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October 22, 2007

Overview of the Strategic Alliance and Tender Offer and Overview of the Share Exchange

1. Overview of the Surviving Company (After the Merger)
 
Trade Name of the Surviving Company after the Merger KYOWA HAKKO KIRIN CO., LTD.
Address 1-6-1 Ohtemachi, Chiyoda-ku, Tokyo
President and CEO Yuzuru Matsuda, (current President of Kyowa Hakko) (scheduled)
Executive Vice President Tomohiro Mune, (current Managing Director of Kirin Holdings) (scheduled)


2. Kyowa Hakko Kogyo Co., Ltd.
 
Trade Name KYOWA HAKKO KOGYO CO., LTD.
Address 1-6-1 Ohtemachi, Chiyoda-ku, Tokyo
President and CEO Yuzuru Matsuda
Net Sales 354.2 billion yen
(fiscal year ended March 31, 2007/ consolidated)
Net Income 12.6 billion yen
(fiscal year ended March 31, 2007/ consolidated)
Paid-in Capital 26.7 billion yen (as of March 31, 2007)
Major Shareholders The Master Trust Bank of Japan Ltd. (Trust account)
The Dai-ichi Mutual Life Insurance Company
Japan Trustee Services Bank, Ltd. (Trust account)
The Norinchukin Bank
Mizuho Trust & Banking Co., Ltd. Retirement Benefit Trust Account for Mizuho Bank, Ltd. Asset Management Re-entrust Services
Year of Incorporation 1949
Employees 5,756 people (as of March 31, 2007, consolidated)
Business Description Production and sales of pharmaceutical products for medical professionals, raw materials for industrial and pharmaceutical use, healthcare products, products for the agriculture and livestock industry and the fishing industry, alcohol, etc.
Principal Products Coniel®, Allelock®, Depakene®, various amino acids.


3. Kirin Pharma Company, Limited
 
Trade Name Kirin Pharma Company, Limited
Address 6-26-1 Jingumae, Shibuya-ku, Tokyo
President and Chairman of the Board of Directors Katsuhiko Asano
Net Sales 67.2 billion yen
(fiscal year ended December 31, 2006/consolidated)
Operating Income 12.0 billion yen
(fiscal year ended December 31, 2006/consolidated)
Paid-in Capital 3.0 billion yen (as of July 1, 2007)
Major Shareholders Kirin Holdings Company, Limited
Year of Incorporation 2007
Employees 1,270 people (as of July 1, 2007)
Business Description Production, sales, import and export of pharmaceutical products
Principal Products NESP, ESPO, GRAN


4. Kirin Group (Consolidated)
 
Net Sales 1,665.9 billion yen
(fiscal year ended December 31, 2006/consolidated)
Net Profit 53.5 billion yen
(fiscal year ended December 31, 2006/consolidated)
Paid-in Capital 102.0 billion yen (as of June 30, 2007)
Employees 23,332 people (as of December 31, 2006, consolidated)
Business Description Production and sales, of alcoholic/non-alcoholic beverages, pharmaceutical products and health and functional food products, etc.


5. Organizational Structure Hereafter
After the completion of the Tender Offer, the Third Party Allocation of New Shares and the Share Exchange, Kyowa Hakko will become a consolidated subsidiary of Kirin Holdings. The effective date of the Share Exchange is April 1, 2008. Furthermore, Kyowa Hakko and Kirin Pharma will merge on October 1, 2008. The Surviving Company will maintain its listing on the stock exchange. As a principle, Kirin Holdings will cooperate in the strongest reasonable manner to maintain the listing of shares of the Surviving Company on the stock exchange and the shareholding ratio of Kirin Holdings in the Surviving Company shall be maintained at 50.10% for a period of 10 years.

Organizational Chart

6. Overview of the Tender Offer
 
(1) Period: From Wednesday, October 31, 2007 through Thursday, December 6, 2007 (26 business days in Japan)
(2) Purchase price: 1,500 yen per share
(The aggregate tender offer price is scheduled to be 167,367 million yen)
(3) Number of Shares
Scheduled to be Purchased:
111,578,000 shares (27.95% (scheduled) of the total issued shares)


7. Overview of the Share Exchange
 
(1) Schedule of the Share Exchange
  a.   October 22, 2007 Conclusion of the Share Exchange Agreement
  b.   April 1, 2008 Effective date of the Share Exchange
(2) Share Exchange Ratio
  Kyowa Hakko will allocate and deliver 8,862 shares of common stock for one (1) share of the common stock of Kirin Pharma.
(3) Number of Shares to be Issued through the Share Exchange
  In the Share Exchange, Kyowa Hakko will issue 177,240,000 shares of the common stock
 
(Note)   The implementation of the Share Exchange is conditioned upon approval for the Share Exchange being obtained at the extraordinary meeting of shareholders of Kyowa Hakko which will be held after the Tender Offer is completed (the "Extraordinary Meeting of Shareholders of Kyowa Hakko").


8. Overview of the Third Party Allocation of New Shares
  If the number of shares purchased through the Tender Offer is less than 111,578,000 shares, Kyowa Hakko will allocate new shares to Kirin Holdings, at 1,500 yen per share, with the stock payment date set for March 25, 2008, in the amount necessary for Kirin Holdings to acquire, in conjunction with the shares delivered to Kirin Holdings in the Share Exchange between Kyowa Hakko and Kirin Pharma, a number of shares equivalent to 50.10% of the issued shares of Kyowa Hakko as of the effective date of the Share Exchange.

(Note)   If the Third Party Allocation of New Shares is implemented, Kyowa Hakko will obtain approval for the transaction by a special resolution at the Extraordinary Meeting of Shareholders of Kyowa Hakko.

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