November 1, 2018
To whom it may concern:
Company name
Representative
Contact

Toyo Tire & Rubber Co., Ltd.
(Stock code: 5105, TSE 1st Section)
Takashi Shimizu
Representative Director and President
Tamotsu Sakuramoto
Director and Senior Corporate Officer(TEL (072) 789-9100)

Notice Concerning Capital and Business Alliance with and Issuance of New Shares Through Third-Party
Allotment of Shares to Mitsubishi Corporation &Changes in Largest Shareholder Among Major Shareholders and Other Associated Companies
Toyo Tire & Rubber Co., Ltd. (“Toyo Tire”) has resolved at the Board of Directors’ Meeting held today toenter into a capital and business alliance agreement with Mitsubishi Corporation (“MC”) (the “Alliance”) andto issue new shares of Toyo Tire through third-party allotment of shares to MC (the “Third-party Allotment”).
In addition, we hereby announce that the shareholding ratios of our major and largest shareholder and otherassociated companies will have changed following the Third-party Allotment.
In the years ahead, the two companies will respect the autonomy and independence of the other’s
management, and will together seek to grow and enhance corporate value under a long-term partnership basedon a spirit of equality and a cooperative relationship.
I.

Overview of the Alliance1.

Purpose of and Reasons for the Alliance
In January 2017, we articulated our corporate philosophy. “To create excitement and surprise with our

products that exceed customer expectations and enriches society,” committed to pursue this mission. With thisnew foundational principle, beginning in 2017 and spanning the next four years under the new medium-termbusiness plan “Mid-Term ’17,” we have endeavored to execute our business plans and to strengthening ourorganizational foundation for the future. This latest announcement is another step in our global businessstrategy.
To reflect these changes, effective January 1, 2019, we will change our corporate name to “Toyo Tire
Corporation.” The new name also represents our pride and responsibilities as a mobility-centered business, andour determination to continue to grow Toyo Tire into a truly global brand, as well as our aspiration to begin a
new chapter in our history, with a continuing commitment to a mobile society.
We have consistently manufactured high value-added tires based on our proprietary technologies and haveestablished a solid business foundation to meet global demand through optimized product supply from our
production facilities both in Japan and abroad. Our large-diameter tires for light trucks, including SUVs, havedeveloped strong reputation in the marketplace. We have also built a highly profitable business portfolio, andour operating margins are among the highest in the tire industry.
The auto industry is approaching a historic turning point; a “once in a century” event. The industry structureis undergoing a major transformation. In order to survive and remain viable in the era of such unprecedented－ 1 －transformation, we must continue to be aware of industry trends from broader perspective including
cooperation based on cross-industry cooperation, to find our own business strategy, and to ensure that we
maintain our current unique presence in the marketplace and sustain our current financial health. To maintainour future growth will require a further strengthening of our business and management foundations. This is why
we have decided to enter into a capital and business alliance with MC.
Beginning with Australia in 1974, we have tapped new markets in cooperation with MC by establishing tire
sales joint ventures in various regions including Europe, China, Canada and Russia. As a result, we havesucceeded in developing a staunch business foundation of important markets next to Japan and US. MC has
been a vital partner in the worldwide expansion of the Toyo Tire brand.
We will now elevate this collaborative sales relationship to create a framework for broader alliance thatinvolves the entirety of our respective organizations. Henceforth, we will utilize the MC group’s global network
to reinforce our sales and technological strengths. We will also bolster our sales and corporate functions with
employees transferred from the MC group, solidifying our foundation for future growth.
As a general trading company, MC has been shifting its management strategy from a “Business Investment
Model” to “Business Operation Model.” More specifically, MC has openly aspired to not only invest in
businesses but also contribute to the growth of the businesses it has acquired by sharing with them the uniquestrengths and functions of MC, to ultimately build a next-generation business foundation. The endeavor of thetwo companies to jointly create a new stage of tire business and enhance corporate value, through combinationof human resources of the two companies, is in line with MC’s management strategies and will also be very
beneficial in strengthening the mobility-related businesses for MC.
In order to cement the business alliance with MC and accelerate the implementation of our growth strategies,
we have decided to issue new shares to MC through the Third-party Allotment. There is intense competition
within the tire industry and drastic environmental changes globally. Therefore, having MC as a partner isextremely important, as they are familiar with our corporate culture, strengths and uniqueness, and the Alliancewill also allow us to collaborate from a medium- and long-term perspective to jointly build a business modelthat will create additional value. We will use the capital raised through the Third-party Allotment to meet the
future challenges of a mobile society by investing in our global operations. By leveraging our alliance with MC,
our objective is to increase our corporate resilience, thereby further enhancing our corporate.
Following the Third-party Allotment, MC’s stake in our company will increase from the current 3.05% to20.00%.
2.

