Cosmo Energy Submits Notification to the Japan Fair Trade Commission Regarding its Intention to Make Maruzen Petrochemical a Consolidated Subsidiary Through the Acquisition of Additional Shares
January 7, 2016
Cosmo Energy Holdings Co., Ltd.
Cosmo Energy Holdings Co., Ltd. (hereinafter referred to as “Cosmo Energy” or “the Company”) announced that it submitted a notification yesterday to the Japan Fair Trade Commission regarding its intention to make Maruzen Petrochemical Co., Ltd. (hereinafter referred to as “Maruzen Petrochemical”), an affiliate company currently accounted for using the equity method, a consolidated subsidiary through the acquisition of additional shares.
Cosmo Energy is currently in discussions with other Maruzen Petrochemical shareholders concerning the acquisition of the shares that they currently own in order to be able to incorporate Maruzen Petrochemical into its consolidated accounts. The Company intends to conclude a share transfer agreement with existing shareholders and complete the planned share acquisition to make Maruzen Petrochemical a consolidated subsidiary by the end of March 2016, subject to approval by the Japan Fair Trade Commission.
1. Reason for share acquisition
Maruzen Petrochemical owns and operates one of the most competitive naphtha cracking plants in Japan. That being said, there is concern that the petrochemical industry will face increasing competition in the future due to greater productivity among North American and Chinese competitors producing products from low-cost feedstock, slowing demand growth in China, and the declining domestic demand, among other reasons.
Under such conditions, this acquisition will allow Cosmo Energy to optimize its petroleum and petrochemical business operations and further strengthen the competitiveness of each. Furthermore, the Company believes that the transaction will lead to greater competitiveness of the entire industrial complex (Cosmo Energy – Maruzen Petrochemical – Petrochemical derivative producers) centered on Maruzen Petrochemical, which has tremendous potential.
2. Corporate profile of Maruzen Petrochemical
| (1) Company name | Maruzen Petrochemical Co., Ltd. | ||
|---|---|---|---|
| (2) Registered address | 2-1-1 Irifune, Chuo-ku, Tokyo | ||
| (3) Name and title of representative | Shun Fujii President and Representative Director | ||
| (4) Business activities | Production, sales, and other business activities pertaining to petrochemicals | ||
| (5) Paid-in capital | 10,000 million yen | ||
| (6) Date established | October 10, 1959 | ||
| (7) Major shareholders and shareholding ratio (as of January 7, 2016) | Cosmo Energy Holdings Co., Ltd. (*) 30.00% Ube Industries Ltd. 12.00% Denka Company 12.00% JNC Corporation 12.00% Cosmo Matsuyama Oil Co., Ltd. 10.00% Toso Co., Ltd. 5.00% MUFG Bank, Ltd. 4.00% Mizuho Bank Ltd. 4.00% KH Neochem Co., Ltd. 2.00% (Treasury shares) (9.00%) | ||
| (8) Relationship with Cosmo Energy | Capital ties | Cosmo Energy owns 6,000,000 Maruzen Petrochemical shares (30.00% of total), an investment accounted for using the equity method. In addition, Cosmo Matsuyama Oil Co., Ltd., a wholly owned subsidiary of Cosmo Oil Co., Ltd., owns 2,000,000 Maruzen Petrochemical shares (10.00% of total). | |
| Personnel | Keizo Morikawa, President and Representative Director of Cosmo Energy, and Hiroshi Kiriyama, Director of Cosmo Energy, both also serve as directors of Maruzen Petrochemical. | ||
| Business | Cosmo Oil Co., Ltd. (a wholly owned subsidiary of Cosmo Energy) and Cosmo Matsuyama Oil Co., Ltd. (a wholly owned subsidiary of Cosmo Oil Co., Ltd.) both market petrochemical feedstock and products to Maruzen Petrochemical. | ||
| (9) Financials for the last three years | |||
| Fiscal period | Ending March 31, 2013 | Ending March 31, 2014 | Ending March 31, 2015 |
| Consolidated net assets | 91,673 million yen | 98,592 million yen | 103,228 million yen |
| Consolidated total assets | 210,847 million yen | 236,789 million yen | 215,417 million yen |
| Consolidated sales | 421,636 million yen | 568,422 million yen | 549,484 million yen |
| Consolidated operating profit/loss | -55 million yen | 8,921 million yen | 2,743 million yen |
| Consolidated ordinary profit | 1,278 million yen | 11,023 million yen | 6,287 million yen |
| Net income attributable to parent company shareholders | 977 million yen | 7,058 million yen | 4,151 million yen |
*The Maruzen Petrochemical shares held by Cosmo Energy were transferred from Cosmo Oil Co., Ltd. on January 1, 2016 through a company split.
The details of the transaction, including the number of shares purchased and the names of sellers, will be announced once they have been determined.
End
(Contact details for inquiries)
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Cosmo Energy Holdings Co., Ltd.
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