Taisho Pharma : Notice of Acquisition of an Exclusive Distributorship for Products of Biofermin Pharmaceutical Co., Ltd. and Purchase of a Part of its Shares by Taisho Pharmaceutical Co., Ltd.(Taisho Pharmaceutical Holdings)

July 31, 2013
To Whom It May Concern:
Company Name: Taisho Pharmaceutical Holdings Co., Ltd. Head Office: 3-24-1, Takada, Toshima-ku, Tokyo Representative: Akira Uehara, President and CEO
(First Section of the TSE: Code 4581) Contact: Masaki Tsuboi, General Manager
Public Relations Section
(Tel: [phone])

Notice of Acquisition of an Exclusive Distributorship for Products of Biofermin Pharmaceutical Co., Ltd. and Purchase of a Part of its Shares by Taisho Pharmaceutical Co., Ltd.

We hereby announce that Taisho Pharmaceutical Co., Ltd. ("Taisho"), our wholly-owned subsidiary, has executed today with Biofermin Pharmaceutical Co., Ltd. ("Biofermin Pharmaceutical"), our consolidated subsidiary, an exclusive distributorship agreement for products (the "Products") manufactured by Biofermin Pharmaceutical (the "Exclusive Distributorship Agreement"). Taisho has also agreed with Takeda Pharmaceutical Co., Ltd. ("Takeda"), which has been engaged in domestic transactions and export transactions related to the Products to date based on an exclusive distributorship, that Taisho will conduct
domestic transactions in relation to the sale of the Products in Japan by granting to Takeda a distributorship for a certain period of time, and the Takeda group will transfer local import licenses and permits for export transactions of the Products to local subsidiaries in our group, and has also agreed with Takeda on the basic
terms of such arrangements (details are as in 2. below) (the "Sale Arrangement")
In addition to the Sale Arrangement, Taisho has also agreed with Takeda on the purchase of a part of its holding of Biofermin Pharmaceutical shares (the "Share Purchase") (the "Share Purchase Arrangement").
1. Background of the execution of the Exclusive Distributorship Agreement, and the Sale Arrangement and the Share Purchase Arrangement
Since its foundation in 1917, Biofermin Pharmaceutical has been specializing in the manufacture and sale of "Biofermin," a live lactobacillus preparation, and has been actively contributing to the promotion of people's health as a leading company handling lactobacillus preparations. The sale of Biofermin Pharmaceutical's products in the domestic and foreign markets has been conducted by Takeda, pursuant to a certain sale consignment agreement with Takeda (the "Original Agreement").
According to Biofermin Pharmaceutical, it has carefully examined its future business strategies by taking into account the expiration of the Original Agreement as of the end of December 2015, and has made a decision in connection with the Original Agreement with Takeda as follows, and decided to execute the Exclusive Distributorship Agreement:
(i) the portion related to domestic transactions will be terminated by consent as of the end of December 2013 prior to the expiration of the term, and Taisho will be granted an exclusive distributorship for the Products thereafter; and
(ii) the portion related to export transactions will be terminated as of the end of December 2015, and
Taisho will be granted an exclusive distributorship for the Products thereafter.
Taisho has executed the Exclusive Distributorship Agreement with Biofermin Pharmaceutical today, and has also agreed through discussions with Takeda on the Sale Arrangement for conducting

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domestic transactions in connection with the sale of the Products in Japan in the future by granting to
Takeda a distributorship for a certain period of time (details are as in 2. below).
Takeda holds approximately 10.20% (1,216,897 shares) of the voting ratio of Biofermin
Pharmaceutical. In addition to the Sale Arrangement, Taisho has agreed to purchase approximately
8.15% (972,320 shares) of the voting ratio of Biofermin Pharmaceutical from Takeda.
2. Contents of the Sale Arrangement
(1) Domestic over-the-counter (OTC) drug transactions ("Domestic OTC Transactions")
Currently, Biofermin Pharmaceutical grants to Takeda an exclusive distributorship in connection with the Domestic OTC Transactions, and sells OTC drugs to wholesalers through Takeda. However, Biofermin Pharmaceutical has been set to grant an exclusive distributorship to Taisho from around January 2014 pursuant to the Exclusive Distributorship Agreement executed by Taisho with Biofermin Pharmaceutical. On that basis, Taisho, after having been granted the exclusive distributorship, will sell the Products by granting to Takeda a distributorship for the Products in connection with the Domestic OTC Transactions.
(2) Domestic prescription drug transactions ("Domestic PD Transactions")
Currently, Biofermin Pharmaceutical grants to Takeda an exclusive distributorship in connection with the Domestic PD Transactions, and sells prescription drugs to wholesalers through Takeda. However, Biofermin Pharmaceutical has been set to grant an exclusive distributorship to Taisho from around January 2014 pursuant to the Exclusive Distributorship Agreement executed by Taisho with Biofermin Pharmaceutical. On that basis, Taisho, after having been granted the exclusive distributorship, will sell the Products by granting to Takeda a distributorship for the Products in connection with the Domestic PD Transactions through Taisho Toyama Pharmaceutical Co., Ltd., our consolidated subsidiary engaged in the Domestic PD Transactions business.
(3) Export Transactions
As for export transactions of the Products, Biofermin Pharmaceutical currently sells the Products in Taiwan and in Hong Kong through the Takeda group by granting an exclusive distributorship to Takeda, as in the case of the Products for the domestic market. However, Biofermin Pharmaceutical has been set to grant an exclusive distributorship to Taisho from around January
2016 pursuant to the Exclusive Distributorship Agreement executed by Taisho with Biofermin Pharmaceutical. As for export transactions to Taiwan and to Hong Kong, local import licenses and permits will be transferred to local subsidiaries in our group by around December 31, 2015.
As regards ASEAN countries where the lactobacillus preparation market is expanding with the continued economic growth and increased health consciousness, we will work toward making arrangements for launching sale by utilizing the local infrastructure developed by our group.
3. Description of the parties
(1) Description of Takeda

