Conclusion of Agreement of Spin-off and Merger of Medical Products Division

Sekisui Chemical Co., Ltd. is pleased to announce that it has decided at the Board of Directors' Meeting held on January 11, 2008 to spin-off its medical products division, which will be succeeded to a wholly-owned subsidiary Daiichi Pure Chemicals Co., Ltd. ("Daiichi Pure Chemicals"), and has concluded a company spin-off and merger agreement today.

1.	Purpose of Company Spin-off The transfer and the consolidation of Sekisui Chemical's Medical Products Division to Daiichi Pure Chemicals aims to further expand and develop, after the merger, the medical products business as one of Sekisui Chemical Group's strategic business fields with selection of the business fields focusing on diagnostics and concentration of management resources in the fields of development, production and sales.
2.	Outline of Spin-off (1) Schedule Resolution of the Board of Directors :  January 11, 2008 Conclusion of a company spin-off and merger agreement :  January 11, 2008 Effective date of spin-off :  April 1, 2008 * The company spin-off agreement above does not require an approval of a general meeting of shareholders, since it is a simplified company spin-off and merger stipulated in Paragraph 3, Article 784 of the Corporate Law. (2) Method of spin-off The Company is a divisively reorganizing company, and Daiichi Pure Chemicals is a succeeding company. (3) Capital to be decreased due to spin-off No change to the Company's capital (4) Effects on equity warrants and convertible bonds of the divisively reorganizing company The Company has issued equity warrants, but there are no effects on them from the company spin-off. In addition, the Company has not issued any convertible bonds. (5) Rights and obligations succeeded by the succeeding company Daiichi Pure Chemicals will succeed all assets, rights, liabilities and obligations, contracts and incidental agreements concerning medical products business from the Company as a result of the spin-off. However, parts of intellectual property rights, receivables and payables, and employment contracts for a part of employees engaged in the business succeeded shall not be subject to the succession. (6) Forecasts for fulfillment of obligations The Company considers that Daiichi Pure Chemicals will fulfill its obligations for liabilities due after the effective date of the spin-off.
3.	Outline of related parties (As of September 30, 2007)
(1) Company name Sekisui Chemical Co., Ltd. (divisively reorganizing company) Daiichi Pure Chemicals Co., Ltd. (succeeding company) *1 (2) Businesses Construction and sale of unit housing, and manufacturing and sale of pipes and engineering plastics including polyvinyl chloride (PVC) pipes and joints, building materials, interlayer films for laminated glass, foamed polyolefin, fine particles for LCD and photosensitive materials, reagents, and medical devices Manufacturing and sale of diagnostic reagents, research reagents and fine chemicals, and pharmacokinetic studies (3) Date of foundation March 3, 1947 July 10, 1947 (4) Location of main office Kita-ku, Osaka Chuo-ku, Tokyo (5) Title and name of representative Naotake Okubo, President and Representative Director Mutsumi Fukuda, President & CEO (6) Paid-in capital ¥100,002 million ¥1,275 million (7) Outstanding shares 539,507,285 shares 16,470,000 shares (8) Net assets ¥394,294 million, consolidated ¥5,086 million, non-consolidated *2 (9) Total assets ¥815,014 million, consolidated ¥22,304 million, non-consolidated *2 (10) Closing date March 31 March 31 (11) Major shareholders and salient ratio Asahi Kasei Corporation: 5.75% The Dai-ichi Mutual Life Insurance Co.: 4.85% The Master Trust Bank of Japan, Ltd. (trust account): 4.81% Sekisui House, Ltd.: 4.74% Japan Trustee Services Bank, Ltd. (trust account): 3.58% Sekisui Chemical Co., Ltd.: 100% Notes: 1. Daiichi Pure Chemicals Co., Ltd. decided to change its company name to Sekisui Medical Co., Ltd. from April 1, 2008. 2. The simple total of net assets of Daiichi Pure Chemicals and its subsidiaries was ¥5,121 million, and that of total assets was ¥22,347 million.
4.	Outline of division to be spun-off (1) Businesses of the division to be spun-off Manufacturing and sale of diagnostic reagents, medical devices and medical adhesive tape products (2) Financial performance of the division
FY2006 ended March 2007, Medical Products Division (non-consolidated) (a) FY2006 ended March 2007, Sekisui Chemicals (non-consolidated) (b) Ratio (a/b) Net sales ¥8,392 million ¥380,242 million 2.2%
	(3) Assets, liabilities and amounts to be spun-off (As of September 30, 2007)
Assets Liabilities Item Book value Item Book value Current assets ¥187 million Current liabilities ¥- Fixed assets ¥553 million Fixed liabilities ¥- Total ¥740 million Total ¥- * Amounts to be spun-off will be finalized by adding or reducing increases/decreases during the period to the effective date to the amounts in the above.
5.	Sekisui Chemicals after the spin-off There will be no changes in the Company's firm name, businesses, location of the main office, title and name of the representative, paid-in capital and the settlement term. Additionally, effects on the Company from the spin-off are considered insignificant.