Notice Regarding the Execution of Business Integration Agreement and Joint Venture Agreement with Prime Polymer Co., Ltd., Mitsui Chemicals, Inc., and Idemitsu Kosan Co., Ltd. for the Integration of Domestic Polyolefin Business (PP, LLDPE) Accompanied by a Company Split (Simplified Absorption-Type Company Split) by Sumitomo Chemical Company, Limited

Overview of Organizational Restructuring

Sumitomo Chemical Company, Limited will implement a two-step simplified absorption-type company split effective December 24, 2025, with Prime Polymer Co., Ltd. as the successor company, transferring its domestic polypropylene (PP) and linear low-density polyethylene (LLDPE) businesses. The first absorption-type split (①) is scheduled to take effect on July 1, 2026, and the second absorption-type split (②) on April 1, 2027. As consideration for the first absorption-type split, Sumitomo Chemical will acquire 50,000 ordinary shares of Prime Polymer (equivalent to a 20% stake), establishing a joint venture ownership structure of Mitsui Chemicals 52%, Idemitsu Kosan 28%, and Sumitomo Chemical 20%. The legal procedures fall under Article 784, Paragraph 2 of the Companies Act concerning simplified absorption-type splits, thus shareholder approval is not required. Competition law and other clearances are prerequisites.

Purpose and Background of the Restructuring

The domestic polyolefin market faces challenges including declining demand and oversupply. The business integration with the joint venture Prime Polymer—jointly operated by Sumitomo Chemical, Mitsui Chemicals, and Idemitsu Kosan—aims to achieve annual rationalization exceeding 8 billion yen. Synergies will be generated through shared facilities in the Keiyo region and the development of technologies to reduce environmental impact, strengthening the competitiveness of domestic operations and border measures against imports. The integration will accelerate realization of a sustainable green chemical business by promoting the development of high-functionality and environmentally friendly products.

Impact on Shareholders and Investors

Since this absorption-type split is a simplified split, shareholder approval at Sumitomo Chemical is not required, and there will be no change in capital stock. No impact on consolidated financial results is expected for the fiscal year ending March 2026, with the impact on the fiscal year ending March 2027 under review. Sumitomo Chemical will acquire 20% of Prime Polymer shares, resulting in changes to its capital structure. Any future disclosures will be made promptly. The impact on dividend policy is currently unknown.