September 11, 2006
Company: Sekisui Chemical Co., Ltd.
Representative: Naotake Okubo, President & Representative Director
Company code: 4204
Stock listings: Tokyo and Osaka stock exchanges (First Section)
Inquiries: Motokiyo Sanada, Senior Manager, Public Relations Group, Corporate Communications Dept.
TEL: +81-3-5521-0522

This is a notification that at the board of directors meeting held today, the board of directors of Sekisui Chemical Co., Ltd. approved a proposal to purchase all issued shares of Daiichi Pure Chemicals, Co., Ltd. (President & CEO: Shin-ichiro Ashida), a wholly-owned subsidiary of Daiichi Pharmaceutical Co., Ltd., (President & CEO: Kiyoshi Morita), which in turn is a wholly-owned subsidiary of Daiichi Sankyo Company, Limited (Representative Director & President: Takashi Shoda), and to turn Daiichi Pure Chemicals into a subsidiary. A share transfer agreement was also concluded with Daiichi Pharmaceutical today.

1.Reason for the share purchase

Based on the medium-term management vision, which was launched in fiscal 2006, Sekisui Chemical is aiming to transform itself into a prominent and highly-profitable corporation and considers creating growth businesses and new businesses, which can realize high profits, an important issue. At the same time, the High Performance Plastics Company is making progress in expanding the scope of its business, centered on the three strategic fields of IT, automotives, and medical products. In the field of medical products, leveraging its material technology and business know-how acquired through many years in overseas markets, the High Performance Plastics Company is expanding its business into the field of testing (test reagents and testing equipment) and treatment (pharmaceuticals and material of treatment); however, issues related to expanding and strengthening sales efforts, production-related technology, and product development that makes use of material technology have surfaced.


Daiichi Pure Chemicals has made contributions to the medical society in a wide range of fields through its support of the development of pharmaceuticals, ranging from testing reagents to medicines, and particularly for its testing reagent business, the company has quickly developed and brought to market new products that meet market needs through close ties among R&D, production, and sales, which has resulted in the quick expansion of this business. Among its products, for HDL and LDL cholesterol testing reagents, which are lipid testing reagents, the company has not only captured the largest share of the domestic market but also that of the global market.

Sekisui Chemical expects to realize substantial synergies by integrating the superior development, production, and sales-marketing abilities of Daiichi Pure Chemicals with its own material technology and overseas business know-how. In particular, Sekisui Chemical expects to create new business by strengthening the competitiveness of its products making use of the value chain from materials to sales and expanding sales through its overseas know-how and offices in the field of testing reagents, and acquiring the production technology for bulk pharmaceuticals and pharmaceutical development technology in the field of treatment possessed by Daiichi Pure Chemical.

After careful examination, it was determined that both Sekisui Chemical and Daiichi Pure Chemicals could further strengthen their businesses competitiveness and realize substantial growth if the two companies were to work together. Sekisui Chemical, therefore, has decided to purchase all the shares of Daiichi Pure Chemicals from Daiichi Pharmaceutical.

2.Subsidiary being transferred (outline of Daiichi Pure Chemicals)

(1)	Company	Daiichi Pure Chemicals, Co., Ltd.
(2)	Representative	President & CEO: Shin-ichiro Ashida
(3)	Location	3-13-5 Nihonbashi, Chuo-ku, Tokyo
(4)	Established	July 10, 1947
(5)	Main businesses	Diagnostics business, research products business, fine chemicals business, and pharmacokinetics research business
(6)	End of fiscal year	March 31
(7)	Employees	604
(8)	Main offices	Sales offices: 10 locations, including Tokyo, Nagoya, and Osaka Plants: Ibaraki, Iwate Research lab: Ibaraki
(9)	Capital	¥1,275 million
(10)	Total number of issued shares	16,470,000 common shares
(11)	Shareholder	100% by Daiichi Pharmaceutical Co., Ltd.
(12)	Earning for recent years

	FY2005 (ending March 31)	FY2006 (ending March 31)
Sales	¥22,593 million	¥22,803 million
Operating Income	¥2,176 million	¥2､551 million

3.Company from which shares are being acquired

(1)	Company	Daiichi Pharmaceutical Co., Ltd.
(2)	Representative	President & CEO: Kiyoshi Morita
(3)	Location of headquarters	3-14-10 Nihonbashi, Chuo-ku, Tokyo
(4)	Main businesses	Production, sales, import, and export of items such as pharmaceuticals

4.Number of shares to be acquired, acquisition prices, and shares held after acquisition

(1)	Number of shares before transfer	0
(2)	Number of shares acquired	16,470,000
(3)	Number of shares after transfer	16,470,000

5.Schedule

September 11, 2006:	Board of Directors adopts resolution to acquire the shares, and share transfer contract is concluded
October 2, 2006:	Shares will be transferred

6.Future outlook

Earnings for the fiscal year are not expected to be revised.

<Reference> Sekisui Chemical's Medical Division

Division establishment: 1983

Sales:	Actual:	for fiscal 2005	¥11.5 billion
	Projections:	for fiscal 2006 for fiscal 2008 for fiscal 2010	¥25.0 billion ¥40.0 billion ¥50.0 billion

Responsible director: Mutsumi Fukuda, President of High Performance Plastics Company, General Manager of Medical Division, (responsible for MD business unit)

Office locations:

2 sales offices (Tokyo, Osaka) Research lab (Osaka) 2 plants (Hyogo, Yamaguchi) Overseas operating company (Beijing, China) Overseas sales companies (in total seven, located in Germany, USA, etc.)

Businesses: Sekisui Chemical is expanding into the following testing and treatment fields

	Business area	Technology	Main products
Testing field	Testing equipment	•Extrusion molding •Polymerization	•Vacuum blood collection tubes •Serum separation reagent •Clotting reagent
	Testing reagents	•Fine particle polymerization •Polymer surface modification	•Latex for test reagents •Test reagents for syphilis
	Analysis column	•Matrix polymerization for liquid chromatography •Chromatography	•Analysis column for diabetes
Treatment field	Medical adhesive products	•Design of medical adhesives •Production of adhesive tape	•Compress for back pain •Angina patch
	Contracted clean molding	•Precision clean molding •Resin formulation	•Tracheotomy catheter •Parts for blood circuits
	Dentistry equipment	•High-frequency induction heating	•Artificial denture furnace

Press Contact Sekisui Chemical Co., Ltd. Corporate Communication Department Fax: (+81) 3-5521-0510 pr_group@sekisui.jp

Disclaimer This press release may contain forward-looking statements. Such forward-looking statements are based on current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements due to changes in global economic, business, competitive market and regulatory factors.