Cosmo Oil : Announcement on Capital and Business Alliance

Kygnus Sekiyu K.K. (President: Masahiro Wakazawa; hereinafter 'Kygnus') and Cosmo Energy Holdings Co., Ltd. (Representative Director and CEO: Keizo Morikawa; hereinafter 'CEH') today announce the conclusion of Capital and Business Alliance Agreement (hereinafter 'the Agreement'). CEH acquires 20% of common share of Kygnus in the 1st quarter of FY2017 (from April 1, 2017 to June 30, 2017). Along with the Agreement, Kygnus and Cosmo Oil Co., Ltd. (President and Representative Director: Hisashi Kobayashi) plan to start petroleum products sales transaction 3 years after.

CEH today submits the notification regarding this scheme to the Japan Fair Trade Commission.

1. Background and Purpose
   Kygnus and CEH (hereinafter the 'Parties') have jointly discussed several measures of reinforcing competitiveness in order to respond to changes in business environments.
   The Parties have concluded a wide range of business alliances including capital relationship as well as implementation of supply and purchase activities of petroleum products, which contributes to realizing enhancement of Parties' competitiveness. The business alliances in details will be determined through discussions hereafter.
   The domestic market share of petroleum products of the Parties will reach 14% and we aim to achieve sustained growth and maximization of corporate value as the third force in the domestic petroleum industry.
   
2. Company Overview
   

   Trade Name	Kygnus Sekiyu K.K.
   Headquarters Location	8-1, Yaesu 2-chome, Chuo-ku, Tokyo
   Name & Title of Representative	Masahiro Wakazawa (President)
   Date of Establishment	February 1, 1972
   Paid-in-capital	2 billion JPY (as of March 31, 2016)
   Primary Business	Buying and selling of petroleum and petrochemical products
   Net Sales	431.5 billion JPY (FY2015)
   Number of Employees	83 (as of March 31, 2016)
   Shareholder	SAN-AI OIL CO., LTD.
   Number of SS	493 SS (as of March 31, 2016)
   Sales Volume of Petroleum Products	4.04 million KL (actual data of FY2015)

   Trade Name	Cosmo Energy Holdings Co., Ltd.
   Headquarters Location	1-1, Shibaura 1-chome, Minato-ku, Tokyo
   Name & Title of Representative	Keizo Morikawa (Representative Director and CEO)
   Date of Establishment	October 1, 2015
   Paid-in-capital	40 billion JPY (as of March 31, 2016)
   Primary Business	Management of subsidiaries involved in oil ranging from upstream to downstream and other businesses
   Net Sales	2,244.3 billion JPY (consolidated, FY2015)
   Number of Employees	7,116 (consolidated, as of March 31, 2016)
   Major Shareholders	Infinity Alliance Limited Japan Trustee Services Bank, Ltd. (account in trust) Mizuho Bank, Ltd. The Bank of Tokyo-Mitsubishi UFJ, Ltd. The Kansai Electric Power Company, Incorporated Mitsui Sumitomo Insurance Company, Limited. Aioi Nissay Dowa Insurance Co.,Ltd. Sompo Japan Nipponkoa Insurance Inc. Cosmo Energy Holdings Client Stock Ownership Goldman,Sachs&Co.Reg
   Number of SS	3,054 SS (as of March 31, 2016)
   Sales Volume of Petroleum Products	21.35 million KL (actual data of FY2015) (Actual result of petroleum refining and marketing business of core business companies for FY2015)

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