(Disclosure Update) Notice on the Execution of the Absorption-Type Demerger Agreement Concerning the Integration of Domestic Polyolefin Business (PP, LLDPE) Among Sumitomo Chemical Company, Limited, Prime Polymer Co., Ltd., Mitsui Chemicals, Inc., and Idemitsu Kosan Co., Ltd. Involving a Company Split (Simplified Absorption-Type Demerger) by Sumitomo Chemical Company, Limited

Overview of This Business Integration

Sumitomo Chemical Company, Limited has decided to implement a two-step simplified absorption-type demerger to transfer its domestic polyolefin business (polypropylene and linear low-density polyethylene businesses) to Prime Polymer Co., Ltd. The first-step absorption-type demerger agreement was executed on April 1, 2026. Prime Polymer is a joint venture between Mitsui Chemicals, Inc. and Idemitsu Kosan Co., Ltd., and Sumitomo Chemical will acquire shares representing a 20% stake in the company. The business integration and joint venture agreements were finalized on December 24, 2025, and the effective date of the first-step absorption-type demerger is scheduled for July 1, 2026.

Future Schedule and Impact

The second-step absorption-type demerger agreement is scheduled to be signed in January 2027, with an effective date expected on April 1, 2027. This absorption-type demerger qualifies as a simplified absorption-type demerger and does not require shareholder approval; however, acquisition of necessary permits and approvals under competition law and other regulations is a condition, and the schedule may change accordingly. For the current consolidated earnings forecast, revenue is expected to decline year-over-year, while core operating income and net income attributable to owners of the parent are expected to increase, making it essential to closely monitor the impact of the business integration.