[Translation]
May 14, 2021
To whom it may concern:
Company Name:
Name of Representative:

Contact:

Phone:

Company Name:
Name of Representative:

Contact:

Phone:

Mitsui Chemicals, Inc.
Osamu Hashimoto
President & CEO(Securities code: 4183)
Junichi Inoue
General Manager of Corporate
Communications Division+81-3-6253-2100

Mitsui & Co., Ltd.
Kenichi Hori
President and Chief Executive Officer(Securities code: 8031)
Masaya Inamuro
General Manager of Investor Relations
Division+81-3-3285-7657

Notice Regarding Commencement of Tender Offer for Shares of Honshu Chemical
Industry Co., Ltd. (Securities Code: 4115)
Mitsui Chemicals, Inc. ("Mitsui Chemicals") and Mitsui & Co., Ltd. ("Mitsui & Co.," and together with
Mitsui Chemicals, the "Offerors") have decided, as published in the "Notice Regarding Scheduled
Commencement of Tender Offer for Shares of Honshu Chemical Industry Co., Ltd. (Securities Code:4115)" dated November 11, 2020 (the "Offerors' November 11, 2020 Press Release"), that they will jointly
acquire shares of the common stock (the "Target's Shares") of Honshu Chemical Industry Co., Ltd. (the"Target") through a tender offer (meaning the tender offer pursuant to the Financial Instruments andExchange Act (Act No. 25 of 1948, as amended; the "Act") and related laws and regulations; the "Tender
Offer"), upon the satisfaction (or waiver by the Offerors) of certain conditions, including the completion of
the procedures and actions required by antitrust laws of Japan, the EU, China, Taiwan and Turkey becausesuch procedures and actions are expected to take a certain period of time (For details, see "(II) Joint Tender
Offer Agreement" under "(6) Matters concerning material agreements regarding the Tender Offer" under"1. Purposes of the Purchase" below. Such preconditions are hereinafter referred to as the "Conditions").

The Offerors, having confirmed that all of the Conditions have been satisfied, announce that the Tender1Offer will commence from May 17, 2021 as follows.

1. Purposes of the Purchase(1) Outline of the Tender Offer

As of the date of this Press Release, each of the Offerors (Note 1) holds 3,098,000 shares(Shareholding Ratio (Note 2): 26.99%) of the Target's Shares, which are listed on the Second Sectionof Tokyo Stock Exchange, Inc. (the "TSE"), making the Target an equity method affiliate of each
Offeror.
(Note 1) As of March 31, 2020, Mitsui Chemicals did not hold any shares in Mitsui & Co., but
was entitled to instruct the exercise of the voting rights pertaining to 3,592,000 sharesof the common stock of Mitsui & Co. held in the name of Mitsui Chemicals, Inc.
Retirement Benefit Trust Account (shareholding ratio (rounded to the second decimal
place) to the total number of issued shares (excluding the treasury shares owned by
Mitsui & Co.): 0.21%). As of March 31, 2020, Mitsui & Co. held 3,474,078 shares of
the common stock of Mitsui Chemicals (shareholding ratio (rounded to the second
decimal place) to the total number of issued shares (excluding the treasury shares owned
by Mitsui Chemicals): 1.82%), and was entitled to instruct the exercise of the voting
rights pertaining to 3,474,000 shares of the common stock of Mitsui Chemicals held in
the name of Mitsui & Co., Ltd. Retirement Benefit Trust Account (shareholding ratio(rounded to the second decimal place) to the total number of issued shares (excluding
the treasury shares owned by Mitsui Chemicals): 1.82%).
(Note 2) "Shareholding Ratio" refers to the ratio (rounded to the second decimal place) to thenumber of Target's Shares (11,476,788 shares) obtained by deducting the number oftreasury shares owned by the Target as of March 31, 2021 (23,212 shares) from the total
number of issued shares as of March 31, 2021 (11,500,000 shares), both as stated in the"Consolidated Financial Results for the Fiscal Year Ended March 31, 2021 (JapaneseGAAP)" published by the Target on May 14, 2021 (the "Target's Annual Earnings
Briefing").

As announced in the Offerors' November 11, 2020 Press Release, the Offerors entered into a joint
tender offer agreement (the "Joint Tender Offer Agreement") on the same date of the press release,and each of the Offerors resolved to jointly implement the Tender Offer for all of the Target's Shares(excluding the Target's Shares owned by the Offerors and the treasury shares owned by the Target;
hereinafter the same) as part of the series of transactions (the "Transaction") to make the Offerors

2the sole shareholders of the Target, with Mitsui Chemicals' and Mitsui & Co.'s voting rightpercentages in the Target after the privatization being 51% and 49%, respectively, subject to thesatisfaction (or waiver by the Offerors) of the Conditions as follows:(i)

The special committee established by the Target issued a written report in favor of the Target(x) supporting the Tender Offer and (y) recommending the shareholders of the Target to tenderin the Tender Offer and (z) implementing the Share Consolidation (as defined in (III)
Establishment of independent special committee at the Target and procurement of written
report from the said committee" under "(3) Measures to ensure the fairness of the Tender Offer,such as measures to ensure the fairness of the Tender Offer Price and measures to avoid conflictof interests" below; hereinafter the same), and this report has not been withdrawn;(ii) The Target's board of directors, excluding directors who have or may have interests with theOfferors, reached an unanimous resolution to support the Tender Offer and to recommend theTarget's shareholders to tender in the Tender Offer, and this resolution was publicly announced
and no resolution has been made to withdraw this opinion or that conflicts with this opinion;(iii) It has been confirmed that there have been no material facts concerning the Target's business(those facts stipulated in Article 166, Paragraph 2 of the Act) that have not been publicly
disclosed (as defined in Article 166, Paragraph 4 of the Act) by the Target;(iv) The Offerors have agreed between themselves on the contents of the disclosure documents tobe filed or announced jointly by the Offerors by the date of public notice concerning
commencement of the Tender Offer;(v) Necessary procedures were performed, necessary arrangements were made, and waiting
periods (if any) have lapsed (including to receive notice that no cease and desist order will be
issued) pursuant to the antitrust laws of Japan, the EU, China, Taiwan, and Turkey with respect
to the Transaction, and it is reasonably projected that no measures or procedures will beassumed that would prevent the implementation of the Transaction by the antitrust authorities
and other judicial or administrative agencies concerning antitrust laws of those countries orregions;(vi) There are no filings, litigation or procedures pending at judicial or administrative agencies that
seek to restrict or prohibit any of the Transaction, and there is no judgment or a concrete
possibility for a judgment to be made, by any judicial or administrative agency that restricts or
prohibits any of the Transaction;(vii) Each company in the Target Group (as defined in "(I) Background and purposes of the Tender
Offer and decision-making process leading to the consummation of the Tender Offer" under"(2) Background and purposes of the Tender Offer and decision-making process leading to theconsummation of the Tender Offer and management policy after the Tender Offer" below) has
received written confirmations from the counterparties to the agreements executed by each3company in the Target Group that are materially important for business stating that thosecounterparties will not exercise their rights upon execution and performance of the Joint Tender
Offer Agreement, and these confirmations have not been rescinded;(viii) The Shareholders Agreement (as defined in "(II) Management policy after the Tender Offer"
under "(2) Background and purposes of the Tender Offer and decision-making process leading
to the consummation of the Tender Offer and management policy after the Tender Offer"
below) is executed between the Offerors and has been effective;(ix) The representations and warranties made by the Offerors (for the specific details thereof, see"(II) Joint Tender Offer Agreement" under "(6) Matters concerning material agreements
regarding the Tender Offer" below) under the Joint Tender Offer Agreement are true andaccurate in all material respects;(x) All obligations that must be performed, or complied with, by the Offerors by 15:00 on thebusiness day immediately preceding the date of public notice of commencement of the Tender
Offer pursuant to the Joint Tender Offer Agreement have been performed and complied within all material respects; and(xi) There has been no material change in the business or property of the Target or any of its
subsidiaries, and there has been no other circumstance that would materially impede theachievement of the purpose of the tender offer as provided in the proviso to Article 27-11,
Paragraph 1 of the Act.

On May 5, 2021 (local time), the European Commission issued a document stating its decision toapprove the acquisition of the Target's Shares through the Tender Offer (the "Acquisition"), and theOfferors received this document on May 5, 2021. The Offerors, having confirmed that all of theConditions had been satisfied by confirming that the Acquisition was approved on the same date,decided on May 14, 2021 to commence the Tender Offer from May 17, 2021.

The Offerors have set the minimum number of tendered shares to be purchased in the Tender Offer
at 1,455,200 shares (Shareholding Ratio: 12.68%), and if the total number of shares, etc. tenderedin the Tender Offer (the "Tendered Shares") is less than the minimum number of tendered shares tobe purchased in the Tender Offer, the Offerors will purchase none of the Tendered Shares.
Meanwhile, with the intention of privatizing the Target's Shares, the Offerors have not set the
maximum number of tendered shares to be purchased in the Tender Offer. If the total number of theTendered Shares is no less than the minimum number of tendered shares to be purchased in theTender Offer, the Offerors will purchase all of the Tendered Shares. The minimum number oftendered shares to be purchased in the Tender Offer (1,455,200 shares) has been set so that the sumof the voting rights in the Target held by the Offerors upon the successful completion of the Tender4

Offer should be no less than two thirds (2/3) (fractional number, if any, shall be rounded up) of thetotal number of voting rights in the Target (114,767), which is the number of voting rights pertaining
to the number of shares (11,476,788 shares) obtained by deducting the number of treasury shares
owned by the Target as of March 31, 2021 (23,212 shares) from the total number of issued shares of
the Target as of March 31, 2021 (11,500,000 shares), both as stated in the Target's Annual Earnings
Briefing).

While the purpose of the Tender Offer is for the Offerors to be the sole shareholders of the Target,
such minimum number of tendered shares to be purchased in the Tender Offer was set so that theOfferors will hold no less than two thirds (2/3) of the number of voting rights of all shareholders of
the Target after the Tender Offer in order to ensure the adoption of a special resolution of theshareholders meeting of each company as provided in Article 309, Paragraph 2 of the Companies
Act (Act No. 86 of 2005 as amended; hereinafter the same), which is a requirement for the
implementation of the Share Consolidation under "(4) Policies on the organizational restructuring,etc. after the Tender Offer (matters concerning "two-step acquisition")" below.

