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The JFTC Closed its Review on the Proposed Acquisition of Shares of C&H Co., Ltd.by DAIKEN CORPORATION

January 24/2013
Japan Fair Trade Commission

Upon a notification regardinga proposed acquisition of shares of C&H Co., Ltd. (C&H)by DAIKEN CORPORATION(DAIKEN), the Japan Fair Trade Commission (JFTC) had reviewed the notified stock acquisition and reached the conclusion that, on the premise of the remedies offered by DAIKEN,the deal would not substantially restraincompetition in any particular fields of trade. Accordingly, the JFTC has notified DAIKENthat a cease and desist order will not be issued by the JFTC, resulting in the completion of its review.

1 Outlines of the transaction

DAIKEN,a manufacturer of wood-based materials including medium density fiberboard (MDF) and of interior materials made of wood-based materials, plans to acquire the stocks of C&H, a wholly-owned subsidiary of a MDF manufacturer, HOKUSHIN Co., Ltd. (HOKUSHIN) and a distributer of HOKUSHIN’s products, and thereby to obtain more than half of C&H’s voting rights. In concurrence with the acquisition of the stocks of C&H, DAIKEN plans to acquire the stocks of HOKUSHIN, and thereby to raise its holding ratio of HOKUSHIN’s voting rights to about 15%.

2  Reviewing process

Receipt of the notification regarding the proposed acquisition of C&H’s shares byDAIKENon April 25, 2012 (start of the primary review)

Request for reports, etc. by the JFTC on May 25, 2012 (start of the secondary review)

Receipt of all requested reports from DAIKEN on January 11, 2013 (the due date for a prior notice was set on April 12, 2013)

Submission of a report on changes in the notification by DAIKEN, in which the remedies were incorporated on January 18, 2013

Notification to DAIKEN that a cease and desist order will not be issued on January 24, 2013

3 Conclusion

By examining the possible impacts on competition by the planned acquisitions, the JFTC had found that, the acquisitions would form vertical market foreclosure for a particular type of MDF provided by HOKUSHIN and would hamper competitive behaviors by interior material manufacturers competing with DAIKEN. DAIKEN thereafter offered remedies to address the JFTC’s concern where DAIKEN shall have C&H supply the particular type of MDF to such interior material manufacturers on the terms reasonable and substantively equivalent to those applied to products sold to DAIKEN and its subsidiaries, etc. for five years after the completion of the notified acquisition. The JFTC concluded that the remedies offered would be sufficient to eliminate the competitive concern that could arise by the acquisitions and that, given the remedies, the notified acquisition would not substantially restrain competition in any particular fields of trade.

*Every announcement is tentative translation. Please refer to the original text written in Japanese.



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