Details of the Alliance(1) Details of the business allianceToyo Tire and MC have agreed to collaborate in the following initiatives: “reinforcement of sales
capabilities”, “enhancement of technological capabilities” and “reinforcing resources.” The two companies
will strengthen their collaborative relationship and endeavor to maximize synergies from the Alliance.
Details of the three major initiatives are as follows:①

Reinforcement of sales capabilities

The demand for tire products has remained strong globally. Meeting the demand more speedily anddelivering more differentiated products to customers will greatly help in improving our corporate value inthe future. We also plan to establish with MC joint task forces in each region (Japan, China, Europe,－ 2 －Middle East, Africa and Asia) and leverage the MC group’s global network to develop sales channels,
enhance marketing capabilities, and reinforce logistics and other operations.
②

Enhancement of technological capabilities

We aspire to deliver to customers products that astonish, and to do so, we will seek to advance ourdevelopment and technological capabilities. Towards this end, and with the future of the mobile society inmind, Toyo Tire and MC will jointly promote with outside parties a range of collaborative initiatives, suchas the “Research on Next-generation Materials (such as new features rubbers and renewable materials),”“Advanced Development of Production Technologies (such as new features vulcanizers and rubber
kneading machines)” and “Application of AI/IoT Technologies (such as factory automation and newgeneration tires).” We also plan to extensively utilize the MC group’s network, to drive advanced research,development of materials and technologies; streamline the procurement of raw materials; and build a new
business model, so that we can ultimately strengthen our proprietary technological platform.
③

Reinforcing resources

To enhance sales and marketing capabilities globally, and to strengthen our management foundation
over the medium to long term, we will receive MC’s marketing and corporate personnel into ourorganization, including at headquarters, and at the sales subsidiaries both in Japan and overseas. Under the
existing cooperative framework with MC, we have already assigned some personnel from MC to ouroverseas sales subsidiaries and administrative divisions. We expect the Alliance to further strengthen ourhuman resources, and as a result, help enhance our business operations and strengthen our managementfoundation.
(2) Details of the capital alliance
We will issue new shares to MC by way of the Third-party Allotment, for the purpose of establishing amore stable capital relationship with MC, realizing synergies by making better use of each other’s uniquestrengths and management resources, and ultimately enhancing the corporate value of the two companies.
Through the Third-party Allotment, MC will acquire 26,931,956 shares of our common stock, which will
increase their total shareholding percentage of Toyo Tire stock from 3.05% to 20.00%.
(3) Dispatch of director
As part of the business alliance, we intend to propose the appointment to the Toyo Tire Board of Directors,
one director designated by MC, who we believe to be qualified, at the next regularly scheduled general
meeting of the shareholders following the payment date. During the period of the Alliance, the proposed
appointment of an MC designated director shall continue each time there is a general meeting of theshareholders where the appointment of directors is on the agenda.
(4) Profile of the proposed allottee (as of March 31, 2018, for other than the Notes)
(1)
(2)

Name
Address ofheadquarters(3)

Name and title of

Mitsubishi Corporation
3-1, Marunouchi 2-Chome, Chiyoda-ku, Tokyo, 100-8086, Japan
President and Chief Executive Officer－ 3 －Takehiko Kakiuchi

the representative
Manufacturing and marketing a wide range of products, including energy,
metals, machinery, chemicals and living essentials through our domestic and(4)Lines of businessoverseas network. We also are involved in diverse businesses by actively
investing in areas such as natural resources development and infrastructure,
and we are engaged in finance businesses.

