Showa Denko to split, transfer phenolic resin business to subsidiary AICA SDK Phenol

30-Jun-15

At a board meeting, a decision was taken for Showa Denko (SDK) ) to split and transfer its phenolic resin business to its wholly owned subsidiary AICA SDK Phenol Co.,Ltd. SDK and AICA SDK Phenol have concluded an absorption-type company split agreement. SDK took these steps as parts of the procedure for transferring its phenolic resin business to Aica Kogyo Company, Limited (Aica) (TOKYO & NAGOYA:4206), that SDK announced on April 27, 2015. The agreement is scheduled to take effect on September 1, 2015. AICA SDK Phenol will deliver 100 common shares to SDK at the time of the absorption-type company split. With regard to the rights and obligations pertaining to SDK's phenolic resin business, AICA SDK PhenoL will succeed to all of these rights and obligations. SDK has been providing its domestic customers with phenolic resins in various states such as liquid, lumps, powder, and grains. However, the size of the domestic market for industrial phenolic resins has been a little less than 100,000 tons a year for some years now. In order to pursue further growth of this business in the future, it is necessary for phenolic resin manufacturers to make inroads into the foreign markets which are expected to grow. Under the circumstances, SDK had already concluded the final agreement with Aica, which actively promotes phenolic resin business overseas, to transfer SDK's phenolic resin business to Aica. Prior to the transfer of its phenolic resin business to Aica, SDK is scheduled to split and transfer the business to AICA SDK Phenol on September 1, 2015, and transfer 85% of the shares of AICA SDK Phenol to Aica on that day.