Takeda Announces Further Details of Splitting off (Simple Absorption-type Split) of Japan Consumer Healthcare Business Unit

February 20, 2017 Osaka, Japan

Takeda Pharmaceutical Company Limited (TSE:4502) ("Takeda") today announced that it has entered into an agreement with Takeda Consumer Healthcare Company Limited (TCHC), a wholly-owned subsidiary of Takeda, to transfer its Japan Consumer Healthcare Business Unit (JCHBU) to TCHC. Takeda announced its intention to spin-off JCHBU to TCHC in February 2016*, in order to realize a more agile business model to promptly meet environmental changes and customers' needs in the consumer healthcare market.

*http://www.takeda.com/news/2016/20160203_7280.html

Since this is an absorption-type split carried out between Takeda and its wholly-owned subsidiary, certain items of the matters are omitted from disclosure, in line with Tokyo Stock Exchange disclosure guidelines.

1. Purpose of Company Split 

Japan Consumer Healthcare Business Unit (JCHBU) is a business unit of Takeda which operates the consumer healthcare business, mainly in Japan. JCHBU has been realizing sustained growth by focusing on over-the counter medicines including Alinamin and Benza, and a health food named Midori-no-Shukan. The market environment surrounding the consumer healthcare business is constantly changing, and customers' needs are becoming more and more diversified. TCHC, which will succeed Takeda's JCHBU business, will have a more agile business model to promptly meet these needs, further contributing to better health for people through high quality consumer healthcare brands. TCHC aims to become a leading company in the consumer healthcare markets of the Asian region.

2. Details of Company Split

(1)Schedule of company split 

Decision by the Director delegated by the Board of Directors February 20, 2017
Date of conclusion of the company split agreement February 20, 2017
Effective date of the company split April 1, 2017
(Note) The company split is to be conducted by Takeda as defined in Paragraph 2, Article 784, of the Companies Act. Accordingly, no approval by a general meeting of shareholders is required.

(2) Method of company split
It is an absorption-type split (simple absorption-type split) in which Takeda is a splitting company and TCHC is the succeeding company.

(3) Details of stock allocation.
As consideration for the company split, TCHC will allocate its 100 common shares to Takeda.

(4) Treatment of stock options and corporate bonds with stock options for the splitting company
Although Takeda has issued stock options, there will be no change to the treatment of these stock options due to the company split.

(5) Increase or decrease of capital stock due to the company split
There will be no change in Takeda's capital stock due to the company split.

(6) Rights and obligations to be succeeded by the succeeding company
TCHC will succeed the assets relating to Takeda's JCHBU business, as well as the rights and obligations incidental thereto, except for those stipulated otherwise in the absorption-type split agreement.

(7) Capability of satisfying liabilities
It has been judged that TCHC will not have any problem in performing its obligations relating to the liabilities it will bear following the effective date of the absorption-type company split.

 

3. Outline of the Companies

  Splitting company
(As of September 30, 2016)
Succeeding company
(As of January 25, 2017)
(1) Company name Takeda Pharmaceutical Company Limited Takeda Consumer Healthcare Company Limited
(2) Location 1-1, Doshomachi 4-chome, Chuo-ku, Osaka, Japan 8-2, Marunouchi 1-chome, Chiyoda-ku, Tokyo, Japan
(3) Representative President & CEO: Christophe Weber President: Masashi Sugimoto
(4) Scope of business Research & development, manufacturing, sales and marketing of pharmaceutical products, etc. Research & development, manufacturing, sales and marketing of over-the-counter products, quasi-drugs, etc.
(5) Capital 64,955 million yen 10 million yen
(6) Date established January 29, 1925 April 15, 2016
(7) Number of shares issued 790,396,895 shares 100 shares
(8) Fiscal year end March 31 March 31
(9) Major shareholders and ratio of shares held

Nippon Life Insurance Company

6.42%

The Master Trust Bank of Japan, Ltd. (Trust account)

