The original disclosure in Japanese was released on September 20, 2018 at 16:00 (GMT+8)

September 28, 2018
CompanyTakara Bio Inc.

Headquarters

Nojihigashi 7-4-38, Kusatsu, Shiga 525-0058, Japan

Representative

Koichi Nakao, President & CEOContact

Shuichiro Matsuzaki, Executive Vice President

Telephone(+81)77-565-6970

Websitehttp://www.takara-bio.co.jp/(First Section of the TSE, code: 4974)

Notice Regarding Business Reorganization by Simplified Absorption-type Company Split
Kusatsu/Shiga, Japan-September 20, 2018 – Takara Bio Inc. (Takara Bio), today announced that a resolution has been
made at meeting of the Board of Directors, to transfer Takara Bio Group’s functional food business to Shionogi
Healthcare Co., Ltd (Shionogi Healthcare) pursuant to the company split with the effective date of January 1, 2019(scheduled).
The company split is that the change in total assets is less than 10% of net assets as of the last day of the latest
fiscal year, and the change in net sales is less than 3% of net sales as of the last day of the latest fiscal year. Accordingly,
the disclosure items and contents are partially omitted.
1. Purpose of Company Split
The functional food business in Takara Bio Group has focused on the healthy foods with eating experiencein Japan from a long time and has attained the development, manufacture and sales of the functional foods
utilizing the advanced biotechnology. Fucoidan involved in Gagome kombu (kelp) has been developed as afunctional food material based on scientific clarification of its functionality and chemical structure with ourproprietary biotechnology in the past. It has applied to commercialization of functional food series “Fucoidan”
by mail-order service through Takara Healthcare Inc. as a wholly-owned subsidiary of our parent Takara
Holdings Inc. In addition, the business was developed to commercial reality based on functional
characteristics of food ingredients such as agar-derived “Agaro-oligosaccharide”, Ashitaba (Angelica Herb)“Chalcone”, herb (Peucedanum japonicum) “Isosamidin”, Yam (Dioscorea esculenta) “Yamsgenin”,
Mushroom “Terpene” and to evidence acquisition in human intervention study, and so on.
Takara Bio’s Medium-Term Management Plan 2020 started in 2017 aims to promote three businesses: Bioindustry,Gene Therapy, and AgriBio businesses, enhance Takara Bio’s standing as a global industrial company forregenerative medicine products, and to achieve prodigious growth.
Under the plan, Takara Bio Group engaged in the business in line with its growth strategy. Through activities
based on recent progress in the business environment, it is considerably more important in creating high corporate
value, with the aim of fulfilling “selection and concentration” in business operation and achieving the plan. With thisbackground, Takara Bio has been seeking a company to continue the business maximizing the use of corporate
resource such as research achievements, etc. accumulated in the functional food business. As a result of discussion
and negotiations with Shionogi Healthcare, a group company of Shionogi & Co., Ltd. strengthening the functional
food business, Takara Bio has decided to implement a business reorganization by the company split.

12. Summary of Company Split(1) Schedule of Company Split
Execution Date of Agreement between Takara Bio and Shionogi
Healthcare
Effective Date between Takara Bio and Shionogi Healthcare
Delivery Date of Money between Takara Bio and Shionogi
Healthcare

September 20, 2018
January 1, 2019 (Scheduled)
December 28, 2018 (Scheduled)

Note: Because the company split is a simplified absorption-type split, as specified in Article 784, Paragraph 2of the Companies Act, for Takara Bio, it will be implemented without obtaining the approval of a general
meeting of shareholders.
(2) Method of Company Split
Due to the absorption-type split method with Takara Bio as the splitting company, the functional food businessin Takara Bio’s AgriBio business will transferred to Shionogi Healthcare.
(3) Details of allotments related to Company Split
The compensation amount for this split receiving from Shionogi Healthcare will be 534.8 million yen in cash.
Note: Compensation may be adjusted afterward due to changes of assets and liabilities succeeded.
(4) Handling of Stock Acquisition Rights and Bonds with Stock Acquisition Rights Accompanying Company
Split
Not specified.
(5) Changes in Capital due to Company Split
There are no changes in capital related to the company split.
(6) Rights and Obligations to be Assumed by Successor Company
Takara Bio will transfer in accordance with “Agreement concerning Transfer of Share and Absorption-type
Split” and “Absorption-type Split Agreement” executed between Takara Bio and Shionogi Healthcare.
(7) Prospect of Fulfillment of Obligations
Takara Bio recognizes there to be no problem relating to the prospect of fulfillment of obligation to be borneby Takara Bio for the purpose of the company split.
3. Reason of Detail allotments related to Company Split(1) Reason of Detail allotments
For the purpose of validity assessment of compensation in the relevant business, Takara Bio selected Value
Advisory LLC (Value) as a third-party advisory institution and requested Value to assess the business value.
Value made an assessment using Discounted Cash Flow method (DCF method). To determine thecompensation in the relevant business, Takara Bio has discussed with Shionogi Healthcare based on thecircumstances such as financial status in business, assets condition, future outlook, etc. and reference toassessment results from Value, reaching agreement on the compensation amount in stated Article 2. (3).

