Idemitsu Kosan : Announcement on the Acquisition of Shares in Seibu Oil Company Limited（PDF：266KB）

June 14, 2022

Press Release

Company Name: Idemitsu Kosan Co., Ltd.

Representative Director & Chief Executive Officer:

Shunichi Kito

(Company Code: 5019, TSE Prime Market)

Contact person: Munehiro Sekine, General Manager,

Investor Relations Office, Finance & Accounting Department (TEL: [phone])

Announcement on the Acquisition of Shares in Seibu Oil Company Limited

Idemitsu Kosan Co., Ltd. ("Idemitsu" or the "Company") hereby announces that its board passed a resolution on June 14, 2022, to acquire shares in Seibu Oil Company Limited ("Seibu Oil") to make it a subsidiary, to terminate its product purchase agreement (product sales agreement) with Seibu Oil effective March 31, 2024, on the assumption that the termination of refinery operations at Seibu Oil's Yamaguchi Refinery in March 2024.

1. Overview and purpose for the acquisition, etc

Pursuant to Idemitsu's corporate vision for 2030, "Your Reliable Partner for Brighter Future," the Company is engaging

in technological innovation and business restructuring aimed at achieving a carbon neutral society while simultaneously fulfilling its social mission of providing stable energy supply.

Domestic petroleum product demand is expected to decrease further due to structural issues such as the aging and decreasing population, the impact of the COVID-19 pandemic, and global trends towards decarbonization. In light of this evolving operating environment, the Company determined that a revamping of the Idemitsu group's manufacturing and supply framework is inevitable and that making Seibu Oil a subsidiary of the Company, terminating the product purchase agreement, and terminating refinery operations at Yamaguchi Refinery is the best course of action for Idemitsu.

Until the termination of refinery operations, the Company will continue to contribute to stabilizing regional energy supply and to ensure that Seibu Oil operates safely. New business development using the former site of the Yamaguchi Refinery will be considered after termination of refinery operations, while also continuing the oil tank, storage, and solar power generation businesses. The Company will cooperate with Seibu Oil in such operations and in measures towards the termination of refinery operations at Yamaguchi Refinery. Employment contracts with Seibu Oil employees will remain in place, and the Company expect that they are provided with opportunities to work actively in various capacities within the Company or Idemitsu group refinery and complex.

2. Outline of subsidiary to be transferred (Seibu Oil Company Limited)

(1)	Company name		Seibu Oil Company Limited
(2)	Location		7 Kandamitoshiro-cho,Chiyoda-ku, Tokyo
(3)	Representative		Representative director and president: Satoshi Handa
(4)	Business description		Manufacturing, sales, etc. of petroleum products
(5)	Paid-in capital		JPY 8 billion
(6)	Established		June 25, 1962
				Idemitsu Kosan Co., Ltd. (38.00%)
(7)	Major	shareholders	and	UBE Corporation (11.00%)
shareholding ratio (as of March 31,	The Chugoku Electric Power Co., Ltd. (10.79%)
2022)			Mitsui O.S.K. Lines (5.00%)
				Mizuho Bank, Ltd. (5.00%)
				Capital		The Company owns 38% of the target's shares
	Relationship between the		Personnel		1 executive director of the Company is also a director of the
(8)	listed company and the			target
	target
		Business		The Company purchases petroleum products produced by
					the target
(9)	Consolidated operating results and financial position of the target over the last 3 years
	Fiscal year ended		March 2019		March 2020		March 2021
	Consolidated net assets				32,691		32,280		28,820
		(JPY millions)
	Consolidated total assets				167,016		157,973		171,126
		(JPY millions)
	Consolidated net assets per share			10,439		9,873		10,695
		(JPY)
	Consolidated net sales				498,350		464,447		273,465
		(JPY millions)
	Consolidated operating income			4,765		1,288		(3,168)
		(JPY millions)
	Consolidated ordinary income			4,950		1,471		(4,421)
		(JPY millions)
	Net income attributable to owners
		of the parent				3,518		1,072		(2,971)
		(JPY millions)
	Consolidated net income per share			220		67		(186)
		(JPY)
	Dividends per share (JPY)				70		60		30

3. Overview of Seibu Oil Yamaguchi Refinery

Location:	5 Nishioki, Sanyoonoda-shi, Yamaguchi Pref.
Refinery capacity:	Crude distillation unit : 120,000 BD
Assets owned:	crude oil refinery equipment, crude oil/product tanks, various shipping equipment
Employees:	453 (as of April 1, 2022)

4. Overview of the product purchase agreement

Covered products: fuel oils (gasoline, kerosine, jet fuel, diesel oil, A type heavy oil, C type heavy oil, LPG), chemical products (xylene, benzene, etc.)