5.01%

Japan Trustee Services Bank, Ltd. (Trust Account)

4.67%

JP Morgan Chase Bank 380055

4.40%

Takeda Science Foundation

2.27%

Takeda Pharmaceutical Company Limited

100%

(10)Financial results of the previous fiscal year (consolidated, IFRS)
  Takeda Pharmaceutical Company Limited
Equity attributable to owners of the Company 1,948,692 million yen
Total assets 3,824,085 million yen
Equity attributable to owners of the Company per share 2,487.04 yen
Revenues 1,807,378 million yen
Operating profit 130,828 million yen
Profit before income taxes 120,539 million yen
Profit attributable to owners of the Company 80,166 million yen
Basic earnings per share 102.26 yen
Dividend per share 180.00 yen

Through the company split, Takeda plans to transfer all shares of Takeda Healthcare Products Company Limited (“Takeda Healthcare”), a wholly-owned subsidiary of Takeda, which manufactures consumer healthcare products mainly in Japan, to TCHC. As a result, Takeda Healthcare will be a wholly owned subsidiary of TCHC. The outline of Takeda Healthcare is as follows.

(1)  Company name Takeda Healthcare Products Company Limited
(2)  Location 21, Osadano-cho 2-chome, Fukuchiyama city, Kyoto
(3)  Representative President: Keiichiro Arimoto
(4)  Scope of Business Manufacturing of over-the-counter products
(5)  Capital 400 million yen
(6)  Date established March 5, 1980
(7)  Number of shares issued 8,000 shares
(8)  Fiscal year end March 31
(9)  Execution Day (Effective Day) April 1, 2017
(10) Major shareholders and ratio of shares held before Execution Day

Takeda Pharmaceutical Company Limited

100%

(11) Major shareholders and ratio of shares held after Execution Day

Takeda Consumer Healthcare Company Limited

100% (scheduled)

 

4. Outline of the business unit to be split off from Takeda to TCHC

(1)Details of the business unit to be split off
The portion of the business to be split off is research & development, manufacturing, sales and marketing of over-the-counter products, quasi-drugs, etc. (consumer healthcare business) mainly in Japan which are operated by Takeda's JCHBU.

(2)Financial results of the business unit to be split off
The table below shows sales revenues and operating income of the Split BU.
Revenue the previous fiscal year (FY2015) 81,816 million yen
Operating profit the previous fiscal year (FY2015) 17,941 million yen

(3)Items and amounts of split assets and liabilities (As of December 31, 2016)
Assets Liabilities
Item Book value Item Book value
Current assets 6.9 billion yen Current liabilities 1 billion yen
Fixed assets 3.5 billion yen Fixed liabilities 0 yen
Total 10.4 billion yen Total 1 billion yen

 

5. The Parties' Status after the company split

(1)JCHBU business is to be succeeded to TCHC, while there are no change in company name, locations, representatives, capitals and fiscal year of Takeda after the company split.

(2)JCHBU business will be operated by TCHC, while there are no change in company names, locations, representatives, and fiscal year end of TCHC after the company split. However, the amount of TCHC's capitals increases from 10 million yen to 490 million yen through the company split.

 

6. Future outlook

As the company split is a simple absorption-type split with a wholly owned subsidiary of Takeda, the impact on Takeda's consolidated results for FY2016 is minimal.
(Reference)Consolidated earnings forecast for this fiscal year (As of October 28, 2016) and consolidated results for the previous fiscal year (in million yen)
  Revenue Operating profit Profit before income taxes Profit attributable to owners of the Company
Forecast for the current FY ending 
March 2017
1,700,000 135,000 132,500 93,000
Results for the previous FY ended 
March 2016
1,807,378 130,828 120,539 80,166

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Contact:

Tsuyoshi Tada
TEL:+81-3-3278-2417
tsuyoshi.tada@takeda.com