With respect to the method to purchase the Tendered Shares by Mitsui Chemicals and Mitsui & Co.,(i) if the total number of Tendered Shares is 2,487,859 or more shares, Mitsui Chemicals willpurchase the Tendered Shares up to 2,640,394 shares, and Mitsui & Co. will purchase the remainderof the Tendered Shares up to the total number of the Tendered Shares, and (ii) if the total number ofTendered Shares is less than 2,487,859 shares, each of the Offerors will purchase one half of thetotal number of the Tendered Shares (fractional number, if any, shall be rounded up with respect tothe shares to be purchased by Mitsui Chemicals, and shall be rounded down with respect to theshares to be purchased by Mitsui & Co.).

As already mentioned, the Offerors intend to eventually set Mitsui Chemicals' and Mitsui & Co.'s
respective voting right percentages in the Target at 51% and 49% through the Transaction and jointly
seek to enhance the Target's corporate value. Mitsui Chemicals is considering aggressively investing
business resources in the Target for research and development and production technologies bymaking it a consolidated subsidiary of Mitsui Chemicals. Mitsui & Co. believes that the privatizationof the Target's Shares will enable it to invest business resources in the Target more aggressively,
although the Target will remain an equity method affiliate of Mitsui & Co.

If the Offerors fail to acquire all of the Target's Shares in the Tender Offer despite the successful
completion of the Tender Offer, the Offerors will implement the series of procedures to makethemselves the sole shareholders of the Target, as stated in "(4) Policies on the organizational5

restructuring, etc. after the Tender Offer (matters concerning "two-step acquisition")" below.

According to the "Statement of Opinion on the Tender Offer for Shares of Honshu Chemical Industry
Co., Ltd. by Mitsui Chemicals, Inc. and Mitsui & Co., Ltd. and Recommendation for Tender"
published on November 11, 2020 by the Target (the "Target's November 11, 2020 Press Release"),the Target resolved at its board of directors meeting held on November 11, 2020 to express its
opinion as of that date in favor of the Tender Offer, if commenced, and to recommend that its
shareholders tender their shares in the Tender Offer.

Furthermore, according to the "Notice Regarding Statement of Opinion in Favor of the Tender Offer
for the Company's Shares by Mitsui Chemicals, Inc. and Mitsui & Co., Ltd. and Recommendation
to Tender" published by the Target on May 14, 2021 (the "Target's May 14 Press Release, andtogether with the Target's November 11, 2020 Press Release, the "Target's Press Releases"), at theTarget's board of directors meeting held on May 14, 2021, all nine (9) directors of the Target held adiscussion, and in view of the Target's business conditions and the environment surrounding theTransaction, again carefully considered the various terms of the Tender Offer, decided that even asof May 14, 2021 there were no factors to change its opinion concerning the Tender Offer as ofNovember 11, 2020, and those nine (9) directors of the Target resolved with a unanimous vote that
the Target will again express its opinion in favor of the Tender Offer and recommend to its
shareholders to tender their shares in the Tender Offer. For details of the process of decision-making
by the board of directors of the Target at the meetings on November 11, 2020 and May 14, 2021, see
the Target's Press Releases and "(V) Unanimous approval of all disinterested directors of the Target
and the opinion of all auditors that they have no objection" under "(3) Measures to ensure the fairnessof the Tender Offer, such as measures to ensure the fairness of the Tender Offer Price and measures
to avoid conflicts of interest" below.

(2) Background and purposes of the Tender Offer and decision-making process leading to theconsummation of the Tender Offer and management policy after the Tender Offer(I)

Background and purposes of the Tender Offer and decision-making process leading to theconsummation of the Tender Offer

Mitsui Chemicals is a new company established by the equal merger of Mitsui
Petrochemical Industries, Ltd. ("MPI") and Mitsui Toatsu Chemicals, Inc. as of October 1,
1997, and it originates from the commencement of operation of the ammonium sulfate plant
located at Omuta-city, Fukuoka Prefecture in April 1933 by Toyo Koatsu Industries Inc., i.e.

6the predecessor company of Mitsui Toatsu Chemicals, Inc. Mitsui Chemicals was listed on
the Second Section of the TSE and the Second Section of the Osaka Securities ExchangeCo., Ltd. ("OSE") in October 1962, and was listed on the First Section of the TSE and theFirst Section of the OSE in February 1965. In December 2003, Mitsui Chemicals wasdelisted from the First Section of the OSE. Mitsui Chemicals and its 127 consolidated
subsidiaries and 27 equity method companies (as of March 31, 2021) ("Mitsui Chemicals
Group") are mainly engaged in the: (i) "Mobility" business mainly engaged in manufactureand sales of automobile-related materials; (ii) "Healthcare" business engaged in
manufacture and sales of vision care materials, dental materials and nonwovens; (iii) "Food& Packaging" business engaged in manufacture and sales of agrochemicals and packaging
materials; and (iv) "Basic Materials" business engaged in manufacture and sales of
petrochemicals and basic chemicals. The Mitsui Chemicals Group has its ratio of overseas
sales reaching approximately 54% and the ratio of overseas employees reachingapproximately 43%. The Mitsui Chemicals Group's corporate mission is to: "Contributebroadly to society by providing high-quality products and services to customers throughinnovation and the creation of materials, while keeping in harmony with the global
environment." Its corporate target is: "Constantly pursuing innovation and growth tobecome a chemical group with an undisputed global presence." On November 16, 2016, theMitsui Chemicals Group issued its 2025 Long-term Business Plan that envisioned targets
for 2025 ("2025 Long-term Business Plan"). According to the 2025 Long-term Business
Plan, the mission of the Mitsui Chemicals Group is to contribute to solving social challenges
in order to realize a "cohesive society in harmony with the environment," "health andhappiness in an aging society," and "industrial platforms in harmony with local
communities." The Mitsui Chemicals Group is making efforts to create a better futuresociety in five (5) business categories, namely, "Mobility," "Healthcare," "Food &Packaging," "Basic Materials," and "Next Generation Business," which creates new
solutions and system businesses focused on energy solutions, agri-solutions, medical
solutions and IoT (Note 1) solutions. In addition, as announced during the CEO Presentationof Business Results and Outlook on June 2, 2020, pursuant to the strategic policy of 2020,
ICT (Note 2) was named as the business domain to be strengthened in the next period, andgrowth will be accelerated through aggressive investment.
(Note 1) "IoT" is an acronym for Internet of Things, meaning the interconnection via theInternet of computing devices embedded in everyday objects.
(Note 2) "ICT" is an acronym for Information and Communication Technology.

Mitsui & Co. was incorporated under the trade name of Daiichi Bussan Kaisha, Ltd. in July

7

1947. In February 1959, it changed its trade name to the current Mitsui & Co., Ltd. (Mitsui& Co. listed its shares on the TSE in May 1949, listed its shares on the Sapporo Securities
Exchange, the Nagoya Stock Exchange, Inc. and the OSE in November 1954, and listed its
shares on the Fukuoka Stock Exchange in February 1959. Due to the integration of the cash
markets of the TSE and the OSE in July 2013, Mitsui & Co. is no longer listed on the OSE).
Utilizing the global operating locations, network and information resources as a general
trading company, Mitsui & Co. and its 280 consolidated subsidiaries and 234 equity method
affiliates (as of March 31, 2021) ("Mitsui & Co. Group") multilaterally pursue business inthe fields of Iron & Steel Products, Mineral & Metal Resources, Energy, Machinery &Infrastructure, Chemicals, Lifestyle, and Innovation & Corporate Development. The Mitsui& Co. Group regards the Chemicals segment as one of the core business domains, and thisencompasses trade and investment in a range of industries, from upstream and midstream
chemicals such as basic chemicals and fertilizer and inorganic resources, to downstream
chemicals that meet diverse market needs, including functional materials, electronics
materials, specialty chemicals (Note 3), forestry and housing materials, fertilizers, feed
additives, and flavor and fragrance chemicals. The Chemicals segment is also pursuing new
initiatives in the tank terminal business (Note 4), carbon fiber, and human nutrition. The
future basic strategies of the Chemicals segment are to make investments for businessexpansion leading to growth of existing businesses, as well as to increase profits of existing
businesses through strengthening of business management capabilities, the establishmentof next-generation revenue pillars in Energy Solutions and Healthcare/Nutrition (Note 5),
the enhancement of trading functions given changes in market structures, and theengagement in new growth opportunities such as activities to achieve low-carbon society
as stated in the "Medium-term Management Plan 2023" published on May 1, 2020.
(Note 3) "Specialty chemicals" mean materials for green chemicals, materials fordetergents, surface activating agents and their materials and materials for
lubricants.
(Note 4) "Tank terminal business" is a business engaged in the storage, preservation andshipment services for petroleum products and petrochemicals, which is a major
infrastructure in the energy and chemical industries.
(Note 5) "Healthcare/Nutrition" is a business field expected to drive creation ofmultifaceted value using existing businesses as a platform in order to create
multifaceted value through integration of medicine and food including hospitals
and their ancillary business, medical data business, integrated facility
management, nutrition/presymptomatic diseases measures.