Purchase volume: about 5 million KL/year

5. Overview of Counterparties for Stock Acquisitions

(1)	Company name	UBE Corporation
(2)	Location	1978-96 Kogushi, Ube-shi, Yamaguchi Pref.
(3)	Representative	President & Representative Director: Masato Izumihara
(4)	Business description	Manufacturing, sales, etc. of chemical products, construction materials, and
machinery
(5)	Paid-in capital	58,435 million yen
(6)	Established	March 10, 1942
(7)	Net assets	394,035 million yen
(8)	Total assets	837,954 million yen
(9) Major shareholders and	The Master Trust Bank of Japan, Ltd. (trust account) (16.53%)
Custody Bank of Japan, Ltd. (trust account) (5.66%)
shareholding ratio (as of September
Sumitomo Life Insurance Company (2.05%)
30, 2021)
	Custody Bank of Japan, Ltd. (trust account 7) (1.64%)
		Nippon Life Insurance Company (1.64%)
		Capital		None
	Relationship between the	Personnel		None
(10)	listed company and the
Business		None
	target
	Related party		Not applicable
		status
(1)	Company name	The Chugoku Electric Power Co., Ltd.
(2)	Location	4-33 Komachi, Naka-ku,Hiroshima-shi, Hiroshima Pref.
(3)	Representative	President and Director: Mareshige Shimizu
(4)	Business description	Power business, etc.
(5)	Paid-in capital	197,024 million yen
(6)	Established	May 1, 1951
(7)	Net assets	608,445 million yen

(8)	Total assets	3,566,947 million yen
		The Master Trust Bank of Japan, Ltd. (trust account) (12.07%)
(9) Major shareholders and	Yamaguchi Prefecture (9.43%)
shareholding ratio (as of September	Nippon Life Insurance Company (4.11%)
30, 2021)		Custody Bank of Japan, Ltd. (trust account) (4.04%)
		Chugoku Electric Power employee stock ownership association (1.95%)
		Capital	None
	Relationship between the	Personnel	None
（10） listed company and the
Business	None
	target
	Related party	Not applicable
		status
(1)	Company name	Mitsui O.S.K. Lines
(2)	Location	2-1-1 Toranomon, Minato-mu, Tokyo
(3)	Representative	President and CEO: Takeshi Hashimoto
(4)	Business description	Shipping, etc.
(5)	Paid-in capital	65,400 million yen
(6)	Established	December 28, 1942
(7)	Net assets	1,334,866 million yen
(8)	Total assets	2,686,701 million yen
		The Master Trust Bank of Japan, Ltd. (trust account) (14.93%)
(9) Major shareholders and	Custody Bank of Japan, Ltd. (trust account) (7.74%)
shareholding ratio (as of September	Sumitomo Mitsu Banking Corporation (2.50%)
30, 2021)		Mitsui Sumitomo Insurance Co., Ltd. (2.35%)
		MSIP CLIENT SECURITIES (1.61%)
		Capital	None
	Relationship between the	Personnel	None
(10)	listed company and the
Business	None
	target
	Related party	Not applicable
		status
(1)	Company name	Tokio Marine & Nichido Fire Insurance Co, Ltd.
(2)	Location	2-6-4 Otemachi, Chiyoda-ku, Tokyo
(3)	Representative	President & Chief Executive Officer: Shinichi Hirose
(4)	Business description	Property and casualty insurance, etc.
(5)	Paid-in capital	101,995 million yen
(6)	Established	March 20, 1944
(7)	Net assets	2,936,346 million yen
(8)	Total assets	9,562,449 million yen

(9)	Major shareholders and		Tokio Marine Holdings (100%)
shareholding ratio
			Capital		None
	Relationship between the		Personnel		None
(10)	listed company and the
	Business		None
	target
		Related party		Not applicable
			status
(1)	Company name		Kajima Corporation
(2)	Location		1-3-1 Motoakasaka, Minato-ku, Tokyo
(3)	Representative		President & Representative Director: Hiromasa Amano
(4)	Business description		Construction, etc.
(5)	Paid-in capital		81,447 million yen
(6)	Established		February 22, 1930
(7)	Net assets		953,566 million yen
(8)	Total assets		2,337,741 million yen
			The Master Trust Bank of Japan, Ltd. (trust account) (14.45%)
(9) Major shareholders and		Custody Bank of Japan, Ltd. (trust account) (5.53%)
shareholding ratio (as of September		Kimiko Kajima (3.17%)
30, 2021)			Custody Bank of Japan, Ltd. (trust account 7) (1.82%)
			Kajima employee stock ownership association (1.81%)
			Capital		None
	Relationship between the		Personnel		None
(10)	listed company and the
	Business		None
	target
		Related party		Not applicable
			status
6. Number of shares acquired, acquisition price, and shares held before and after the transaction
	Shares held before	6,080,000 shares
(1)	(number of voting rights: 6,080,000)
transfer
	(share of voting rights held: 38%)
(2)	Number of shares	4,625,561 shares
acquired	(number of voting rights: 4,625,561)
(3)	Acquisition price	Undisclosed (to protect confidentiality)
	Shares held after	10,705,561 shares
(4)	(number of voting rights: 10,705,561)
transfer
	(share of voting rights held: 66.9%)