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February 18,2003 Ajinomoto Co.,Inc. (2802 JP) and Unilever reached agreement for the sale of Ajinomoto's 50% stake in their JV to Unilever 1. Description of the transaction Ajinomoto Co.,Inc. ("Ajinomoto") and Unilever reached an agreement to terminate the seven joint venture companies spread out in six Asian countries and signed the Stock Purchase Agreement on Tuesday,February 18th. Ajinomoto will sell its 50% stake in CPC/AJI in two tranches. Cash consideration of US$381 million will be paid in two installments in March 2003 and March 2004. 50% stake of the joint venture held by Ajinomoto will be sold as follows: 1st tranche:50% stake in CPC/AJI (Asia),Singapore,Thailand and Malaysia, 30% stake in CPC/AJI (Hong Kong) and 25% stake in Taiwan.In addition,Ajinomoto will continue to be entitled to dividends during this transition period from the companies in which it still holds an interest. Ajinomoto will also transfer all management rights of the seven companies to Unilever with the sale of the first tranche and withdraw its independent and non-independent directors of the joint venture companies. 2. Reasons for the sale Ajinomoto originally formed 50:50 joint venture companies ("CPC/AJI") with CPC International (later,Bestfoods) in 1987 by investing in its subsidiaries in six Asian countries (Hong Kong,Malaysia,Philippines,Singapore,Taiwan and Thailand). As part of the Bestfoods acquisition in 2000,Unilever acquired Bestfoods'stake in CPC/AJI. As a result of a series of discussions on the strategic direction of CPC/AJI,both parties came to the conclusion that a sale of Ajinomoto's stake in the joint venture would best achieve the objectives of both CPC/AJI's shareholders,which is to develop independent strategy in Asia. 3. Ajinomoto's strategy Ajinomoto already has operating subsidiaries that mainly produce and sell seasonings in the six Asian countries. Through those subsidiaries,Ajinomoto will actively work to enhance existing products and to develop new lines of products for the growing Asian market. In addition,Ajinomoto will be able to freely develop its own processed food brands on a global basis,which has been carried out by the joint venture companies in the joint venture countries. Ajinomoto plans to utilize the proceeds from the sale of the shares not only for the expansion of food business in Asia,but also for promising business operations around the world. Ajinomoto will continue in its goal and expand its business globally to achieve its established target of "aiming to be a global corporation in food and amino acid products originated in Japan." 4. Financial impact As the result of these transactions,Ajinomoto expects to reflect an increase to reported 'extraordinary income' as follows: In our Consolidated Income Statement
Appendix 1. Description of the acquiror
2. Description of the CPC/AJI joint venture companies (as of December 31,2002)
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