Sekisui House : Notice regarding Determination of Policies on Reorganization of Sekisui House Construction Companies NEW

News Release

Notice regarding Determination of Policies on Reorganization of

Sekisui House Construction Companies

(Company-Split and Establishment of a Preparatory Company Associated with

Transition to an Intermediary Holding Company)

September 7, 2023 - At the meeting of the Board of Directors held today, Sekisui House, Ltd. (the "Company") determined to reorganize Sekisui House Construction Companies, which is scheduled to be implemented on February 1, 2024, and to establish a company-split preparatory company associated with a transition to an intermediary holding company. As this is a simplified absorption- type company split with wholly-owned subsidiaries of the Company, some details have been omitted from this press release.

I. Purpose of the reorganization

The Sekisui House Construction companies, which are subsidiaries of Sekisui House, comprise a general construction company group engaged in the design, construction, contracting and administration of building construction, civil engineering works and landscaping. As construction companies that perform the foundation work and framing assembly for housing built by the Company, they play an important role in ensuring the quality of the Company's housing and are central to the Sekisui House Group's construction capabilities, which are one of its core competencies. They are also helping to expand orders for remodeling to improve seismic resistance and thermal insulation, and for primary contracting for the new construction of such facilities as stores, distribution warehouses and factories.

Enhancing and expanding construction capabilities is an important aspect of the Sekisui House Group's growth strategy, and as such, the ongoing growth of the Sekisui House Construction group, which is central to said construction capabilities, is essential. The Company has therefore decided to establish an intermediate holding company to oversee the Sekisui House Construction Group and promote business with an eye to business domain expansion. While keeping the Sekisui House Construction companies closely rooted in local communities, this move is aimed at realizing high-quality, safe construction and implementing flexible personnel system reforms while delegating authority to the intermediate holding company and clarifying responsibility to grow the built-to-order business by realizing growth strategy and reinforcing governance.

II. Outline of the reorganization

In the reorganization, Sekisui House Construction Holdings, Ltd. (owned 100% by the Company; the "Company-Split Preparatory Company") will be established as an intermediary holding company having control over Sekisui House Construction Group and the Company-Split Preparatory Company will absorb the business under the scope of Sekisui House Construction Business Headquarters of the Company (the "Company Split").

(1) Schedule of the Company Split

(1)	Date of resolution by the Company's Board of	Early December 2023
Directors to approve the absorption-type company split	(scheduled)
agreement
(2)	Date of conclusion of the absorption-type company	Early December 2023
split agreement	(scheduled)
(3)	Effective date of the Company Split	February 1, 2024 (scheduled)

1. Since the Company Split will be a simplified company split that satisfies the conditions described under Article 784, Paragraph 2 of the Companies Act, no general meeting of shareholders of the Company will be held to approve the absorption-type company split agreement.

1. Method of the Company Split

The Company Split will be an absorption-type company split with the Company as the splitting company and the Company-Split Preparatory Company as the successor company.

(3) Details of allocation related to the Company Split

At the time of the Company Split, the Company-Split Preparatory Company will issue 1,800 shares of its common stock, all of which will be allocated to the Company.

(4) Handling of stock acquisition rights and bonds with stock acquisition rights

There will be no change in the handling of stock acquisition rights issued by the Company, and the Company has not issued any bonds with stock acquisition rights.

1. Increase/decrease in capital stock due to the Company Split There will be no change to the amount of the Company's capital.
2. Rights and obligations to be assumed by the successor company

Through the Company Split, the Company-Split Preparatory Company which is the successor company will take over the assets, obligations, agreements and other rights and obligations in relation to the business under the scope of Sekisui House Construction Business Headquarters to the extent specified in the absorption-type company split agreement.

(7) Prospects for fulfilling financial obligations

Detailed financial obligations to be assumed by the successor company will be announced as soon as they are determined.

Ⅲ. Profiles of the parties involved in the Company Split

		Splitting Company	Successor Company
①	Name of	Sekisui House, Ltd.	Sekisui	House	Construction
	company		Holdings, Ltd.
② Location	1-1-88, Oyodonaka, Kita-ku, Osaka	1-1-88, Oyodonaka, Kita-ku, Osaka
		Yoshihiro Nakai
③ Representative	Representative Director	To be determined
		President & Executive Director, CEO
		Contracting of design and
		construction of pre-engineered
		houses; sale of houses and
	Business	residential land; sale, acquisition,	Managing and controlling the Group
④	brokerage, leasing and
description	by holding shares or equity interest
		management of real estate;
		remodeling and renovation of
		houses; and other related
		businesses
⑤ Capital	202,854 million yen	10 million yen
⑥ Establishment	August 1, 1960	November 1, 2023
	Total number
⑦ of shares	662,862,666 shares	200 shares
	issued
⑧ Fiscal period	January 31	January 31
		The Master Trust Bank of Japan, Ltd.
	Major	(Trust account) 17.00%
	shareholders	Custody Bank of Japan, Ltd. (Trust
⑨ and	account) 6.34%	Sekisui House, Ltd.	100%
	shareholding	SMBC Nikko Securities Inc. 3.82%
	ratios（*）	Employees' Stockholding 3.14%
		Sekisui Chemical Co., Ltd. 2.17%
⑩ Business results and financial position of the last fiscal year
Fiscal period	Consolidated fiscal year ended				―
January 31, 2023
Net assets	1,667,546 million yen
		Since the fiscal year ending January
Total assets	3,007,537 million yen
		31, 2024 is the first year of the
Book value per share	2,466.06 yen
			establishment	of	Sekisui	House
Net sales	2,928,835 million yen
Construction		Holdings,		Ltd.,
Operating income	261,489 million yen
information on the financial situation
Ordinary income	257,272 million yen
and results	of	operations	of	the
Net income attributable	184,520 million yen
immediately	preceding fiscal	year
to owners of parent
Net income per	276.58 yen	does not exist.
share

1. Major shareholders and shareholding ratios of the splitting company are as of July 31, 2023. The ratio of shareholding is calculated deducting shares of treasury stock from the total number of shares issued.

IV. Outline of the business Division to be split

(1) Outline of the business division to be split

Business under the scope of Sekisui House Construction Business Headquarters of the Company

(2) Results of the business to be split

No profit-making operations are conducted.

(3) Items and book value of assets and liabilities to be split

Assets:	To be determined
Liabilities:	To be determined

Details will be disclosed as soon as they are determined.

V. Status after the Company Split

There will be no change to the name, location, representative person, business description, capital, or accounting period of the Company which is the splitting company. The Company-Split Preparatory Company which is the successor company is scheduled to allot 1,800 shares of its common stock to the Company through the Company Split. Although the amount of its capital will increase, details are not yet determined. There will be no change to the name, location, business description or accounting period of the Company-Split Preparatory Company, and its representative person is not yet determined.

VI. Future outlook

The Company Split is anticipated to have an insignificant impact on the Company's consolidated business results because it is reorganization between the Company and its consolidated subsidiary.

*** *** ***

For further information, please contact:

Mr. Atsushi Yoshida

Executive Officer, Head of Investor Relations Department

Sekisui House, Ltd.

Email: [e-mail]