8According to the Target's Press Release, the Target was initially founded by Asajiro Yuraand his partners as Yuraseiko & Company in November 1914. Asajiro Yura and his partners
succeeded in industrializing the production of aniline (Note 6) and synthetic phenol (Note7) for the first time in Japan in 1914 in order to self-produce dye after its import from
Europe was halted, and full production commenced at Kozaika in Wakayama-city (theTarget's current Wakayama plant). However, an application of the Corporate Rehabilitation
Act for the Target was filed in 1953. Subsequently, in March 1956, the corporate
rehabilitation process of the Target was closed with the full support of one of thepredecessor companies of Mitsui & Co., Daiichi Trading Co., Ltd. ("Daiichi Trading") (andthe Target changed its corporate name to the current Honshu Chemical Industry Co., Ltd.
in October 1955 before the decision to close the corporate rehabilitation process was made).
In October 1960, the Target listed its shares on the Second Section of the OSE and in
December 1961, the Target listed its shares on the Second Section of the TSE. Due to theintegration of the cash markets of the TSE and the OSE in July 2013, the Target is no longer
listed on the OSE.
(Note 6) "Aniline" is a type of aromatic compounds used as synthetic coating material ofleather products. As of 1914, it was the main material for navy-blue Kasuri print.
The first synthetic dye discovered is said to be coal-tar dye (aniline dye)
discovered by Sir Perkins of the UK in 1856, and much research on synthetic dye
was conducted in Europe thereafter.
(Note 7) "Synthetic phenol" is a type of aromatic compounds used as a material for various
chemicals such as dye, surface-active agent, bactericide, agrichemical, medicine
and other intermediates. The Target, which was also successful in benzene
distillation in addition to synthesis of aniline as of 1914, succeeded in the
production of phenol from benzene using synthesis technology.

After the change of its corporate name, the Target began domestic production of bisphenol
A (Note 8; "BPA") for the first time in Japan in 1959, and also became the world's firstcompany to industrialize synthesis cresol in 1967, and thus succeeded in the production ofvarious basic chemicals as a pioneer in the chemicals industry. However, since these basic
chemicals are significantly affected by market changes, in 1980, the Target built a plant that
was able to switch and produce multiple products in order to stabilize its business, and thisallowed the Target to advance and enter the fine chemicals market, which are highperformance or high value-added chemicals of various types produced in small volumes.
(Note 8) "Bisphenol A (BPA)" is a chemical mainly used as a material for plastic(polycarbonate resin and epoxy resin).

9

Furthermore, the Target transferred its business related to the previous major product BPA
to MPI in 1988, and accelerated the change of its focus from basic chemicals to uniqueproducts for niche markets, and also drastically changed its course to become a finechemical specialist engaged in R&D. As a result, the Target is now equipped with a system
to seamlessly conduct small-volume test production to large-scale production in accordancewith the demands of customers by using plants operating switchable production of multiple
products, and has achieved stable business management. In addition, for the purpose ofstrengthening the production of specialty bisphenol (Note 9), the Target established a joint
venture company called Hi-Bis GmbH (consolidated subsidiary of the Target; "Hi-Bis")
together with the Mitsui & Co. Group and other investors in 2001. In order to respond tofurther increase in demands, the second plant has been operating in Hi-Bis since 2014.
(Note 9) "Specialty bisphenol" is a chemical used as a material for specialty polycarbonate
resin (for use in automobile components, optical and electronic components) andspecialty epoxy resin (for use in semiconductor sealant, laminated plates), in orderto enforce heat resistant features and optical properties.

The Mitsui Chemicals Group and the Target have built a relationship through capital
relationships and business transactions through the present. Their relationship began in
1959 when the Target commenced to supply phenol to MPI, the predecessor company of
Mitsui Chemicals. Thereafter, the Target continued to supply aniline, BPA and a number ofother products to the Mitsui Chemicals Group. In December 1968, MPI acquired 700,000
shares of the Target's Shares (shareholding ratio based on the total number of issued sharesat the time: 7.78%) from Toyo Rayon Co., Ltd. for the purpose of building an alliance on
phenol, etc. For the purpose of reinforcing the relationship, MPI became an underwriter ofa third party allotment by the Target in 1977. Subsequently, in 1980, MPI acquired theTarget's Shares from minority shareholders of the Target. In 1987, MPI acquired 817,000
shares of the Target's Shares from Mitsui & Co. and as a result owned a total of 3,098,000
shares of the Target's Shares (shareholding ratio based on the total number of issued sharesat the time: 30.98%). In 1988, MPI accepted the transfer of the Target's BPA business andalso transferred production technologies, etc. of MPI's fine chemical products to the Target.
After the capital increase of the Target in March 1997, the total number of issued shares of
the Target increased to 11,500,000 shares and led to a decrease in the investment ratio of
MPI in the Target. MPI, currently known as Mitsui Chemicals, continues to own 3,098,000
shares of the Target's Shares and its Shareholding Ratio is 26.99% (the history of investment
is provided herein based on internal records). The Target is the main purchaser of phenol

10and meta-, para-cresol for the Mitsui Chemicals Group, while the Mitsui Chemicals Groupis the main supplier of major materials, i.e. phenol and meta-, para-cresol, for the Target.
Thus, these two parties have built both capital and transactional relationships.

The Mitsui & Co. Group and the Target have also built a relationship through capital
relationships and business transactions through the present. As a general trading company
handling chemicals, the Mitsui & Co. Group has, since its days as one of its predecessor
companies, Daiichi-Trading, conducted transactions to supply raw materials to the Target
and to sell the Target products both in and outside Japan. In addition, when an applicationof the Corporate Reorganization Act was made for the Target in 1953, Daiichi Trading
acquired a stake in the Target in order to support the rebuilding of the Target (number ofacquired shares: 80,940 shares; shareholding ratio based on the total number of issued
shares at the time: 20.91%). Then, it became an underwriter of multiple third party
allotments by the Target and also repeatedly became a transferee and transferor of theTarget's Shares. In 1987, after the transfer of 817,000 shares of the Target's Shares to Mitsui
Chemicals, Mitsui & Co. owned 3,098,000 shares of the Target's Shares (shareholding ratio
based on the total number of issued shares at the time: 30.98%). After the capital increaseof the Target in March 1997, the total number of issued shares of the Target increased to
11,500,000 shares and led to a decrease in the investment ratio of Mitsui & Co. in the Target.
Currently, Mitsui & Co. continues to own 3,098,000 shares of the Target's Shares and its
Shareholding Ratio is 26.99% (the history of investment is provided herein based oninternal records). Based on this capital relationship, the Mitsui & Co. Group supports new
business developments of the Target in addition to acting as supplier of materials and sellerof products, and is also committed to the stabilization of business base and the development
and implementation of growth strategies of the Target. The Mitsui & Co. Group has also
been a co-investor of Hi-Bis, the Target's subsidiary, since its incorporation. Accordingly,
the Mitsui & Co. Group deems that the Mitsui & Co. Group, the Target and Hi-Bis aremutually important business partners. As of the date of this Press Release, the Target groupconsists of the Target and 2 subsidiaries (together with the Target, the "Target Group"), andhas four (4) core businesses (i.e. Cresol Derivatives, Biphenol, Electronic Chemicals andSpecialty Bisphenols).

The Target Group's management policy is to "act as Global Fine Chemical Specialist fordeveloping and utilizing its original technologies thus creating valuable products, andthereby realizing sustainable growth in collaboration with our clients. It is also our goal to
make ourselves a genuinely reliable company and to gain respect from our clients,

11employees, shareholders and the regional society." Currently, under this policy, the Target
has four (4) core businesses; namely, (i) Cresol Derivatives (Note 10); (ii) Biphenol (Note11); (iii) Electronic Chemicals (Note 12); and (iv) Specialty Bisphenols. Based on theseproducts, the Target is actively operating in Japan and overseas mainly in niche markets
within IT, automobile and medical industries.
(Note 10)"Cresol Derivatives" are chemicals used as materials for vitamin E (additive foranimal feeds), electronic chemicals and antioxidants.
(Note 11) "Biphenol" is a chemical used as a material for liquid crystal polymers (LCP)
used in components of electronic devices such as personal computers,
smartphones and digital home electronic appliances, and for polyphenyl sulfone(PPSU) used in medical areas and aircrafts.
(Note 12)"Electronic Chemicals" produced by the Target Group are used in the production
processes for semiconductors and flat panel displays (LC displays and organic EL
displays).

In addition, in order to become a Global Fine Chemical Specialist and build a competitive,
profitable and strong business base, the Target Group has set up a long-term vision for 2030
called "HCI 500." Moreover, the Target Group has developed a 4-year medium-term
management plan commencing from 2020 called "Medium-term Management Plan 20"(devised in January 2020) to link the results of the 4-year medium-term management plancommencing from 2016 called "Medium-term Management Plan 16" (devised in February2016) and to seek further growth. The Target Group aims to achieve 30 billion yen of sales
and 4.2 billion yen of operating income in 2023 by development and sales of IT-related
goods during the active development of materials related to 5G (Note 13), a next-generation
technology standard for broadband cellular network. Also, the Target Group will newly
adopt EBITDA (income calculated by adding income before taxes and interest expense anddepreciation costs) as its business target, and aims to increase EBITDA from 4.5 billion yen
in 2019 to 6.8 billion yen through aggressive investments, and also plans to increase theratio of sales of new products from 10% to 15% (since the relevant Medium-termManagement Plan 20 was prepared before effects of the COVID-19 pandemic became
evident, future business plans and expected results are subject to change). The specificmeasures to be taken to enhance corporate value are: (i) to acquire production abilities, todevelop new products and to strategically invest in new business domains; (ii) to becommitted to IT-related goods market, including 5G, in addition to existing businessdomains and development topics; (iii) to promote more efficient research and accelerated
development through utilization of materials informatics (Note 14) and establishment of12new bench facilities (Note 15); and (iv) to be fully committed in efforts regarding ESG(Note 16) and sustainability (Note 17).
(Note 13)"5G" is a 5th generation technology standard for broadband cellular network after
4G.
(Note 14)"Materials informatics" is a method of informatics using statistical analysis inorder to discover new materials from mass data.
(Note 15)"Bench facilities" refer to small-scale facilities that conduct prior test production
or necessary measurement of design data upon full production.
(Note 16)"ESG" stands for Environment, Social and Governance.
(Note 17)"Sustainability" refers to a concept to maintain a long-term good naturalenvironment and human society without depleting or damaging any functions andsystems based on three (3) perspectives, i.e. environmental, social and economic
aspects.

