LIXIL : Jan 27, 2020ReleaseNotification Regarding Start of Consideration of Merger between LIXIL Group Corporation and its subsidiary > NEW

[This is an English translation of the original text written in Japanese]

January 27, 2020

LIXIL Group Corporation Kinya Seto

Representative Executive Officer and President (First Section of TSE/NSE, code 5938)

(Contact): Kayo Hirano

Senior Manager, Investor Relations Office

Notification Regarding Start of Consideration of Merger between

LIXIL Group Corporation and its subsidiary

LIXIL Group Corporation (hereinafter "LGC") announced today that its Board of Directors has resolved to start considering a merger between LGC, the holding company of the LIXIL Group, and LIXIL Corporation (hereinafter "LIXIL"), its 100% subsidiary.

The details are as follows:

1. Purpose of the merger

LIXIL Group's aim is to be an entrepreneurial company that can achieve sustainable competitiveness and growth in order to fulfill its corporate purpose to contribute to society by making better homes a reality for everyone, everywhere. To achieve this aim, the company is taking steps to transform its operations, including strengthening governance, enhancing productivity and efficiency, as well as becoming a more agile organization that enables better decision-making.

Since 2001, under the former Tostem Inax Holding Corporation, LIXIL Group adopted a holding company structure to optimize overall operations while maintaining cooperation between each operating company. This structure was continued when LIXIL was established following the integration of five major operating companies in 2011. However, as LIXIL Group's strategy has evolved, it must now place greater focus on actively managing its core businesses and driving synergies across these business areas to accelerate growth. This is in line with the announcement of July 22, 2019, ("Announcement Regarding Management's Future Direction"), which stated that the highest priority of the current executive officers and board of directors is to enhance corporate value by focusing on LIXIL's core businesses inside and outside of Japan.

By dissolving the two-tier structure of LGC and LIXIL, efficiency will be improved by eliminating duplication of management, operating costs and human resources. This change will enable faster decision-making, as well as improve corporate governance by simplifying the group management system and increasing the transparency of management.

Based on these considerations, the Board of Directors has today resolved to consider eventually merging LGC and LIXIL.

2. Overview of the companies to be merged

(1) Name of the	LIXIL Group Corporation		LIXIL Corporation
company
(2)	Major business	1) To control and manage the		To manufacture and sell building
		operations of the companies operating	materials and housing equipment for
		businesses relating to living in Japan	housing and buildings, operate
		and foreign countries by obtaining and	housing-related businesses as well as
		holding the shares or the equities in	related services.
		such companies.
		2) To control and manage the
		operations of the companies operating
		business relating to urban environment
		in Japan and foreign countries by
		obtaining and holding the shares or the
		equities in such companies.
(3)	Year of	September 1949		October 2001
foundation
(4)	Headquarters	Ojima 2-2-1,Koto-ku, Tokyo, JAPAN	Ojima 2-2-1,Koto-ku, Tokyo, JAPAN
(5)	Representative	Kinya Seto		Kazuhiko Otsubo
(6)	Capital	JPY68,418 million		JPY34,600 million
(7)	Outstanding	313,319,159 shares		650,649 shares
shares
(8)	Major	The Master Trust Bank of	6.17%	LIXIL Group Corporation	100%
shareholders and	Japan, Ltd. (Trust
its % of	account)
shareholding	Japan Trustee Services	4.91%
(As of September	Bank, Ltd. (Trust Account)
30, 2019)	State Street Bank Client	3.72%
		Omnibus OM04

(Note) excluding	(Standing Proxy: The
treasury stock of	Hongkong and
23,223,744 shares.	Shanghai Banking
	Corporation Limited
	Tokyo Branch)
	Other
(9) Financial	IFRS (Consolidated)		JGAAP (Stand-alone)
position and
Total equity (JPY million)	567,167	Total equity (JPY million)	134,964
operating results
Total asset (JPY million)	2,059,544	Total asset (JPY million)	829,446
for the latest fiscal
Equity attributable to	1,839.59	Net asset per share (JPY)	207,430.08
year (March 2019)	owners of the parent per
	share (BPS) (JPY)
	Revenue (JPY million)	1,832,608	Net Sales (JPY million)	883,231
	Operating loss (JPY	-15,029	Operating income (JPY	6,019
	million)		million)
			Ordinary income (JPY	8,470
			million)
	Loss for the year	-52,193	Net loss (JPY million)	-79,642
	attributable to owners of
	the parent (JPY million)
	Basic loss per share (JPY)	-179.98	Loss per share (JPY)	-122,404.19

3. Future plans

The LIXIL Group will establish a project team to advance the consideration of the merger between LGC and LIXIL as part of its initiatives to improve its corporate governance, management efficiency, and corporate value. The project team will consider the method of the merger, the timing of the completion of the merger, and the management structure after the merger, etc.

4. Future outlook

As the considered merger is between LGC and its 100% of consolidated subsidiary, there will be no negative impact on LIXIL Group's consolidated financial performance. LGC will announce the timing of the completion of the merger, and the management structure after the merger once it is agreed and determined.

End