2

(2) Related to assessment① Relationship between advisory institution, Takara Bio and Shionogi Healthcare
Value, a third-party advisory institution is independent of Takara Bio and Shionogi Healthcare, and is not
specified to those involved in Takara Bio and Shionogi Healthcare. There are also no noteworthy relationships
related to this company split.
② Assessment Overview
For the purpose of validity assessment, Value made an assessment using DCF method to make a businessvalue from present discounted value of future cash flow produced by the business. The business value assessedby DCF method ranged between 490 million and 722 million yen.
Value adopted any information received or disclosed directly on basis of the premise that all of those areaccurate and complete, and thereby had no independent verification of accuracy and completeness. As forassets or liabilities (including contingent liabilities) from Takara Bio and its subsidiary, Value had noevaluation, appraisement or assessment independently. The Value’s assessment reflects information andeconomic condition until September 19, 2018. It is based on the premise that the financial forecast in therelevant business was made and reviewed under the best forecast and judgment at present.
There are no fiscal years anticipating significant change in profit planning of the relevant business on basisof Value’s assessment by DCF method. Also, the relevant business plan is not based on fulfillment of thecompany split.
4.

Outlines of Companies Involved in Company Split(1) Company Name
(2) Head Office(3) Representative

Splitting Company

Successor Company

Takara Bio Inc.

Shionogi Healthcare Co., Ltd

Nojihigashi 7-4-38, Kusatsu, Shiga
525-0058, Japan

7th Floor, Yodoyabashi Square, 618, Kitahama 2-chome, Chuo-ku,
Osaka 541-0041, Japan

Koichi Nakao

Itaru Hirano

President and CEOPresident and CEODevelopment, manufacture and(4) Business Description

Bioindustry Businesssales of healthcare products such

Gene Therapy Businessas OTC pharmaceuticals, quasi-AgriBio Businesspharmaceuticals, medical device,etc.

(5) Paid-in Capital

14,965,828,496 yen

10,000,000 yen(6) Establishment

April 1, 2002

January 15, 2016(7) Number of Issued Stock

120,415,600 shares

1,000 shares(8) Book Closing Date

March 31

March 31(9) Major shareholder andShareholding Ratio

Shionogi & Co., Ltd. 85.0%
Takara Holdings Inc. 60.9%

Rohto Pharmaceutical Co., Ltd.
15.0%

3(10) Business Results and Financial Status in the latest fiscal year
Splitting Company

Successor Company

Accounting Term

Fiscal year ended March 31, 2018

Fiscal year ended March 31, 2018

Net assets

61,9594,090

Total assets

68,854

5,463

Net assets per share (in yen)514.544,090,524.99

Net sales

32,312

7,246

Operating income

3,555

347

Ordinary income

3,861

348

2,335

226

19.39

226,046.01

Net income(Net income attributable toowners of the parent)
Net income per share (in yen)(millions of yen unless it is specified )Overview of Split Business Section(1) Business Description of Split Section
Functional food business.
(2) Business Results of Split Division (As of March 31, 2018)
Split Division (a)Splitting Company

Ratio (a/b)(Consolidated) (b)Net Sales

693

32,312

2.1%

Operating income

73

3,555

2.0%
(millions of yen)

(3) Assets and Liabilities allocated and Book Value (As of March 31, 2018)
AssetsLiabilities

Current assets

356

Current liabilities

50

Non-current assets

150

Non-current liabilities-Total assets

506

Total liabilities

50(millions of yen)

Note: The above amount will be finalized by considering the changes of financial position until theeffective date. Upon the company split, the ratio of transferred assets of 506 million yen to net
assets of 61,959 million yen (as of March 31, 2018) is 0.8%.
5.

Status of Company Split(1) Status of Split Company
There will be no changes in name, location, title and name of company representative, business description,
capital and accounting term of Splitting company (Takara Bio) due to the company split.
(2) Status of Successor Company
There will be no changes in name, location, title and name of company representative, business description,
capital and accounting term of Successor company (Shionogi Healthcare) due to the company split.
6.

Future Outlook
The influence by the company split is immaterial to the current and next fiscal year’s financial forecast.

4(Reference)
Financial Forecast for the fiscal year ending March 31, 2019 compared with previous fiscal year (announced onMay 11, 2018)
Net sales

Operating

Ordinary income

incomeNet income attributableto owners of the parent

FY2019 Forecast

36,800

5,000

5,200

FY2018 Actual

32,312

3,555

3,861

3,100
2,335
(millions of yen)5