DENKI KAGAKU KOGYO KABUSHIKI KAISHA (Headquarter: Chuo-ku, Tokyo; Shinsuke Yoshitaka, President & CEO, hereinafter "DENKA") and MITSUI & CO., LTD. (Headquarter: Chiyoda-ku, Tokyo; Masami Iijima, President & CEO, hereinafter "Mitsui") are pleased to announce that DENKA and Mitsui decided to establish Denka Performance Elastomer, a joint venture company with the capital ratio of 70% by DENKA and 30% by Mitsui ("DPE"), in the U.S., and to enter into an agreement with DuPont, an international diversified chemicals manufacturer, for an acquisition (the "Acquisition") of DuPont's business relating to the manufacture and sale of chloroprene rubber ("CR") business (the "Subject Business") and that DENKA and Mitsui entered into such agreement with DuPont on December 9, 2014.
We aim to complete the Acquisition during the 1st half of 2015, subject to official approvals of competent authorities.
* What is CR
CR is a synthetic rubber which is easy to process and has a strong balance of excellent properties such as weather resistance, ozone resistance, oil resistance, abrasion resistance, flame retardance, heat resistance, etc. CR is used for a wide range of application such as transmission belts and automotive parts, foam rubber, adhesives, etc. There are two methods to manufacture CR, acetylene method and butadiene method, of which main raw materials differ.
1. Purpose of Acquisition
In 1962, DENKA commenced the manufacture and sale of CR at the Omi plant (Itoigawa-city, Niigata) by using its own technology (acetylene method), and currently is one of the largest CR manufacturer supplying in approximately 80 countries worldwide.
In 1931, DuPont first developed CR, leading the way for companies around the world. It currently manufactures in butadiene method, and supplies in North America, South America, and Europe.
As a result of this Acquisition, DENKA will hold a second production base of butadiene method in a predominant location, North America, in addition to the Omi plant of acetylene method. This will enhance a high-quality stable supply structure and is expected to increase customer satisfaction.
The acquisition is one of the most important subject for DENKA's "Achive flexible production structure" which is one of DENKA's new growth strategies, and DENKA will continue to try to achieve early the numerical targets.
While Mitsui has utilized its global sales network, has coopertated with DENKA for a long period, and has engaged in sales of Denka Chloroprene, by jointly conducting the Acquisition, Mitsui aims further to expand and develop the CR business together with DENKA as its business partner.
2. Outline of Acquisition
We will acquire from DuPont its CR business, a part of DuPont's performance polymers segment.
The outline of the Acquisition is as follows:
|(1) Subject Business
||Business of manufacture and sales of CR, owned by DuPont
|(2) Business Location
||Location of Plant: Pontchartrain plant located at La Place, Louisiana, U.S.
|(3) Number of Employees
||Approx. 235 employees
*The acquisition price is scheduled to be from JPY10 billion to JPY14 billion.
*We expect the size of DENKA's CR business after acquisition to be approximately JPY50 billion.
3. Outline of DuPont
|(1) Company Name
||E.I.du Pont de Nemours and Company
||Wilmington, Delaware, U.S.
|(3) Name and Title of Representative
||Ellen J.Kullman, Chair of the Board & CEO
|(4) Main Business
||Provision of products, technologies and services based on science technologies
|(5) Stated Capital
||USD541 million (as of the end of December 2013)
Approx. JPY65 billion (JPY120/USD)
|(6) Year of Incorporation
|(7) Consolidated Net Assets
||USD16,286 million (as of the end of December 2013)
Approx. JPY1,950 billion (JPY120/USD)
|(8) Consolidated Total Assets
||USD51,499 million (as of the end of December 2013)
Approx. JPY6,180 billion (JPY120/USD)
(reference from DuPont's "Annual Report 2013")
4. Expected Schedule
|(1) Date of Execution of Agreement
||December 9, 2014
|(2) Date of Acquisition of Business
||1st half of 2015 (projected)
(Note) The closing of the transaction is subject to official approvals of competent authorities.
This announcement contains forward-looking statements. These forward-looking statements are based on Mitsui's current assumptions, expectations and beliefs in light of the information currently possessed by it and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause Mitsui's actual results, financial position or cash flows to be materially different from any future results, financial position or cash flows expressed or implied by these forward-looking statements. These risks, uncertainties and other factors referred to above include, but are not limited to, those contained in Mitsui's latest Annual Securities Report and Quarterly Securities Report, and Mitsui undertakes no obligation to publicly update or revise any forward-looking statements.
This announcement 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.