Osaka, Japan, December 15, 2016 - Takeda Pharmaceutical Company Limited （TSE: 4502） today held a meeting of the Board of Directors and adopted a resolution to sign an agreement （“Tender Agreement”） with Fujifilm Corporation （Head Office: Minato-ku, Tokyo, “Fujifilm”） to transfer its shareholding in Wako Pure Chemical Industries, Ltd. （Head Office: Chuo-ku, Osaka, “Wako Pure Chemical”）, a consolidated subsidiary through the tender offer bid （“TOB”） to be launched by Fujifilm in late February. After adopting the resolution, Takeda entered into the Tender Agreement with Fujifilm.
This is a positive strategic move for Fujifilm, Wako Pure Chemical, and Takeda. The sale price is 198.5 billion yen and Takeda expects to post a one-time pre-tax gain of approximately 100 billion yen in its FY2017 consolidated income statement.
1. Rationale to tender in the TOB
Wako Pure Chemical was established in 1922 with the spin-off of the chemical agent division of Takeda. It has been developing and producing high-grade products as a comprehensive laboratory reagent manufacturer, and addresses needs in cutting-edge research areas under its management philosophy, “We hope to serve the well-being of the public through our efforts to promote the development of scientific technologies and progress of academic research.” At present, by leveraging its core competency of proprietary technological capabilities, Wako Pure Chemical is able to serve the diverse needs of scientists, medical professionals and the industrial world in general through its three key businesses of “Laboratory Chemicals”, “Specialty Chemicals” and “Clinical Diagnostic Reagents”.
In order to achieve sustainable growth as a global pharmaceutical company, Takeda aims to discover and develop innovative drugs by focusing its R&D efforts on the areas of Oncology, Gastroenterology （GI） and Central Nervous System （CNS）, plus Vaccines. After carefully considering and examining options for Wako Pure Chemical’s business, Takeda has concluded that Wako Pure Chemical can better accelerate its development with the support of Fujifilm, which has maintained a long-term capital and business relationship with Wako Pure Chemical and has a mid- to long-term growth strategy centered on the business fields of “Healthcare” and “Highly Functional Materials”. Wako Pure Chemical, at its meeting of the Board of Directors held on December 15, 2016, adopted a resolution to express its supportive opinion for the TOB and to recommend its shareholders to tender their shares.
In the Tender Agreement, Takeda and Fujifilm agreed that, after the completion of the undermentioned Share Repurchase by Wako Pure Chemical, Takeda will tender all of its remaining shareholding in Wako Pure Chemical for the TOB and have Nihon Pharmaceutical Industry Co., Ltd. （“Nihon Pharmaceutical”）, one of Takeda’s subsidiaries, tender all of its remaining shareholding in Wako Pure Chemical. The Tender Agreement also sets the following conditions precedent for Takeda and Nihon Pharmaceutical （“Takeda Group”） to tender: 1） the TOB is legally and effectively commenced and not withdrawn, 2） each of the representations and warranties*1 made by Fujifilm in the Tender Agreement is true and correct in all material respects, 3） there are no laws, regulations and judicial decisions or the like that would restrict or prohibit the consummation of the TOB, 4） Fujifilm has performed or complied with all of its obligations, covenants and conditions*2 required to perform or comply prior to the commencement of the TOB under the Tender Agreement, 5） Fujifilm has completed necessary procedures and formalities under competition law in Japan and overseas and 6） the Share Repurchase has been completed. However, Takeda is not restrained from tendering or having Nihon Pharmaceutical tender for the TOB by waiving all or part of those conditions precedent at its own discretion. Takeda and Fujifilm also agreed that Takeda Group may not tender or may cancel the tender that has been made, in such a case that a third party commences a tender offer bid （the “Counter TOB”） for shares in Wako Pure Chemical with a considerably higher offer price than the TOB price, and that Takeda makes a reasonable decision after receiving a legal opinion letter to the effect that tendering for the TOB is reasonably considered to breach the duty of due care of a prudent manager for Takeda’s directors, and furnishes the letter to Fujifilm.
At its Board of Directors meeting held on December 15, 2016, Wako Pure Chemical also adopted a resolution to submit an agenda for an extraordinary shareholders’ meeting to be held on February 6, 2017, prior to the TOB, concerning the repurchase of its own shares, up to approximately 97 billion yen, at the same price as the TOB price （the “Share Repurchase”, collectively, together with the TOB, the “Share Transfer”）. Wako Pure Chemical will implement the Share Repurchase subject to shareholders’ approval. If Wako Pure Chemical implements the Share Repurchase, Takeda will transfer all of Takeda's Group shareholding （“Takeda’s Shareholding”） for 198.5 billion yen in total, by tendering part of Takeda’s shareholdings for the Share Repurchase and by tendering all the remaining Takeda’s Shareholding for the TOB.
