August 6 2019
To Whom It May Concern:
Company Name: KIRIN HOLDINGS COMPANY, LIMITED
Representative: Yoshinori Isozaki, President & CEO
Code Number: 2503 (TSE 1st Section)
Head Office:4-10-2, Nakano, Nakano-ku, Tokyo 164-0001, Japan
Name and Title of Contact Person:
Nobuhiko Hori
General Manager of Corporate Communications Department
Telephone Number: (03) 6837-7015

Company Name: FANCL CORPORATION
Representative: Kazuyuki Shimada, President & CEO, Representative
Director
Code Number: 4921 (TSE 1st Section)
Head Office:89-1, Yamashita-cho, Naka-ku, Yokohama, Kanagawa 231-8528, Japan
Name and Title of Contact Person:
Yukihiro Ishigami
CFO, Executive Director, General Manager, Corporate Planning Division
Telephone Number: (045) 226-1200

Notice Regarding Capital and Business Alliance
Between Kirin Holdings Company Limited and FANCL Corporation
Kirin Holdings Company Limited (President and CEO: Yoshinori Isozaki, hereinafter “KIRIN”) andFANCL Corporation (President & CEO, Representative Director: Kazuyuki Shimada, hereinafter“FANCL”) today jointly announced that the Board of Directors of each company passed a resolution toenter into a capital and business alliance agreement between KIRIN and FANCL (hereinafter such capitaland business alliance will be referred as the “Capital and Business Alliance”).

1. Purpose of and Reasons for the Capital and Business Alliance
On February 2019, KIRIN announced its Long-Term Management Vision, Kirin Group Vision 2027
(hereinafter “KV2027”) to create value across Food & Beverages to Pharmaceuticals and to become aglobal leader in CSV*1. Within “Kirin Group CSV Purpose”, a guideline of long-term and non-financial
goals formulated to achieve KV2027, KIRIN has identified “Health and Well-being”, “Communityengagement” and “the Environment” as the three key CSV issues to be addressed while playing its role as“A Responsible Alcohol Producer”.
KIRIN has a long history of involvement with the promotion of “Health and Well-being”. Since KIRIN’s
entrance into the life science field with the introduction of the Long-Term Management Vision in 1981,
KIRIN has been addressing social issues surrounding “Health and Well-being” with expertise from both
“Food & Beverages domain” and “Pharmaceuticals domain”. KIRIN will address the social issues
surrounding “Health and Well-being” such as the rise in life-induced disease and medical expenses resulting
from increase in life expectancy with enhancement of customers’ quality of life and promotion of preventive
healthcare. At the same time, KIRIN believes addressing these social issues will provide opportunities for
growth and promote innovation.
Therefore, KIRIN established its strategy to create the “Businesses bridging Pharmaceuticals and Food1

& Beverages” in KV2027, and grow them into another core business of KIRIN by leveraging theorganizational excellence and assets that KIRIN has amassed over the years.
On April 2019, KIRIN completed its reorganization process to position the Kyowa Hakko Bio Co., Ltd.
in its group as the core company for the “Businesses bridging Pharmaceuticals and Food & Beverages” tofully utilize KIRIN group’s assets on high functioning amino acid, immune system, brain health andintestinal environment enhancing functional materials.
FANCL announced “VISION2030” as the long-term vision in 2018 to support customer lifestyles full ofbeauty and health globally in “Beauty” and “Health” business domain, as a corporate group that customers
can trust and rely upon.
Since established in 1980, FANCL has achieved its growth by providing the world’s first Mutenka*2
cosmetics and cosmetic products for women who have sensitive skin and scientifically proven nutritional
products as “supplements” with reasonable price in 1994 to resolve negative social issues. Despite theincrease in life expectancy, the increase in “healthy life expectancy”, a measure of how long a person will
live in good health, still stagnates in the Japanese society. FANCL has set its mission to contribute to theextension of “healthy life expectancy” and reduction of medical expenses by providing high-quality
functional foods.
KIRIN and FANCL believes its vision and mission to resolve social issues related to “Health and Wellbeing” and the extension of “healthy life expectancy” to achieve future growth are in line with each other.
The Capital and Business Alliance will provide benefit to both companies to accelerate its businessdevelopment by mutually utilizing its strength in its overall value chain from research and development formaterials and ingredients, production, marketing to distribution.
Furthermore, KIRIN and FANCL believes that the realization of the various synergies between them will
enable them to resolve far more health related social issues than on their own.
*1 Creating Shared Value. It is all about creating value that can be shared with customers and society*2 FANCL’s Mutenka cosmetics: Safe and assured products with zero additives that cause stress to the skin such as preservatives,
petroleum surfactants, fragrances, ultraviolet absorbents and artificial coloring

