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

This business integration aims to strengthen the competitiveness of the PO business, including PP and polyethylene (PE), in Japan, as well as the competitiveness against imported products.

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

Details of the business integration

Sumitomo Chemical will transfer its businesses subject to Prime Polymer through a two-phase absorption-type split. In Phase One (planned effective on July 1, 2026), Sumitomo Chemical will acquire equity shares equivalent to a 20% stake in Prime Polymer. As a result, Prime Polymer will become a joint venture company in which Mitsui holds a 52% stake, Idemitsu holds a 28% stake, and Sumitomo Chemical holds a 20% stake. Phase Two (planned effective on April 1, 2027) will be a split value to be separately agreed upon by Sumitomo Chemical and Prime Polymer.

The parties have agreed that the first phase will be the implementation of Absorption-Type Split Phase One, in which all of the businesses subjected to the Business Integration, excluding manufacturing functions, will be transferred, and the scheduled system integration preparations at Prime Polymer will be completed.

Following this, the second phase will be the Absorption-Type Split Phase Two, in which the assets and liabilities, contractual status, and contractual rights and obligations associated with the manufacturing functions of the businesses will be transferred.

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