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About the Agreement to Acquire Mitsubishi Plastics' Piping Materials Operations
Jul 10, 2012
SEKISUI CHEMICAL CO., LTD
SEKISUI CHEMICAL CO., LTD. (Head Office: Osaka City, Osaka-fu. President: Naofumi Negishi, hereinafter called "Sekisui Chemical") hereby announces the decision for Sekisui Chemical to conclude a comprehensive statement of mutual agreement to Acquire (hereinafter called "acquisition of this business") Mitsubishi Plastics, Inc.'s (Head Office: Chiyoda-ku, Tokyo. President and CEO: Takumi Ubagai, hereinafter called Mitsubishi Plastics) piping materials operations at the Board of Directors' Meeting held today.
This will bolster the business base of the company, and accelerate, advance the "integrated power development" and "value chain business expansion" currently being promoted by Urban Infrastructure and Environmental Products Company, to aim toward becoming a leading company in the urban infrastructure business.

Note
1. Background

Sekisui Chemical began a water infrastructure business (hereinafter called "this business") in 1952 including the production of PVC pipes. The company has been expanding their use in the civil engineering, construction and housing sectors under the brand name of "Eslon Pipe."
In the Midterm Management Plan, "GS21 SHINKA!" 2nd Stage Rolling Plan being deployed since 2011, Urban Infrastructure and Environmental Products Company has been trying to bolster business under its policies of "integrated power development" and "value chain business expansion."
The company made a joint investment with Mitsubishi Plastics in 2002, in establishing a production integrating company to achieve standardization of product specifications and mutual utilization of production bases, and implement collaborative shipping. But the acquisition of this business was agreed upon based on the necessity to further boost operational efficiency and added value in response to expected changes in the market environment and competition with other companies throughout the world in the future.

2. Goals / Expected Results

With the acquisition of this business, Sekisui Chemical will bolster the earning capacity of its basic business centered on piping materials. At the same time, the company will shift its management resources to domestic stock businesses and overseas integrated businesses to aim for continued steady growth.
Furthermore, Sekisui Chemical will make use of the acquired assets in expectation of the following results.
(1) Enhancement of power in procuring raw materials as the result of increased product volume
(2) Greater and thorough cost cuts in production and logistics
(3) Boosting of value chain business expansion and integrated power development as the result of new sales opportunities and resources
(4) New developments through utilization of elemental technology such as recycling molding
(5) Global expansion through utilization of advanced plastic processing technology

3. Details of the Acquisition

Sekisui Chemical will acquire Mitsubishi Plastics and its associated company running piping materials-associated operations (excluding the crosslinked polyethylene pipes business). Furthermore, the acquisition of this business will require prior approval from the authorities concerned. An application will be made quickly, and it is planned to for this acuisition to be carried out as quickly as possible upon obtaining the approval.
The following will be taken over in this agreement.
(1) Personnel, assets, contracts, intellectual property, etc., associated with the piping materials operations of Mitsubishi Plastics
    Note. The piping materials operations mentioned above exclude the cold piping materials operations (the crosslinked polyethylene pipes business)
(2) Personnel, contracts, etc., associated with the piping materials operations of Mitsubishi Plastics Marketing Co., Ltd. and RYOJU CORPORATION
(3) Part of machinery and equipment associated with the piping materials operations of Ryobi Techno Inc.
(4) Stocks in the following piping materials-associated companies held by Mitsubishi Plastics
Toyo Plastics Industries Corp.
Hanyu Plastics Industries Ltd.
WUXI SSS-DIAMOND PLASTICS CO., LTD.
M&S Pipe Systems Co., Ltd.

