September 28, 2016
Kuraray Co., Ltd.
Notice Concerning the Merger of Subsidiary Kuraray Chemical Co., Ltd.
Kuraray Co., Ltd. (hereinafter “Kuraray”) hereby announces that it passed aresolution at its Board of Directors’ meeting held on September 28, 2016, tocarry out a merger aimed at absorbing Kuraray Chemical Co., Ltd. (hereinafter“Kuraray Chemical”), one of Kuraray’s wholly owned subsidiaries.
In addition, since this merger pertains to the absorption of a wholly
owned subsidiary, some details of the information disclosed below have been
omitted.
1. Purpose of the Merger<Background>To realize its “Long-Term Corporate Vision” of becoming a “high profit
specialty chemical company with a global presence”, the Kuraray Group has
been considering innovations to build a growth strategy for the future to expand
its business domains in the medium-term business plan “GS-STEP”.
Simultaneously, the Kuraray Group has determined the three key strategic areas,
namely, “aqua and environment”, “energy”, and “optics and electronics”, all ofwhich have significant potential for market growth.
<Purpose of the Merger>
Kuraray is striving to commercialize KURANODE, a plant-based hard carbon
anode material, for use in components of lithium ion batteries (LiBs), targetingthe energy field. Meanwhile, Kuraray Chemical is engaged in the activatedcarbon business on a global basis, acting as a manufacturer of highly functional
carbon materials that are used in a range of applications, including the energy,
water resource and air purification fields.
The market that both companies has targeted is expected burgeoning
growth for automotive LiB components and also to grow by approximately 7%
every year for activated carbon, due to the tightening of regulations against
water and air pollution, as well as demand growth in emerging nations.
Given this operating environment, Kuraray has decided to execute amerger aimed at absorbing Kuraray Chemical to aim for earlier expanding thecarbon material business.
We will provide optimal solutions with technological innovation,
generated by the combination of both companies’ accumulated technologies

and expertise, satisfying customer requirements that have become ever more
stringent. At the same time, we will fully leverage the Group’s overseas networkand other management resources to accelerate the expansion of our carbon
material business.
2. Overview of the Merger(1) Schedule
The resolution of the merger at the Board of Directors’ meeting:
September 28, 2016
The signing of the merger agreement: September 28, 2016
The effective date of the merger:
January 1, 2017 (scheduled)
Note: The merger will be carried out as a short-form merger by Kuraray inaccordance with the provisions of Article 796, Paragraph 2 of Japan’sCompanies Act. Simultaneously, the merger will be performed by Kuraray
Chemical based on the stipulations for absorption-type mergers set out under
Article 784, Paragraph 1 of the same act. Therefore, no general meeting ofshareholders is required to gain respective approval for the merger agreement.
(2) Method of the Merger
Kuraray, the surviving company, will absorb Kuraray Chemical, which will bedissolved as a result of the merger.
(3) Share Allocation in Accordance with Merger
Not applicable.
(4) Treatment of Absorbed Company’s Stock Acquisition Rights andConvertible Bonds with Stock Acquisition Rights
Not applicable.

3. Outline of Companies Involved in the Merger
1. Company name
2. Location
3. Representative’sname and title
4. Principal
businesses

Surviving company
Kuraray Co., Ltd.
1621, Sakazu, Kurashiki
City, Okayama Prefecture
Masaaki Ito, Representative
Director and President
Manufacture and sale ofchemicals, resins, fibers andtextiles¥88,955 million
June 24, 1926

5. Capital
6. Dateof
establishment
7. Shares issued
354,863,603
8. Fiscal year-end
December 31
9. Major shareholders The Master Trust Bank ofand their holdings
Japan, Ltd. (Trust account):
7.82%
Japan Trustee ServiceBank, Ltd. (Trust account):
6.09%
10. Corporate performance and financial standing
Kuraray Co., Ltd.
(consolidated)
Fiscal year Ended December 31, 2015
Net assets¥503,589 million
Total assets¥701,770 million
Net assets per share¥1,412.46
Net sales¥521,721 million
Operating income¥66,077 million
Ordinary income¥64,535 million
Net income¥35,749 million
Net income per share¥101.84

Absorbed company
Kuraray Chemical Co., Ltd.
4342, Tsurumi, Bizen City,
Okayama Prefecture
Yasuhiro Yamamoto,
Representative Director andPresident
Manufacture and sales ofactivated carbon and relatedproducts¥600 million
December 11, 194012,000,000
December 31
Kuraray Co., Ltd.: 100%

Kuraray Chemical Co., Ltd.
(non-consolidated)
Ended December 31, 2015
¥9,326 million¥15,657 million¥777.20¥17,799 million¥1,009 million¥967 million¥166 million¥13.85

4. The Status of the Surviving Company(1) Company name:
Kuraray Co., Ltd.
(2) Location of registered office:1621, Sakazu, Kurashiki City,
Okayama Prefecture(3) Representative’s name and title:
Masaaki Ito, Representative
Director and President(4) Principal businesses:
Manufacture and sale ofchemicals, resins, fibers andtextiles(5) Capital:¥88,955 million(6) Fiscal year-end:
December 31
5. Outlook
Because this merger is between Kuraray and its wholly owned subsidiary,
Kuraray expects the merger to have no effect on its consolidated performance.