(5)

Capital204,447 million yen(6)Date established

April 1, 1950(7)

No. of shares issued

1,590,076,851 shares(8)

Fiscal year end

March

(9)

No. of employees

77,476 (consolidated)(10)

Main customers

Corporations in Japan and abroad(11)

Main banks

Major shareholders(12)

and theirshareholding ratios(13)

MUFJ Bank, Ltd.､Mizuho Bank, Ltd.､Mitsubishi UFJ Trust and Banking
Corporation
Japan Trustee Service Bank, Ltd. (Trust Account)

8.28%

The Master Trust Bank of Japan, Ltd.(Trust Account)

5.32%

Tokio Marine & Nichido Fire Insurance Co., Ltd.

4.69%

Meiji Yasuda Life Insurance Company

4.08%

Ichigo Trust Pte. Ltd.

2.29%

The Master Trust Bank of Japan, Ltd.
(Mitsubishi Heavy Industries, Limited Account, Retirement

2.03%

Benefit Trust Account)
STATE STREET BANK WEST CLIENT - TREATY 505234

1.73%

Japan Trustee Service Bank, Ltd. (Trust Account 5)

1.66%

Japan Trustee Service Bank, Ltd. (Trust Account 9)

1.40%

Japan Trustee Service Bank, Ltd. (Trust Account 1)

1.23%

Relationship between the parties

Capital relationshipOur shareholding in the607,703 shares (common stock)proposed allottee(as of June 30, 2018)

Proposed allottee’s
shareholding in ourcompany

Personnel exchange
Transaction
relationship

3,890,250 shares (common stock)(as of June 30, 2018)

7 employees are seconded from MC to Toyo Tire
Selling products to MC
The party to receive the allocated new shares (the “Allottee”) will not fall

Related party statusunder the category of a related party to Toyo Tire. Also, neither the parties
related to nor the associated companies of the Allottee fall under the
category of related parties to Toyo Tire.

(14)

Financial performance and results of operations for the latest three years (consolidated, IFRS)－ 4 －FYE Mar. 2016

FYE Mar. 2017

FYE Mar. 2018

4,592,516

4,917,247

5,332,427

million yen

million yen

million yen

14,916,256

15,753,557

16,036,989

million yen

million yen

million yen

2,898.23 yen

3,101.43 yen

3,362.34 yen

6,925,582

6,425,761

7,567,394

million yen

million yen

million yen

Net profit (loss)△149,395

440,293

560,173(attributable to owners of MC)

million yen

million yen

million yen△93.68 yen

277.79 yen

353.27 yen

50.00 yen

80.00 yen

110.00 yen

Equity attributable to owners of MC
Total assets
Equity attributable to owners of MC
per share
Revenues

Basic net profit (loss) per share(attributable to owners of MC)
Dividend per share (yen)(5) Timeline of the Alliance(1)Date of Board of Directors’ resolution

November 1, 2018(2)

Date of capital and business alliance agreement conclusion

November 1, 2018(3)

Pay-in period for the Third-party Allotment

January 15, 2019 - June 28, 2019

(6) Future prospect
For details regarding future prospect, please refer to the section below: “II. Issuance of New Shares via
Third-party Allotment, 3. Future Prospect.”－ 5 －II. Issuance of New Shares via Third-party Allotment
1.

Summary of the Third-party Allotment(1)

Pay-in period

January 15, 2019 - June 28, 2019(2)

No. of shares issued

26,931,956 shares of common stock(3)

Pay-in amount

1,890 yen per share(4)

Total proceeds

50,356,396,840 yen (estimated net proceeds)(5)

Offering method(proposed allottee)

Third-party allotment (Mitsubishi Corporation)
Each of the above conditions is subject to effective filing of
the securities registration statement under the Financial

(6)

Other

Instruments and Exchange Act of Japan and completion of theprocedures required for the Third-party Allotment under thedomestic and overseas anti-trust acts.

Note:
As of November 1, 2018, the payment date is described as a range due to the uncertain timing of whenapprovals may be obtained from domestic and overseas antitrust authorities. MC has agreed to pay within
the Pay-in period after all conditions required for the Third-party Allotment have been satisfied.
2.

