MediPal : Notice of Basic Agreement concerning Integration between Consolidated Subsidiaries

November 2, 2023

MEDIPAL HOLDINGS CORPORATION

Representative: Shuichi Watanabe, Representative Director, President and CEO

Code number: 7459 (Prime Market, Tokyo Stock Exchange)

Contact: Yuji Sakon,

Managing Director, General Manager of Administration Division

Tel: [phone]

Notice of Basic Agreement concerning

Integration between Consolidated Subsidiaries

MEDIPAL HOLDINGS CORPORATION ("MEDIPAL") hereby announces the signing of a basic agreement concerning an integration ("the integration") between wholly owned subsidiaries MP Gokyo Food & Chemical Co., Ltd. ("MP Gokyo Food & Chemical") and MEDIPAL FOODS CORPORATION ("MEDIPAL FOODS").

Because the integration is between wholly owned subsidiaries subject to consolidated accounting, some disclosure items and details are omitted.

1. Purpose of the integration

The MEDIPAL Group is engaged in business in the domain of "Pharmaceuticals, Health, and Beauty" based on our management philosophy of "contributing to people's health and the advancement of society through creation of value in distribution."

Within this domain, the mission of the food business conducted by MP Gokyo Food & Chemical and MEDIPAL FOODS is to support people's healthy lives based on the themes of "food safety and functionality" and "deliciousness and palatability."

Against the backdrop of a declining birthrate and an aging population, the Japanese food industry is experiencing a shift in its landscape, marked by changes in consumer preferences, including an increasing demand for health-conscious foods and foods with functional claims. We determined that the best way to swiftly address this shift, respond to customer and consumer needs, and further develop our food business would be to effectively utilize our management resources and further solidify our nationwide customer base through the integration.

2. Overview of the integration

(1) Schedule of the integration

Signing of basic agreement concerning the integration	November	2, 2023
Effective date	October 1,	2024 (planned)

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(2) Method of the integration

An absorption-type merger, with MP Gokyo Food & Chemical as the surviving company and MEDIPAL FOODS as the absorbed company. There will be no change to the surviving company's trade name as a result of the integration.

(3) Allocation related to the integration

Because this is an integration between wholly the Company's owned subsidiaries subject to consolidated accounting, there will be no issuance of new shares, increase in share capital, delivered money due to merger, or any other consideration as a result of the integration.

1. Share acquisition rights and bonds with share acquisition rights associated with the integration None applicable

3. Overview of the companies party to the integration (as of September 30, 2023)

		Surviving company	Absorbed company
(1) Name	MP Gokyo Food & Chemical Co., Ltd.	MEDIPAL FOODS CORPORATION
(2) Address	2-5-25 Umeda, Kita-ku,Osaka-shi,	17-1-4Kita-10-jo,Chuo-ku, Sapporo-
		Osaka Prefecture	shi, Hokkaido Prefecture
(3)	Name and title of	Hidemitsu Wakita, President and	Takaharu Kayama, Representative
	representative	Chief Executive Officer	Director, President
(4)	Business	Manufacture, processing, trade,	Sale of raw materials for food
		import, and export of food materials	processing, food additives, etc.
		and additives, pharmaceutical
		excipients, personal care products,
		coatings, industrial chemicals,
		electronic materials, and other
		finished goods
(5)	Share capital	¥200 million	¥60 million
(6)	Date of establishment	October 2, 1947	March 9, 1965
(7) Total number of shares	2,000,000	70,000
	issued
(8)	Fiscal year end	March 31	March 31
(9)	Number of employees	221	107
(10) Major shareholders	MEDIPAL (100.0%)	MEDIPAL (100.0%)
	and shareholding ratio

4. Future outlook

We anticipate that the integration will yield economic benefits over the medium to long term due to synergy. This includes economies of scale for common products and increased sales of in-house R&D products. However, the precise value of the impact has yet to be determined.

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The English version of this document is a translation of the Japanese original and is provided for information purposes only. While reasonable efforts have been made to provide an accurate translation, no liability is assumed by MEDIPAL HOLDINGS CORPORATION for any errors, omissions, or ambiguities in the translation. In the event of any inconsistency or conflict between the English version and the Japanese original, the Japanese original shall prevail.

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