東洋紡（3101） – (Delayed) Regarding agreement reached with Mitsubishi Corporation on Toyobo’s company split and establishment of a joint venture

To whom it may concern, March 24, 2022 Name of company: Toyobo Co., Ltd. Name of representative: Ikuo Takeuchi, President & CEO (Stock code: 3101, First Section of the Tokyo Stock Exchange) Contact: Katsuhiro Iwai, General Manager, Corporate Planning Department (TEL +81-6-6348-3054) Regarding agreement reached with Mitsubishi Corporation on Toyobo’s company split (simple absorption-type company split) involving the spin-off of the functional materials business and establishment of a joint venture Toyobo Co., Ltd. is pleased to announce that it has reached an agreement with Mitsubishi Corporation (referred to as “MC” hereafter) regarding a company split involving the spin-off of Toyobo’s functional materials business (referred to as “the Company Split” hereafter) toward the establishment of a joint venture (referred to as “the New Company” hereafter) as well as the investment MC will make in the New Company (referred to as “the Investment” hereafter). This move is aimed at sharpening the competitive edge of Toyobo’s functional materials and enabling the company to continue to provide solutions at the global level. MC is headquartered in Chiyoda Ward, Tokyo, and headed by President and CEO Takehiko Kakiuchi. Since the Company Split is a simple absorption-type company split between Toyobo and its wholly owned subsidiary, certain disclosure items and details have been omitted. As preconditions for carrying out the Company Split and the Investment, Toyobo and the New Company will sign an absorption-type company split agreement with Toyobo as a split company and the New Company as the succeeding company, and Toyobo and MC will, based on detailed consideration from now on, sign including but not limited to a shareholders agreement between Toyobo and MC. We will announce when matters that are currently unresolved are finalized. Toyobo and MC will hereafter be referred to as “the Parties” when they are mentioned together. 1. Background and purpose Based on its corporate philosophy, “Jun-Ri-Soku-Yu (adhering to reason leads to prosperity),” which reflects the spirit of its founder, Eiichi Shibusawa, Toyobo has striven to grow by helping to realize a sustainable society through the solution of social problems with the provision of various products and technologies. At present, Toyobo is evaluating and stratifying its business operations based on profitability and growth potential. It then concentrates its resources on areas associated with films, life sciences and the environment by placing them as focal areas of its business, while adopting a strategy of proactively expanding to the global market business operations whose domestic markets have matured. Meanwhile, Toyobo is under pressure to think outside the box and make sweeping changes to its business at a time when it faces external demands due to heightened environmental awareness across the world such as making green business operations with the use of renewable energy, etc., as well as responding to the requirements of the market in line with society’s rapid digital transformation. Against this backdrop, the Parties agreed to set up the New Company as a business entity to build up its strong position in the functional materials industry on the global stage; manage the portfolio of technologies and products; and enhance its ability of addressing industrial issues such as the environment and digitalization. This will be made possible through joint business operations between Toyobo, which has the ability to manufacture products and develop technologies related to functional materials, and MC, which has broad know-how in sales and trading of functional materials and the development of related businesses, as well as having knowledge and experience as a general trading company in doing business abroad and making business eco-friendly and digitalized. 2. Establishment of the New Company (1) Outline of the New Company to be established The outline of the New Company Toyobo plans to set up is as follows at this point. The details will be worked out through negotiations between the Parties, and we will inform you of them when they are finalized. 