2. Details of the Capital and Business Alliance(1) Details of Business Alliance
KIRIN and FANCL will utilize both business resources and create synergies to expand and develop its
businesses. KIRIN and FANCL are planning to determine the details of the business alliance with furtherdiscussions. Key collaboration topics are as follows;
A. Development of Material, Product, Brand

Integration of “Brand” and “Technology”:
Development of new products and brands with new concepts utilizing both “Brand” and“Technology”
Development of products utilizing unique materials:
Development of supplement for healthy lifestyle and anti-aging skincare products
B. Co-development of products and businessCo-development in areas such as “life-induced disease”, “brain function”, “frail”, “physicaltherapy”, “immune system” and “intestinal environment”
Co-development of cosmetic products utilizing yeast and fermentation technologyCo-development of new business model
C. Mutual utilization of business platform
Mutual utilization of production capacity

Cross-selling utilizing both channels

Utilization of each distribution platform such as KIRIN’s vending machine and FANCL’s online
and catalogue sales and direct stores(2) Details of Capital Alliance
KIRIN agreed with Mr. Kenji Ikemori who is the founder of FANCL, his relatives (5 individuals) andtheir asset management companies that KIRIN acquires the outstanding shares from each shareholder
respectively through off-auction trading. This transaction will be executed on September 6, 2019. The total
number of shares to be acquired by Kirin upon this transaction totaled 39,540,400 shares, and the transaction
amount will be JPY 129.3 billion. KIRIN’s shareholding ratio after this transaction will be 30.3%*3 of all
outstanding shares (130,353,200) / 33.0%*3 of total voting rights (1,198,195) in FANCL as of the end of2March 2019.
*3 round off to one decimal places(3) Dispatch of executives
KIRIN and FANCL agreed in the Capital and Business Alliance Agreement that KIRIN has the right toappoint 1 full-time director, 1 part-time director and 1 full-time auditor.
Furthermore, FANCL is planning to submit a proposal at its annual general shareholder meetingscheduled for June 2020 for election of directors and auditors including candidates appointed by KIRIN

3. Overview of the Parties Involved in Strengthening the Capital and Business AllianceA) KIRIN HOLDINGS (As of December 31, 2018)(1)
Company NameKIRIN HOLDINGS COMPANY, LIMITED(2)
Head Office
4-10-2, Nakano, Nakano-ku, Tokyo 164-0001, Japan(3)
Representative
Yoshinori Isozaki, President & CEO
Developing group-wide management strategies and overseeing(4)
Description of Businesstheir implementation(5)
Capital102,046 million yen(6)FoundedFebruary 23, 1907
8.25%
 The Master Trust Bank of Japan, Ltd.（TrustAccount）
5.15%
 Japan Trustee Services Bank, Ltd. （TrustAccount）
 Meiji Yasuda Life Insurance Company
3.75%
3.43%
Major Shareholders and  JP MORGAN CHASE BANK 380055
2.02%
 Japan Trustee Services Bank, Ltd. （TrustShareholding Ratio(Percentage of ownedAccount #5）(7)
shares in the total
1.96%
 Japan Trustee Services Bank, Ltd. （Trustnumber of issued shares
Account #4）
excluding treasury
 SSBTC CLIENT OMNIBUS ACCOUNT
1.78%
shares) STATE STREET BANK WEST CLIENT 1.66%
TREATY 505234
1.56%
 Japan Trustee Services Bank Ltd. （TrustAccount #7）
 STATE STREET BANK AND TRUST
1.49%
COMPANY 505001
Capital Relationship None
PersonalNone
Relationship withRelationship
(8)
FANCL
Trade Relationship None
Related Party Status None
(9)
Financial Position and Performance in the Past 3 Fiscal Years
Consolidated fiscal year ended
December 31, 2016
December 31, 2017 December 31, 2018
Total equity
959,188
1,229,139
1,200,920
Total assets
2,422,825
2,398,572
2,303,624
Total equity attributable toowners of the parent company
773.821049.55
1043.37
per share (yen)Consolidated revenue
1,853,937
1,863,730
1,930,522
Consolidated normalized
181,982
194,609
199,327
operating profit
Consolidated operating profit
196,590
211,000
198,322
Consolidated profit before tax
208,151
233,711
246,852
Consolidated profit attributable
148,918
241,991
164,2023

