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AMOREPACIFIC Announces Consolidation with Pacific Industries

Global 2002-10-15

1. Purposes of Consolidation The consolidation is aimed at generating synergy from the merger of AMOREPACIFIC Corp. whose core business involves the production and sales of cosmetics, and Pacific Industries Co., Ltd. whose main business is to provide materials to AMOREPACIFIC for cosmetic production. The following describes the detailed objectives of the consolidation: 1) The growing presence of the world’s premier cosmetic companies in Korea has raised the need for the company to advance its product designs and cosmetic ingredients. By combining the core capabilities of the two companies, the company seeks to put into place an end-to-end process, from the development of new products to the production of finished goods. This will help the company reduce costs and the time spent on communicating with its suppliers, as well as increasing production adaptability to market needs, in order to stay competitive with foreign companies. 2) The consolidation is aimed at reducing management costs, increasing asset-utilization efficiency, and furthering long-term management strategies to increase corporate value and shareholders’ wealth. 3) By reaping the above advantages, the company seeks to become a global leader in the cosmetic industry. 4) The consolidation is also aimed at increasing the liquidity of company shares and ensuring stable management of share prices. Accordingly, there will be stock splits at a ratio of 1:10 involving a proportional decrease in the par value per share, upon consolidation. This has been agreed upon and signed into a contract on September 10, 2002. 2. Consolidation Schedule 1) Board of directors’ meeting to approve the consolidation: September 10, 2002 2) Annual shareholders’ meeting to approve the consolidation: October 25, 2002 3) Implementation of consolidation: To be effective as of November 30, 2002 3. Consolidation Ratio Common Shares AMOREPACIFIC Corp.: Pacific Industries Co., Ltd. = 1 : 0.0733 Preferred Shares AMOREPACIFIC Corp.: Pacific Industries Co., Ltd. = 1 : 0.1221