Mitsui, Idemitsu, and Sumitomo Chemical ink MoU to merge polyolefin business

Aiming to strengthen the competitiveness of the domestic polyolefin business

Mitsui Chemicals, Idemitsu Kosan Co., and Sumitomo Chemical Co. announce that the three companies have entered into a Memorandum of Understanding (MoU) concerning the integration of the polyolefin (PO) business operated by Prime Polymer (PRM), a joint venture between Mitsui and Idemitsu, with Sumitomo Chemical’s polypropylene (PP) business and linear low-density polyethylene (LLDPE) business in Japan.

Mitsui, Idemitsu and Sumitomo Chemical have explored the opportunities for collaboration to strengthen the competitiveness of the domestic PO business, including PP and polyethylene (PE), and have reached a mutual understanding as set forth in the MoU.

The implementation of the Business Integration is subject to the completion of necessary clearances, regulatory permissions and approvals under competition laws and other relevant laws and regulations. Going forward, Mitsui, Idemitsu, and Sumitomo Chemical will continue discussions toward the conclusion of a definitive agreement for the Business Integration.

Since establishment in 2005 as a joint venture between Mitsui and Idemitsu, PRM has been a leader in the Japanese PO industry, with PP and PE (LLDPE and high-density polyethylene (HDPE)) as its main products.

PRM and Sumitomo Chemical have a shared understanding that integrating Sumitomo Chemical’s PP and LLDPE businesses in Japan into PRM will not only strengthen the domestic PO business but also enhance the competitiveness against imported products.

The Business Integration is expected to generate significant synergies both in the production of PRM and Sumitomo Chemical, both having operating bases in the Keiyo region of Japan, and in the development of technologies to reduce environmental impact.

Through the Business Integration, Mitsui, Idemitsu, and Sumitomo Chemical will work together to optimize the PO production system, with the goal of achieving cost rationalization of more than 8 billion yen per year, thereby further strengthening their competitiveness as resilient and essential companies.

Furthermore, by enhancing their capabilities to develop high-performance and environmentally conscious products, Mitsui, Idemitsu, and Sumitomo Chemical will accelerate efforts to realize a sustainable green chemical business.

While details of the integration method and the terms and conditions of the Business Integration have yet to be determined, Mitsui, Idemitsu, and Sumitomo Chemical are considering a method that Sumitomo Chemical transfers the Sumitomo Target Businesses to PRM, and Sumitomo Chemical acquires the shares equivalent to a 20% stake in PRM.

The final decision will be made after discussions among Mitsui, Idemitsu, and Sumitomo Chemical.