ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Keita Ishii, President & COO; hereinafter “ITOCHU”) announced today that ITOCHU has concluded a contract to form a capital and business alliance with Nishimatsu Construction Co., Ltd. (headquartered in Minato-ku, Tokyo; Nobutoshi Takase, Representative Director and President; hereinafter “Nishimatsu Construction”). ITOCHU will become practically the largest shareholder* in Nishimatsu Construction (number of shares held: 4,022,800 shares; ownership ratio: 10.16%). Through this capital and business alliance, ITOCHU would enhance our existing value chain from upstream (construction materials) and downstream operations (real estate developments and managements) by incorporating construction functions. ITOCHU also aims to strengthen our partnership further with leading companies in the construction industry and addresses social issues such as SDGs and national resilience.

ITOCHU and Nishimatsu Construction have built a good collaborative relationship through previous joint real estate development projects, the ordering of construction work, the procurement of materials and equipment, and other dealings. The two companies decided to form this capital and business alliance based on the common view that pooling their management resources and knowhow and further strengthening their alliance would create new synergies and help enhance the corporate value of both of them.

ITOCHU’s targets laid out in its medium-term management plan are “realizing business transformation by shifting to a market-oriented perspective”, and “enhancing our contribution to and engagement with the SDGs through business activities”. Through this capital and business alliance, the two companies will realize improvement in their corporate value in the medium and long term and contribute to the realization of sustainable society by promoting following four initiatives: (1) to build strengthened partnerships in the construction industry; (2) to bring technologies to realize a more safe, secure and decarbonized society; (3) to collaborate in real estate businesses under capital efficiency and optimization strategy; and (4) to expand the customer base and to enhance competitiveness.

(1) Building construction partnerships
By building construction partnerships with leading companies in the construction industry, which have the technologies and construction methods to resolve frontline issues, the two companies will jointly promote labor savings, efficiency improvement, and DX.

(2) Realizing a safe, secure, and decarbonized society
ITOCHU and Nishimatsu Construction see the social challenges of realizing a decarbonized society and national resilience as areas of growth and plan to expand their business domains through joint participation in PPPs for the delivery of public facilities and infrastructure and joint initiatives in the renewable energy business.

(3) Collaborating in real estate businesses under capital efficiency and optimization strategy
The two companies will drive capital efficiency and optimization strategy through real estate development and investment in and management of income generating real estate, thereby establishing the basis for Nishimatsu Construction's stable growth and also strengthening the safety and security of ITOCHU's real estate development business through improvement in its monozukuri (manufacturing) capability.

(4) Expanding the customer base and enhancing competitiveness
ITOCHU and Nishimatsu Construction plan to strengthen the earnings power, competitiveness and stability of their respective businesses by combining their customer bases and capabilities, such as networks of group companies and suppliers both in Japan and overseas, their material and equipment procurement capabilities, and engineering capabilities.