(1) Company Name:	Takeda Pharmaceutical Co., Ltd.
(2) Registered Office:	1-1, Doshomachi, 4-chome, Chuo-ku, Osaka 540-8645, Japan
(3) Name and Title of the Representative:	Yasuchika Hasegawa President and Representative Director
(4) Primary Business:	Manufacture, sale, import and export of pharmaceutical drugs, quasi-pharmaceutical products, and other related products
(5) Paid-in Capital:	63,541 million yen (as of March 31, 2013)
(6) Date of Establishment:	January 29, 1925

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(7) Major Shareholders and
Nippon Life Insurance Company 7.14%
Shareholding Ratio
Japan Trustee Services Bank, Ltd. (trust account)
4.40%
The Master Trust Bank of Japan, Ltd. (trust account) 4.29% Takeda Science Foundation 2.27%
SSBT 0D05 OMNIBUS ACCOUNT-TREATY CLIENTS
2.11%
Barclays Securities Japan Ltd. 1.52% State Street Bank and Trust Company 505225 1.33%
Japan Trustee Services Bank, Ltd. (trust account 9)
The Chase Manhattan Bank, N.A. London S. L. Omnibus Account
1.05%
1.03%
Sumitomo Mitsui Banking Corporation 0.99% (as of March 31, 2013)

(2) Description of Biofermin Pharmaceutical

(1) Company Name:	Biofermin Pharmaceutical Co., Ltd.
(2) Registered Office:	5-5, Sanbancho, Nagata-ku, Kobe Hyogo Prefecture, Japan
(3) Name and Title of the Representative:	Takaaki Fujimoto President, Representative Director
(4) Primary Business:	Manufacture and sale of pharmaceutical drugs, quasi- pharmaceutical products, and foods
(5) Paid-in Capital:	1,227 million yen (as of March 31, 2013)
(6) Date of Establishment:	February 12, 1917
(7) Major Shareholders and Shareholding Ratio	Taisho Pharmaceutical Co., Ltd. 54.79% Takeda Pharmaceutical Co., Ltd. 10.01% Kazunori Teratani 1.68% Kumiko Takatsu 1.21% Akifumi Onishi 0.99% The Bank of Tokyo-Mitsubishi UFJ, Ltd. 0.77% Yukiko Hosomi 0.66% Biofermin Pharmaceutical Employee Shareholding 0.58% Association Manpuku-ji Religious Corporation 0.54% Hisa Kinzoku Kogyo Co., Ltd. 0.51% (as of March 31, 2013)

(3) Description of Taisho

(1) Company Name:	Taisho Pharmaceutical Co., Ltd.
(2) Registered Office:	3-24-1, Takada, Toshima-ku, Tokyo
(3) Name and Title of the Representative:	Shigeru Uehara President, Representative Director
(4) Primary Business:	Manufacture and sale of over-the-counter (OTC) drugs, foods, and other goods, and manufacture and sale of prescription drugs
(5) Paid-in Capital:	29,804 million yen (as of March 31, 2013)
(6) Date of Establishment:	May 5, 1928
(7) Major Shareholders and Shareholding Ratio	Taisho Pharmaceutical Holdings Co., Ltd. 100% (as of March 31, 2013)

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4. Number of shares to be purchased by Taisho through the Share Purchase, and its shareholding before and after the purchase

(1) Number of shares held before change	6,659,701 (Number of voting rights: 66,597) (Voting ratio: 55.83%)
(2) Number of shares to be purchased	972,320 (Number of voting rights: 9,723)
(3) Number of shares held after change	7,632,021 (Number of voting rights: 76,320) (Voting ratio: 63.98%)

5. Schedule

(1) Date of resolution by the Board of Directors	July 31, 2013
(2) Date of execution of the new distributorship agreement	July 31, 2013
(3) Execution of the share purchase agreement	July 31, 2013
(4) Date of share acquisition	August 5, 2013 (planned)
(5) Effective date of the new distributorship agreement	January 1, 2014 (planned)

6. Future outlook
The impact of the Exclusive Distributorship Agreement, the Sale Arrangement and the Share Purchase
Arrangement on our consolidated operating results is expected to be immaterial.

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