While customer needs and market needs for materials are expected to diversify andintensify given the full commencement of 5G services in the near future, the penetration of
CASE (Note 18), further advancement of digital transformation (Note 20) via AI (Note 19)
and IoT, the Offerors believe that, through their past capital and transactional relationships
with the Target, the Target has a high potential for growth with its various high-technologies
in domains of high-performance monomer (Note 21) related to ICT, Mobility and
Healthcare. However, and concurrently, in order to draw out the potential of the Target andachieve sustainable growth even in the midst of dramatic changes in the external
environment, such as the progress of CASE and 5G, increased competition withcompetitors in China, South Korea and Taiwan, or the build-up of business alliances among
competitors, the Offerors are aware that any challenges that the Target is facing or will facein each business domain must be addressed with sufficient and prompt countermeasures.
Specifically, the major challenges are: (i) regarding the Target's major businesses of Cresol
Derivatives, Biphenol, Electronic Chemicals and Specialty Bisphenols, while demand
therefor is expected to increase on a stable basis, the capital expenditures to increase timely
and competitive production power in accordance with market growth, and the acquisitionof additional personnel and know-how for such purpose; (ii) regarding the mobility
specialty bisphenols business of Hi-Bis, the implementation of countermeasures against
lower demand and slowdown in growth as a result of a weaker global automobile markets;and (iii) regarding the whole Target Group, the acceleration of strengthening of productdevelopment abilities and production technologies and the build-up of new profit platforms
in order to win over competitors.

13

(Note 18)"CASE" stands for Connected, Autonomous/Automated, Shared & Service, andElectric.
(Note 19)"AI" is an acronym for Artificial Intelligence, a technology that "aims to make ahigh level of inference accurately for a large amount of knowledge data
(Prospectus of The Japanese Society for Artificial Intelligence)."(Note 20)"Digital transformation" means any transformation of products, services andbusiness models by companies based on customer needs and social needs in orderto respond to rapid changes in business environment and by using data and digitaltechnology, and any transformation of business, organization, process, corporate
culture and features in order to gain competitive advantages over othercompetitors.
(Note 21)"Monomer" means a small molecule comprising polymers (e.g. ethylene).

The Offerors have been seeking to build alliances regarding individual businesses andproducts with the Target. However, there are certain restrictions in efficient and aggressive
investments of business resources in the Target, and mutual use of business resources andpersonnel exchange among the Offerors and the Target pursuant to the limited capital
relationship in which the Target remains as an equity method affiliate of each Offeror. In
addition, even if any support from the Offerors for the challenges stated in (i), (ii) and (iii)
above is beneficial for the Target, the Offerors are forced to be cautious when considering
whether such support should be provided if the question of whether such support isbeneficial for the Offerors themselves remains unclear. Also, if there are any conflicts ofinterest between the Offerors and the Target's minority shareholders, it is difficult for theTarget to completely match the interests of the Offerors and those of the Target's minority
shareholders. Therefore, the Offerors must carefully consider, on a case-by-case basis,
measures to avoid conflicts of interest whenever any measures to deal with the challenges
listed in (i), (ii) or (iii) are implemented or any transactions between the Target and theOfferors are conducted. As a result, prompt decision-making and implementation of
measures are difficult.

Under such circumstances, since both the Mitsui Chemicals Group that deems ICT as adomain of growth in terms of business strategy and the Mitsui & Co. Group that seeks toincrease the profitability of the high-performance monomer business as part of existing
business growth based on the basic strategy of the Chemicals segment regard the Target as
a strategic investment target given its deemed high potential for growth in the ICT businessdomain and the high-performance monomer business, the Offerors have intermittently

14engaged in discussions with the Target since late August 2019 in order to resolve theabovementioned challenge of the inability of the Offerors and the Target to build sufficientalliances. Because the requirements of fairness and transparency in the corporate
governance of listed subsidiaries are becoming more stringent based on the "Group
Governance System Guidelines" that were issued by the Ministry of Economy, Trade andIndustry on June 28, 2019, the management supervision of the Offerors and the Target
having a relationship similar to a parent and subsidiary of listed companies is also expected
to be more demanding. This means that upon the decision-making of the Target, certain
procedures to resolve any structural conflicts of interest between the Offerors and theTarget's minority shareholders will be more time-consuming than ever, and thus, mayhinder the progress of further alliance with the Target. Accordingly, each of the Offerors
was aware that the review and revision of the capital relationships between the Offerors
and the Target was one of the challenges. As such, Mitsui & Co. repeatedly discussed theTarget in its efforts to maximize the corporate value of associated companies within the
Mitsui & Co. Group, and the Offerors jointly commenced to specifically consider
privatizing the Target when the Mitsui & Co. Group proposed privatizing the Target to
Mitsui Chemicals, which had continued to keep the same investment ratio in the Target
since 1987 in early October 2019. Mitsui & Co. is a general trading company and has
limited capacity to solely offer support relating to the strengthening of research anddevelopment and production technology that are required for further growth of the Target.
Therefore, Mitsui & Co. does not intend to act alone to privatize the Target. In addition,
Mitsui Chemicals believes that distribution networks in and outside Japan held by Mitsui& Co. as a general trading company are essential for the operation of the Target. Therefore,
Mitsui Chemicals does not intend to act alone to privatize the Target. After suchconsideration, in late January 2020, the Offerors decided that in order to facilitate prompt
decision-making of the Target and to attain more efficient and aggressive investment andmutual utilization of business resources, the conflicts of interest with the Target's minority
shareholders must be resolved. In addition, if the Offerors become the sole shareholders of
the Target through the Transaction, and the trinity management system is adopted throughstrengthened capital relationships: (i) the Offerors will be able to maximize the use of the
Mitsui Chemicals Group's organic synthesis technology and development skills of polymer
materials, as well as the Mitsui & Co. Group's integrated capabilities and networks in andoutside Japan with global customers and partners, and will be able to support the Target
more aggressively by the improvement of technical skills through personnel andinformation exchanges, joint research and development, joint procurement of raw materials
and materials, optimization of logistics, and reinforcement of sales and marketing; and (ii)15the Target will be able to resolve its lack of personnel, technical skills and functions throughthe abovementioned support from the Offerors, and will also be able to actively conductvarious measures, including capital expenditures and M&As, that had been difficult for theTarget itself to conduct given the short-term low performance risk due to deteriorating
financial conditions and temporary cost increase, the stock price fluctuation risk as a result
thereof, and any possible conflicts of interest with the Target's minority shareholders.
Therefore, the Offerors decided that in the end, the abovementioned challenge of theinability of the Offerors and the Target to build sufficient alliances will be resolved and thecorporate value of the Target as well as the corporate value of the Mitsui Chemicals Groupand the Mitsui & Co. Group will also increase. After subsequent discussions, in early April
2020, the Offerors decided to make the Target a consolidated subsidiary of Mitsui
Chemicals with Mitsui Chemicals investing 51% in the Target and Mitsui & Co. investing
49% in the Target and privatize the Target, in order to enable Mitsui Chemicals toaggressively invest the business resources of research and development and production
technologies to the Target. Specifically, the Offerors believe that planning andimplementing medium and long-term measures including those stated in (i) through (iii)
below will further enhance the corporate value of the Target. Although implementation ofthese measures are crucial in terms of medium and long-term growth of the Target, it islikely that there would be a need to readily conduct any prior investments that do notdirectly or necessarily maximize the Target's short-term profits or any efforts that accrue
temporary cost increases, and there is also a risk of a decrease in the stock price due to atemporary drop in revenue. Therefore, the Offerors believe that providing a reasonable
opportunity to sell shares without imposing the risk on the Target's minority shareholders
meets the interests of all minority shareholders of the Target.

(i)Strengthening of existing businesses and products

Existing businesses and products will be strengthened from various angles. This includes
the use of customer networks, supply chains and technical bases of the Offerors to increase
distributors of the existing products and to execute long-term contracts with customers,
the reinforcement of production capacity for biphenol and optical specialty bisphenol, andthe development of purposes of use for specialty bisphenols business of Hi-Bis. In addition,although the ICT-related businesses developed by the Target and the Mitsui Chemicals
Group respectively were similar in nature, specific alliances have hardly been formed
between the two parties although the possibilities were considered because there was an
issue with conflicts of interest with the minority shareholders and there were certain

16

restrictions in efficient and aggressive investments and mutual utilization of businessresources under the limited capital relationship of an equity method affiliate. When theTarget becomes a consolidated subsidiary of Mitsui Chemicals through the Transaction,
this will enable aggressive and mutual utilization of business resources, and offerings tocustomers will be expanded by intensified material designs and combination of materials.
Accordingly, the Offerors believe that this will enable the group as a whole to make higher
value-added offerings to customers.

(ii) Creation of new businesses and products

Based on the unique technical capabilities of the Target to promptly and stably produce
high-quality new products in the high-performance monomer business domain related to
ICT, Mobility and Healthcare that have been cultivated since its foundation, and by
making the Offerors as the sole shareholders of the Target through the Transaction, more
efficient and aggressive investment and mutual utilization of business resources, whichwere difficult considering the issue of possible conflicts of interest with minority
shareholders under the current limited capital relationships, are possible. The investment
and mutual utilization specifically refer to the aggressive utilization of a wide range of
research and development and production technology base such as polymers and catalytic
technologies built by the Mitsui Chemicals Group as a general chemical manufacturer, as
well as the consolidation of marketing and solution proposal capacities using the global
network of the Mitsui & Co. Group as a general trading company. The Offerors also
believe that expansion of product lineups and entry into new business domains are
possible. Furthermore, advanced technologies including AI and materials informatics thatare being adopted by the Offerors will also be introduced. Specifically, the Offerors arecontemplating development of new monomers for which demand is increasing in ICTrelated markets, joint development using organic synthesis, polymers, simulation andmaterials informatics technologies and research and development supports.

(iii) Personnel development and development of basis for sustainable development

Personnel development will be conducted to win global competition through joint use of
personnel development platforms and programs held by the Offerors and exchange of
personnel and technology, and also to respond to social requirements on ESG and to seek
to strengthen the sustainable business base by the alliance of three (3) parties.

