ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Yoshihisa Suzuki, President & COO; hereinafter “ITOCHU”) announced today that it has concluded a capital and business alliance agreement with Daiken Corporation (headquartered in Nanto, Toyama; Masanori Okuda, Representative Director President; hereinafter “DAIKEN”), and has agreed to acquire equity shares issued by DAIKEN through third-party allotment.

DAIKEN is a leading manufacturer of residential housing materials in Japan and it formulated a long-term vision for its business in 2015, declaring that it will explore possibilities for cultivating and expanding its existing businesses while creating new markets with the aim to transform from a housing material manufacturer into an all-embracing company for building materials. ITOCHU is a common stock holder of DAIKEN. Both companies have taken steps to promote collaboration, aiming to achieve growth strategy targets embraced by DAIKEN, such as making the company’s business structure less dependent on new residential construction, establishing a stable earnings base in the domestic residential construction market, and expanding sales of building materials in ASEAN member states, China and the Oceania region.

With this capital and business alliance, ITOCHU aims to achieve significant business growth in terms of its General Products & Realty segment by leveraging knowhow developed by DAIKEN as a leading manufacturer of housing materials in Japan. Meanwhile, DAIKEN embraces a strategy to expand its business by relying on ITOCHU’s comprehensive capabilities as a general trading house. The two companies share a mutual interest in this regard and understand that the partnership will help to maximize corporate value for both parties. Based on the alliance agreement involving stock acquisition by ITOCHU through third-party allotment, the two companies will aim to achieve further enhancement in the mutual business partnership and a greater synergistic effect. Moreover, the new alliance is expected to facilitate DAIKEN’s new investments aimed at achieving further growth in the raw materials and building materials business abroad as well as other businesses in Japan and abroad.

Under the new alliance, both companies will focus on contributing to the sustainable development of society in the field of housing and residential life in Japan and abroad, while mutually respecting each other’s management and trying to enhance corporate value with a long-term, equal and amicable partnership.

1) Expansion of product lineups for public and commercial facilities and information sharing on properties

2) Expansion of remodeling and renovation business

3) Expansion of wooden materials business

4) Promotion of brand enhancement and building materials sales in China and the ASEAN region