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22 December 2009

Conclusion of Agreement on Business Merger for Transportation Interior Materials

Toyota Boshoku Corporation
Kawashima Selkon Textiles Co., Ltd.
Toyota Tsusho Corporation

Since the "Basic Agreement on Establishment of A New Merger Company for Transportation Interior Materials" (hereinafter referred to as "Basic Agreement") reached on June 18, 2009, Toyota Boshoku Corporation ("Toyota Boshoku"), Kawashima Selkon Textiles Co., Ltd. ("Kawashima Selkon Textiles") and Toyota Tsusho Corporation ("Toyota Tsusho") have been discussing merger of such businesses ("This Business Merger"), and we are pleased to advise that we have agreed on the details of This Business Merger and concluded a merger agreement today.

1. Objective of This Business Merger

The circumstances surrounding present industry of transportation interior materials are structurally very difficult owing to worldwide decrease of car production volume, severe cost competition etc. To survive this intensifying competition, it has become an urgent issue to promote further rationalization and streamlining as well as globalization to cope with the global market demand and to strengthen product development capability aiming to enhance functionality and design.

Utilizing respective advantages of the three companies, we will enhance business competitiveness and strengthen global operation through This Business Merger by

1)	strengthening the sales, development and production bases by cooperating to achieve synergic effects across areas of technological expertise, customer base, business field and geographical region, and achieving improved efficiency through integrated process of operation, and
2)	establishing fabric development and production system capable of creating both cutting edge designs and highly functional fabrics that not only reflect the particular requirements of the whole car interior spaces but which also take into account environmental and health concerns.

2. Method of This Business Merger

1)	Toyota Boshoku, Kawashima Selkon Textiles and Toyota Tsusho to establish a new company, TB Kawashima Co., Ltd. ("TB Kawashima" as released on June 18, 2009) as of December 22, 2009.
2)	Kawashima Selkon Textiles to split out interior material business for automobiles, trains and aircrafts, which TB Kawashima to succeed. (hereinafter called "This Company Split [Kawashima Selkon Textiles]"
3)	Toyota Boshoku to split out transportation interior material business, which TB Kawashima to succeed effective April 1, 2010 (hereinafter called "This Company Split [Toyota Boshoku]"), and together with This Company Split collectively, "This Company Split")
4)	TB Kawashima and Tatsumura Textile AI Co., Ltd. ("Tatsumura Textile AI") to merge by absorption with TB Kawashima as surviving corporation and Tatsumura Textile AI as expired corporation ("This Merger").
5)	Kawashima Selkon Textiles to transfer a part of its shares in TB Kawashima to Toyota Boshoku and Toyota Tsusho effective April 1, 2010.

3. Profile of the companies involved with This Merger

(1)

Profile of the New Company

[1]

company name:

TB Kawashima Co., Ltd.

[2]

registered address:

1-1, Toyoda-cho, Kariya, Aichi

[3]

head office address:

923 Toendo, Aisho-cho, Echi-gun, Shiga

[4]

shareholding:

Toyota Boshoku	39%
Kawashima Selkon Textiles	39%
Toyota Tsusho Group	22%

[5]

capital:

December 22, 2009 :	1 million yen
April 1, 2010 :	490 million yen (planned)

[6]

fiscal year:

ends March 31

[7]

representative:

Tsuyoshi Kuriyamoto

[8]

business operations:

manufacture and sale of transportation interior materials

[9]

products:

fabrics for seat/door, headliners & other interior materials

[10]

company formation:

December 22, 2009

[11]

number of employees:

1,350 (April 1, 2010 planned)

[12]

board members:

President & Representative Director: Tsuyoshi Kuriyamoto (Adviser of Toyota Boshoku)
Representative Director: Suzuo Kato (Managing Director of Kawashima Selkon Textiles)
Director: Naoya Enomoto (Representative Director of Tatsumura Textiles AI)
Director (non-executive): Shuhei Toyoda (President of Toyota Boshoku)
Director (non-executive): Koji Iida (Managing Director of Toyota Boshoku)
Director (non-executive): Masao Nakanishi (President of Kawashima Selkon Textiles)
Director (non-executive): Katsunori Takahashi (Vice Chairman of Toyota Tsusho)
Corporate Auditor (non-executive): Kenichi Noda (Managing Officer of Toyota Boshoku)

Note:

The profile of the New Company has been partly changed from the contents released as per "Basic Agreement on Establishment of A New Merger Company for Transportation Interior Materials" dated June 18, 2009.