to owners of parent
Consolidated basic earnings per
163.19share (yen)Dividend per share (yen)39.00（Note） In millions of yen unless specified otherwise

265.17183.57

46.00

51.00

B) FANCL (As of March 31, 2019)
FANCL Corporation
Company Name89-1 Yamashita-cho, Naka-ku, Yokohama, Kanagawa 231-8528,(2)
Head OfficeJapan(3)
Representative
Kazuyuki Shimada, President & CEO, Representative Director
(1)

(4)

Description of Business(5)(6)

CapitalFounded(7)Major Shareholders andShareholding Ratio(Percentage of owned
shares in the total
number of issued shares
excluding treasuryshares)

Research, development, manufacture, and sale of cosmetics andhealth foods
10,795
August 18, 1981
 Kenji Ikemori
9.53%
 Keiai Corporation

6.64%

 The Master Trust Bank of Japan, Ltd. （ TrustAccount）
 Japan Trustee Services Bank, Ltd. （ TrustAccount）
 PILLOWS Co., Ltd

6.56%

 Masaharu Ikemori

3.21%

 Akiko Miyajima

3.07%

 Hiromitsu Miyajima

3.00%

 Yukio Ikemori

2.25%

5.13%4.04%

1.91%
 Japan Trustee Services Bank, Ltd. （Trust Account#9）
Capital Relationship None
PersonalNone
Relationship withRelationship
(8)
KIRIN
Trade Relationship None
Related Party Status None
(9)
Financial Position and Performance in the Past 3 Fiscal Years
Consolidated fiscal year ended
March 31, 2017
March 31, 2018
March 31, 2019
Consolidated net assets
72,40275,59760,916
Consolidated total assets
85,677
92,38080,307
Consolidated net assets per
568.57588.40500.59share (yen) *Consolidated net sales
96,305
109,019
122,496
Consolidated operating income2,244
8,448
12,387
Consolidated ordinary income
2,385
8,650
12,348Net income attributable to
5,146
6,191
8,649
owners of parent
Consolidated basic earnings per40.96
48.83
68.82
share (yen) *Dividend per share (yen) *
29.00
29.00
30.00
（Note）In millions of yen unless specified otherwise
FANCL conducted a 2-for-1 stock split on December 1, 2018. Accordingly, consolidated net assets per share,
consolidated basic earnings per share and dividends per share have been calculated as if this stock split had takenplace at the beginning of the fiscal year ended March 31, 2017.

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4. Schedule(1) Date of Board of Directors resolution（FANCL）(2) Date of Board of Directors resolution（KIRIN）(3) Conclusion date of Capital and Business Allianceagreement(4) Conclusion date of share purchase agreement(5) Date of Share Transfer

August 6, 2019
August 6, 2019
August 6, 2019
August 6, 2019
September 6, 2019 (planned)

5. Outlook
At present, the effects of the Capital and Business Alliance on KIRIN and FANCL's consolidated results
are expected to be minor for the foreseeable future, but due to the development and strengthening of thepartnership between the two companies in the future, we believe that it contributes to improvement of its
performance and corporate value. We will promptly announce it any matters that require disclosure in thefuture.

END

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