17

Pursuant to such recognition, the Offerors began to specifically consider the Transactions
from early October 2019 as mentioned above. In early March 2020, Mitsui Chemicals
appointed Mori Hamada & Matsumoto as its legal advisor, and in early April 2020,
appointed SMBC Nikko Securities Inc. ("SMBC Nikko Securities") as its financial
advisor and third-party valuator independent from the Offerors and the Target. In early
March 2020, Mitsui & Co. appointed Anderson Mori & Tomotsune as its legal advisor,
and in early April 2020 (In January 2021, Anderson Mori & Tomotsune changed its firmname in Japanese, but its English firm name remains the same.), appointed Nomura
Securities Co., Ltd. ("Nomura Securities") as its financial advisor and third-party valuator
independent from the Offerors and the Target. In late May 2020, the Offerors jointly
submitted an initial proposal regarding the Transaction to the Target. Subsequently, theOfferors conducted due diligence on the Target during the period from mid-July 2020 to
mid-September 2020. From early July 2020 onwards, the Offerors repeatedly and fully
discussed and negotiated with the Target regarding the management system and business
policy after the Transaction, the terms and conditions of the Transaction and other related
matters. Specifically, Mitsui Chemicals and the Target discussed the synergies on July 28,
2020, and the Offerors and the Target again discussed the synergies on August 24, 2020.
On September 4, 2020, the Offerors received a request for the Transaction from the Target
that included matters related to the governance system and business operation system after
the Transaction ("Request Dated September 4, 2020"). Subsequently, the Offerors and theTarget discussed the synergies on September 16 and September 18, 2020, and on
September 23, 2020, the Offerors and the Target discussed the Request Dated September
4, 2020 received from the Target. On September 30, 2020, the Offerors submitted theiranswer to the Request Dated September 4, 2020 to the Target. Also on that date, Mitsui &Co. submitted an answer regarding the synergies to the Target, and Mitsui Chemicals
submitted an answer regarding the synergies to the Target on October 6, 2020. In responseto an additional request from the Target as of October 9, 2020 ("Request Dated October 9,2020"), the Offerors submitted an answer thereto on October 12, 2020. In response to afurther request from the Target as of October 16, 2020 ("Request Dated October 16, 2020"),
the Offerors submitted an answer thereto to the Target on October 26, 2020. With regards
to the price of tender offer in the Tender Offer (the "Tender Offer Price"), the Offerors
proposed the Tender Offer Price as 1,550 yen per share to the Target on October 9, 2020.
After a request was made by the Target to reconsider the Tender Offer Price because it
failed to satisfy the level sought by the Target on October 12, 2020, the Offerors and theTarget discussed and negotiated the terms and conditions of the Transaction and on
October 19, 2020, the Tender Offer Price was re-proposed as 1,760 yen per share. After18the Target requested that the Offerors reconsider the Tender Offer Price on October 23,
2020 because the proposed Tender Offer Price did not fully reflect the corporate value of
the Target, the Offerors proposed the Tender Offer Price as 1,800 yen per share on October
26, 2020. On the same date, the Target again requested reconsideration of the Tender Offer
Price due to the same reason. In response, the Offerors proposed the Tender Offer Price
as 1,830 yen per share on November 5, 2020, and the Offerors and the Target havecontinued to discuss and negotiate the Tender Offer Price thereafter.

As a result of these discussions and negotiations, the Offerors and the Target agreed inearly November 2020 that in order to adapt to the recent severe business environment asa result of diversification and intensification of customer needs, and for the Target to attain
growth strategies with a sense of speed ahead of other competitors, the best ways toenhance the corporate value of the Target was to implement each of the abovementioned
measures after privatizing the Target and making the Offerors become the Target's sole
shareholders, through which the Offerors may jointly and more flexibly invest various
business resources, and to transfer to a system where medium and long-term
strategies/policies decisions and flexible management decisions are made. On November
6, 2020, the Target informed the Offerors that the Tender Offer Price of 1,830 yen per
share was acceptable. Accordingly, it was decided that the Offerors would enter into the
Joint Tender Offer Agreement as of November 11, 2020, and, because the procedures andactions required by antitrust laws in Japan, the EU, China, Taiwan and Turkey are expected
to take a certain period of time, that if the Conditions, including completion of those
procedures, are satisfied (or waived by the Offerors), the Offerors would jointly
implement the Tender Offer for all the Target's Shares as part of the Transaction.

On May 5, 2021 (local time), the European Commission issued a document stating its
decision to approve the Acquisition, and the Offerors received this document on May 5,
2021. The Offerors, having confirmed that all of the Conditions had been satisfied byconfirming that the Acquisition was approved on the same date, decided on May 14, 2021
to commence the Tender Offer from May 17, 2021.

(II)

Management policy after the Tender Offer

As of the date of this Press Release, the board of directors of the Target consists of nine (9)members, and its board of auditors consists of four (4) members. The Offerors plan to newly
nominate an individual to be appointed as director(s) of the Target for the purpose of19

building a better business structure for efficient implementation of each measure stated in"(I) Background and purposes of the Tender Offer and decision-making process leading to
the consummation of the Tender Offer" above. Specifically, the Offerors agreed pursuant tothe shareholders agreement (the "Shareholders Agreement") entered into as of November
11, 2020, that after the completion of the Transaction: (i) the number of directors of theTarget will be no more than seven (7), the Offerors are entitled to appoint three (3) directors
each and one director from the Target may be appointed by respecting the opinion of therepresentative directors of the Target; and (ii) the number of representative directors of theTarget will be two (2) and Mitsui Chemicals is entitled to appoint the President andRepresentative Director and Mitsui & Co. is entitled to appoint the Vice President andRepresentative Director. Each Offeror intends to consider and nominate the personnel who
is most capable at the time to maximize the corporate value regardless of his/her department
or position as the representative director of the Target. Moreover, the Offerors agreed under
the Shareholders Agreement that after the completion of the Transaction: (iii) the Target's
Audit & Supervisory Board shall be abolished and shall have three (3) auditors, the Target
is entitled to appoint one (1) full-time auditor and the Offerors are entitled to appoint one(1) part-time auditor each; and (iv) the Offerors shall establish a shareholder steeringcommittee for the operation of the Target, and its members will be the responsible personsof the Offerors and the persons appointed by the Offerors.

For an overview of the Shareholders Agreement, see "(I) Shareholders Agreement" under"(6) Matters concerning material agreements regarding the Tender Offer" below.

Furthermore, as announced by the Target in its "Notice Concerning Change of Officers"
dated May 14, 2021, Mr. Yoshinori Ashida, Target's auditor, is scheduled to resign fromoffice at the closing of the 92nd annual general meeting of shareholders to be held on June24, 2021 as his term of office matured.

In addition, the Offerors responded regarding the management policy of the Target after theTransaction during discussions with the Target concerning the Request Dated September 4,2020 and the Request Dated October 9, 2020. Specifically, the Offerors responded to theTarget that the main management policies after the Transaction are: (i) consideration of the
adoption of a new executive officer system and transfer of business execution powers to
executive officers in order to establish a framework to enable officers and employees of theTarget to be independently involved in the business execution even after the Transaction(the transitional period will be subsequently discussed and determined by the Offerors and20the Target); (ii) no adverse change to employee benefits directly resulting from theTransaction is expected to be made, and the Offerors believe that the Target's employees
may work with pride and loyalty even after the Transaction; (iii) Mitsui Chemicals and theTarget will assume roles in research and development in accordance with their specialty,
Mitsui Chemicals will offer necessary support to any research and development that is
independently promoted by the Target, and a cooperative structure will be built in areas
mutually deemed to be required; and (iv) the Offerors will actively promote company-wide
efforts to enhance the Target's corporate value in order to maximize the corporate value of
the Target

The Offerors intend to implement and promote in good faith the matters provided in
response to the Target concerning the relevant Requests.

(III) Decision-making process leading to and grounds for the opinion in favor of the Tender Offer
by the Target

According to the Target's Press Release, as stated in "(I) Background and purposes of theTender Offer and decision-making process leading to the consummation of the Tender
Offer" above, the Target received an initial proposal for the Transaction from the Offerors
in late May 2020.

After receiving the proposal, as stated in "(3) Measures to ensure the fairness of the Tender
Offer, such as measures to ensure the fairness of the Tender Offer Price and measures toavoid conflicts of interest" below, because (i) the Offerors respectively own 3,098,000
shares of the Target's Shares (Shareholding Ratio: 26.99%) as of the date of this Press
Release and this Transaction constitutes the acquisition of an equity method affiliate byother associated companies of the Target that are the Target's major shareholders and top
shareholders, (ii) the Offerors own a total of 6,196,000 shares (Shareholding Ratio: 53.99%)of the Target's Shares, and therefore are controlling shareholders of the Target, which could
give rise to an issue of structural conflicts of interest and information asymmetry withgeneral shareholders in the process of consideration of the Transaction by the Target, andbecause (iii) of the total of nine (9) directors of the Target, six (6) (Messrs. Yuji Fukuyama,
Yoshiji Ohori, Hidebumi Kasuga, Katsuya Okano, Nobuyoshi Ikeda and Takuya Inagaki)
were former employees of the Offerors within the most recent ten (10) years (calculated
from the time of receipt of the proposal), and of the total of four (4) auditors of the Target,one (1) (Mr. Yoshinori Ashida) was a former employee of Mitsui Chemicals within the most21

recent ten (10) years and one (1) (Mr. Masafumi Takenaka) currently is also an employee ofMitsui Chemicals, the Target established the following structures for discussions andnegotiations for the Transaction to ensure fairness of the whole process for considerations
and decisions made regarding the necessity of the Transaction and the appropriateness of its
terms and conditions.

On May 31, 2020, the Target appointed Nagashima Ohno & Tsunematsu as its legal advisor
independent from the Offerors and the Target.

