September 26, 2013
To whom it may concern,
Company name:Name of representative:(TSE Code:Taiyo Nippon Sanso Corporation
Shinji Tanabe, President
4091, First Section of the TSE)

Company name:Name of representative:

Mitsubishi Chemical Holdings Corporation
Yoshimitsu Kobayashi
President & Chief Executive Officer
4188, First Section of the TSE)

(TSE Code:

Notice regarding the Capital and Business Alliance between Taiyo Nippon Sanso Corporationand Mitsubishi Chemical Holdings Corporation
Taiyo Nippon Sanso Corporation (“TNSC”) and Mitsubishi Chemical Holdings Corporation(“MCHC”) hereby announce that today they have executed a capital and business alliance agreement(the “Agreement”; and the capital and business alliance created under the Agreement shall hereinafter
be referred to as the “Capital and Business Alliance”), as stated below.
1.

Reason for Creating the Capital and Business Alliance

Since its development of Japan’s first oxygen generator in 1934, TNSC has been focusing primarily on
air separation plants that produce industrial gases (oxygen, nitrogen, and argon), while working toadvance a variety of technologies and develop its business as an industrial gas manufacturer.
MCHC has developed its business in a broad range of areas, such as functional products, healthcare,and materials, through Mitsubishi Chemical Corporation (“Mitsubishi Chemical”), Mitsubishi Tanabe
Pharma Corporation, Mitsubishi Plastics, Inc., and Mitsubishi Rayon Co., Ltd. as the core companies.
TNSC was formed in 2004 through the merger of Nippon Sanso Corporation and Taiyo Toyo Sanso
Co., Ltd. (“Taiyo Toyo Sanso”). At that time, Taiyo Toyo Sanso was in an alliance relationship with
Mitsubishi Chemical and engaged in the industrial gas manufacturing business through a joint ventureof Taiyo Toyo Sanso and Mitsubishi Chemical, and Mitsubishi Chemical possessed 34.85% (thepercentage of the number of shares held, to the total number of issued shares) of the Taiyo Toyo
Sanso stock. As a result of the formation of TNSC, Mitsubishi Chemical became the largest
shareholder of TNSC, holding 10.09% of TNSC stock. Mitsubishi Chemical continued to acquire
TNSC stock thereafter through the market, and as a result, by the end of 2009, its shareholding
percentage reached the current percentage of 15.12% (the percentage of the number of shares held, tothe total number of issued shares).
MCHC, Mitsubishi Chemical’s parent company, deeply understands the effectiveness of businessstrategies and the potential improvement of TNSC. TNSC and MCHC therefore believed that theywould be able to further expand their business opportunity by causing TNSC to establish a broad
alliance relationship with the respective companies of the Mitsubishi Chemical Holdings Group,including Mitsubishi Chemical. They thus agreed to create a business alliance relationship.
Specifically, the companies aim to mutually cooperate and strengthen the relationship in a broad rangeof areas, including the construction and operation of a supply chain in and outside of Japan, marketing
activities utilizing the global network, logistics using a business base, and research and development.
In addition, for the purpose of making the business alliance even more firm and generating asynergetic effect, and also, meeting its financial needs concerning future business development,

-2including capital investment, TNSC has decided to issue new shares and dispose of treasury shares by
way of third-party allotment (collectively, the “Capital Increase by Third-Party Allotment”), and toappoint MCHC as the allottee.
2.

Details of the Capital and Business Alliance(1)

Details of the business alliance(i)

Business related to industrial gases
TNSC has thus far supplied gases through the piping (on-site plant) method, mainly tolarge customers in Japan. From now on, TNSC intends to extend the know-how forstably supplying gases, which it has fostered over years for domestic customers, tonew overseas manufacturing bases planned by MCHC. By doing so, TNSC aims tofurther expand overseas business. TNSC will also procure the base load that is stable
for the long term, by supplying gases through the piping method, and absorb demands
for liquefied gases, cylinder gases, and gas-related equipment in neighboring markets,
thereby aiming to expand its sales through the synergetic effect generated with theexisting products/businesses. In order to promptly realize transactions andcooperative business in overseas as stated above, TNSC and MCHC will establish aworking group after executing the Agreement to specifically consider the relevantmatters.

