Takeda Announces Details of New Business Venture with Teva in Japan

Osaka, Japan, December 28, 2015 – Takeda Pharmaceutical Company Limited (TSE: 4502) ("Takeda") today announced the details of the business venture which was disclosed November 30, 2015 in the press release titled, "Teva and Takeda establish unique partnership to meet the wide-ranging needs of patients and growing importance of generic medicines use in Japan".
[http://www.takeda.com/news/2015/20151130_7215.html]

Takeda will split off its off-patented and data exclusivity expired products business ("long listed products business") via an absorption-type split, and subsequently the business will be succeeded by the Japanese subsidiaries of Teva Pharmaceutical Industries Ltd. of Israel.

This is a triangular absorption-type company split among Teva Pharma Japan Inc. ("Teva Pharma") and Taisho Pharm. Ind., Ltd. ("Taisho Pharm"), as well as Takeda. In this absorption-type company split, Takeda will be the splitting company and Taisho Pharm will be the succeeding company. Takeda's long listed products business will be transferred to Taisho Pharm, and Taisho Pharm will allocate shares of Teva Pharma, which will become its parent company, to Takeda as consideration for the company split. The company name of Taisho Pharm, which will succeed Takeda's long listed products business and also continue its generics business, will become Teva Takeda Yakuhin Ltd. ("Teva Takeda Yakuhin"), and the company name of Teva Pharma, which will continue its generics business, will become Teva Takeda Pharma Ltd. ("Teva Takeda Pharma"). Both companies will jointly engage in the new business.

Teva will hold 51% of Teva Pharma's shares through Teva Holdings KK ("Teva Holdings"), which is also the Japanese subsidiary of Teva, and Takeda will hold 49% of Teva Pharma's shares.

The new business venture of Teva Takeda Pharma and Teva Takeda Yakuhin (collectively, "the new companies"), to be established in or after April 2016, will deliver Teva's high-quality generic medicines and Takeda's long listed products to patients and healthcare professionals in Japan. Its aim is to become a leading off-patent product (including generic medicines and long listed products) company in Japan, leveraging Takeda's corporate brand and the unique distribution network that has been built through Takeda's longstanding business in Japan, and Teva's wide product portfolio and cutting-edge business efficiency.

As this company split is expected to correspond to certain criteria of the Tokyo Stock Exchange in terms of changes in Takeda's total assets and revenue, part of disclosure items and contents are omitted.

1. Purpose of company split
This strategic move between Takeda, an R&D driven pharmaceutical company which has a long history as a leading company in Japan, and Teva, which is among the top ten pharmaceutical companies in the world and a global leader in generics, will form the new companies to meet the wide-ranging needs of patients and correspond to the growing importance of generics in Japan, by delivering Takeda's transferred long listed products and Teva's generic medicines. The Japanese generics market is one of the fastest growing in the world, and is expected to continue its high growth driven by social requirements such as increased patient need for the stable supply of affordable high quality medicines, and the Japanese government's initiatives to control healthcare expenditure. Takeda's leading brand reputation and strong distribution presence in Japan combined with Teva's global expertise in supply chain, operational networks, commercial deployment, and R&D and scientific insight, brings forward a new, collaborative business model in line with government objectives that will ultimately serve millions of patients. Moreover, Takeda will further strengthen its initiatives to lead innovation in medicine through providing innovative new drugs.

2. Details of company split

1) Schedule of company split

^{(Note) The company split is to be conducted by Takeda as defined in Paragraph 2, Article 784, of the Companies Act.
Accordingly, no approval by a general meeting of shareholders as defined in Paragraph 1, Article 783 of the Companies Act is required.}

2) Method of company split

In this company split, Takeda will be the splitting company and Taisho Pharm will be the succeeding company. More specifically, Teva Pharma will carry out a stock exchange with Teva Holdings, and thereby Taisho Pharm will become a fully owned subsidiary of Teva Pharma. Taisho Pharm will then allocate shares of Teva Pharma to Takeda.

3) Details of stock allocation

As consideration for the company split, Taisho Pharm will allocate 49% of shares of Teva Pharma to Takeda. As a result, Teva Holdings and Takeda will hold 51% and 49% shares, respectively, of the total shares issued by Teva Takeda Pharma, whose name will be changed from Teva Pharma.

4) Treatment of stock options and corporate bonds with stock options for the splitting company

Although Takeda has issued stock options, there will be no change to the treatment of these stock options due to the company split.

5) Increase or decrease of capital stock due to the company split

There will be no change in Takeda's capital stock due to the company split.

6) Rights and obligations to be succeeded by the succeeding company

Taisho Pharm will succeed the assets relating to Takeda's long listed products business covered by the absorption-type company split agreement, as well as the rights and obligations incidental thereto.

7) Capability of satisfying liabilities

It has been judged that Taisho Pharm will not have any problem in performing its obligations relating to the liabilities it will bear following the effective date of the absorption-type company split; however, it does not guarantee that Takeda will bear a responsibility of those liabilities.

3. Calculation of share allotment relating to the company split

Taking into consideration the results of calculations by the third-party appraiser of the long listed products business of Takeda (the splitting company), and the generic medicine businesses of both Taisho Pharm (the succeeding company), and Teva Pharma, Takeda and Teva have comprehensively considered the relevant factors such as the respective states of finances and assets, as well as forecasts for the future, and after a series of deliberations have ultimately agreed upon the abovementioned shareholding ratio.

4. Outline of the companies