While receiving advice from Nagashima Ohno & Tsunematsu, the Target resolved at its
board of directors' meeting on June 2, 2020 to establish a special committee solely
comprised of outside officers of the Target who are independent from the Offerors and theTarget (the "Special Committee") to exclude arbitrariness of the Target's decision-making
concerning the Transaction, including the Tender Offer, to ensure fairness, transparency andobjectiveness in the decision-making process and to avoid the uncertainty of conflicts ofinterest. For details on the composition and the activities of the Special Committee, see "(III)
Establishment of independent special committee at the Target and procurement of written
report from the said committee" under "(3) Measures to ensure the fairness of the Tender
Offer, such as measures to ensure the fairness of the Tender Offer Price and measures toavoid conflict of interests" below. One of the four (4) auditors of the Target, Mr. Masafumi
Takenaka, concurrently holds an executive position at Mitsui Chemicals. In order to exclude
any effects arising from the issue of structural conflicts of interests in the Transaction as
much as possible, Mr. Takenaka did not participate in the discussions of the Target's meetingof the board of directors regarding the Transaction, including the above Target's meeting of
the board of directors on June 2, 2020, and he also did not participate in any considerationsof the Transaction in a position as the Target, or any discussions and negotiations with theOfferors concerning the Transaction.

Furthermore, on June 9, 2020, the Target appointed Deloitte Tohmatsu Financial Advisory
LLC ("Deloitte Tohmatsu Financial Advisory") as its financial advisor and third-party
valuator independent from the Offerors and the Target, and requested that Deloitte Tohmatsu
Financial Advisory evaluate the Target's Shares as the third-party valuator.

Subsequently, the Target considered the appropriateness of the Transaction throughnumerous discussions and considerations with the Offerors based on the outline of theTender Offer including the purpose of the Transaction, the effects on the Target resulting

22

from the Transaction, the details of the management policy after the Transaction and thecurrent stock price trend, and also while receiving advice from Nagashima Ohno &Tsunematsu and Deloitte Tohmatsu Financial Advisory. During the following process of
discussions and considerations, the Target reported to the Special Committee from time totime and has been handling, pursuant to the handling policies confirmed in advance by theSpecial Committee and opinions, instructions and requests given by the Special Committee
upon important negotiation phases.

First, regarding the initial proposal from the Offerors received in late May 2020, while
receiving advice from Nagashima Ohno & Tsunematsu and Deloitte Tohmatsu Financial
Advisory, the Target and the Offerors discussed on June 18, 2020 in order to confirm andanalyze further details of the proposal. Thereafter, the Target submitted a questionnaire to
the Offerors on June 26, 2020. Based on the answers from the Offerors thereto, since thegrounds for the enhancement of the Target's corporate value were confirmed to a certain
extent, the Target accepted due diligence by the Offerors from July 10, 2020 and continued
further discussions and negotiations.

Next, regarding the rationality of the purpose of the Transaction, the Target repeatedly
discussed with the Offerors in order to specifically confirm and analyze the synergies in theTransaction. The Target and Mitsui Chemicals discussed the synergies on July 28, 2020, andthe Target and the Offerors again discussed the synergies on August 24, 2020. Subsequently,
the Offerors and the Target discussed the synergies on September 16 and September 18,
2020, and on September 23, 2020, the Offerors and the Target discussed a request for theTransaction submitted by the Target on September 4, 2020 ("Request Dated September 4,2020"). In the end, the Target received an answer dated September 30, 2020 regarding thesynergies from Mitsui & Co., and an answer dated October 6, 2020 regarding the synergies
from Mitsui Chemicals.

The Target also came to acknowledge that it is crucial to ensure the independence of the
management by the Target after the Transaction for the enhancement of the corporate valueof the Target because having a pioneering spirit has always been the Target's basic policy
while it engaged in the creation of a number of products (first in Japan) using unique
technology since its foundation in 1914. Accordingly, the Target decided that there is a needto re-confirm and analyze whether independent management by the Target can be ensured
even after the Transaction. During the 5th meeting of the Special Committee on August 27,
2020, the Offerors explained the rationality of the purpose of the Transaction, and the Target

23

confirmed and discussed with the Offerors regarding the issue as to whether the
independence of the management by the Target can be ensured after the Transaction inparallel with the confirmation and consideration of the synergies mentioned above.
Specifically, the Target and the Offerors discussed and re-confirmed the management policy,
etc. after the Transaction as envisioned by the Offerors on September 3, 2020. On September
4, 2020, the Target submitted the Request Dated September 4, 2020 to the Offerors, which
included matters related to the governance system and business operation system after theTransaction.

Subsequently, on October 9, 2020, the Target submitted to the Offerors the Request Dated
October 9, 2020 concerning the answer dated September 30, 2020 received from theOfferors in response to the Request Dated September 4, 2020. Afterwards, the Target
received an answer dated October 12, 2020 from the Offerors in response to the Request
Dated October 9, 2020. On October 16, 2020, the Target submitted the Request Dated
October 16, 2020 to the Offerors, and on October 26, 2020, the Target received an answer
thereto from the Offerors.

Based on the abovementioned discussions with the Offerors and the details of theabovementioned answers received from the Offerors, the Target decided that the synergies
explained below can be expected and that the independent management by the Target canbe ensured even after the Transaction as stated in "(II) Management policy after the Tender
Offer" above. Consequently, the Target was able to confirm the rationality of the purpose of
the Transaction, and commenced specific discussions and considerations on the terms andconditions of the Transaction, including the Tender Offer Price.

The Offerors and the Target commenced to discuss and consider the specific terms andconditions of the Transaction including the Tender Offer Price, from early October 2020,and conducted ongoing discussions and negotiations.

Regarding the Tender Offer Price, the Target received an initial proposal from the Offerorsof 1,550 yen per share as the Tender Offer Price on October 9, 2020. Based on the report on
tentative share valuation results of the Target's Shares from Deloitte Tohmatsu Financial
Advisory and the opinion of the Special Committee, and also while receiving advice from
Deloitte Tohmatsu Financial Advisory, the Target requested that the Offerors reconsider theTender Offer Price because the Tender Offer Price failed to meet the level sought by theTarget on October 12, 2020. The Target discussed and negotiated with the Offerors a number24

of times regarding the terms and conditions of the Transaction, and the Offerors re-proposed
the Tender Offer Price as 1,760 yen per share on October 19, 2020. After the Target
requested that the Offerors reconsider the Tender Offer Price on October 23, 2020 because
the proposed Tender Offer Price did not fully reflect the corporate value of the Target, theOfferors re-proposed the Tender Offer Price as 1,800 yen per share on October 26, 2020.
On the same date, the Target again requested reconsideration of the Tender Offer Price dueto the same reason. As a result, the Offerors proposed the Tender Offer Price as 1,830 yen
per share on November 5, 2020. After receiving the proposal, the Target confirmed its
validity with the Special Committee, and also requested further opinion from Deloitte
Tohmatsu Financial Advisory. The Target carefully considered by also taking into accountthe share valuation report procured from Deloitte Tohmatsu Financial Advisory as ofNovember 10, 2020 ("Share Valuation Report"). As a result, the Target decided that therelevant proposed Tender Offer Price was appropriate because a suitable premium wasadded to the market price, and was reasonable because it exceeded the median of the pricerange of the results based on the discounted cash flow method ("DCF Method") by Deloitte
Tohmatsu Financial Advisory as stated below. As stated herein, the Target has continuously
negotiated with the Offerors regarding the Tender Offer Price.

Furthermore, the Target received necessary legal advice from Nagashima Ohno &Tsunematsu concerning the method and process of decision-making of the Target's meetingof the board of directors and other concerns, including procedures for the Transaction, andreceived a written report from the Special Committee as of November 10, 2020 ("November
10, 2020 Written Report") (for details of the outline of the November 10, 2020 Written
Report and the specific activities of the Special Committee, see "(III) Establishment of
independent special committee at the Target and procurement of written report from the said
committee " under "(3) Measures to ensure the fairness of the Tender Offer, such as measures
to ensure the fairness of the Tender Offer Price and measures to avoid conflicts of interest").
Based on the legal advice from Nagashima Ohno & Tsunematsu and the Share Valuation
Report procured from Deloitte Tohmatsu Financial Advisory, and also giving full respect tothe details of the November 10, 2020 Written Report submitted by the Special Committee,
the Target carefully discussed and considered in view of whether the corporate value of theTarget will increase through the Transaction and whether the interests to be enjoyed byminority shareholders can be ensured by implementing the Transaction using fair procedures.

The Target Group has built various cooperative relationships on sales to customers andresearch and development not only limited to its major shareholders, the Mitsui Chemicals

25

Group and the Mitsui & Co. Group, and has gained trust from customers through its
continuous efforts in research and development, production and sales/marketing in order tosatisfy customer's demands based on its customer-first policy and its prompt attainment ofgoals. However, the business environment of the Target Group is significantly affected not
only by trends of the fine chemical industry to which the Target Group belongs, but also bytrends of periphery markets. In the automobile market, medium and long-term trends
involve EV and automated driving, and there is a slowdown in growth due to the current
decrease in travel as a result of the COVID-19 pandemic. In addition, in the IT-related goods
market, competitions to establish de facto standards (Note 1) for various materials for 5G
and ICT high-performance device are gaining speed at an unprecedented level, and customer
needs and market needs of materials are diversifying and intensifying. As stated above,
while the changes in the market environment of the Target Group are accelerating, andcustomer needs are diversifying and intensifying, the Target believes that in order to attain
growth strategies with a sense of speed ahead of other competitors and gain profit therefrom,the Target must urgently build new products and new business domains and expand the
production system. In order to deal with these matters, the Target is aggressively engaged
in employment of professionals, utilization of external institutions and increase of open
innovation, but there is a limit in investing significant resources given its current size ofbusiness.
(Note 1)"Competitions to establish de facto standards" mean that since existing standard
materials are unable to meet the demand functions in high-speed and large-capacity
cellular market mainly related to 5G where demands are rapidly increasing, relatedcompanies are making efforts to allow their own standards to be adopted as the
new standard materials in order to ensure their competitive superiority in therelevant market.

Under such circumstances, the Target figured that pursuant to the customer-first policy, inorder to place various cooperative relationships regarding sales to customers and researchand development as a top-priority as before without impairing such trust, and to satisfy
customers' needs with more speed, it is important to obtain the following business resources
through the Transaction. The Target wishes to attain the Target's sustainable growth for years
to come by gaining more trust from the customers. The Target believes that the synergies
listed in (i) through (iii) below as stated in "(I) Background and purposes of the Tender Offerand decision-making process leading to the consummation of the Tender Offer" above are
expected as a result of the Transaction.