4. Future Schedule (Planned)

July 10, 2012: Conclusion of a comprehensive statement of mutual agreement, application to Fair Trade Commission (notification of plans regarding acquisition of business)
Within the fiscal year (autumn to winter): Completion of acquisition (decide on date of acquisition upon attaining approval of authorities concerned)

<Reference (1)> Outline of company concerned

Company Name SEKISUI CHEMICAL CO., LTD. Mitsubishi Plastics, Inc.
Address 2-4-4 Nishitenma,Kita-ku,Osaka City,Osaka (Palace Bldg.)
1-1-1 Marunouchi,Chiyoda-ku,
Tokyo
Representative President Naofumi Negishi President & CEO Takumi Ubagai
Month and Year of Establishment March 1947 January 1943
Capital 100,000 million yen 21,503 million yen
Principal Business
(i) Manufacture and sales of Pipes and engineering plastics for water supply and drainage systems, building materials, and performance materials
(ii) Manufacture and sales of automotive materials, electronic materials, medical products, and other high performance plastics-related products
(iii) Manufacture and sales of modular houses, and remodeling business
Manufacture and sales of plastics products
Sales 965 billion yen (on consolidated basis for fiscal year ended March 2012) 379 billion yen (on consolidated basis for fiscal year ended March 2012)
Number of Employees 20,855 (on consolidated basis for fiscal year ended March 2012) 8,831 (on consolidated basis for fiscal year ended March 2012)
*There are no capital or personal ties between the companies concerned

<Reference (2)> Outline of company whose business will be taken over (acquisition of associated business or machinery and equipment only)

Company Name Mitsubishi Plastics Marketing Co., Ltd. RYOJU CORPORATION
Address (Mitsubishi Plastic Bldg.)
1-2-2 Nihonbashi Hongoku-cho,
Chuo-ku,Tokyo
(Daiwa-Ueno Bldg.)
5-6-10 Ueno,Taito-ku,Tokyo
Representative President Ryohei Ogawa President Shinji Koshino
Month and Year of Establishment July 2010 November 1955
Capital 4 million yen 3.5 million yen
Principal Business Sales of Mitsubishi Plastics products Sales of plastics and plastic products
Stockholders Mitsubishi Plastics: 100% Mitsubishi Plastics: 100%
Number of Employees Approx. 280 Approx. 120

Company Name Ryobi Techno Inc.
Address 1 Tsukigase-cho,Nagahama City,Shiga Prefecture
Representative President Takehiko Watanabe
Month and Year of Establishment August 1965
Capital 4 million yen
Principal Business Manufacture and sales of plastic products
Stockholders Mitsubishi Plastics: 100%
Number of Employees Approx. 180

<Reference(3)> Outline of company whose stocks will be bought out (as of July 10, 2012)

Company Name Toyo Plastics Industries Corp. Hanyu Plastics Industries Ltd.
Address 300 Kamijo Araimachi,Kofu City,
Yamanashi Prefecture
392 Kami-iwase,Oaza,Hanyu City,
Saitama Prefecture
Representative President Yoshihiro Fujimi President Ryuichiro Nakamura
Month and Year of Establishment May 1955 May 1918
Capital 130 million yen 200 million yen
Principal Business Manufacture and sales of injection, extrusion and blow molded products Manufacture and sales of extrusion molding products
Stockholders Mitsubishi Plastics Group: 100% Mitsubishi Plastics: 99.8%
Number of Employees Approx. 90 Approx. 70

Company Name WUXI SSS-DIAMOND PLASTICS CO., LTD. M&S Pipe Systems Co., Ltd.
Address Wuxi National High & New Technology Industrial Development Zone, Wuxi, Jiangsu (Shimbashi TS Bldg.)1-22-5 Nishi Shimbashi,Minato-ku,Tokyo
Representative President & CEO Tsutomu Nakamura President Takashi Hariu
Month and Year of Establishment June 2002 April 2002
Capital 4 million U.S. dollars 20 million yen
Principal Business Manufacture and sales of plastic joints Consultation for manufacturing and shipping pipes and joints
Stockholders Sekisui Chemical; 51%, Mitsubishi Plastics: 49% Sekisui Chemical: 51%, Mitsubishi Plastics: 49%
Number of Employees Approx. 150 2

Press Contact

Sekisui Chemical Co., Ltd.
Corporate Communication Department, Public Relations Group
Fax: +81-3-5521-0510

Disclaimer

This press release may contain forward-looking statements. Such forward-looking statements are based on current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements due to changes in global economic, business, competitive market and regulatory factors.
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