Purpose and Reasons for the Third-party Allotment
As described in “I. Overview of the Alliance, 1. Purpose of and Reasons for the Alliance” above, theThird-party Allotment shall be conducted as part of the Alliance, for the purpose of further strengthening thecollaborative relationship between Toyo Tire and MC, to jointly generate more synergies, and to finance ourplanned capital investments.
Although the Third-party Allotment is expected to have some dilutive effect on Toyo Tire’s shares, we
believe further collaborations with MC through the Alliance will help enhance our corporate value over the
medium to long term and ultimately increase returns to our existing shareholders.
3.

Amount, Uses and Timing of Expenditure of the Proceeds(1) Proceeds from the Third-party Allotment
Total① paid-in amount

50,901,396,840 yen

Estimated②
cost of issuance545,000,000 yen

Estimated③
net proceeds

50,356,396,840 yen

Notes:*1. Consumption and other taxes are not included in the estimated cost of issuance.
*2. Registration related fees are expected to account for the majority of the estimated cost of issuance.
(2) Specific uses of the proceeds
As part of the business growth strategies set forth in “Mid-Term’17,” we are committed to optimizing
the operations at our tire plants and bolstering our portfolio. We plan to use the net proceeds totaling about
50 billion yen, net of the estimated cost of issuance, to finance the capital investments in manufacturing
facilities and to strengthen our technological platforms, in order to ultimately strengthen our businessfoundation globally.

－ 6 －More specifically, the primary uses, the amounts and timing of expenditures are assumed to occur as set
forth below. The amount of capital expenditure exceeding the estimated net proceeds will be allocatedcash reserves, etc. The proceeds from the Third-party Allotment will be managed appropriately (e.g, held
in a company banking account, etc. until the proceeds are actually disbursed.
Key uses

AmountTiming of planned expenditure

6 billion yen

Dec. 2018 – Jul. 2020

10 billion yen

Apr. 2019 – Jun. 2021

33 billion yen

Jan. 2020 – Apr. 2023

7 billion yen

Jan. 2019 – Dec. 2020

Increased production capacity at the U.S. tire①

plant (Phase 5)
Increased production capacity at the Malaysia②

tire plant (Phase 2)③

Construction of new production base
Expansion of truck and bus tire production④

facilities
Total①

56 billion yen

Increased production capacity at the U.S. tire plant.
On September 28, 2017, we announced a plan to invest approximately 14.0 billion yen to construct abuilding expansion (Phase 5) at its US tire production facility (Toyo Tire North America Manufacturing
Inc.: “TNA”; Georgia). Phase 5 will have a total annual capacity to produce 2.4 million passenger car
tires (note: actual capacity may be less depending on the type and size of tire actually produced).
Initially, we will install equipment capable of producing half this volume, or 1.2 million passenger car
tires annually; production is scheduled to start in April 2019. Later, we will install the remainder of theequipment to increase capacity by an additional 1.2 million passenger car tires. Toyo Tire will initiate
equipment orders for the expanded facilities in December 2018, and start up operation of each line in
the expanded facilities beginning in January 2020, and complete them in phases. The first half of thePhase 5 expansion is scheduled to be completed in July 2020.

②

Increased production capacity at the Malaysia tire plant
On September 28, 2017, we announced a plan to invest approximately 21.0 billion yen to construct a
new manufacturing building at its Malaysian tire plant (Toyo Tyre Malaysia Sdn Bhd, Perak). The newbuilding will have an annual production capacity of 4.8 million passenger car tires (note: actual
capacity may be less depending on the type and size of tire actually produced). Initially, we will installequipment capable of producing half this volume, or 2.4 million passenger car tiers annually;
production is scheduled to start in October 2019. In the second phase, we will install the remainder ofthe equipment to increase capacity by an additional 2.4 million passenger car tires. Toyo Tire will
initiate equipment orders for the first expansion in April 2019, and start operation of each line after
production equipment installation commences in September 2020, and complete them in phase. The
expansion project is scheduled to be completed in June 2021.

