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News Release

FOR IMMEDIATE RELEASE
May 11, 2004

Notice Concerning the Spin off of the Machinery Division of Eisai Co., Ltd.

Listed Stock Name:Eisai Co., Ltd.
President & CEO:Mr. Haruo Naito
Headquarters:4-6-10 Koishikawa Bunkyo-ku, Tokyo
Securities Code:4523
Listed Locations: First Sections of the Tokyo Stock Exchange
& the Osaka Securities Exchange
Inquiries: Mr. Hiroyuki Mitsui
Vice President
Corporate Communications & General Affairs
Phone: +81-3-3817-5085

Notice Concerning the Spin off of the Machinery Division of Eisai Co., Ltd.


At the meeting of the Board of Directors of Eisai Co., Ltd. on May 11, 2004, it was decided that from October 1, 2004, the Machinery Division will be divested from the Company (hereinafter the "Separation") and transferred to Herusu Co., Ltd., a consolidated subsidiary of the Company.


From the date of the Separation, it is intended that the corporate name of the successor company [Herusu] shall be changed to Eisai Machinery Co., Ltd.


In addition, a basic agreement has been reached that prior to this integration of machinery business, the business of Chiba Plant, the production base for cosmetic materials, shall be transferred to Koyo Sangyo Co., Ltd., and Koyo Kako Co., Ltd., on September 30, 2004. Products of Cosmetics and Toiletaries will continue to be produced by Koyo Sangyo Co., Ltd. under contract.


Details

1 . Objective of the Separation
Presently, the Company's Machinery Division is involved in the production and export of pharmaceutical related machinery, while Herusu handles Japan sales of these products. This integration will unify the entire operation from production through sales, with a reorganization to business systems that will facilitate speedy provision of more efficient services to all customers.

2 . Overview of the Separation

(1) Schedule of the Separation
Separation Agreement approval by the Board of Directors (company making the Separation)May 11, 2004
Separation Agreement approval by the Board of Directors (successor company)May 11, 2004
Date of SeparationOctober 1, 2004 (planned)
Registration of the SeparationOctober 1, 2004 (planned)
In accordance with the provisions of the Commercial Code Article 374.22 (simple absorption type separation), the company making the Separation is not required to obtain consent at the general shareholders' meeting. In accordance with the provisions of the Commercial Code Article 374.23 Paragraph 1, (simple absorption type separation), the successor company is not required to obtain consent for the Separation from a shareholders' meeting.

(2) Format of the Separation
1. Format of the Separation

The Company is defined as the company making the Separation; Herusu Co., Ltd. is the successor company in this company separation and absorption type arrangement.
2. Reason for Adopting this Format

By clarifying the system of responsibility for business in their management of consolidated entities and making the management independent, the Company aims to achieve a higher level of satisfaction for all customers. Accordingly, a company separation and absorption type format is being employed in which Herusu succeeds the business of the Machinery Division and allocates to the Company all of their newly issued shares.

(3) Allocation of Shares

The 2,000 shares of common stock to be issued by the successor company will all be allocated to the Company, which is the company making the separation.

(4) Allocated Grant of Funds

No funds are allocated for payment.

(5) Transferred Rights and Responsibilities

Herusu Co., Ltd. succeeds all assets of the Machinery Division of the Company making the separation, as well as their liabilities, their status under any contracts and any associated rights and responsibilities. Herusu does not, however, take over the employment contracts of employees involved, and the Company's employees employed mainly in the business subject to the Separation at the time of the Separation will be seconded to the successor company or, with the approval of the employee concerned, may be transferred to the successor company.

(6) Forecast on Debt Servicing

No problems are foreseen on servicing of debt of the Company and the successor company after the Separation.

(7) Board of Directors and Auditors of the successor company as of May 11, 2004

Directors and auditors of the successor company are as follows:

Representative Director Kenji Hanawa
Director Yosuke Murashima
Director Ryosaku Tagaya
Auditor Takahisa Tateishi
Auditor Toshimori Minami