|（1）Company name||Wako Pure Chemical Industries, Ltd.|
|（2）Headquarters||1-2 Doshomachi 3-Chome, Chuo-ku, Osaka|
|（3）Name and title of representative||Shinzo Kobatake, President|
|（4）Business description||Production and distribution of laboratory chemicals, specialty chemicals and diagnostic reagents|
|（5）Capital||2,340 million yen （as of September 30, 2016）|
|（6）Date of establishment||June 5, 1922|
|（7）Major shareholders and percentage of shares held
（as of September 30, 2016）1
|Takeda Pharmaceutical Company Limited||69.42%|
|Wako Pure Chemical Employee Shareholding Association||1.68%|
|（8）Relationships between Takeda and Wako Pure Chemical2||Capital relationship||Takeda holds 69.75% of the outstanding shares of Wako Pure Chemical （including 0.33% indirectly held） as of September 30, 2016|
|Personnel relationship||Takeda dispatches an auditor to Wako Pure Chemical|
|Transactional relationship||Takeda purchases products and materials from Wako Pure Chemical. Wako Pure Chemical also loans to Takeda.|
|（9）Operating result and financial conditions for the last three years （consolidated）|
|Accounting period||Fiscal year ended March 2014||Fiscal year ended March 2015||Fiscal year ended March 2016|
|Consolidated net assets （million yen）||119,919||124,429||125,355|
|Consolidated total assets （million yen）||149,986||152,281||152,853|
|Consolidated net assets per share （yen）||3,598.84||3,734.16||3,837.40|
|Consolidated sales （million yen）||75,064||77,602||79,391|
|Consolidated operating income （million yen）||7,205||7,672||7,761|
|Consolidated ordinary income （million yen）||7,360||7,837||7,849|
|Net income attributable to shareholders of parent （million yen）||4,566||5,080||5,662|
|Consolidated earnings per share （yen）||137.05||152.50||172.15|
|Dividend per share （yen）||83.00||85.00||88.00|
|（1）Company name||Fujifilm Corporation|
|（2）Headquarters||26-30, Nishiazabu 2-chome, Minato-ku, Tokyo|
|（3）Name and title of representative||Kenji Sukeno, President|
|（4）Business description||Development, production, sales, and service of 1） Imaging Solutions （color films, digital cameras, color paper・services・equipment for photography printing, instant photo systems, optical devices） and 2） Information Solutions （medical systems, life science products, pharmaceutical products, graphic systems, flat panel display materials, recording media, electronic materials）|
|（5）Capital||40,000 million yen （as of December 15, 2016）|
|（6）Date of establishment||October 2, 2006|
|（7）Major shareholders and percentage of shares held||Fujifilm Holdings Corporation||100.00%|
|（8）Relationships between Takeda and Fujifilm||Capital relationship||Not Applicable|
|Personnel relationship||Not Applicable|
|Transactional relationship||Not Applicable|
|Whether Fujifilm constitutes a related party||Not Applicable|
|（1）Number of shares held prior to the transfer||23,259,242 shares
（Takeda: 23,148,821 shares, Nihon Pharmaceutical1: 110,421 shares）
（Number of votes：23,258）
（％ of total votes2：71.78％） （as of September 30, 2016）
|（2）Number of shares to be transferred3||23,259,242 shares
（Takeda：23,148,821 shares, Nihon Pharmaceutical1: 110,421 shares）
（Number of votes：23,258）
（％ of total vote2s：71.78％） （as of September 30, 2016）
（Transfer price4：198,517,630,470 yen （8,535 yen per share））
|（3）Number of shares held after the transfer5||0 shares
（Number of votes：0）
（％ of total votes：0.00％）
|（1）Execution of the Tender Agreement||December 15, 2016|
|（2）Date of the extraordinary shareholder’s meeting of Wako Pure Chemical regarding the Share Repurchase||February 6, 2017 （tentative）|
|（3）Date of the meeting of Board of Directors and the public notice regarding the Share Repurchase||February 6, 2017 （tentative）|
|（4）Application deadline of the Share Repurchase||February 14, 2017 （tentative）|
|（5）Settlement date of the Share Repurchase||February 24, 2017 （tentative）|
|（6）Tender offer period of the TOB||From February 27, 2017 to April 3, 2017 （tentative）|
|（7）Disclosing date of result of the TOB||April 4, 2017 （tentative）|
|（8）Commencement date of settlement of the TOB||April 21, 2017 （tentative）|
As a result of the Share Transfer, Wako Pure Chemical will be removed from Takeda's consolidated subsidiaries （FY2015 revenue: 79.4 billion yen）.
If the Share Transfer is completed, Takeda will post a one-time pre-tax gain of approximately 100 billion yen in the first quarter of FY2017. The cash impact is expected to exceed 100 billion yen. There will be no financial impact on Takeda’s FY2016 consolidated earnings forecast*.
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