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Mitsui to Sign an Agreement to Integrate its LPG Business

Aug. 3, 2010


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Mitsui & Co., Ltd. ("Mitsui") announced today that Mitsui, JX Nippon Oil & Energy Corporation ("NOE", a wholly owned subsidiary of JX Holdings, Inc.), Marubeni Corporation ("Marubeni") and Mitsui Marubeni Liquefied Gas Co., Ltd. ("MLG"*1) have signed an agreement on the integration of the Liquefied Petroleum Gas ("LPG") business of MLG and NOE's LPG business unit ("Integration"), following a basic consensus about the detailed discussion between the parties as previously announced on April 5, 2010.

1. Purpose of the Integration

The purpose of the Integration is to strengthen the respective competitiveness and profitability of LPG business through rationalizing the whole supply chain. The integrated company ("Newco") will aim to be an energy company which meets customers' needs, fulfilling its responsibility to become a more efficient and stable LPG supplier and focusing positively on new energy businesses, such as sales of fuel cells, by utilizing its nation-wide sales networks for the supply of LPG.

2. Outline of the Integration

1) Method of the Integration
The Integration units are NOE's LPG business which used to be carried out by the former Nippon Oil Corporation*2 or its affiliates ("NOE's carved-out LPG business"*3), and MLG. The Newco will be established based on an "absorption-type split" (kyushu bunkatsu) through which MLG, as the successor company, will acquire NOE's carved-out LPG business. Furthermore, NOE will carve out its assets necessary for Newco to operate its LPG business.

2) Outline of the Newco

(1) Name To be decided
(2) Business Activities LPG imports and marketing, new energy related instruments marketing
(3) Capital 2 billion yen
(4) Date of Integration By the end of the fiscal year 2010

Note: Subject to review by the relevant regulatory and governmental authorities

(5) Shareholders NOE 66,668 shares*4, Mitsui 40,000 shares, Marubeni 26,667 shares
(6) Representative executive NOE will nominate the president.
Mitsui or Marubeni will nominate the vice-president.
(7) Import Volume Approx. 3,160,000 MT (Sum of 2009 FY)
(8) Domestic Sales Volume Approx. 3,630,000 MT (Sum of 2009 FY)
(9) Number of Terminals 10 import terminals and 6 domestic terminals

Other details about the Integration will be decided in the future.

*1. MLG is a joint-venture between Mitsui and Marubeni, owned 60% by Mitsui and 40% by Marubeni.
*2. NOE was founded on July 1, 2010 by the merger of Nippon Oil Corporation, Nippon Petroleum Refining Co., Ltd. and Japan Energy Corporation (Japan Energy).
*3. NOE's carved-out LPG business does not include NOE's LPG business which used to be carried out by the former Japan Energy or its affiliates, as well as NOE's business in propylene, intermediate products of oil refining process, etc. The main assets of NOE's carved-out LPG business are as follows.
(1) Facilities and land for terminals and LPG filling stations in Niigata, Akita and Sendai (Kagoshima Pref.) Terminal.
(2) Facilities and land related to LPG business in Sendai (Miyagi Pref.), Kawasaki and Osaka Terminal.
(3) Shares of KYUSHU L.P.G. FUKUSHIMA TERMINAL COMPANY, LIMITED and Onahama LPG Terminal.
(4) Shares of six LPG sales subsidiaries owned by ENEOS FRONTIER CO., LIMITED, a wholly owned subsidiary of NOE.
*4. The number of the shares which would be allotted to NOE was determined by the consultation among the parties with reference to the valuation results of NOE's carved-out LPG business and MLG's business provided by the third-party financial advisors appointed by the prospective shareholders of Newco.

Outline of NOE's carved-out LPG business and company outline of MLG

  NOE's carved-out LPG business Mitsui Marubeni Liquefied Gas Co., Ltd. (MLG)
Import Volume
(2009FY)
Approx. 1,570,000 MT Approx. 1,590,000 MT
Domestic Sales Volume
(2009FY)
Approx. 1,860,000 MT Approx. 1,770,000 MT
Location of
Import Terminals
Sendai (Miyagi Pref.)
Niigata (Niigata Pref.)
Kawasaki (Kanagawa Pref.)
Osaka (Osaka Pref.)
Fukushima (Nagasaki Pref.) *1
Aomori (Aomori Pref.)
Nanao (Ishikawa Pref.)
Karatsu (Saga Pref.)
Ichihara (Chiba Pref.) *2
Chiba (Chiba Pref.) *3
Location of
Domestic Terminals
Akita (Akita Pref.)
Sendai (Kagoshima Pref.)
Onahama (Fukushima Pref.) *4
Kushiro (Hokkaido Pref.)
Ishikari (Hokkaido Pref.)
Shiogama (Miyagi Pref.)
Onahama (Fukushima Pref.) *4
Number of main sales subsidiaries 6 2
Number of retail customers Approx. 100,000 Approx. 200,000

*1 The LPG terminal owned by KYUSHU L.P.G. FUKUSHIMA TERMINAL COMPANY, LIMITED, a joint-venture between NOE and Astomos Energy Corporation.
*2 The LPG terminal owned by Kyokuto Petroleum Industries.,Ltd, a joint-venture between MITSUI OIL CO., LTD and Exxon Mobil Corporation.
*3 The LPG terminal owned by Marubeni Ennex Corporation, a subsidiary of Marubeni.
*4 The LPG terminal owned by Onahama LPG Terminal, a joint-venture between NOE and MLG.

Notice:
This press release includes forward-looking statements about Mitsui. These forward-looking statements are based on the current assumptions and beliefs of Mitsui in light of the information currently available to it, and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause Mitsui's actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. The risks, uncertainties and other factors referred to above include, but are not limited to, those contained in Mitsui's latest annual report on Form 20-F, which has been filed with the U.S. Securities and Exchange Commission.
This press release is published in order to publicly announce specific facts stated above, and does not constitute a solicitation of investments or any similar act inside or outside of Japan, regarding the shares, bonds or other securities issued by us.

Information

For inquiries on this matter, please contact

Mitsui & Co., Ltd.
Investor Relations Division
Telephone: +81-3-3285-7910
Facsimile: +81-3-3285-9819
infoTKADZ@mitsui.com
Mitsui & Co., Ltd.
Corporate Communications Division
Kazuhisa Kawamura
Telephone: +81-3-3285-7540
Facsimile: +81-3-3285-9819