February 5, 2019
To Whom It May Concern:
Company Name: KIRIN HOLDINGS COMPANY, LIMITED
Name and Title of Representative: Yoshinori Isozaki, President & CEO
Code Number: 2503
Head Office:4-10-2, Nakano, Nakano-ku, Tokyo 164-0001, Japan
Name and Title of Contact Person:
Tetsuya Fujiwara
Director of Group Corporate Communications
Telephone Number: (03) 6837-7015

Notice Regarding Acquisition of Shares in Kyowa Hakko Bio
Kirin Holdings Company, Limited (President and CEO: Yoshinori Isozaki; hereinafter, “KirinHoldings”) hereby announces that, at a meeting held on February 5, 2019, the Board of Directors
resolved that Kirin Holdings will acquire 95% of all outstanding shares in Kyowa Hakko Bio Co.,
Ltd. (President & Chief Executive Officer: Takeshi Minakata; hereinafter, “Kyowa Hakko Bio”)
from Kyowa Hakko Kirin Co., Ltd. (President and COO: Masashi Miyamoto; hereinafter, “Kyowa
Hakko Kirin”) (hereinafter referred to as “the Share Acquisition”) and concluded a share transfer
agreement with Kyowa Hakko (hereinafter referred to as “the Agreement”) on the same date.
1.

Purpose of the Share Acquisition
Kirin Holdings has aimed to co-achieve sustainable growth with societies by addressing socialissues through its businesses and realizing value creation for the customers under its “New Kirin
Group Vision 2021,” long-term management vision for 2021 by utilizing its unique businessportfolio, centered on the Alcoholic and Non-Alcoholic Beverages businesses and thePharmaceuticals and Bio-Chemicals businesses, as well as its strengths in technology and marketing.
The Kirin Group identified “Health and Well-being”, “Community engagement”, and“the Envitonment” as CSV priority issues, and expects new value creation byaddressing “Health and Well-being” issues through its businesses to be one of potential
growth drivers of the Kirin Group.
The Kyowa Hakko Kirin Group companies, which are in charge of the Kirin Group’s
Pharmaceuticals and Bio-chemicals businesses, possess the Management Philosophy “to contributeto the health and well-being of people around the world by creating new value through the pursuit ofadvances in life sciences and technologies.” In accordance with this philosophy, its businesses cover
Bio-Chemicals and other businesses around the core Pharmaceuticals business. Kyowa Hakko Bio
was established in 2008 by Kyowa Hakko Kogyo Co., Ltd. (now Kyowa Hakko Kirin) as a spin-offof the Bio-Chemicals business. As the subsidiary of the Kyowa Hakko Kirin Group companies
responsible for the Bio-Chemicals business, it has leveraged its wide-ranging knowledge offermentation and synthesis to supply a variety of products, such as amino acids, nucleic acids,vitamins, peptides and synthetic compounds to customers in Japan and overseas, providing goods
and services that meet the health needs of people around the world.
Kirin Holdings and the Kyowa Hakko Kirin Group has been facilitating collaboration with eachother. For example, in 2017, “iMuse” was launched by Kirin Holdings as a group-wide brand tocommercialize the “Lactococcus lactis strain plasma,” which has been the fruit of joint development
between three companies of Kirin Company, Limited, Koiwai Dairy Products Co., Ltd., and Kyowa-1-Hakko Bio. Against the backdrop, as a result of considering and discussing the possibility for further
collaboration in the business domain of “Health and Well-being” on which Kirin Holdings isfocusing as a future growth driver, Kirin Holdings and Kyowa Hakko Kirin came to the decision thatby making Kyowa Hakko Bio a direct subsidiary of Kirin Holdings, it would be possible to more
effectively use each other’s strengths and management resources, as well as raise the speed ofbusiness development, beginning with the “Health and Well-being” domain, and so open the way tomaximizing group synergies and the corporate value of Kyowa Hakko Bio. In addition, the Share
Acquisition would allow Kyowa Hakko Kirin to concentrate management resources on thePharmaceuticals business, primarily new drug development, and to further accelerate the pace ofgrowth, leading in turn to the maximization of corporate value of the Kirin Group. Accordingly, it
was decided that part of the Kyowa Hakko Bio shareholding would be sold to Kirin Holdings.

2.

Description of Kyowa Hakko Bio (As of December 31, 2018)(1)
Company nameKyowa Hakko Bio Co., Ltd.
(2)
Address
1-9-2 Otemachi, Chiyoda-ku, Tokyo
Title and name of(3)
Takeshi Minakata, President & Chief Executive Officer
representative
Research, development, manufacture and sale of raw materials for(4)Business description
pharmaceutical and industrial use, healthcare products and others(5)
Capital10,000 million yen(6)
Establishment
October 1, 2008
Major shareholders(7)
Kyowa Hakko Kirin Co., Ltd (100%)(interests)
Kyowa Hakko Kirin, in which Kirin Holdings owns
Capital50.10% shares, owns 10 issued shares (100%) in Kyowa
Hakko Bio.
Six employees of Kirin Holdings are posted to Kyowa
Relationship between
Personnel
Hakko Bio, and 6 employees of Kyowa Hakko Bio are(8)Kirin Holdings andposted to Kirin Holdings.
Kyowa Hakko Bio
Kirin Holdings makes transactions for the consignment
Businessof manufacturing of consumer healthcare products.
Related party Kyowa Hakko Bio is a consolidated subsidiary of Kirin
statusHoldings, and comes under the category of related party.
Consolidated results of operations and consolidated financial position of Kyowa Hakko Bio within(9)
the past three years (IFRS)Fiscal year closing months
Dec. 2016
Dec. 2017
Dec. 2018
Total assets
131,443 million yen
130,024 million yen
130,847 million yen
Revenue
81,807 million yen81,136 million yen
78,204 million yen
Core operating profit
5,556 million yen
7,189 million yen
8,128 million yen(Note 1)
(Note 2)

