Notice Regarding Absorption Merger Between Consolidated Subsidiaries and Changes in Specific Subsidiaries

Merger Overview

Kato Sangyo Co., Ltd. resolved an absorption merger with its consolidated subsidiary Toan Gia Hiep Phuoc Trading Co., Ltd. (TGC) as the surviving company and Nam Khai Phu Service Trading Production Co., Ltd. (NKP) as the disappearing company. The merger agreement was signed on 2026-04-15, and the effective date is set as 2026-07-01. This merger is a corporate restructuring between consolidated subsidiaries, with no allocation of shares or monetary compensation.

Purpose and Impact of the Merger

The purpose of this merger is to expand business operations in Vietnam, generate synergies, optimize the allocation of management resources, and improve financial structure. NKP mainly engages in import and sales of meat products and recorded net sales of 588.2 billion VND (3,529 million JPY) but an operating loss of 15.2 billion VND (91 million JPY loss) in the immediately preceding fiscal year. Meanwhile, TGC imports and sells processed foods and other products, reporting net sales of 165.1 billion VND (990 million JPY) and operating income of 1.8 billion VND (10 million JPY). The impact of the merger on the consolidated performance of the Company is expected to be minor.