③

Construction of new production base

－ 7 －

On March 10, 2017, Toyo Tire included in its “Mid-Term ’17 Plan,” future investments in new
production facilities with a plan for sustainable growth through 2020 and beyond. Accordingly, we willcontinue to explore possible options, to ensure that we have sufficient capacity to quickly and flexibly
respond to market demand and sales forecasts, taking into account the available production from theplanned plant expansions described above. The new production facilities are expected to have an initial
capacity to produce a maximum of 4 million passenger car tires a year (note: actual capacity may beless depending on the type and size of tire actually produced).
④

Expansion of truck and bus tire production facilities
Toyo Tire is focused on developing a superior truck/bus tire incorporating differentiating
technologies. In order to position Toyo Tire as a manufacturer of tires with technological advantages,
we are seeking to expand our presence in this category. Towards this end, we are committed toenhancing our capacity to supply higher-value added products. To increase production capacity at ourexisting truck/bus tire plants, Toyo Tire will commence equipment orders starting in January 2019, andplans to start line operations in phases beginning in January 2020. The plant expansion is scheduled tobe completed in December 2020, resulting in an expected increase in the production of 200,000
truck/bus tires per year.

4.

Views on Reasonable Use of Proceeds
We believe that appropriation of the proceeds for the uses stated in section “3. Amount, Uses and Timing of

Expenditure of the Proceeds” will help enhance our corporate value and ultimately increase returns to ourexisting shareholders. We therefore have determined that the uses of proceeds from the Third-party Allotment
are reasonable.
5.

Rationale of Issue Conditions, Etc.
(1) Basis for calculation of the pay-in amount and its specific details
The issue price is set at 1,890 yen, which is the closing price for the common shares of Toyo Tire on theFirst Section of Tokyo Stock Exchange on the business day (October 31, 2018) immediately prior to the dateof the resolution concerning the Third-party Allotment by the Board of Directors (“BoD resolution date”).
The timing for determining the issue price is based upon the fact that it is the market price closest in timeto the calculation date, and forms reasonable basis for calculating a fair price for the company’s shares.
The issue price represents a 0.53% discount over 1,900 yen (rounded down to the nearest yen), theaverage closing price for the month immediately preceding the BoD resolution date (October 1, 2018 to
October 31, 2018). This represents a 2.38% premium over 1,846 yen (rounded down to the nearest yen), theaverage closing price for the past three months (August 1, 2018 to October 31, 2018); and a 6.78% premium
over 1,770 yen (rounded down to the nearest yen), the average closing price for the past six months (May 1,
2018 to October 31, 2018).
The issue price mentioned above is calculated in compliance with the “Rules Concerning Handling of
Allotment of News Shares to Third Party, Etc.” of the Japan Securities Dealers Association (JSDA), andhence, we believe the issue price will not be particularly advantaged. Please note that all the 4 company
auditors who participated in the resolution concerning the Third-party Allotment (of which, 3 are outside
auditors) have expressed an opinion that the issue price is in compliance with the “Rules Concerning
Handling of Allotment of News Shares to Third Party, Etc.” and will not be particularly advantaged.
－ 8 －(2) Basis for judgement that the number of shares issued and the degree of dilution are reasonable
The Third-party Allotment will allocate 26,931,956 shares (equivalent to 269,319 voting rights) to the
proposed allottee. This constitutes 21.18% of 127,179,073 shares, the total number of issued shares as ofJune 30, 2018 (or 21.24% of 1,268,064 total voting rights as of June 30, 2018), causing dilution in
proportion to the increased share volume.
Nonetheless, we believe a more strengthened capital relationship with MC through the Third-party
Allotment will help enhance the partnership, improve the corporate value of our group, and eventually
increase returns to our existing shareholders. We have therefore determined both the number of the newshares issued and the degree of dilution in the Third-party Allotment to be reasonable.
6.

