December 19, 2017

Whom It May Concern
Company :KYORIN Holdings, Inc.
Representative : Minoru Hogawa
Representative Director, President(Security Code: 4569, TSE 1st Sec.)Contact :Shuji Miyaki, Director, Corporate
Communication
Telephone :(0)3-3525-4707

Consolidation of Group Production Functions (Absorption-type Demergerand Absorption-type Merger among the Wholly Owned Subsidiaries of the Company)

The Company has resolved today at a meeting of the Board of Directors to have KYORIN Pharmaceutical Group
Facilities Co., Ltd. (Chiyoda-ku, Tokyo)* (hereinafter "KYORIN Pharmaceutical Group Facilities Co., Ltd. (Tokyo)"),the new manufacturing subsidiary established in October 2017, as announced in the press releases "Consolidation ofGroup Production Functions" on May 11, 2017, and "Establishment of a Subsidiary" on September 28, 2017, acquire
the Noshiro Plant (Noshiro, Akita) of KYORIN Pharmaceutical Co., Ltd., a consolidated subsidiary of the Company,and the Production Division (Nanto, Toyama) of KYORIN Rimedio Co., Ltd., a consolidated subsidiary of theCompany, through an absorption-type company demerger and integrate KYORIN Pharmaceutical Facilities Co., Ltd.
(Koka, Shiga) (hereinafter "KYORIN Pharmaceutical Facilities Co. Ltd. (Shiga) "), a consolidated subsidiary of theCompany, through an absorption-type merger.

The overview of this consolidation of production functions is as shown below. This will be conducted amongwholly owned subsidiaries of the Company and thus statements of the matters and information to be disclosed havebeen partly omitted.
*The Company has determined that the name of the new manufacturing subsidiary will be the same as that of its current
consolidated subsidiary, KYORIN Pharmaceutical Facilities Co., Ltd. (Koka-shi, Shiga), following the completion of consolidationof production functions. KYORIN Pharmaceutical Facilities Co., Ltd. (Koka-shi, Shiga) will be absorbed through the consolidationof production functions.

1. Purpose of consolidation of production functions
One of the priority strategies of the Group’s medium-term business plan (2016 – 2019), HOPE 100 Stage 2, is“Enhanced low cost structure: Reform of the cost structure through optimization within the Group” and the Group has
been conducting the overall optimization of production operations through collaborations between its Groupcompanies. The establishment of the manufacturing subsidiary and consolidation of the production functions underthe directions resolved on at today’s meeting of the Board of Directors is aimed at the leveling of capacity utilizationand the efficient use of assets, and the building of a competitive Group production structure for consistently providing
high-quality products at low cost.

2. Summary of consolidation of production functions- Absorption-type demerger between KYORIN Pharmaceutical Co., Ltd. and KYORIN Pharmaceutical Group
Facilities Co., Ltd. (Tokyo) and absorption-type demerger between KYORIN Rimedio Co., Ltd. and KYORIN
Pharmaceutical Group Facilities Co., Ltd. (Tokyo)(1) Schedule for respective absorption-type demergers
Meeting of the Board of Directors
for approval of the respective
agreements on the absorption-typedemergers

December 19,2017(KYORIN Pharmaceutical Co., Ltd., 、 KYORIN Pharmaceutical
Group Facilities Co., Ltd.)
December 22,2017(KYORIN Rimedio Co., Ltd.,)

Date of execution of the respective
agreements on the absorption-type

December 22,2017

demergers
General meeting of shareholders forapproval of the respective
agreements on the absorption-typedemergers

January 15,2018(KYORIN Rimedio Co., Ltd.,)
January 17,2018(KYORIN Pharmaceutical Co., Ltd.,、KYORIN Pharmaceutical
Group Facilities Co., Ltd.)

Date of the respective
absorption-type demergers

April 1,2018(effective date)(2) Method of the respective absorption-type demergers
Absorption-type demerger with KYORIN Pharmaceutical Co., Ltd. and KYORIN Rimedio Co., Ltd. as thedemerged companies and KYORIN Pharmaceutical Group Facilities Co., Ltd. (Tokyo) as the successor company(3) Description of allotment upon the respective absorption-type demergers
The respective absorption-type demergers will be conducted among wholly owned subsidiaries of theCompany and thus there will be no allotment of shares and others upon the respective absorption-type demergers.

