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Press Room
Notice Regarding Capital and Business Alliance between Toyota Tsusho Corporation and Lilycolor Co., Ltd.
2009-02-27
Toyota Tsusho Corporation (hereinafter "Toyota Tsusho") and Lilycolor Co., Ltd. (hereinafter "Lilycolor") have agreed to enter into a capital and business alliance agreement to strengthen the cooperative relationship between the two companies. This matter has been determined by way of resolution at a meeting of the Board of Directors of Lilycolor, held today.
At the same time Toyota Tsusho has agreed to enter into a contract with Yamasakae Shoji Ltd. (hereinafter "Yamasakae Shoji") for the transfer of shares in Lilycolor, as detailed below.
1. Background and Objectives of Business Alliance
Lilycolor is engaged in the sale of interior goods, primarily being wallpaper and curtains, and office furniture and supplies. The company has established a good reputation for its product development and design capabilities. The key challenges facing the business today are the need to respond to diversifying consumer needs and the need to supply products that represent a good balance between safety, environmental impact and price.
Meanwhile, Toyota Tsusho is seeking to transform its business by expanding its lifestyle industry operations to coexist with the company's core automotives business, with the aim of achieving a more balanced revenue structure.
Both companies are involved in transactions concerning interior goods and have built up a cooperative relationship over a period of many years.
Against this backdrop, the thinking of the two companies matched in their desire to further foster their relationship based on mutual trust and cooperation. The major pillars of the ongoing relationship are to be <1> the establishment of a joint venture to tap the specialty areas of each of the companies and <2> the realization of synergy effects.
2. Framework of the Alliance
(1) Establishment of a Joint Venture
A joint venture will be established to utilize Toyota Tsusho's domestic and international network to develop new markets whilst at the same time utilizing Lilycolor's new product development capabilities to develop new materials.
(2) Achievement of Synergy Effects
The companies will strive to build a value chain, to strengthen its function and to achieve synergy effects between Toyota Tsusho's production procurement, distribution, IT function and sales channels on the one hand, and Lilycolor's product development and design capabilities on the other, by cooperatively developing the businesses below.
<1>Domestic and foreign home interior materials and related goods business
<2>Businesses relating to homes in general
<3>General businesses relating to the above
Further, the two companies will closely examine ways to promote efficiency and increase corporate value through the mutual provision and utilization of business functions.
(3) Interchange of Personnel
Toyota Tsusho and Lilycolor intend to exchange directors and personnel.
The details of these arrangements shall be announced as and when decided.
3. Objectives and Details of Capital Alliance
(1) Objectives of Capital Alliance
While further solidifying the relationship of mutual trust and cooperation between Toyota Tsusho and Lilycolor, Toyota Tsusho has agreed to acquire 2,444,100 ordinary shares in Lilycolor from Lilycolor's largest shareholder, Yamasakae Shoji, in order to develop and expand the scale of Lilycolor's business.
Following the share acquisition Toyota Tsusho's holding of Lilycolor shares will constitute 19.43% of the ordinary shares on issue by that company.
(2) Details of Capital Alliance
<1>Number of shares to be acquired: 2,444,100 ordinary shares
<2>Payment date: March 2, 2009 (Monday)
<3>Transferee and number of shares: Toyota Tsusho Corporation, 2,444,100 shares
(Note) This Capital and Business Alliance will result in a change to the largest shareholder of Lilycolor. For details please refer to the Notice Regarding Change in Largest Shareholder separately published by Lilycolor today.
4. Outline of the Companies
Toyota Tsusho Corporation
(1) Main business: domestic transactions relating to all kinds of domestic goods, import and export transactions, cross-border transactions, all types of insurance agency operations, etc.
(2) Date of establishment: July 1, 1948
(3) Headquarters: Century Toyota Building, 9-8 Meieki 4-chome, Nakamura-ku, Nagoya, Japan
(4) Representative: Junzo Shimizu, President
(5) Capital: 64.9 billion yen (current as of March 31, 2008)
(6) Number of employees: 2,474 (current as of March 31, 2008)
(7) Relationship with Lilycolor
<1>Capital relationship: owns 16,500 shares in Lilycolor
<2>Personal relationship: n/a
<3>Transactional relationship: sale of interior material products
Lilycolor Co., Ltd.
(1) Main business: Procurement and sale of interior materials such as wall covering materials and curtains
Procurement and sale of office furniture and office supplies
(2) Date of establishment: July 15, 1949
(3) Headquarters: 7-5-20 Nishi-Shinjuku, Shinjuku-ku, Tokyo
(4) Representative: Toshiyuki Yamada, President
(5) Capital: 3.33 billion yen (current as of December 31, 2008)
(6) Number of employees: 505 (current as of December 31, 2008)
(7) Relationship with Toyota Tsusho
<1>Capital relationship: n/a
<2>Personal relationship: n/a
<3>Transactional relationship: sourcing of interior material products
5. Schedule
February 27, 2009 ?Execution of Capital and Business Alliance Agreement
6. Future Outlook
The effect of the alliance on the business results of each of the companies this period is expected to be minimal. The companies plan to work to strengthen and develop their mutually cooperative relationship. Any pertinent matters that should arise in the future will be duly announced.
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