26

(i)

Strengthening of existing businesses and products

Existing businesses and products of the Target may be strengthened from various angles.
This includes more possibilities of the use of customer network, supply chains and technicalbase of the Offerors to increase distributors of the existing products and to execute longterm contracts with customers, the reinforcement of production capacity for biphenol andoptical specialty bisphenol, and the development of purposes of use for specialty bisphenols
business of Hi-Bis.

(ii)

Creation of new businesses and products

Based on the unique technical capabilities of the Target to promptly and stably produce highquality new products in the high-performance monomer business domain related to ICT,
Mobility and Healthcare that it has been cultivating since its foundation, the Target believes
it can expand and accelerate the development of new products including existing businesses
and the development of new monomers for which demand is increasing in ICT-related
markets through the aggressive utilization of a wide range of research and development andproduction technology base such as polymers and catalytic technologies built by the Mitsui
Chemicals Group as a general chemical manufacturer, the consolidation of marketing andsolution proposal capacities using the global network of the Mitsui & Co. Group as a general
trading company, as well as the introduction of advanced technologies, including AI andmaterials informatics, which are being adopted by the Offerors.

(iii) Personnel development and development of basis for sustainable development

Personnel development will become possible to be conducted by the Target to win global
competition through joint use of personnel development platforms and programs held by
the Offerors and exchange of personnel and technology, and also the Target believes it canseek to strengthen a sustainable business base that responds to social requirements on ESG
by the alliance of three (3) parties.

In addition, the utilization of abundant business resources of the Offerors is expected to
expand the Target's business scale through an increase in the Target's production volume,
expansion of business, expansion or increase of production sites based on business
continuous plan, and prompt and definite securement of necessary business resources. The
Target also believes that flexible and prompt resolution of challenges that were difficult to27

be handled by the Target alone will be possible, and that offering of solutions and new values
to various customers as before will further increase the feasibility of the Target's long-term
vision "HCI 500."

In accordance with the above reasons, the Target concluded in early November 2020 thatfurther alliance with the Offerors through the Transaction including the Tender Offer is thebest option for the enhancement of the corporate value of the Target.

The Target's board of directors determined that the Transaction, including the Tender Offer,
is expected to enhance the Target's corporate value, the Tender Offer Price and other terms
and conditions of the Tender Offer are appropriate for all shareholders of the Target, andthat the Tender Offer offers reasonable opportunities to all shareholders of the Target to sell
the shares based on the following facts relating to the Tender Offer Price (1,830 yen): (i)regarding the share valuation results of the Target's Shares calculated by Deloitte Tohmatsu
Financial Advisory as stated in "(II) Procurement of Share Valuation Report by the Target
from an independent third-party valuator" under "(3) Measures to ensure the fairness of theTender Offer, such as measures to ensure the fairness of the Tender Offer Price and measures
to avoid conflicts of interest," the Tender Offer Price exceeds the maximum of the pricerange based on the average market price method, is within the price range based on thecomparable company analysis method and exceeds the median of the price range based on
the DCF Method; (ii) the price accounts for a 41.86% premium (rounded to the second
decimal place; hereinafter the same in calculation of the premiums (%) over the stock prices)
over the closing price (1,290 yen) of the Target's Shares on the Second Section of the TSE
as of November, 10, 2020, i.e. the business day immediately prior to the date of publicationof the Offerors' November 11, 2020 Press Release, a 43.64% premium over the simple
average closing price (1,274 yen) for the month ending November 10, 2020, a 42.86%
premium over the simple average closing price (1,281 yen) for the three (3) months ending
November 10, 2020, a 50.87% premium over the simple average closing price (1,213 yen)for the six (6) months ending November 10, 2020, and such premiums stand comparison
with premiums adopted in recent transactions similar to the Transaction; (iii) measures toresolve conflicts of interest stated in "(3) Measures to ensure the fairness of the Tender Offer,such as measures to ensure the fairness of the Tender Offer Price and measures to avoid
conflicts of interest" below are adopted and minority shareholders' interests are taken into
consideration; (iv) the Tender Offer Price was determined after measures to resolve theabovementioned conflicts of interest were taken and the Target and the Offerors repeatedly
discussed and negotiated (i.e. after good-faith and continuous discussions and negotiations

28

based on the share valuation results of the Target's Shares prepared by Deloitte Tohmatsu
Financial Advisory, the discussions with the Special Committee and the legal advice from
Nagashima Ohno & Tsunematsu); and (v) effective increase of the proposed price for theTender Offer took place at the request of the Special Committee.

Thus, the Target resolved at its board of directors' meeting held on November 11, 2020,
through discussion by all of its nine (9) directors and with unanimous approval of all of
those nine (9) directors that, as the opinion of the Target as of the same date, the Target will
express its opinion to support the Tender Offer if the Tender Offer is commenced, andrecommend that its shareholders tender their shares in the Tender Offer. Three (3) auditorsof the Target (excluding Mr. Masafumi Takenaka) participated in the above board of
directors' meeting and all participating auditors have given their opinion that they do not
object to the above resolution.

The Target also resolved at the abovementioned meeting of the board of directors that: (i)upon the commencement of the Tender Offer, the Special Committee established by theTarget shall consider whether changes should be made to the November 10, 2020 Written
Report and shall inform the Target's board of directors that, if there is no change in its
previous opinion, the fact thereof, or if there is a change in its opinion, the details of suchchange; and (ii) the Target shall express its opinion again regarding the Tender Offer upon
the commencement of the Tender Offer based on the opinion of the Special Committee.

In early March 2021, the Target received contact from the Offerors that if the procedures
and actions required by the antitrust laws of Japan, the EU, China, Taiwan and Turkey werecompleted by early May 2021, the Offerors would commence the Tender Offer on May 17,
2021, and the Target commenced preparations to again review the various terms of theTender Offer. Thereafter, on May 10, 2021, the Target received contact from the Offerors
that they were scheduled to commence the Tender Offer from May 17, 2021 upon thesatisfaction of the Conditions, because the procedures and actions required by the antitrust
laws of Japan, the EU, China, Taiwan and Turkey had been completed. Having received thiscontact, on May 11, 2021, the Target requested that the Special Committee established by
the Target review whether there were any changes to be made on the contents of theNovember 10, 2020 Written Report, and either (i) advise the Target accordingly if there isno need to make any such changes thereto; or, (ii) if any changes were necessary, state an
opinion as to why it made those changes. The Special Committee confirmed with the Target
the facts regarding whether there had been any material change to the circumstances that29

could affect the Transaction since November 11, 2020, and conducted review on the above
mentioned matters for which the review was requested, confirmed that there are no reasons
for which the contents of the November 10, 2020 Written Report should be changed evenafter taking into account the situation from November 11, 2020 until May 13, 2021, and on
May 13, 2021, with a unanimous resolution of the committee members, submitted to theTarget's board of directors the written report dated May 13, 2021 (the "May 13, 2021 Written
Report") stating that the committee had no changes to its above opinion.

Accordingly, the Target, having again carefully considered various terms concerning theTender Offer by taking into account the Target's business conditions (including the contentsof the Target's "Notice Concerning Revision of Earnings Forecast" published on February
9, 2021 (the "Target's Earnings Forecast Revision Press Release")) and the environment
surrounding the Transaction while giving maximum respect to the contents of the May 13,2021 Written Report submitted by the Special Committee, decided that, even as of May 14,
2021, there were no reasons to change its opinion concerning the Tender Offer as ofNovember 11, 2020.

Further, at the Target's board of directors meeting held on May 14, 2021, all of its nine (9)directors held a discussion and all of those nine (9) directors unanimously resolved to again
state the board’s opinion in favor of the Tender Offer and to recommend that the Target's
shareholders tender their shares in the Tender Offer. Three (3) auditors of the Target(excluding Mr. Masafumi Takenaka) participated in the above board of directors meetingand stated their opinion that they had no objection to the above resolution.

For details of the resolution of each of the Target's meeting of the board of directors held
on November 11, 2020 and May 14, 2021, see "(V) Unanimous approval of all disinterested
directors of the Target and the opinion of all auditors that they have no objection" under "(3)Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairnessof the Tender Offer Price and measures to avoid conflicts of interest."(3) Measures to ensure the fairness of the Tender Offer, such as measures to ensure the fairness of theTender Offer Price and measures to avoid conflict of interests

As of the date of this Press Release, the Target is not a consolidated subsidiary of the Offerors, andthe Tender Offer does not constitute a tender offer by the controlling shareholder. However,
because: (i) the Offerors respectively own 3,098,000 shares of the Target's Shares (Shareholding30

Ratio: 26.99%) as of the date of this Press Release, and this Transaction constitutes the acquisitionof an equity method affiliate by other associated companies of the Target that are the Target's major
shareholders and top shareholders; (ii) the Offerors own a total of 6,196,000 shares (Shareholding
Ratio: 53.99%) of the Target's Shares, and therefore are equivalent to controlling shareholders of
the Target, which could give rise to an issue of structural conflicts of interest and information
asymmetry with general shareholders in the process of consideration of the Transaction by theTarget; and (iii) of the total of nine (9) directors of the Target, six (6) (Messrs. Yuji Fukuyama,
Yoshiji Ohori, Hidebumi Kasuga, Katsuya Okano, Nobuyoshi Ikeda, and Takuya Inagaki) wereformer employees of the Offerors within the most recent ten (10) years, and of the total of four (4)auditors of the Target, one (1) (Mr. Yoshinori Ashida) was a former employee of Mitsui Chemicals
within the most recent ten (10) years and one (1) (Mr. Masafumi Takenaka) currently is also an
employee of Mitsui Chemicals, the Offerors and the Target implemented measures below in (I) to(VI) to ensure fairness of the Tender Offer from the stage of the Tender Offer, eliminate
arbitrariness in decision-making concerning this Transaction, and to ensure fairness, transparency,
and objectiveness in the decision-making process, and to avoid doubts of conflicts of interest.
Among the descriptions below, the descriptions of the measures implemented by the Target are
based on explanation received from the Target.