Reasons for Selecting the Proposed Allottee, Etc.
(1) Profile of the proposed allottee
Please refer to section “I. Overview of the Alliance, 3. Profile of the Proposed Allottee” above.
(2) Reasons for selecting the proposed allottee
Please refer to section“I. Overview of the Alliance, 1.Purpose of and Reasons for the Alliance” above.
(3) Proposed allottee’s policy for holding the shares
We have confirmed with MC that the Third-party Allotment is part of the partnership between Toyo Tire
and MC, and that MC intends for the shares acquired through the Third-party Allotment to be held over the
medium to long term.
Toyo Tire plans to obtain a letter of commitment from the proposed allottee that, in the event that the
proposed allottee transfers all or a portion of the shares acquired from Toyo Tire through the Third-party
Allotment within two (2) years of the allotment date, the proposed allottee shall without delay issue a written
notice to Toyo Tire detailing such transfer, shall consent to Toyo Tire’s reporting in writing such transfer tothe Tokyo Stock Exchange and thus making it available for public inspection.
(4) Details confirmed with regards to funds required of the proposed allottee for the payment
Toyo Tire has received a notice from the proposed allottee confirming that it has secured the financial
resources necessary for the total amount to be paid (total issue price). Further, we have confirmed based on
the proposed allottee’s quarterly financial statements as stated in their quarterly report (the first quarter from
April 1, 2018 through June 30, 2018) (submitted on August 10, 2018) that the proposed allottee has secured
cash and cash equivalents sufficient for the payment (1,246,587 million yen). Therefore, Toyo Tire has
determined that the proposed allottee will have no difficulty making the payment.

7.

Major shareholders and their shareholding ratios after the Third-party Allotment
Before the Third-party Allotment ( June 30, 2018)
Name

After the Third-party Allotment

Shareholding
ratio

Name

Shareholding
ratio

Bridgestone Corporation

7.86% Mitsubishi Corporation

20.00%The Master Trust Bank of Japan,

6.07% Bridgestone Corporation

6.48%

－ 9 －

Ltd.(Trust Account)
Japan Trustee Services Bank, Ltd.

6.06%

(Trust Account)Toyota Motor Corporation

3.75%

The Master Trust Bank of Japan, Ltd.
(Trust Account)
Japan Trustee Services Bank, Ltd.

5.01%
5.00%

(Trust Account)

BNYM SA/NV FOR BNYM FORFMSF – FRANKLIN MUTUAL

3.45% Toyota Motor Corporation

3.09%

FINANCIAL SERVICES FUNDBNYM SA/NV FOR BNYM FOR
Mitsubishi Corporation

3.05% FMSF - FRANKLIN MUTUAL

2.85%

FINANCIAL SERVICES FUNDORBIS SICAV

2.69% ORBIS SICAV2.22%

MUFJ Bank, Ltd.

2.21% MUFJ Bank, Ltd.

1.83%

Japan Trustee Services Bank, Ltd.

1.79%

(Trust Account 5)
STATE STREET BANK AND

1.72%

TRUST COMPANY

Japan Trustee Services Bank, Ltd.

1.47%

(Trust Account 5)
STATE STREET BANK AND

1.42%

TRUST COMPANY

Notes:*1. The above is based on the register of shareholders as of June 30, 2018, and the shareholding ratios
represent the ratios of shareholdings to the total number of issued shares (fractions are truncated).
*2. The numbers of shares held by The Master Trust Bank of Japan, Ltd. (Trust Account), Japan Trustee
Service Bank, Ltd. (Trust Account) and Japan Trustee Service Bank, Ltd. (Trust Account5) are the numberof shares held in connection with their trust business.
*3. Although MUFJ Bank, Ltd. and its joint shareholders Mitsubishi UFJ Trust and Banking Corporation,
Mitsubishi UFJ Kokusai Asset Management Co., Ltd. and Mitsubishi UFJ Morgan Stanley Securities Co.
have reported, in their Substantial Shareholding Report (Change Report) made available for public
inspection as of April 16, 2018, that they own the following numbers of shares as of April 9, 2018, we havenot included them in the list of our major shareholders, since we were unable to confirm beneficial
ownerships of the number of shares held in the name of these corporations as of June 30, 2018. The
information described in their Substantial Shareholding Report (Change Report) is as show below:
Number of
Ratio to total number ofName

Address

shares owned
shares issued(,000 shares)

MUFJ Bank, Ltd.