(ii)

Mutually using the distribution channel
In order to promote the mutual use of the respective companies’ distribution channel,TNSC and MCHC will establish a working group after executing the Agreement tospecifically consider the relevant matters. To be more specific, the working groupwill consider the possibilities of the cooperative business and transactions in every
business segment, including the expansion of sales in TNSC’s medical care business(medical gases and related equipment) through MCHC’s distribution channel, and theutilizationof the TNSC’s distribution channels for MCHC’s artificial carbonatedsprings and carbon fiber containers.

(2)

Details of the capital alliance
Upon creating the business alliance with TNSC, MCHC will acquire, by October 15, 2013,
45,096,000 shares of common stock of TNSC through the Capital Increase by Third-PartyAllotment (the percentage to the total number of issued shares after the Capital Increase by
Third-Party Allotment will be 10.41%). In conjunction with the Capital Increase by ThirdParty Allotment, MCHC intends to acquire shares of TNSC from TNSC’s existing
shareholders through transactions via the ToSTNeT market or through negotiated transactions
outside the market (collectively, “Negotiated Transactions”). If such share acquisitions
actually takes place, the shareholding percentage of MCHC (the percentage to the total
number of issued shares after the Capital Increase by Third-Party Allotment, including those
held indirectly) will be approximately 27% at maximum.
For details of the Capital Increase by Third-Party Allotment, please refer to the “NoticeRegarding Issuance of New Shares and Disposition of Treasury Shares by Way of Third-PartyAllotment, and Change of the Principal Shareholder” separately disclosed by TNSC today.
TNSC has updated the “Measures against Large Volume Purchases of the Company Stock(Defensive Measures for Mergers)” in the seventh ordinary meeting of shareholders held onJune 29, 2011, which had been introduced in the fourth ordinary meeting of shareholders held

-3on June 27, 2008. In its board of directors’ meeting held today, TNSC has resolved that theacquisition of TNSC stock by MCHC through the Capital Increase by Third-Party Allotment
and Negotiated Transactions would not fall under the category of a large volume purchase as
stipulated under the said defensive measures.
3.

Outline of the Parties to the Capital and Business AllianceCorporateName
Location
Title and Nameof theRepresentative(As of March 31, 2013, unless specifically indicated)
Mitsubishi Chemical Holdings
Taiyo Nippon Sanso CorporationCorporation
1-3-26, Koyama, Shinagawa-ku, Tokyo
1-1-1, Marunouchi, Chiyoda-ku, Tokyo
Yoshimitsu Kobayashi
President & Chief Executive Officer

Shinji Tanabe, President

Details ofBusiness

Production and sale of industrial gases
and related equipment/devices

Stated Capital
Date of
Incorporation
Number ofIssued Shares
Date ofSettlement ofthe AccountNumber of
Employees

27,039 million yen

Management and control of groupcompanies (establishing strategies,
distributing resources, and other mattersfor or in relation to the entire group)
50,000 million yen

July 19, 1918

October 3, 2005

403,092,837 shares

1,506,288,107 shares

March 31

March 31

11,468 (consolidated); 1,386 (nonconsolidated)

55,131 (consolidated); 97 (nonconsolidated)
Mitsubishi Chemical Corporation
Mitsubishi Tanabe Pharma Corporation
Mitsubishi Plastics, Inc.
Mitsubishi Rayon Co., Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust and Banking
Corporation
Mizuho Corporate Bank, Ltd.
The Norinchukin Bank
Master Trust Bank of Japan ,Ltd..
4.69%(Trust Account)
Meiji Yasuda Life Insurance
Company (Standing Proxy), Trust 4.27%& Custody Services Bank, Ltd.

