For Immediate Release
December 2, 2016
Company Name:
Representative:

Securities Code:
Stock Exchange Listings:
Inquiries:

Sumitomo Chemical Co., Ltd.
Masakazu Tokura
President and Representative
Director4005
First Section of the Tokyo StockExchange
Hiroshi Ando
General Manager
Corporate Communications Dept.
(Tel: +81-3-5543-5102)

Announcement Concerning the Consolidation of the S-SBR Business with Zeon
Corporation, by Absorption-type Split and the Establishment of a New Joint
Venture Company
Sumitomo Chemical announced that its Board of Directors has resolved today to enter into anagreement with Zeon Corporation (“Zeon”) for the establishment of a joint-venture company
between the two companies regarding the integration of their Solution Styrene Butadiene
Rubber (“S-SBR") businesses.
As the company split resulting from this business integration involves an arrangement for
which certain portions of items and details for disclosure may be omitted, disclosure under thepresent announcement has partially been omitted.
1. Purpose of the Business Consolidation
Sumitomo Chemical’s S-SBR is used as a feedstock for fuel-efficient tires. With heightening
environmental awareness and tightening environmental regulations worldwide, demand forfuel-efficient tires is likely to keep increasing steadily in the future, while competition in themarketplace is ever growing keener with many of the manufacturers expanding production
capacities.
Under the circumstances, Sumitomo Chemical and Zeon have been looking into various
opportunities of co-operation, including developing new products to better meet customers'
needs by bringing their technologies together, increasing cost-competitiveness further, forminga new joint venture capable of strengthening the business through an ensured stable supply ofproducts, or transferring their S-SBR business operations, including those of their respective
affiliates, to a newly formed joint venture. After in-depth consideration, the two companies haverecently agreed that certain synergistic benefits should accrue from integrating their businesses
in a manner outlined below.

2. Outline of the Business Consolidation(1) Details
As set forth in the Joint Venture Agreement, Zeon will establish a new wholly owned subsidiarycalled ZS Elastomer Co., Ltd. (“ZSE”). Sumitomo Chemical and Zeon will then succeed therights and obligations of the sales and R&D functions of each company’s respective S-SBR
business to ZSE.
It should be noted that this Business Consolidation is contingent on the approval of the board of
directors of Zeon, the relevant domestic and international authorities.
(2) Outline of the joint-venture company (Scheduled)(Status of the Succeeding Company after the Company Split)
Company nameZS Elastomer Co., Ltd.

Address

1-6-2 Marunouchi, Chiyoda-ku, Tokyo 100-8246, Japan

Representative

Not determined

Scope of business

Buying, selling, research and developing, manufacturing, andprocessing of synthetic rubbers

CapitalJPY 450 million

Date EstablishedDecember 8, 2016 (Scheduled)

Fiscal year end

March 31

Net assets

Not determined

Total assets

Not determined

Major shareholders
ratio of shares heldand Zeon Corporation: 60%; Sumitomo Chemical Co., Ltd.: 40%

3. Business Consolidation Partner
Company name

Zeon Corporation

Address

1-6-2 Marunouchi, Chiyoda-ku, Tokyo 100-8246, Japan

Representative

Kimiaki Tanaka, President

Scope of business

Manufacturing and selling of elastomer materials and specialty
materials

CapitalJPY 24,211 million

Date Established

April 12, 1950

Major shareholders
ratio of shares held

and The Yokohama Rubber Co., Ltd.: 9.57%
Japan Trustee Services Bank, Ltd (Trust Account): 5.05%

(as of September 30, 2016)

Mizuho Bank, Ltd : 4.67%
Asahi Mutual Life Insurance Company: 3.24%
National Mutual Insurance
Cooperatives: 2.94%

FederationofAgriculturalRelationshipbetween No notable capital, personnel, or trade relationships exist
Partner and the Company
Performance and Financial Results of the Past Three Fiscal Years (consolidated)
Yen in millions, unless otherwise noted
Fiscal Year End

March 2014

March 2015

March 2016

Net assets

181,414215,631

215,586

Total assets

370,872

399,512384,753

Net assets per share (yen)783.11

931.34949.91

Net sales

296,427

307,524

295,647

Operating income

29,901

28,24529,856

Ordinary income

32,56131,09832,153

Net income attributable to owners of parent

19,65019,08018,079Net income per share (yen)

85.15

84.13

79.86

Dividends per share (yen)

13.00

14.00

15.00

4. Outline of the Company Split(1) Company Split Schedule
Approval of the Joint Venture Agreement(by resolution of the Board of Directors)

December 2, 2016

Execution of Joint Venture Agreement

December 2, 2016

Establishment of the Succeeding Company

December 8, 2016 (scheduled)

Approval of the Company Split Agreement(by resolution of the Board of Directors)

January 30, 2017 (scheduled)

Execution of the Company Split Agreement

January 30, 2017 (scheduled)

Effective date of the Company Split

April 1, 2017 (scheduled)

Please note that the schedule above is subject to change based on the progress of relative
domestic and international regulatory approvals and other procedures concerning thetransaction

