June 11, 2007 - Ajinomoto Co., Inc. (Ajinomoto; President and CEO: Norio Yamaguchi; Headquarters: Tokyo, Japan) and Calpis Co., Ltd. (Calpis; President: Souhei Ishiwata; Headquarters: Tokyo, Japan) today agreed to make Calpis a wholly owned subsidiary of Ajinomoto through an exchange of shares, and signed a share exchange agreement.
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Background and Objectives |
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The business environment in the food products industry, in which both companies operate, has changed significantly over the past several years in Japan and overseas. Dealing with these changes requires companies to do even more to provide high-value-added products and services to consumers.
Ajinomoto has set the goal of transforming its health and nutrition business into a pillar of growth in its medium- to long- term management plan, .The company believes that bringing in the Calpis brand, which is associated with an image of health, along with Calpis's firm foundation in the beverage business and technology for utilizing lactobacillus and microorganisms, will contribute to expansion of the Ajinomoto Group's health and nutrition business.
Calpis, meanwhile, has set the goal of becoming a value-added company through global development of lactic acid beverages and functional health foods and beverages, with the objective of increasing its corporate value. Calpis believes that strengthening its capital relationship with Ajinomoto will enable it to make even greater use of Ajinomoto's business base, which will help Calpis generate additional growth.
With the background of a long and trusting relationship between the two companies, the share exchange will allow them to have a common long-term vision and strategy and accelerate the management decision-making process. It will also enable them to effectively deploy their management resources in strategic areas. In addition, both companies will integrate and employ their technologies that use microorganisms, including amino acid and lactobacillus technologies, as well as other management resources to expand and accelerate their efforts to provide products and services with health value. Moreover, by developing broadly based overseas operations, the two companies aim to be a corporate group that contributes to advances in food, health and a better life for all.
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| 2. |
Expected Synergies |
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The two companies expect the following synergies from the share exchange:
(1) Cooperation in the health and functional foods and beverages businesses
(2) Cooperation in overseas business
(3) Research and development
(4) Use of the Calpis brand
(5) Strengthening existing Calpis businesses
(6) Reduction of common expenses through integration
To quickly realize the benefits of these synergies, Ajinomoto and Calpis will establish a Synergy Committee that will begin examination of concrete methods.
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| 3. |
Calpis after the Share Exchange |
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Calpis will continue to exist as an independent company, and its current management team and systems will remain in place for the time being. |
| 4. |
Overview of the Share Exchange |
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Share Exchange Ratio |
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One share of Calpis common stock will be exchanged for each 0.95 shares of Ajinomoto common stock. |
For reference: Share Exchange Premium
The share exchange ratio represents, with the reference date of June 6, a 21.2% premium over the ratio of the latest share prices, 22.9% over the ratio of 1-month average prices and 24.0% over the ratio of 3-month average prices.
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| 2) |
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Share Exchange Schedule |
| Board of Directors resolution on share exchange (both companies) / Signing of share exchange agreement |
June 11, 2007 (Monday) |
| Record date for general meeting of shareholders (Calpis) |
June 30, 2007 (Saturday) |
| Extraordinary shareholders meeting of shareholders to approve share exchange (Calpis) |
August 29, 2007 (Wednesday) (Expected) |
| Share delisting (Calpis) |
September 25, 2007 (Tuesday) (Expected) |
| Effective date of share exchange |
October 1, 2007 (Monday) (Expected) |
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| 5. |
Overview of Ajinomoto and Calpis |
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| Ajinomoto (consolidated basis) |
| (1) Company name |
Ajinomoto Co., Inc. |
| (2) Principal businesses |
Manufacturing and sale of seasonings, processed foods, frozen foods, edible oils, coffee, beverages, chilled dairy products, amino acids, sweeteners, specialty chemicals, pharmaceuticals, medical foods, etc., and other business activities |
| (3) Date of establishment |
December 17, 1925 |
| (4) Head office |
15-1, Kyobashi 1-chome, Chuo-ku, Tokyo |
| (5) Representative |
Norio Yamaguchi, President and CEO |
| (6) Capital |
79,863 million yen (as of March 31, 2007) |
| (7) Net sales |
1,158,510 million yen (year ended March 31, 2007) |
| (8) Ordinary income |
61,589 million yen (year ended March 31, 2007) |
| (9) Fiscal year end |
March 31 |
| (10) Number of employees |
24,733 (as of March 31, 2007) |
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| Calpis (consolidated basis) |
| (1) Company name |
Calpis Co., Ltd. |
| (2) Principal businesses |
Manufacturing and sale of beverages, functional health foods and drinks, dairy products, alcoholic beverages, feed additives, etc., and other business activities |
| (3) Date of establishment |
October 13, 1917 |
| (4) Head office |
4-1, 2-chome, Ebisu-minami, Shibuya-ku, Tokyo |
| (5) Representative |
Souhei Ishiwata, President |
| (6) Capital |
13,056 million yen (as of December 31, 2006) |
| (7) Net sales |
120,445 million yen (year ended December 31, 2006) |
| (8) Ordinary income |
5,426 million yen (year ended December 31, 2006) |
| (9) Fiscal year end |
December 31 |
| (10) Number of employees |
1,330 (as of December 31, 2006) |
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