Major
Customers

Manufacturers inside and outside Japan

Major
Transacting
Banks

Mizuho Corporate Bank, Ltd.
The Bank of Tokyo-Mitsubishi UFJ,Ltd.
The Norinchukin Bank

Major
Shareholders
andShareholding
Percentage

Mitsubishi ChemicalCorporation

15.12%JFE Steel Corporation

6.27%

Taiyo Nippon Sanso
Corporation’s shareholding
association
Meiji Yasuda Life Insurance
Company
National Mutual Insurance
Federation of Agricultural
Cooperatives
Mizuho Corporate Bank, Ltd.
Master Trust Bank ofJapan ,Ltd. (Trust Account)

5.14%Japan Trustee Services Bank, Ltd.
4.07%
(trust account)

3.97%

Takeda Pharmaceutical Company
3.43%
Limited

3.77%

Nippon Life Insurance Company

3.59%
2.93%

The Bank of Tokyo-Mitsubishi
UFJ, Ltd.
Tokio Marine & Nichido Fire
Insurance Co., Ltd.

3.28%
2.72%
2.26%

-4-Japan Trustee Services Bank,
Ltd. (Trust Account)

2.78%

The Norinchukin Bank

2.48%

SSBT OD05 OMNIBUS
ACCOUNT - TREATY
CLIENTS (Standing proxy), The
2.05%
Hongkong and Shanghai Banking
Corporation Limited, Tokyo
BranchTAIYO LIFE INSURANCE
1.64%
COMPANY
Japan Trustee Services Bank, Ltd.
1.55%
(Trust Account 4)Dai-Ichi Life Insurance
1.87%
Company, Limited
Relationship between the Parties
TNSC holds 10,477,182 shares (including those held indirectly) of the stock of MCHC.
CapitalRelationship
MCHC holds 60,947,870 shares (including those held indirectly) of the stock of TNSC.
Personnel
Relationship

One (1) officer of MCHC concurrently serves as the outside-director of TNSC.

There are no material transactional relationships between TNSC and MCHC to benoted. There are no material transactional relationships to be specifically noted,
between people or companies affiliated with TNSC, and those affiliated with MCHC.
Application as a TNSC is an equity method affiliate of MCHC, and falls under the category of a related
Related Partyparty.
Operational Results and Financial Conditions for the Last 3 Fiscal Years
Transactional
RelationshipAccounting
PeriodNetassets(consolidated)
Total
assets(consolidated)
Net assets
per share(consolidated; inyen)
Sales(consolidated)
Operating income(consolidated)
Ordinary
income(consolidated)
Net
incomefor theyear(consolidated)
Net
incomeMarch 2011

March 2012

March 2013

March 2011

March 2012

March 2013

207,416

219,611224,253

1,114,003

1,144,954

1,203,316

617,676

607,024

615,820

3,294,014

3,173,970

3,307,758

481.71506.02525.38514.30522.77553.54

483,620

477,451

468,387

3,166,771

3,208,168

3,088,577

35,46831,067

24,884

226,493

130,579

90,241

34,16729,73023,060223,899

133,61487,054

12,736

21,200△2,071

83,58135,486

18,596

31.86

53.33

△5.25

58.72

24.06

12.61

-5per sharefor theyear(consolidated; inyen)
Dividends
per share
(yen)

12.0

12.0

12.0

10.010.0

12.0(in millions of yen, unless specifically indicated)
4.

Schedule
(1)
(2)
(3)

(4)
5.

Resolution of board of directors
Execution of the Agreement
Commencement date of theCapital and Business Alliance
RelationshipDue date of payment for the
Capital Increase by Third-PartyAllotment

September 26, 2013 (today)
September 26, 2013 (today)
October 15, 2013
October 15, 2013

Future Prospects

The specific effect of the Capital and Business Alliance on the business results of TNSC and MCHC iscurrently unknown. If any matters that should be disclosed occur, the companies will promptly
disclose the details thereof, as soon as they become aware of them.
[Contact for the Case at Issue]
Taiyo Nippon Sanso Corporation:
Tsutomu Moroishi, General Manager, Public Relations/IR Department; 03-5788-8015
Mitsubishi Chemical Holdings Corporation:
Yoshihiro Ikegawa, General Manager, Public Relations/IR Department; 03-6748-7120