2-7-1 Marunouchi, Chiyoda-ku,
Tokyo

Mitsubishi UFJ Trust and Banking 1-4-5 Marunouchi, Chiyoda-ku,
CorporationTokyo

Mitsubishi UFJ Kokusai Asset

1-12-1 Yurakucho, Chiyoda-ku,

Management Co., Ltd.

Tokyo

Mitsubishi UFJ Morgan Stanley

2-5-2 Marunouchi, Chiyoda-ku,

Securities Co., Ltd.

Tokyo

－ 10 －

2,823

2.22%

3,252

2.56%

968

0.76%

252

0.20%

Notes:*4. Although Wellington Management Company, LLP and its joint shareholders Wellington Management
Hong Kong Ltd. and Wellington Management Japan Pte Ltd. have reported, in their Substantial
Shareholding Report (Change Report) made available for public inspection as of May 7, 2018, that they
own the following numbers of shares as of April 30, 2018, we have not included them in the list of ourmajor shareholders since we were unable to confirm beneficial ownerships of the number of shares held in
the name of these corporations as of June 30, 2018. The information described in their Substantial
Shareholding Report (Change Report) is as show below:
Number of
Ratio to total number ofName

Address

shares owned
shares issued(,000 shares)

Wellington Management Company 280 Congress Street, Boston,
LLP

Massachusetts 02210

Wellington Management Hong
Kong Ltd

2,091

1.64%

3,849

3.02%

763

0.60%

17F, Two International FinanceCentre, 8 Finance Street Central,
Hong Kong

Wellington Management Japan Pte Palace Building 7F, 1-1-1
Ltd

Marunouchi, Chiyoda-ku, Tokyo

Notes:*5. Although Mizuho Securities Co., Ltd. and its joint shareholder Asset Management One Co., Ltd. havereported, in their Substantial Shareholding Report (Change Report) made available for public inspection asof May 22, 2018, that they own the following numbers of shares as of May 15, 2018, we have not included
them in the list of our major shareholders since we were unable to confirm beneficial ownerships of thenumber of shares held in the name of these corporations as of June 30, 2018. The information described intheir Substantial Shareholding Report (Change Report) is as show below:
Number of
Ratio to total number ofName

Address

shares owned
shares issued(,000 shares)

Mizuho Securities Co., Ltd.
Asset Management One Co., Ltd.

8.

1-5-1 Otemachi, Chiyoda-ku,
Tokyo
1-8-2 Marunouchi, Chiyoda-ku,
Tokyo

1,596

1.26%

4,164

3.27%

Future Prospect
We believe that the impact the Alliance and the Third-party Allotment will have on our consolidated earnings

for the period ending December 2018 is minimal, and also that synergies expected from the Alliance as well as
the development and strengthening of the long-term partnership between the two companies will help enhance
our corporate value during the medium to long term. If the need to revise earnings forecasts and/or any matterto be disclosed arises, such information shall be disclosed immediately.
9.

Matters Related to Procedures Required under the Corporate Code of Conduct－ 11 －

The Third-party Allotment this time does not require us to obtain opinions from independent third parties
under Article 432 of the Securities Listing Regulations set forth by the Tokyo Stock Exchange or follow theprocedures for confirming the intent of shareholders, since (i)the dilution rate is below 25%, and (ii) it does not
involve the change of a controlling shareholder.
10. Business results and status of equity financing in the last three years(1) Earnings for the last three years (consolidated)FYE Dec. 2015

FYE Dec. 2016

FYE Dec. 2017

Net sales

407,789 million yen

381,635 million yen

404,999 million yen

Operating income

63,381 million yen

49,315 million yen

45,308 million yen

Ordinary income

56,814 million yen

44,102 million yen

40,167 million yen

1,674 million yen△12,260 million yen

15,476 million yen

Net profit per share

13.19 yen

△96.54 yen

121.87 yen

Dividend per share

45.00 yen

45.00 yen

45.00 yen

Net assets per share

1,353.19 yen

1,114.82 yen

1,252.66 yen

Net profit attributable toowners of parent(2) Current number of issued shares and number of dilutive shares (as of June 30, 2018)
Ratio to the number of shares

