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April 28, 2008

Kyowa Hakko Food Specialties Co., Ltd.
Kirin Food-Tech Company, Limited
Kyowa Hakko Kogyo Co., Ltd.
Kirin Holdings Company, Limited

Business integration of Kyowa Hakko Foods and Kirin Food-Tech:
Kirin Group and Kyowa Hakko Group aim to maximize synergies
by integrating their food businesses

TOKYO April 28, 2008— Kyowa Hakko Food Specialties Co., Ltd. ('Kyowa Hakko Foods'), Kirin Food-Tech Company, Limited ('Kirin Food-Tech'), Kyowa Hakko Kogyo Co., Ltd. ('Kyowa Hakko'), and Kirin Holdings Company, Limited ('Kirin Holdings'), have reached basic agreement to integrate the food products businesses of the Kirin Group and the Kyowa Hakko Group and today signed a letter of understanding to that effect.

The two Groups announced a strategic business alliance in October 2007 and since then have been pursuing discussions on business integration and cooperation. Through the merger and integration of Kyowa Hakko Foods and Kirin Food-Tech the companies aim to maximize the corporate value of the business by creating synergies, while also enhancing its market presence, with the overall aim of proposing and delivering appealing, tasty and healthy food products and ingredients to customers, mainly in Asia and Oceania.

Kyowa Hakko Foods and Kirin Food-Tech will merge to form Kirin Kyowa Foods Company, Limited ('Kirin Kyowa Foods') as of April 1, 2009, with Kyowa Hakko Foods as the continuing company. The new company will be managed as a joint venture by Kyowa Hakko and Kirin Holdings until the end of 2010, and from January 1, 2011 will become a wholly-owned subsidiary of Kirin Holdings through the transfer of Kyowa Hakko's entire holding of shares in the new company. The merger ratio to create the new company is to be decided based on calculation of the value of the two companies.

Based on the strengths of each company in fermentation-related technology, the new company, Kirin Kyowa Foods, aims to propose and deliver to customers appealing, tasty and healthy food products and ingredients. The creation of Kirin Kyowa Foods represents a new start and it is expected to play a key role in the quantum leap in growth in the area of food and health that the Kirin Group is targeting in its long-term management vision, Kirin Group Vision 2015 ('KV2015'). Kirin Food-Tech's products include yeast extracts and the nucleic acid-type umami seasoning Ribotide, production of which commenced at its Indonesian factory in March this year, while leading domestic brands of Kyowa Hakko Foods include its natural seasonings, fermented seasonings and bread ingredients. Based on the broad product areas of each company, Kirin Kyowa Foods will provide value proposals that meet customer needs and strive to secure a powerful position as a leading food products and ingredients company in Asia and Oceania.

Through this merger of their foods businesses, Kyowa Hakko Group and Kirin Group aim to further enhance corporate value by leveraging their respective strengths to maximize synergies.

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© 2007 Kirin Holdings Company, Limited.

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