Figures in the above consolidated operating results and consolidated financial position for the fiscal year
ended December 31, 2018 have not been audited by an accounting auditor.
Core operating profit was calculated by deducting “selling, general and administrative expenses” and“research and development expenses” from “gross profit,” and adding “share of profit (loss) ofinvestments accounted for using equity method” to the amount.

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Description of the counterparty of the share acquisition (As of December 31, 2018)(1)
Company nameKyowa Hakko Kirin Co., Ltd.
(2)
Address
1-9-2 Otemachi, Chiyoda-ku, Tokyo
Title and name of(3)President and COO: Masashi Miyamoto
representative(4)
Business description
Manufacturing and marketing of pharmaceuticals(5)
Capital26,745 million yen(6)
Establishment
July 1, 1949
Total equity(7)
616,028 million yen (Fiscal year ended December 31 2017)(Consolidated)
Total assets(8)708,295 million yen (Fiscal year ended December 31 2017)(Consolidated) Kirin Holdings Company, Limited 50.10%
 The Master Trust Bank of Japan, Ltd. (Trust Account) 6.91%
 Japan Trustee Services Bank, Ltd. (Trust Account) 3.47%
Major shareholders
 The Norinchukin Bank 1.86%(interests)(9)
 STATE STREET BANK WEST CLIENT – TREATY 505001 1.19%(As of December 31,
 Mizuho Trust & Banking Co., Ltd. (Retirement Benefit Trust for Mizuho2018)
Bank, Ltd) 1.18%
 Japan Trustee Services Bank, Ltd. (Trust Account 5) 0.85%
 Goldman Sachs & Company Regular Account 0.85%
Kirin Holdings holds 288,819 thousand shares in Kyowa
CapitalHakko Kirin, equivalent to 50.10% of the total numberof shares issued by it.
One Director of the Board from Kirin Holdings
concurrently serves as a Director of the Board in Kyowa
Hakko Kirin, and one Audit & Supervisory Board
Relationship between
Member concurrently serves as an Audit & Supervisory
Personnel(10)Kirin Holdings andBoard Member in Kyowa Hakko Kirin. Moreover, 17Kyowa Hakko Kirin
employees of Kirin Holdings are posted to Kyowa
Hakko Kirin, and 11 employees of Kyowa Hakko Kirin
are posted to Kirin Holdings.
BusinessKyowa Hakko Kirin lends funds to Kirin Holdings.
Related party Kirin Holdings is the parent of Kyowa Hakko Kirin andstatus
falls under the category of related party.

4.

Number of shares to be acquired, acquisition price and percentage of shareholding before
and after the acquisition
0 shares(1) Shares owned before change(Number of voting rights: 0)(Voting rights ownership percentage: 0%)
95 shares(2) Number of shares to be acquired(Number of voting rights: 95)(3)

Acquisition priceApproximately ¥128.0 billion(4)

Shares owned after change

95 shares(Number of voting rights: 95)(Voting rights ownership percentage: 95%)

(Note 1)

The number of shares issued by the target company as of the time of this release (February 5, 2019) is 10
shares, but the target company intends to conduct a 1:10 stock split before the Share Acquisition takes
place, so that at the time of the Share Acquisition, the number of shares issued will be 100 shares.

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(Note 2)(Note 3)(Note 4)Furthermore, the number of shares and the number of voting rights in the above table use figures fromafter the stock split.
The acquisition price will be adjusted in accordance with the dividends of surplus cash paid to Kyowa
Hakko Kirin by Kyowa Hakko Bio up to the date on which the Share Acquisition is executed, and inaccordance with the state of Kyowa Hakko Bio’s net assets as of the last day of the month prior to which
the Share Acquisition will be executed.
The acquisition price is for consideration of Kyowa Hakko Bio’s shares and does not include the advisory
fees, for which Kirin Holdings is obliged to maintain confidentiality.
Kyowa Hakko Kirin retains a put option to sell the remaining 5 percent of Kyowa Hakko Bio’s shares toKirin Holdings after 3 years from the date on which the Share Acquisiton is exwcuted (or on a date thatKirin Holdings and Kyowa Hakko Kirin separately agree on).

5. Schedule(1) The date of Board of Directors’ resolution

February 5, 2019(2)

The date of contract execution

Same date as above(3)

Expected date of share transfer

April 24, 2019 (planned)

6.

Prospects going forward
The financial impact of this transaction will be insignificant.

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