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Press Release

Submission of Notification to the Japan Fair Trade Commission in relation to the Intention of Share Acquisition of Maruzen Petrochemical Co., Ltd. (Incorporation to the consolidated accounts)

January 7, 2016
Cosmo Energy Holdings Co., Ltd.

Cosmo Energy Holdings Co., Ltd. (Representative Director & CEO: Keizo Morikawa)(hereinafter, CEH) announced that submission had been made yesterday to the Japan Fair Trade Commission in relation to the intention of share acquisition of Maruzen Petrochemical Co., Ltd.(hereinafter, MPC), an affiliate company currently accounted for under the equity method. CEH is in discussion with other shareholders of MPC in acquiring the shares which they own in order to incorporate MPC into CEH's consolidated accounts.

CEH intends to conclude the transaction agreement with the existing shareholders of MPC and complete the share acquisition to incorporate MPC into CEH's consolidated accounts by the end of March 2016 subject to approval by the Japan Fair Trade Commission.

1. Reason of Share Acquisition

MPC owns and operates one of the most competitive naphtha crackers in Japan but the petrochemical industry faces increasing competition in the future for reasons such as the North American and Chinese competitors producing products from low cost feedstock, slowing demand growth in China and the declining domestic demand.

Under such business environment, this acquisition will allow CEH to optimize its petroleum and petrochemical business operations, further strengthening its cost competitiveness. Furthermore, this transaction leads to the possibility of increasing the cost competitiveness for the whole industrial zone in the area (CEH – MPC – Petrochemical derivative producers)

2. Summary of MPC

(1) Company Name Maruzen Petrochemical Co., Ltd.
(2) Registered Address 1-1, Irifune 2-chome, Chuo-ku, Tokyo
(3) Name & Title of Representative Shun Fujii (Representative Director, President)
(4) Primary Business Petrochemical Business (Production, Sales, Etc.)
(5) Paid-in-Capital 10,000 MM JPY
(6) Date of Establishment October 10, 1959
(7) Shareholders

30.00%

CEH(*)

12.00%

Ube Industries Ltd.

12.00%

Denka Co., Ltd.

12.00%

JNC Corporation

10.00%

Cosmo Matsuyama Oil Co., Ltd.

5.00%

Toso Co., Ltd.

4.00%

The Bank of Tokyo-Mitsubishi UFJ Ltd.

4.00%

Mizuho Bank Ltd.

2.00%

KH Neochem Co., Ltd.

(9.00%)

(Treasury Shares)
(8) Relationship with Cosmo Capital Ties CEH owns 6,000,000 of MPC shares (30.00%) and is accounted for under the equity method. In addition, Cosmo Matsuyama Oil Co., Ltd., 100% subsidiary of Cosmo Oil Co., Ltd., own 2,000,000 shares (10.00%) of MPC.
Human Resources Keizo Morikawa, Representative Director & CEO of CEH and Hiroshi Kiriyama, Director of CEH are both also directors of MPC.
Business Cosmo Oil Co., Ltd. (100% subsidiary of CEH) and Cosmo Matsuyama Oil Co., Ltd. (100% subsidiary of Cosmo Oil Co., Ltd.) both market petrochemical feedstock and products to MPC
(9) Financials for the most recent 3 years
Fiscal Term End-March 2013 End-March 2014 End-March 2015
Consolidated Net Asset 91,673 MM JPY 98,592 MM JPY 103,228 MM JPY
Consolidated Total Asset 210,847 MM JPY 236,789 MM JPY 215,417 MM JPY
Consolidated Turnover 421,636 MM JPY 568,422 MM JPY 549,484 MM JPY
Consolidated Operating Profit -55 MM JPY 8,921 MM JPY 2,743 MM JPY
Consolidated Ordinary Profit 1,278 MM JPY 11,023 MM JPY 6,287 MM JPY
Net Income attributable to parent company shareholders 977 MM JPY 7,058 MM JPY 4,151 MM JPY

*The shares of MPC held by CEH has been transferred from Cosmo Oil Co., Ltd. on January 1, 2016 through company split.

The details of the transaction (number of shares purchased, name of the sellers, etc.) will be announced upon final decision.

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