(2) Profile of Companies Involved

1. company name

Toyota Boshoku Corporation (Split Company)
as of March 31, 2009

Kawashima Selkon Textiles Co., Ltd. (Split Company)
as of March 31, 2009

Tatsumura Textile AI Co., Ltd. (Expired Corporation by absorption merger)
as of March 31, 2009

2. business

manufacture and sale of automotive parts and textile products

manufacture and sale of traditional clothing & artistic textiles, automotive interior materials and interior decoration products

development, manufacture, finishing and sale of transportation fabrics

3. date of establishment

January 1918

May 1938

February 2001

4. registered address

1-1, Toyoda-cho, Kariya, Aichi

265 Ichihara-cho, Shizuichi, Kyoto

1-11-1, Mikawaanjo-cho, Anjo, Aichi

5. title/name of representative

Shuhei Toyoda, President & Representative Director

Masao Nakanishi, President & Representative Director

Naoya Enomoto, Representative Director

6. capital

JPY 8,400 million

JPY 8,277 million

JPY 310 million

7. outstanding shares

187,665,738 shares

93,903,222 shares

6,200 shares

8. stockholders' equity

JPY 122,235 million

JPY 8,567 million

JPY 320 million

9. total assets

JPY 338,768 million

JPY 42,139 million

JPY 1,368 million

10. fiscal year end

March 31

11. number of employees

7,579

1,323

12. major business partners

Customers:
Toyota Motor Corporation
Toyota Auto Body Co., Ltd.
Denso Corporation

Suppliers:
Toyota Motor Corporation
Aisin Seiki Co., Ltd.
Inoac Corporation

Customers:
Honda Motor Co., Ltd.
Hayashi Telempu Co., Ltd.
Johnson Controls K.K.

Suppliers:
Chori Co., Ltd.
N. I. Teijin Shoji Co., Ltd.
Tachikawa Corporation

Customers:
Toyota Tsusho Corporation
Suzuki Motor Corporation
Fuji Heavy Industries Ltd.
Namba Press Works Co., Ltd.
Inoac Corporation

Suppliers:
Teijin Tecloth Ltd.
Teijin Nestex Limited
Yamaguchi Knit Co., Ltd.
Inoac Corporation

13. major shareholders and shareholding ratio

Toyota Motor Corporation
39.36%
Towa Real Estate Co., Ltd.
9.78%
Denso Corporation
5.43%
Japan Trustee Service Bank, Ltd.
4.95%
Toyota Industries Corporation
4.13%
NHK Spring Co., Ltd.
3.85%

Raison Investment Limited Partnership
8.51%
Kawashima Orimono Selkon Kyoei-kai, shareholding association organized by business partners
5.27％
Kawashima Orimono Selkon Employees' Shareholding Association
4.69%
Sumitomo Mitsui Banking Corporation
4.15%
Japan Trustee Service Bank, Ltd.
3.38%
Hayashi Telempu Co., Ltd.
3.19%

Toyota Tsusho Corporation

70.02%

Teijin Tecloth Ltd. *

19.98%

Tatsumura Textile Co., Ltd.

10.00%

14. major financing banks

Bank of Tokyo-Mitsubishi UFJ, Ltd., Sumitomo Mitsui Banking Corporation

Sumitomo Mitsui Banking Corporation, Bank of Tokyo-Mitsubishi UFJ, Ltd., Bank of Kyoto, Ltd., Resona Bank, Limited

* changed to Teijin Fibers Limited as of December 1

15. Business performances in recent 3 fiscal years (consolidated)

(unit: millions of yen; for index per share, yen)

	Toyota Boshoku Corporation (Split Company)			Kawashima Selkon Textiles Co., Ltd. (Split Company)			Tatsumura Textile AI Co., Ltd. (Expired Corporation by absorption merger)
fiscal year	March 2007	March 2008	March 2009	March 2007	March 2008	March 2009	March 2007	March 2008	March 2009
net sales	1,082,755	1,233,789	979,775	80,649	85,833	73,186	6,101	7,023	5,515
operating income	48,381	65,596	14,054	409	513	△610	126	132	3
ordinary income	52,143	65,696	13,292	221	192	△808	134	132	7
net income	30,105	40,720	△5,064	46	815	△4,127	125	70	△6
net income per share	160.76	217.76	△27.15	0.50	8.71	△44.10	20,296.33	11,345.03	△976.74
dividend per share	24.00	35.00	20.00	-	-	-	-	2,630	-
net assets per share	858.86	997.43	848.01	142.32	149.35	91.12	43,928.93	55,273.97	51,667.22

4．Outline of business divisions to be split

(1)

outline of businesses to be split
The business of Toyota Boshoku to be split concerning This Company Split [Toyota Boshoku] is business related to development, manufacture and sale of transportation interior materials of Toyota Boshoku.
The business of Kawashima Selkon Textiles to be split concerning This Company Split [Kawashima Selkon Textiles] is business related to development, manufacture and sale of interior materials for automobiles, trains, aircrafts etc.

(2)

Operating results of the divisions to be split in fiscal year ending March 2009 (consolidated)

	Toyota Boshoku (Split Company)			Kawashima Selkon Textiles (Split Company)
	split business (A)	total (B)	ratio (A)/(B)×100	split business (A)	total (B)	ratio (A)/(B)×100
net sales	1,962	979,775	0.2%	23,793	73,186	32.51%

5．Forecast and impact of This Merger on business results
	Impact on consolidated and individual business results of Kawashima Selkon Textiles will be advised as soon as they are fixed. Impact on consolidated and individual business results of Toyota Boshoku is expected to be insignificant. Impact on consolidated and individual business results of Toyota Tsusho is expected to be insignificant.