is intended to become a R & D oriented company who is able to create numerous new ideas and practical measures for launching differentiated products into the market based on its own originalities fostered through continued R & D activities and profound marketing/sales experiences. The new company will be operated under its business management strategies including prioritization for pursuing profit with value-added products.

2. Outline of the Company Split

(1) Schedule

January 21, 2010 (planned) Approval of the Company Split Contract by the board of directors
July 1, 2010 (planned) Date of the Company Split (the effective date)
July 1, 2010 (planned) Date of registration of the Company Split

Because this is a simple company split for the Company as provided for in Article 784, Paragraph 3 of the Companies Act of Japan and a summary-method company split for Gokyo as provided for in Article 796, Paragraph 1 of the same Act, neither company will convene a general meeting of the shareholders to obtain shareholders' approval of the Company Split.

(2) Company Split Method
An absorption-type company split (a simple company split) in which the Company shall be the splitting company and Gokyo shall be the succeeding company.

(3) Share Allotments
No share will be allotted when the Company Split takes place.

(4) Treatment of Share Options, etc.
The Company has issued neither any share options nor bonds withshare options.

(5) Decrease in Capital, etc., Due to the Company Split
There will be no decrease in capital, etc. of the Company due to the Company Split.

(6)Rights and Obligations to be Succeeded by the Succeeding Company
Gokyo shall succeed to the assets, liabilities, status under contracts (except for employment contracts) related to the Food & Speciality Products business and all rights and obligations thereof to the extent specified by the Company Split Contract. As regards succession to the obligations, it will be carried out by an assumption of obligations without exempting the Company therefrom.

(7) Prospect for Fulfillment of Obligations
The Company has concluded that there will be no problems regarding the certainty of fulfilling the obligations to be borne by the Company and the new company after the Company Split.

3. Summary of the Company Involved in the Company Split (as of March 31, 2009)

(1) Name Dainippon Sumitomo Pharma
(Splitting Company)
Gokyo Trading
(Succeeding Company)
(2) Head office 6-8, Doshomachi 2-Chome, Chuo-ku, Osaka 2-7, Kawaramachi 2-Chome,Chuo-ku, Osaka
(3) Representative Masayo Tada, President and Chief Executive Officer Seiichi Yamamoto, President and Chief Executive Officer
(4) Business Manufacture, sale/purchase, and import/export of pharmaceuticals, veterinary products, food additives, industrial chemicals, and other chemical products, etc. Sale, export and import of food additives, chemical products and fine chemicals
(5) Capital 22,400 million yen 100 million yen
(6) Established May 1897 October 1947
(7) Outstanding Shares 397,900,154 shares 2,000,000 shares
(8) Fiscal Year-End March 31 March 31
(9) Number of Employees 4,787 (Consolidated) 86
(10) Major Clients MEDIPAL HOKDINGS CORPORATION,
Alfresa Corporation
Dainippon Sumitomo Pharma Co., Ltd.
Mitsui Chemicals, Inc
(11) Major Financing Banks Sumitomo Mitsui Banking Corporation,
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corporation
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
(12) Major Shareholders and Shareholding Ratio Sumitomo Chemical Co., Ltd. 50.12%
Inabata& Co., Ltd. 6.86%
The Master Trust Bank of Japan, Ltd.(Trust Account) 4.17%
Nippon Life Insurance Company 2.65%
Japan Trustee Services Bank, Ltd (Trust account) 2.56%
Dainippon Sumitomo Pharma Co., Ltd. 96.3%

4. Operating Results for the Last Three (3) Years of the Company Involved in the Company Split

(Unit: million yen)

Dainippon Sumitomo Pharma (consolidated)
(Splitting Company)
Gokyo Trading
(Succeeding Company)
Fiscal
Years
Ended
March 31,
2007
March 31,
2008
March 31,
2009
March 31,
2007
March 31,
2008
March 31,
2009
Net
Assets
306,012 318,277 324,495 1,939 2,150 2,366
Total
Assets
382,535 399,790 391,294 9,430 9,233 8,996
Net
Assets per
Share
(yen)
767.52 800.63 816.49 969.94 1075.32 1,183.20
Net sales 261,213 263,992 264,037 20,794 22,224 22,301
Operating
Profit
45,554 39,813 31,166 292 476 507
Recurring
Profit
43,181 37,657 31,395 286 467 518
Net Profit
of the
Current
Fiscal
Year
22,605 25,591 19,987 122 271 295
Net Profit
of the
Current
Fiscal
Year per
Share
(yen)
56.86 64.39 50.30 61.48 135.57 147.60
Dividends
per Share
(yen)
14.00 18.00 18.00 7.50 7.50 7.50

5. Summary of the Business Division to be Split Off

(1)Description of Business of the Division to be Split Off
Sales, purchase, export and import of food additives, industrial chemicals and other chemical products

(2)Operating Results of the Division to be Split Off

(Unit: million yen)

March 31,2009
The Division to be
Split Off
(a)
March 31,2009
The Company
(unconsolidated basis)
(b)
Ratio (a/b)
Net sales 9,634 248,433 3.9%

(3)Items and Amounts of Assets and Liabilities to be Split Off
To be announced as soon as decided.

6. Status of the Company after the Company Split

(1) There will be no change to the company name, description of business, location of head office, representative, capital, and fiscal year.

(2) Outlook
No major impact is expected on the Company's consolidated operating results.