LAWSON Consolidated Subsidiaries Ninety-nine Plus and VALUE LAWSON to Merge

2009/03/06

Ninety-nine Plus Inc. (Stock code: 3338, JASDAQ, President: Takahiro Fukahori), a consolidated subsidiary of LAWSON, has announced that its Board of Directors today decided to merge with VALUE LAWSON, Inc. (Representative director: Masaki Sakata), also a consolidated subsidiary of LAWSON.

Ninety-nine Plus and VALUE LAWSON operate convenience stores under the SHOP99 and LAWSON STORE100 brands, respectively, and both offer products at a single price. Up to now, the two companies have been forging a mutually cooperative relationship with a view to eventual management integration. This cooperation has brought success on a number of fronts: (1) joint development of the LAWSON Group private brand of Value Line products; (2) vigorous conversion of SHOP99 stores into LAWSON STORE100 stores; (3) creation of a new franchise package set for full-scale operation from fiscal 2009; and (4) rationalization of distribution through the amalgamation of distribution centers.

This merger will bring together the management resources of the LAWSON Group under one entity, enabling the early establishment of a high-growth fresh food convenience store format. It will also further the differentiation of LAWSON from other convenience store chains and facilitate the sharing of expertise. The upshot should be a more competitive LAWSON Group overall.

LAWSON believes that the merger will make it more competitive in a number of ways. First, stepped-up development of distinctive products centered on the private brand Value Line and the sharing of expertise regarding selling fresh produce and other perishable goods across the LAWSON Group will help differentiate LAWSON from competitors. Second, the establishment of a franchise business using a fresh food convenience store format, which is based on LAWSON's infrastructure and knowhow, will enable LAWSON to offer early-stage business opportunities to franchise owners. Moreover, it will give impetus to the conversion of suitably located conventional LAWSON stores to the LAWSON STORE100 format.

Besides greater management efficiency and competitiveness, the merger should lead to enhanced LAWSON Group corporate value.

This merger will have no effect on LAWSON's consolidated results for the fiscal year ended February 28, 2009. Furthermore, there will only be a negligible effect on non-consolidated results for the same period. A further announcement will be made concerning the expected effect on operating results for the fiscal year ending February 28, 2010 and thereafter as soon as this is determined.

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