Shionogi & Co., Ltd., Leo Star Development Limited, the largest shareholder of the China-based Singapore listed company, C&O Pharmaceutical Technology (Holdings) Limited and Gao Bin, executive director, vice chairman and general manager, C&O Pharmaceutical Technology (Holdings) Limited have entered into an agreement (the “Agreement”) that Shionogi shall acquire 160,312,000 C&O shares (about 24.17% of the total shares issued in C&O) out of 193,480,000 C&O shares (about 29.17% of the total shares issued in C&O) held by Leo Star and Gao Bin (the “Transaction”).

Completion of the Transaction is subject to fulfilment or waiver by Shionogi of certain conditions precedent. After the Transaction, Shionogi will conduct a general offer in accordance with the Agreement and the Singapore Code on Take-overs and Mergers, with an intention to make C&O into Shionogi’s subsidiary. The total consideration for the Transaction and the general offer to be made thereafter is expected to be approximately S$219 million (about ¥14.3 billion) at the offer price of S$0.50 for each C&O Share.

After the Transaction, Gao Bin will remain as executive director (vice chairman and general manager) of C&O, and he will continue to hold his remaining about 5% of the total shares issued in C&O indirectly, through Leo Star, during this designated period of his service in C&O. In addition, Shionogi intends to jointly operate C&O with Sumitomo Corporation, which holds about 29% of the total issued shares in C&O.

The Shionogi policy to actively drive the development and the establishment of sales platform in Asia is one of the pillars of Shionogi’s “Third Medium-term Management Plan” which ends in FY2014. Shionogi has positioned China among others, as the most important market to enter, given the facts such as China has the world No.1 population size and has significant potential for demand for pharmaceutical products, in light of the rising income of its population and strong economic growth, on-going aging of society, and increasing access to medical insurance.

C&O is a company engaged in R&D, manufacturing, import and distributing pharmaceuticals products in China, and in addition, utilizes its sales network to distribute strong brands including Amoxycillin Capsules to 300,000 customers (clinics, hospitals and pharmacies) nationwide. C&O is active in selling new pharmaceutical products introduced from the advanced countries through its detailed marketing-based sales activities.

Accordingly, C&O is capable of and experienced in developing pharmaceutical products and dealing with the relevant authorities. As C&O’s capabilities and management policy match Shionogi’s direction for business development in China, we have decided that the acquisition of C&O is the best choice for our entry into the China market.

By welcoming C&O into the Shionogi group, Shionogi will be able to develop business platform in China, where Shionogi is currently lacking. Shionogi will now have presence in China, in addition to its presence in Japan and the United States. The leverage on China’s market growth will help Shionogi achieve its goal set in the “Third Medium-term Management Plan” and allow it to have another core capability for its sustainable mid-long term growth.

The general offer will commence upon the satisfaction of conditions to the completion of the share acquisition by Shionogi from Leo Star and Gao Bin.

Conditions for General Offer are not applicable if the shares held by Leo Star, Gao Bin (including the shares that Shionogi will acquire) and Sumitomo Corporation (together, about 58.17% of the total shares issued in C&O) will not be tendered and will be maintained throughout the General Offer Period, and the shares held by these parties are excluded from “Number of Shares to be Purchased” as set out above.

C&O Pharmaceutical Technology (Holdings) Limited manages a group of companies engaged in R&D, manufacturing, import and sale of pharmaceutical products in China

The directors of Shionogi (including any who may have delegated detailed supervision of this document) have taken all reasonable care to ensure that the facts stated and all opinions expressed in this document are fair and accurate and that no material facts have been omitted from this document and they jointly and severally accept responsibility accordingly. Where any information has been extracted or reproduced from published or otherwise publicly available sources (including, without limitation, in relation to C&O), the sole responsibility of the directors of Shionogi has been to ensure through reasonable enquiries that such information has been accurately and correctly extracted from such sources or, as the case may be, reflected or reproduced in this document.

The general offer described in this announcement has not yet commenced and will be made if and when the conditions to the completion of the Transaction are fulfilled or waived by Shionogi, as the case may be. This announcement is for informational purposes only and does not constitute an offer to purchase or a solicitation of an offer to sell C&O's common stock. The general offer, if made, will be made pursuant to an Offer Document that will be dispatched by Shionogi to C&O shareholders. Those materials (when available) will contain important information, including the terms and conditions of the general offer, that should be read carefully before any decision is made with respect to the general offer.