Ajinomoto and Calpis to Integrate Operations

The companies said that the business environment in the food products industry, in which both companies operate, has changed significantly over the past several years in Japan and overseas.

11/06/07 Ajinomoto Co., Inc. and Calpis Co., Ltd. have agreed to make Calpis a wholly owned subsidiary of Ajinomoto through an exchange of shares, and signed a share exchange agreement.

The companies said that the business environment in the food products industry, in which both companies operate, has changed significantly over the past several years in Japan and overseas. Dealing with these changes requires companies to do even more to provide high-value-added products and services to consumers, they noted as behind the rationale.

Ajinomoto has set the goal of transforming its health and nutrition business into a pillar of growth in its medium- to long- term management plan. The company believes that bringing in the Calpis brand, which is associated with an image of health, along with Calpis's firm foundation in the beverage business and technology for utilizing lactobacillus and microorganisms, will contribute to expansion of the Ajinomoto Group's health and nutrition business.

Calpis, meanwhile, has set the goal of becoming a value-added company through global development of lactic acid beverages and functional health foods and beverages, with the objective of increasing its corporate value. Calpis believes that strengthening its capital relationship with Ajinomoto will enable it to make even greater use of Ajinomoto's business base, which will help Calpis generate additional growth.

With the background of a long and trusting relationship between the two companies, the share exchange will allow them to have a common long-term vision and strategy and accelerate the management decision-making process. It will also enable them to effectively deploy their management resources in strategic areas. In addition, both companies will integrate and employ their technologies that use microorganisms, including amino acid and lactobacillus technologies, as well as other management resources to expand and accelerate their efforts to provide products and services with health value. Moreover, by developing broadly based overseas operations, the two companies aim to be a corporate group that contributes to advances in food, health and a better life for all.