Ajinomoto Co. (TSE:2802) said Thursday that it has reached an agreement to form a partnership with Yamaki Co. and that it will take a 33.4 per cent stake in the Ehime Prefecture-based firm as part of the deal.

Both companies offer Japanese-style seasonings made from bonito, with Ajinomoto known for its powdered goods and Yamaki's strength in liquid products.

Ajinomoto is to acquire the Yamaki shares by March 31 by purchasing existing stock as well as newly issued shares through a private placement.

Yamaki is unlisted, so Ajinomoto did not disclose the price.

Ajinomoto is to install two or three officials to Yamaki. It will become the second-largest shareholder, after Yamaki's founding family, and Yamaki is to be turned into an equity-method affiliate.

Ajinomoto is focusing on bonito as an ingredient for health food and hopes to develop new products through joint research with Yamaki. The alliance is to include sharing of production know-how and intellectual property, and the firms also hope to cut costs through joint purchasing of raw materials and other steps.

"In terms of management, we will respect the autonomy of Yamaki," Ajinomoto President Norio Yamaguchi told reporters, indicating that the company will not buy additional shares.

Yamaki is Japan's largest supplier of dried-bonito shavings, and it is the No. 2 producer of soup bases for noodles. It posted 39.6 billion yen (US$326.4 million) in sales and 600 million yen in pretax profit for the year ended March 2006.

February 2, 2007