(4) Treatment of the share options and the bonds with share options of the demerged companies upon the respective
absorption-type demergers
Not applicable.

(5) Stated capital to increase or decrease upon the respective absorption-type demergers
Not applicable.

(6) Rights and obligations that the successor company will obtain and assume
The successor company will obtain and assume the assets, liabilities, employment agreements and other rights
and obligations relating to the manufacturing of pharmaceuticals and others conducted at the Noshiro Plant ofKYORIN Pharmaceutical Co., Ltd. and the Production Division of KYORIN Rimedio Co., Ltd. on the date of
the respective absorption-type demergers.

(7) Outlook for performance of the obligations
The outlook for performance of the obligations by the successor company after the respective absorption-typedemergers is judged to not to have any problems.

(8) Outline of the companies involved in the respective absorption-type demergers
Demerged companies

Successor company

1)NameKYORIN PharmaceuticalCo., Ltd.,KYORIN Rimedio
Co., Ltd.,KYORIN Pharmaceutical
Group Facilities Co., Ltd.

2)Head office

6,Kanda Surugadai 4ChomeChiyoda-ku,Tokyo287-1, shimocho, MoroeCho,Kanazawa-City,Ishikawa

6,Kanda Surugadai 4Chome Chiyoda-ku,Tokyo

3)Representative

Minoru Hogawa

Michiro Onota

Kazuhiro Marubayashi

4)Scope ofbusiness5)Establishment
date

Manufacture,sales,ofprescription medicine

Manufacture,sales,ofprescription medicine

Manufacture,sales,ofprescription medicine

December 1940

October 1947

October 20176)Closing Date

March 31

March 31

March 31

7)Employees

1,687(as of March 2017)347(as of March 2017)4(as of November 2017)- Absorption-type merger between KYORIN Pharmaceutical Group Facilities Co., Ltd. (Tokyo) and KYORIN
Pharmaceutical Facilities Co., Ltd. (Shiga)(1) Schedule for the absorption-type merger
Meeting of the Board of Directors for

December 19,2017(KYORIN Pharmaceutical Group Facilities Co., Ltd.)

approval of the agreement on theDecember 21,2017

absorption-type merger(KYORIN Pharmaceutical Facilities Co., Ltd.)

Date of execution of the agreement

December 22,2017

General meeting of shareholders forapproval of the agreement on theabsorption-type merger
Date of merger (effective date)

January 17,2018(KYORIN Pharmaceutical Group Facilities Co., Ltd.)
January 23,2018(KYORIN Pharmaceutical Facilities Co., Ltd.)
April 1,2018

(2) Method of the absorption-type merger
Absorption-type merger with KYORIN Pharmaceutical Group Facilities Co., Ltd. (Tokyo) as the surviving
company and KYORIN Pharmaceutical Facilities Co., Ltd. (Shiga) as the absorbed company(3) Description of allotment upon the absorption-type merger
This absorption-type merger will be conducted between wholly owned subsidiaries of the Company and thus
there will be no allotment of shares and others upon the absorption-type merger.

(4) Treatment of the share options and the bonds with share options of the absorbed company upon theabsorption-type merger
Not applicable.

(5) Outline of the companies involved in the absorption-type merger
Surviving company

Absorbed company

KYORIN Pharmaceutical Group
Facilities Co., Ltd.
6,Kanda Surugadai 4-Chome
Chiyoda-ku,TokyoKYORIN Pharmaceutical Facilities Co.,Ltd.
1-4 Sasagaoka, Mizukuchi-cho,
Koka, Shiga

3)Representative

Kazuhiro Marubayashi

Kei Takahashi

4)Scope of business

Manufacture,sales,of prescription
medicine

Manufacture,sales,of prescription
medicine5)Establishment date201720126)Closing Date

March 31

March 317)Employees

4 (as of November 2017)

130(as of March 2017)1)Name2)Head office

3. Future outlook
Expected financial impact is minimal on the consolidated financial results for period ending March 2018.