1) Company name 2) Address To be decided Osaka Umeda Twin Towers South, 1-13-1 Umeda, Kita-ku, Osaka City, Osaka Prefecture 3) Representatives To be decided (planning to nominate two representatives, one 4) Business description Planning, development, manufacturing and sales of products from Toyobo and the other from MC) related to functional materials 5) Capital stock To be decided 6) Date of establishment Scheduled for October 2022 7) End of each accounting term Scheduled for March 31 8) Net assets, Total assets To be decided 9) Stakes (At the time of establishment) Toyobo 100% (After the Investment is made) Toyobo 51%, MC 49% 10) Relationships of Capital At the time of the New Company’s establishment, Toyobo’s those involved in the relationship stake in it is scheduled to be 100%. After the Investment is Company Split made, the stake of Toyobo is planned to be 51%, while MC’s will be 49%. Personnel After the Investment is made, Toyobo plans to appoint four relationship directors to the New Company’s board, while MC plans to appoint three directors. The Parties plan to each appoint an auditor for the New Company. Business To be decided relationship 3. The Company Split (1) Outline of the Company Split 1) Schedule of the Company Split Date of decision by the board of March 24, 2022 Date of reaching agreement between the March 24, 2022 directors Parties A board of directors meeting to approve Scheduled for November 2022 the Agreement on the absorption-type company split Date of sealing the Agreement on the Scheduled for November 2022 absorption-type company split Effective date of the Company Split Scheduled for January 2023 made between the Parties. 2) Method of the Company Split The procedures and schedules are subject to change depending on negotiations and considerations to be Toyobo will be the split company and the New Company to be established will be the succeeding company in the absorption-type company split. The Company Split is scheduled to be carried out without the approval at a general shareholders’ meeting, because it falls under a simple absorption-type company split prescribed by Paragraph 2, Article 784 of the Companies Act. 3) Allocations of shares due to the Company Split Details will be announced when a final decision is reached. 4) Handling of the stock acquisition right and bond with stock acquisition right due to the Company Split Not applicable. 5) Capital subject to change due to the Company Split No change in capital for the split company (Toyobo). 6) Rights and obligations the succeeding company will inherit The succeeding company will inherit what the absorption-type company split agreement stipulates from among the assets, liabilities, rights and obligations such as its contractual status, which are related to the business to be split (As defined in 3. the Company Split (3) Outline of the business division that will be spun of 1) Business operations of the division that will be spun off and inherited by the New Company. The same applies hereinafter.) 7) Projected execution of debt obligations after the Company Split. No problem is expected for the succeeding company in terms of executing debt obligations it must shoulder (2) Outline of those involved in the Company Split Split company (as of March 24, 2022) Succeeding company 1) Company Name Toyobo Co., Ltd. To be decided of representative 4) Business description 2) Address 2-2-8, Dojimahama, Kita-ku, Osaka Osaka Umeda Twin Towers South, 1-3) Title and name Ikuo Takeuchi, President & CEO To be decided (planning to nominate 13-1, Umeda, Kita-ku, Osaka two representatives, one from Toyobo and the other from MC) Business related to films and Planning, development, manufacturing functional materials; mobility; lifestyle and sales of products related to and environment; life science functional materials 5) Capital stock 51,730 million yen To be decided 6) Date of June 1914 Scheduled for October 2022 To be decided establishment 7) Total number of 89,048 shares issued (unit: 1,000 shares) accounting term 8) End of each March 31 March 31 (scheduled) 9) Principal The Master Trust Bank of Japan, Ltd. Toyobo Co., Ltd. is scheduled to hold a shareholders and (Trust Account): 13.85% 100% stake. their percentage of Custody Bank of Japan, Ltd. (Trust (For the plan after the Investment is stock owned or Account): 8.47% made, please refer to “2. Establishment stakes National Mutual Insurance Federation of the New Company (1) Outline of the of Agricultural Cooperatives: 4.00% New Company to be established.”) Custody Bank of Japan, Ltd. (Trust Account 9): 2.47% Employee stock ownership plan: 2.22% (As of September 30, 2021) 10) Business performance and fiscal conditions of the latest business year (consolidated) There is no ended business year. Net assets Total assets 188,635 491,188 Net assets per share (in yen) Net sales 2,090.47 yen 337,406 Operating profit 26,657 Ordinary profit 20,706 Profit attributable to owners of parent 4,202 Net profit per share (in yen) 47.30 yen (Unit: in millions of yen unless specified otherwise) (3) Outline of the business division that will be spun off 1) Business operations of the division that will be spun off and inherited by the New Company Business related to planning, development, manufacturing and sales of functional materials in Japan and overseas (Business related to Polymerization Development, VYLON® and HARDLEN®, Photo Functional Materials, Fine Chemicals, Engineering Plastics, Water Treatment Membranes, Environment Solution Devices, Activated Carbon Products, Activated Carbon Fibers, Spun-Bounded Fabrics, Lifestyle Materials, High-Performance Fibers), and businesses related to these businesses are scheduled to be handed to the New Company. Details will be announced when the matter is finalized in future negotiations between the Parties. 