Number of shares
Number of shares issued

issued127,179,073 shares

100.0%

-

-

-

-

-

-

Number of dilutive shares at the current
conversion price (exercise price)
Number of dilutive shares at theminimum conversion price (exercise
price)
Number of dilutive shares at the
maximum conversion price (exercise
price)(3) Recent stock price performance① Last three years
FYE Dec. 2015

FYE Dec. 2016

FYE Dec. 2017

Opening price

2,370 yen

2,396 yen

1,481 yenHigh price

3,030 yen

2,588 yen

2,675 yen

Low price

2,107 yen

959 yen

1,237 yen

Closing price

2,404 yen

1,455 yen

2,328 yen

② Last six months－ 12 －

May 2018
Opening
price
High
price
Low
price
Closing
price

June

July

AugustSeptember

October

1,860 yen

1,678 yen

1,608 yen

1,756 yen

1,806 yen

2,020 yen

1,924 yen

1,809 yen

1,765 yen

1,890 yen

2,083 yen

2,075 yen

1,640 yen

1,563 yen

1,523 yen

1,555 yen

1,718 yen

1,773 yen

1,688 yen

1,621 yen

1,759 yen

1,823 yen

2,047 yen

1,890 yen

③ On the business day immediately preceding the BoD resolution date
October 31, 2018
Opening price

1,861 yenHigh price

1,894 yen

Low price

1,851 yen

Closing price

1,890 yen

(4) Equity financing in the last three years
N/A
11. Summary of Issuance(1) Number/type of shares issued

26,931,956 common shares(2) Issuance price

1,890 yen per share(3) Total proceeds

50,901,396,840 yen(4) Amount of capital increase

25,450,698,420 yen(5) Amount of capital surplus increase

25,450,698,420 yen(6) Type of offering

Third-party allotment(7) Proposed allottee

Mitsubishi Corporation(8) Application date

January 11, 2019(9) Subscription period

January 15, 2019 - June 28, 2019(10) Other

Each of the above conditions is subject to effective filingof the securities registration statement under the Financial
Instruments and Exchange Act of Japan and completion of
the procedures required for the Third-party Allotment
under domestic and overseas antitrust laws.

Note:
The payment date is described as a range due to the uncertain timing of when approvals may be obtained
from domestic and overseas antitrust authorities. MC has agreed to pay within the Pay-in period after all
conditions required for the Third-party Allotment have been satisfied.

－ 13 －

III. Change in largest shareholder among major shareholders, and other associated companies
1.

Background Behind the Change
Through the Third-party Allotment, MC will likely become Toyo Tire’s major shareholder, the largest

shareholder among major shareholders and an associated company, since it will hold 20.04% of all voting
rights of Toyo Tire.
2.

Profile of Shareholders Undergoing Changes
For a profile of MC, please refer to section “I. Overview of the Alliance. 3. Profile of the Proposed Allottee.”3.

Number of Voting Rights (Shares) and Ratio of Voting Rights Held by MC Before and After the Change
Number of voting
rights held

Ratio of voting

Rank as major(Number of sharesrights held

shareholder

3.06%

No. 6

Category

held)
Before the change

38,902 rights(as of June 30, 2018)(3,890,250 shares)

Largest shareholder

After the change

308,222 rights(30,822,206 shares)

20.04%

No. 1

among major
shareholders, and otherassociated company

Notes:*1. The ratio of voting rights held after the change is calculated by adding the increased number of voting
rights (269,320 rights), resulting from the issuance of new shares through the Third-party Allotment, to thetotal number of voting rights held by all shareholders (1,268,064 rights), and using the number derived
from this calculation (1,537,384 rights) as the denominator.
*2. In calculating the ratio of voting rights, fractions are truncated.

*3. “The rank as major shareholder” represents the rank currently anticipated based on the register ofshareholders as of June 30, 2018.
4.

Future prospect
For future prospect, please refer to section “II. Issuance of New Shares via Third-party Allotment, 3. Future

Prospect” above.

－ 14 －