Sumitomo Chemical begins phase one of polyolefin business split

In its timely disclosure dated December 24, 2025, titled “Notice Concerning Conclusion of Business Integration Agreement and Joint Venture Agreement Between Sumitomo Chemical and Prime Polymer, Mitsui Chemicals, and Idemitsu Kosan to Integrate the Polyolefin (PP and LLDPE) Business in Japan Through a Company Split (Simple Absorption-Type Split) by Sumitomo Chemical,” the company had stated that it would proceed with a two-phase company split. Under this plan, Sumitomo Chemical will act as the splitting company, while Prime Polymer – a joint venture between Mitsui Chemicals, Inc. and Idemitsu Kosan Co., Ltd. – will act as the transferee.

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As part of this arrangement, Sumitomo Chemical’s polypropylene (PP) and linear low-density polyethylene (LLDPE) businesses in Japan (collectively referred to as the “Target Businesses”) will be transferred to Prime Polymer. In return, Sumitomo Chemical will acquire equity shares representing a 20% stake in Prime Polymer. The companies had also concluded a business integration agreement and a joint venture agreement to formalize this transaction.

The company has now confirmed that, to implement the integration, it has entered into an absorption-type company split agreement with Prime Polymer for the first phase of the two-step process. This agreement–referred to as “Absorption-Type Company Split Agreement (i)” – covers the initial transfer of the Target Businesses. The first phase is termed “Absorption-Type Company Split Phase One,” while the second phase is referred to as “Absorption-Type Company Split Phase Two.” Together, they constitute the overall absorption-type company split.

Both phases are structured as simple absorption-type company splits and are expected to have a limited financial impact. Specifically, each phase is projected to result in a reduction of less than 10% of the company’s total assets relative to its net assets at the end of the previous fiscal year, and a decrease of less than 3% in net sales compared to the previous fiscal year. Therefore, a part of disclosure items and content has been omitted from the Company’s disclosure.

The company also noted that the item numbers and defined terms used in this announcement follow those outlined in the December 24, 2025 disclosure. Only items that have been newly determined or changed since that announcement are highlighted, while unchanged details have been omitted.

Note 1 - For Sumitomo Chemical, both phases of the Absorption-Type Company Split fall under the simple absorption-type split stipulated in Article 784, Paragraph 2 of the Companies Act. Therefore, Sumitomo Chemical plans to conduct the Absorption Type Company Split without obtaining approval through a shareholders’ meeting resolution. 

Note 2 - The Absorption-Type Company Split is subject to the completion of necessary clearances, regulatory permissions, and approvals under competition laws and other relevant laws and regulations. Therefore, this schedule may change for reasons pertaining to regulatory permissions and approval by relevant authorities, or other related reasons. 

Note 3 - Hereinafter referred to as the “Absorption-Type Company Split Agreement (ii).”

See previous update from Sumitomo Chemical about PO businesses integration.