3. Outline of Companies Involved
(1) Trade name Eisai Co., Ltd.
(company making the Separation)
Herusu Co., Ltd.
(successor company)
(2) Business Manufacture and sales of pharmaceuticals, quasi-drugs, and pharmaceutical equipment Sales of pharmaceutical equipment and quasi-drugs
(3) Date of establishment December 6, 1941 March 23, 1964
(4) Head Quarter Location 6-10, Koishikawa 4-chome, Bunkyo-ku, Tokyo 1-13, Nishi-Ikebukuro 3-chome, Toshima-ku, Tokyo
(5) Representative Haruo Naito, President & CEO Kenji Hanawa, Representative Director & President
(6) Capital 44.985 billion yen 64 million yen
(7) Number of issued shares 296,566,949 shares 128,000 shares
(8) Shareholders' capital 405.085 billion yen 699 million yen
(9) Gross assets 515.63 billion yen 3.938 billion yen
(10) Settlement term March 31 March 31
(11) No. of employees 3,858 as of March 2004 56 as of March 2004
(12) Main trading partners Suppliers :
Beta Chem Co., Ltd., Aventis Pharma Ltd., and Novo Nordisk Pharma Ltd.
Customers :
Kuraya Sanseido Inc., Suzuken Co., Ltd., and Fukujin Co., Ltd.
Suppliers :
Eisai Co., Ltd., Bosch Packaging Technology K.K. and Shionogi Qualicaps Co., Ltd.
Customers :
Eisai Co., Ltd., Chugai Pharmaceutical Co., Ltd. and Ono Pharmaceutical Co., Ltd.
(13) Ratio of shares held by major shareholders as of March 2004. The Master Trust Bank of Japan, Ltd. (5.51%), The Chase Manhattan NA London Omnibus Accoiunt(4.74%) , Japan Trustee Services Bank, Ltd. (4.56%), Nippon Life Insurance Company (4.56%) , Saitama Resona Bank, Ltd. (4.18%), Eisai Co., Ltd. (100%percent)
(14) Main trading banks
Saitama Resona Bank, Mizuho Corporate Bank and, Bank of Tokyo-Mitsubishi
Saitama Resona Bank, Mizuho Corporate Bank and Bank of Tokyo-Mitsubishi Bank
(15) Relationship of companies Capital : The successor company is a wholly owned subsidiary of the company making the Separation.
Personnel : Executives dispatched from company making the Separation and employees seconded.
Trading : Company making the Separation sells pharmaceutical equipment to successor company and buys quasi-drugs from them.

(16) The Company's Results Over Last 3 Settlement Terms(Non consolidated)

Eisai Co., Ltd. (company making the Separation)
Settlement term March 2002 March 2003 March 2004
Net Sales 275,032 million yen 289,603 million yen 303,626 million yen
Operating income 63,904 million yen 65,273 million yen 67,057 million yen
Ordinary income 66,026 million yen 64,805 million yen 66,559 million yen
Net income 30,821 million yen 34,174 million yen 41,883 million yen
Net income per share 104.25 yen 117.57 yen 143.73 yen
Annual dividend 29.00 yen 32.00 yen 36.00 yen
Shareholders' capital per share 1,217.58 yen 1,293.44 yen 1,407.52 yen

(17) Results Over Last 3 Settlement Terms of Successor Company

Herusu Co., Ltd. (successor company)
Settlement term March 2002 March 2003 March 2004
Net Sales 6,310 million yen 6,112 million yen 6,623 million yen
Operating income 163 million yen 91 million yen 60 million yen
Ordinary income 164 million yen 94 million yen 58 million yen
Net income 57 million yen 100 million yen 33 million yen
Net income per share 451.74 yen 787.57 yen 258.42 yen
Annual dividend per share 50.00 yen 50.00 yen - yen
Shareholders' capital per share 4,504.33 yen 5,233.79 yen 5,467.24 yen


4. Details of the Business Department (Subject of the Separation)
(1) Outline of Machinery Division
Manufacture, sales and export of pharmaceutical equipment and devices
(2) Sales for Machinery Division during the term to March 2004

Machinery Division (a) Company making the Separation (b) Ratio (a/b)
Net sales
2,492 million yen
303,626 million yen
0.8%
(3) Assets and Liabilities Components of Machinery Division and Respective Amounts (March 31, 2004)
Assets Liabilities
Item Book Value Item Book Value
Current assets 2,763 million yen Current liabilities 90 million yen
Fixed assets 112 million yenFixed liabilities -
Total 2,876 million yen Total 90 million yen
5. Condition of the Company Post Separation
There will be no change to the corporate name, nature of business, head quarters location, capital or settlement terms of the Company after the Separation. The Separation will have a negligible effect on the Company's consolidated performance. The Company is predicted to incur a 90 million yen reduction in gross assets as a result of the Separation.


Reference Material
1. Scheduled date of business transfer: September 30, 2004.
2. Outline of Koyo Sangyo Co., Ltd.

Sales : Approximately 9.1 billion yen (for the term ended February 2003)
Major business operations : Sales of wood rack panels, adhesives, sound proofing materials and synthetic resins.
Main customers : Toshiba Corp. (5%), Chori Co., Ltd. (5%; Dow Kakoh K.K. products), Mitsubishi Electric Corp., Canon Inc., Kanematsu Corp., Hitachi Ltd., Mistsui Chemicals, Inc., Dai Nippon Printing Co., Ltd., Toppan Printing Co., Ltd., Okamura Corporation, Sanyo Electric Co., Ltd. and Platinum Pen Co., Ltd.
For further information

Corporate Communications Department
Eisai Co., Ltd
Tel : 03-3817-5120