Morinaga & Co. said Tuesday it purchased 5 million of its own shares on the Tokyo Stock Exchange, mostly from Fujiya Co., because it has decided to end a 20-year-old cross-shareholding arrangement with struggling Fujiya.
The purchase was made during off-hours trading on the TSE earlier in the day for 1.35 billion yen. The two companies had long-standing relations, holding 5 million of each other's shares.
Against the backdrop of the partnership, Morinaga had been seen as a possible strategic partner to support Fujiya's rebuilding efforts following revelations in January that the time-honored confectioner had used expired ingredients in its products.
But Morinaga opted to end the relationship after Fujiya concluded capital and operational tieups with bread and cake maker Yamazaki Baking Co. Morinaga is also set to sell its Fujiya shares.