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Benesse Corporation today announced plans to move into the classroom-based education market by purchasing all issued shares in Ochanomizu Seminar Co., Ltd. This step comes as part of Benesse's strategy to develop new education businesses in the Tokyo metropolitan area. Focused on the Tokyo area, Ochanomizu Seminar boasts expertise in the operation of prep schools that have achieved high pass rates for students seeking to enter elite private universities. Combining this expertise with its own library of education content, Benesse aims to grow its business in the Tokyo market where changes in the operating environment and diversifying customer needs are dramatic.

Effective October 31, 2006, Ochanomizu Seminar became a wholly owned Benesse subsidiary.

1.Reasons for Acquisition of Shares
Benesse's education business is currently focused on correspondence course products such as Kodomo Challenge for preschoolers and Shinkenzemi courses for elementary through to senior high school students. Benesse also provides mock university entrance exams for senior high school students called Shinken Simulated Exams, extracurricular learning, and support for schools and teachers.

Japan's education environment is currently experiencing major change, characterized by changes to the schooling and entrance exam systems. This is leading to increasingly diverse customer needs. Against this backdrop, Benesse has sought to enhance its mainstay correspondence course business with the addition of high-end products such as special courses for high school students seeking to enter the universities of Tokyo or Kyoto. With the creation of the Metropolitan Area Marketing Development Office in the Senior High School Education Company on October 1, 2006, Benesse has also strengthened internal company systems.

Aiming to build an even more powerful brand in the education field, Benesse plans to roll out a wider choice of new products and services such as classroom-based teaching to supplement its existing correspondence course business.

Ochanomizu Seminar is a recognized pioneer in the industry with 30 years of experience as a prep school operator specifically targeting senior high school students. Focused on the Tokyo metropolitan area, the company has a team of highly skilled educators and an excellent track record in helping students pass entrance exams for elite private universities and other academic institutions. This has helped Ochanomizu Seminar win strong support from both students and parents, enabling it to build a powerful brand in the prep school sector.

By making Ochanomizu Seminar a subsidiary, Benesse aims to generate synergies by marrying its own educational content and expertise in the development of learning materials, with Ochanomizu Seminar's team of highly skilled educators and educational content.

Shinya Fukumoto, Benesse Corporate Senior Vice President and President of the Senior High School Education Company, has been appointed as the company's new president.

2.Impact on Fiscal 2006 Results
As this move will have only a marginal impact on consolidated operating results, forecasts for fiscal 2006 remain unchanged.

Overview of Benesse Corporation
Established: January 1955
Head office: 3-7-17 Minamigata, Okayama-shi, Okayama
Representative: Masayoshi Morimoto, President and CEO
Sales: 333.7 billion yen (fiscal year ended March 2006)
Business:
Shinkenzemi correspondence courses, Kodomo Challenge correspondence courses for preschoolers, Shinken Simulated Exams and other education businesses; language education businesses such as Group company Berlitz International; nursing home, magazine publishing and other businesses.

Overview of Ochanomizu Seminar
Company name: Ochanomizu Seminar Co., Ltd.
Head office: 21-11 Misaki-cho 2-chome, Chiyoda-ku, Tokyo
Representative: Shinya Fukumoto, President
Established: April 1976
Business: Operation of prep schools for senior high school students
Fiscal year-end: February
Employees: 36 (As of September 30, 2006)
Capital: 10 million yen
Total issued shares: 200
Sales: 874 million yen(fiscal year ended February 28, 2006)