(2) Company Split method
This is an absorption-type company split in which Sumitomo Chemical is the splitting companyand ZSE is the succeeding company.
*Sumitomo Chemical will conduct the Company Split without obtaining the approval of theshareholders’ meeting of the Company pursuant to the provision of the “simple absorption-typecompany split” set forth in Article 784, Paragraph 2 of the Companies Act of Japan.
(3) Details of Stock allocations
As consideration of the Company Split, ZSE is to allocate 2,400 shares to Sumitomo Chemical.
On the other hand, for the company split between Zeon and ZSE, ZSE is to allocate 3,599 shares
to Zeon. Accordingly, Zeon will have a total of 3,600 shares with 1 share acquired fromestablishing ZSE. As a result, the capital participation in ZSE will be 60% for Zeon and 40% for
Sumitomo Chemical.
(4) Handling of Stock Acquisition Right and Bonds with Stock Acquisition Rights Accompanying
the share options and bonds with share options accompanying the absorption-type company
split
Not applicable.
(5) Capitalization Changes Accompanying the Company Split
There will be no change in Sumitomo Chemical’s capital stock related to the Company Split.
(6) Succession of Rights and Obligations
ZSE will succeed the rights and obligations of the sales and R&D functions of the S-SBR
business at the time of the effective date based on the Company Split Agreement. Note that ofthe assets and liabilities recorded in Sumitomo Chemical's balance sheet, only cash deposits will
be succeeded.
(7) Capability of Satisfying Liabilities
Sumitomo Chemical has determined that ZSE will not have any problem in performing its
obligation relating to the liabilities it will bear following the Company Split
5. Basis for Calculation of Allocations for the Company Split
The value of property which will be allocated to Sumitomo Chemical from ZSE has been
determined by negotiation with ZEON, taking into consideration the amount of cash which will
be succeeded to ZSE from Sumitomo Chemical and ZEON respectively.
6. Summary of Companies Involved in the Company Split
Splitting company

Succeeding company

As of March 31, 2017 (Scheduled)Company Name

Sumitomo Chemical Co., Ltd.

ZS Elastomer Co., Ltd.

Address

2-27-1 Shinkawa, Chuo-ku, 1-6-2 Marunouchi, Chiyoda-ku,
Tokyo 104-8260, JapanTokyo 100-8246, Japan

Representative

Masakazu Tokura
Not determined
President and Representative

Director
Scope of businessPetrochemical(manufactureand sales of synthetic plastics,etc.), Energy and Functional
Materials (manufacture andsales of synthetic rubber, etc.),
ITrelated
Chemicals(manufacture and sales ofoptical products), Health andCrop Sciences (manufactureand sales of agriculturalchemicals),
Pharmaceuticals(manufacture and sales ofethical drugs)

Buying, selling, research anddeveloping,manufacturing,and processing of syntheticrubbers

Capital

JPY 89,699 million

JPY 0.1 million

Date Established

June 1, 1925

December 8, 2016

Number of shares issued

1,655,446,177

1

Fiscal year end

March 31

March 31

Major shareholders
ratio of shares heldand Japan Trustee Services Bank, Zeon Corporation: 100.0%
Ltd (Trust Account):5.85%(as of September 30, 2016)

The Master Trust Bank ofJapan, Ltd (Trust Account):
5.49%
SumitomoLifeCompany: 4.29%

Insurance

NipponLife
Company: 2.48%

Insurance

Sumitomo Mitsui
Corporation: 2.32%

Banking

Performance and Financial Condition of the Fiscal Year Ended March 31, 2016 (Consolidated)
Yen in millions, unless otherwise noted
Net assets

1,090,776

Total assets

2,662,150

Net assets per share (yen)Net sales

469.252,101,764

Operating income

164,446

Ordinary income

171,217

Net income attributable to owners of parent81,451

Net income per share (JPY)

49.84

7. Overview of the Business to be Split(1) Contents of the Business to be Split
The only portion of the business to be split is Sumitomo Chemical’s sales and R&D functions ofthe S-SBR business. Currently, production functions of the S-SBR business are not included inthe Company Split, though there are plans to succeed these functions in the future. For theperiod until the succession, ZSE will purchase products produced by Sumitomo Chemical andZeon to use for sales.
(2) Financial Results of the Business to be Split
Net Sales: 4,117 million yen (as of March 31, 2016)
The amount above is the net sales of Sumitomo Chemical’s S-SBR business and does not include
sales figures by Sumitomo Chemical Asia Pte Ltd.
(3) Assets and liabilities to be Split
Cash deposit of 240 million yen
No other assets or liabilities are included in this Company Split
8. Status after the Company Split(1) The status of the Splitting Company (Sumitomo Chemical)
There will be no change in the trade name, address, headquarters, representative, business
type, paid-in capital or fiscal year due to the company split.
(2) Status of the Succeeding Company after Company Split (ZSE)
Please refer to 2. Outline of the Business Consolidation (2) Outline of the Joint Venture
Company above for details.
9. Future Outlook
After this Company Split, Sumitomo Chemical and Zeon plan to succeed other functions of theS-SBR business in addition to the sales and R&D functions, including both companies’ S-SBR
business subsidiaries in Singapore. The effect of the Company Split on the Company’s
consolidated financial results will be negligible.