2) Business performance of the division that will be spun off and inherited by the New Company As mentioned in 1), the details of business operations at the division that will be spun off will be decided based on future negotiations between the Parties. At this point, however, the scale of the business operation is projected to be around 100 billion yen in sales. 3) The items and amounts of assets and liabilities to be spun off and inherited by the New Company As mentioned in 1), the details will be notified when the matter is finalized in future negotiations between (4) Situation of the split company and the succeeding company after the Company Split Company name, address, title and name of representative, business operations, capital and end of each accounting term of the split company, and address, business operations and end of each accounting term of the succeeding company will be unchanged. We will announce details when they are finalized. Company name, title and name of representative, and capital of the succeeding company are currently unresolved, will the Parties. be announced when they are finalized. (5) Future prospects We project the effect of the Company Split on our business performance will be minor because the New Company will be a wholly owned subsidiary of Toyobo. After the split, the New Company plans to increase capital through a third-party allocation to MC for the Investment. 4. Start of joint venture (1) Operations of joint venture The Parties (Toyobo and MC) will jointly operate the New Company after the joint venture starts. By working together, they plan to build up a strong position in the functional materials industry at the global level, manage the portfolio of technologies and products, and enhance the ability to deal with industrial issues such as those related to environment and digitalization. Furthermore, they aim to make the New Company capable of helping boost the competitive edge of Japan’s entire materials industry. (2) Outline of the joint venture As described in “(1) Outline of the New Company to be established under 2. Establishment of the New Company,” and “(2) Outline of those involved in the Company Split and (4) The company to be created after the Company Split under 3. The Company Split.” (3) Projected business performance of the joint venture The business projection of the New Company will be discussed between the Parties and therefore is to be decided at this point. (4) Outline of the joint venture partner 1) Company Name Mitsubishi Corporation 2) Address 2-3-1 Marunouchi, Chiyoda-ku, Tokyo 3) Title and name of Takehiko Kakiuchi, President and CEO representative 4) Business description 6) Date of establishment 7) Principal Wide range of businesses spanning multiple industries and overseen by 10 Business Groups: Natural Gas, Industrial Materials, Petroleum & Chemicals solution, Mineral Resources, Industrial Infrastructure, Automotive & Mobility, Food Industry, Consumer Industry, Power Solution, and Urban Development. 5) Capital stock 204,446 million yen April 1950 (Founding year: July 1954) The Master Trust Bank of Japan, Ltd. (Trust Account): 12.59% shareholders and their Custody Bank of Japan, Ltd. (Trust Account): 5.52% percentage of stock BNYM AS AGT/CLTS NON TREATY (standing proxy: MUFJ Bank): owned or stakes 5.40% Meiji Yasuda Life Insurance Company: 4.38% Tokio Marine & Nichido Fire Insurance Co., Ltd.: 3.53% (As of September 30, 2021) 8) Toyobo’s Capital No relationship relationships with MC relationship No relationship Personnel relationship Business relationship Applicability to Not applicable related parties Toyobo and MC group buy and sell products each other 9) Business Accounting period Business year Business year Business year performance and fiscal conditions of ending March ending March ending March 2019 2020 2021 the past three years Consolidated net 6,636,920 6,216,894 6,538,390 assets assets assets per share (in yen) Revenue profit for the business year profit per share for Consolidated total 16,532,800 18,033,424 18,634,971 Consolidated net 3,589.37 yen 3,521.30 yen 3,803.01 yen 16,103,763 14,779,734 12,884,521 Profit before tax 851,813 Consolidated net 645,784 648,864 592,151 253,527 132,241 Consolidated net 372.39 yen 348.50 yen 116.86 yen the business year Dividend per share 125.00 yen 132.00 yen 134.00 yen (Unit: in millions of yen unless specified otherwise) (5) Schedule of the joint venture Date of sealing the basic agreement March 24, 2022 Date of sealing the shareholders’ Scheduled for January 2023 agreement Date of payment of the Investment Scheduled for January 2023 Start of the joint venture Scheduled for January 2023 made between the Parties. (6) Future prospect The procedures and schedules are subject to change depending on negotiations and considerations to be How this joint venture will affect Toyobo’s business performance is unknown at this point, but we will swiftly announce any development deemed necessary to be made public.