Cosmo Energy to Acquire Additional Shares in
Maruzen Petrochemical
March 11, 2016
Cosmo Energy Holdings Co., Ltd.
Cosmo Energy Holdings Co., Ltd. (hereinafter referred to as ”Cosmo Energy” or “the Company”) today announced that it has decided to make Maruzen Petrochemical Co., Ltd. (hereinafter referred to as “Maruzen Petrochemical”) a consolidated subsidiary through the acquisition of additional shares from its existing shareholders (hereinafter referred to as “the Transaction”) pursuant to the January 7, 2016 press release entitled “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.”
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 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, and has gained the understanding and support of each of Maruzen Petrochemical’s existing shareholders regarding its purpose.
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 March 11, 2016) | Cosmo Energy Holdings Co., Ltd. (*) 30.00% Ube Industries Ltd. 12.00% Denka Company Ltd. 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 net assets per share | 11,585 yen | 13,010 yen | 11,836 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 |
| Net income per share | 54 yen | 388 yen | 228 yen |
| Cash dividends per share | 33 yen | 108 yen | 58 yen |
3. Overview of current shareholders from which Cosmo Energy will acquire shares
| (1) Company name | JNC CORPORATION | |
|---|---|---|
| (2) Registered address | 2-2-1 Otemachi, Chiyoda-ku, Tokyo | |
| (3) Name and title of representative | Yasuyuki Gotoh (President and Representative Director) | |
| (4) Business activities | Production, sales, and other activities pertaining to petrochemicals | |
| (5) Paid-in capital | 31,150 million yen | |
| (6) Date established | January 12, 2011 | |
| (7) Net assets | 67,570 million yen | |
| (8) Total assets | 118,230 million yen | |
| (9) Shareholders | CHISSO CORPORATION 100% | |
| (10) Relationship with Cosmo Energy | Capital ties | Not applicable |
| Personnel | Not applicable | |
| Business | Not applicable | |
| Affiliate status | Not applicable | |
| (1) Company name | JNC PETROCHEMICAL CORPORATION (It has been confirmed that JNC PETROCHEMICAL CORPORATION is the substantial shareholder of some of the shares held by JNC CORPORATION on the shareholder register under an agreement between JNC CORPORATION and JNC PETROCHEMICAL CORPORATION, and that these shares are scheduled to be transferred from JNC PETROCHEMICAL CORPORATION to Cosmo Energy.) | |
|---|---|---|
| (2) Registered address | 2-2-1 Otemachi, Chiyoda-ku, Tokyo | |
| (3) Name and title of representative | Tsukasa Taji (President and Representative Director) | |
| (4) Business activities | Production, sales, and other activities pertaining to petrochemicals | |
| (5) Paid-in capital | 2,000 million yen | |
| (6) Date established | June 15, 1962 | |
| (7) Net assets | 21,241 million yen | |
| (8) Total assets | 69,207 million yen | |
| (9) Shareholders | JNC CORPORATION 100% | |
| (10) Relationship with Cosmo Energy | Capital ties | Not applicable |
| Personnel | Not applicable | |
| Business | Not applicable | |
| Affiliate status | Not applicable | |
*JNC CORPORATION is expected to maintain its present shareholding.
4. Number of shares to be acquired (planned)
| (1) Number of shares held by Cosmo Energy prior to transfer | 8,000,000 shares (including indirect holdings of 2,000,000 shares) Number of voting rights: 8,000,000 units (including 2,000,000 units for indirect holdings) Voting rights ratio: 43.9% |
|---|---|
| (2) Number of shares to be transferred | 1,600,000 shares (JNC CORPORATION：800,000 shares, JNC PETROCHEMICAL: 800,000 shares) Number of voting rights: 1,600,000 units Voting rights ratio: 43.9% |
| (3) Acquisition price | Based on the non-disclosure agreement concluded with JNC CORPORATION, Cosmo Energy shall refrain from disclosing the share acquisition price. Additionally, the share acquisition price was determined in consideration of performance and future prospects, among other factors, upon consultation with JNC CORPORATION. |
| (4) Number of shares held by Cosmo after transfer | 9,600,000 shares (including indirect holdings of 2,000,000 shares) Number of voting rights: 9,600,000 units (including 2,000,000 units related to indirect holdings) Voting rights ratio: 52.7% |
5. Schedule
| (1) Signing of share transfer agreement | March 11, 2016 |
|---|---|
| (2) Transfer of shares | Late March 2016 (scheduled) |
6. Future prospects
Although it is assumed that the share acquisition will result in negative goodwill, the impact of the Transaction on business performance announced on February 9, 2016 is considered to be insignificant.
End
(Contact details for inquiries)
Public Relations Group, Corporate Communication Dept., Group Corporate Planning Unit, Cosmo Energy Holdings Co., Ltd.
TEL +81-3-3798-3101 FAX +81-3-3798-3841