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October 31st, 2016 Kawasaki Kisen Kaisha, Ltd. Eizo Murakami, President & CEO Mitsui O.S.K. Lines, Ltd. Junichiro Ikeda, President & CEO Nippon Yusen Kabushiki Kaisha Tadaaki Naito, President Kawasaki Kisen Kaisha, Ltd., Mitsui O.S.K. Lines Ltd., and Nippon Yusen Kabushiki Kaisha have agreed, after the resolution by the board of directors of each company held today, and subject to regulatory approval from the authorities, to establish a new joint-venture company to integrate the container shipping businesses (including worldwide terminal operating businesses excluding Japan) of all three companies and to sign a business integration contract and a shareholders agreement. 1. Background Although growing modestly, the container shipping industry has struggled in recent years due to a decline in the container growth rate and the rapid influx of newly built vessels. These two factors have contributed to an imbalance of supply and demand which has destabilized the industry and has created an environment that is adverse to container line profitability. In order to combat these factors, industry participants have sought to gain scale merit through mergers and acquisitions and consequently the structure of the industry is changing through consolidation. Under these circumstances, three companies have now decided to integrate their respective container shipping on an equal footing to ensure future stable, efficient and competitive business operations. The new joint-venture company is expected to create a synergy effect by utilizing the best practices of the three companies. And by taking advantage of scale merit of its vessel fleet totaling 1.4 million TEUs, realize integration effect of approximately 110 billion Japanese Yen annually and seek swiftly financial performance stabilization. By strengthening the global organization and enhancing the liner network, the new joint-venture company aims to provide higher quality and more competitive services in order to exceed our clients’ expectations. 2. Overview of the new joint-venture company 
* TEU: Twenty-foot Equivalent Unit 3. Schedule Agreement date: October 31st, 2016 Establishment of the new joint-venture company: July 1st, 2017 (planned) Business commencement: April 1st, 2018 (planned) 4. Other The expected impact of the integration to business performance will be informed by each individual company once details have been confirmed. Kawasaki Kisen Kaisha, Ltd. press release |