Furthermore, as of the date of this Press Release, the Offerors decided that because the Offerors
own a total of 6,196,000 shares (Shareholding Ratio: 53.99%) of the Target's Shares, that if theminimum of the so-called "Majority of Minority" is set, the establishment of the Tender Offer
would be rather destabilized, which in turn might not serve the interests of minority shareholders
who wish to tender in the Tender Offer, and, therefore, no minimum of the so-called "Majority of
Minority" was set in this Tender Offer. However, because the Offerors and the Target assumed themeasures below in (I) through (VI), the Offerors and the Target believe that due consideration wasgiven to the interests of the Target's minority shareholders.

(I)

Procurement of a Share Valuation Report from an independent third-party valuator retainedby the Offerors

In order to ensure fairness of the Tender Offer Price, Mitsui Chemicals retained SMBC
Nikko Securities, Mitsui Chemicals' financial advisor, to serve as a third- party valuator
independent from the Offerors and the Target to calculate the share value of the Target's
Shares in order to determine the Tender Offer Price. For details on the share valuation reportconcerning the share value of the Target's Shares (the "Share Valuation Report (SMBC
Nikko Securities)") procured by Mitsui Chemicals from SMBC Nikko Securities, see "(I)31Basis of calculation" under "(4) Basis of calculation of the price of tender offer" under "2.
Summary of tender offer" below.

In order to ensure fairness of the Tender Offer Price, Mitsui & Co. retained Nomura
Securities, Mitsui & Co.'s financial advisor, to serve as a third-party valuator independent
from the Offerors and the Target to calculate the share value of the Target's Shares in orderto determine the Tender Offer Price. For details on the share valuation report concerning
the share value of the Target's Shares (the "Share Valuation Report (Nomura Securities)")
procured by Mitsui & Co. from Nomura Securities, see "(I) Basis of calculation" under "(4)Basis of calculation of the price of tender offer" under "2. Summary of tender offer" below.

(II)

Procurement of Share Valuation Report by the Target from an independent third-party
valuator

The Target, in expressing its opinion concerning the Tender Offer, retained Deloitte
Tohmatsu Financial Advisory as its third-party valuator independent from the Target andthe Offerors to calculate the share value of the Target's Shares, and procured the Share
Valuation Report on November 10, 2020. Deloitte Tohmatsu Financial Advisory is not a
related party of the Target and the Offerors and has no material interests in the Tender Offer.
Deloitte Tohmatsu Financial Advisory will be paid a fixed fee regardless of whether theTransaction is completed and also a performance fee payable on condition that theTransaction is completed. The Target appointed Deloitte Tohmatsu Financial Advisory as
its financial advisor and third-party valuator based on the above fee arrangement by also
taking into account general practices in the same kind of transactions. The Target has not
obtained from Deloitte Tohmatsu Financial Advisory an opinion concerning fairness of theTender Offer Price (fairness opinion).

Deloitte Tohmatsu Financial Advisory considered multiple calculation methods to apply incalculating the share value of the Target's Shares. On the assumption that the Target is agoing concern, and that multifaceted valuation of the Target's Shares is appropriate, Deloitte
Tohmatsu Financial Advisory decided to apply: (i) the average market price method giventhat the Target's Shares are listed on the Second Section of the TSE and thus the market
price thereof is available; (ii) the comparable company analysis method given that there are
multiple listed companies that are engaged in business relatively similar to the Target's
business, and the availability of an analogy of the share value thereof by comparison withcompanies that are determined to be engaged in business similar to the business of the32Target; and (iii) the DCF Method to reflect the future business activities of the Target invaluation, in calculating the per share value of the Target's Shares. The share price range
per share of the Target's Shares as calculated by each of the above methods is as follows.

Average market price method:

From 1,213 yen to 1,290 yen

Comparable company analysis method:

From 1,713 yen to 2,322 yen

DCF Method:

From 1,654 yen to 2,043 yen

Pursuant to the average market price method, as of the reference date of calculation on
November 10, 2020, the share value range per share of the Target's Shares was calculated
to be 1,213 yen to 1,290 yen, based on the closing price of 1,290 yen of the Target's Shareson the Second Section of the TSE, the simple average closing price of 1,274 yen for the
recent one month, the simple average closing price of 1,281 yen for the most recent three(3) months, and the simple average closing price of 1,213 yen for the most recent six (6)months.

Pursuant to the comparable company analysis method, the listed companies that are judged
to be engaged in business similar to the business of the Target and therefore comparablewith the Target were chosen for comparison, and the share value of the Target's Shares wascalculated by using the EBITDA ratio against the enterprise value. For this purpose,
ADEKA Corporation, Sumitomo Bakelite Company Limited, Osaka Organic Chemical
Industry Ltd., Taoka Chemical Company, Limited, Hokko Chemical Industry Co., Ltd., andKoei Chemical Company, Limited were chosen as the listed companies that were judged to
be engaged in business similar to the business of the Target. As a result, the share value
range per share of the Target's Shares was calculated to be 1,713 yen to 2,322 yen.

Pursuant to the DCF Method, the Target's enterprise value and share value were calculated
by using various elements such as the business plan from its Fiscal Year ending March 2021
to its Fiscal Year ending March 2024 prepared by the Target and information disclosed by
it to the public, and by discounting by a certain rate to the present value the free cash flow
projected to be generated by the Target on and after the third quarter of its Fiscal Yearending in March 2021. At this time, the discount rate of 9.20% to 10.20% was applied. In
calculating the going-concern value, perpetual growth rate method was used and theperpetual growth rate of 0.70% to 1.70% was applied. As a result, the share value range pershare of the Target's Shares was calculated to be 1,654 yen to 2,043 yen.

33

The concrete figures for the Target's financial forecast that Deloitte Tohmatsu Financial
Advisory used as the basis for the calculation pursuant to the DCF Method are as follows.
Deloitte Tohmatsu Financial Advisory does not project significant increase or decrease inprofits in comparison with the previous years. Also, because the synergistic effects that
could be expected by executing the Transaction, including the Tender Offer, were difficult
to estimate as of the time of making the calculation, Deloitte Tohmatsu Financial Advisory
did not take these into account in its financial forecasts. The Offerors were informed thatthese financial forecasts were analyzed and reviewed through several sessions of questions
and answers conducted by Deloitte Tohmatsu Financial Advisory with the Target.

(Unit: million yen)March 2021

March 2022

March 2023

March 2024

(6 months)
Net sales

10,67324,227

27,691

29,557

Operating

730

3,088

3,468

4,274

EBITDA

1,477

4,896

5,839

6,927

Free cash flow(757)

(1,802)(1,562)

3,998

income(Note 1) EBITDA is calculated by adding depreciation to operating income, and free cash
flow is calculated based on the EBITDA.
(Note 2) Deloitte Tohmatsu Financial Advisory, in principle, straightforwardly used
information received from the Target and information publicly disclosed by it, etc. in
calculating the share value of the Target's Shares and did not independently verify theiraccuracy and completeness, on the basis that all such materials and information are accurate
and complete and that there are no facts that were not disclosed to Deloitte Tohmatsu
Financial Advisory that may materially affect the calculation of the share value of theTarget's Shares. In addition, as for the information concerning the Target's financial forecast,it was assumed that such information was reasonably prepared based on the best estimate
and judgment that could be made by the Target's management as of the time of making the
calculation. Furthermore, Deloitte Tohmatsu Financial Advisory did not independently
evaluate and assess, or retain a third party firm to appraise or assess, the Target and its
affiliates' assets and liabilities (including financial derivative products, off-book assets andliabilities, and other contingent liabilities). The calculation of Deloitte Tohmatsu Financial
Advisory is said to reflect the above information through November 10, 2020. Furthermore,
the calculation of Deloitte Tohmatsu Financial Advisory is solely for the purpose ofreference for the Target's board of directors in reviewing the share value of the Target's
34

Shares.

The Target's board of directors believes that there were no significant changes to the facts
that are the preconditions for the Share Valuation Report, that would affect this report, even
if taking into account the Target's circumstances from the time of its board of directors
meeting held on November 11, 2020 until May 14, 2021 (including the contents of theTarget's Earnings Forecast Revision Press Release) and it believes that this report is still
effective as advised by Deloitte Tohmatsu Financial Advisory and Nagashima Ohno &Tsunematsu.

(III)

Establishment of independent special committee at the Target and procurement of written
report from the said committee

As indicated above in "(III) Decision-making process leading to and grounds for the opinion infavor of the Tender Offer by the Target" under "(2) Background and purposes of the Tender Offerand decision-making process leading to the consummation of the Tender Offer and management
policy after the Tender Offer," the Target established the Special Committee by resolution of its
board of directors at the meeting of the board of directors held on June 2, 2020. Before
establishment of the Special Committee, the Target, in late May 2020, directly after receiving an
initial proposal for the Transaction from the Offerors, for the purpose of establishing a system toreview, negotiate, and make a judgment concerning the Transaction from the perspective ofenhancing the Target's enterprise value and protecting the interests of general shareholders of theTarget from an independent standpoint from the Offerors, explained to Ms. Akiko Kurokochi,
Outside Director and Independent Director of the Target who has extensive experience andknowledge as a lawyer, that the Target received an initial proposal for the Transaction from theOfferors, and that it is necessary to establish the above system because the Transaction may giverise to issues of structural conflicts of interest and information asymmetry with generalshareholders. The Target, with guidance from Ms. Akiko Kurokochi, explained to Mr. Masayoshi
Mochizuki, the Target's former Outside Director and Independent Director, and Mr. Norihisa
Nakano, the Target's Outside Auditor and Independent Officer, that the Target received an initial
proposal for the Transaction from the Offerors, and that a system to review, negotiate, and make a
judgment concerning the Transaction must be established from the perspective of enhancing theTarget's enterprise value and protecting the interests of general shareholders of the Target from an
independent standpoint from the Offerors. The Target then held discussions with all three (3)independent officers of the Target on how to proceed with the Transaction such as establishing theSpecial Committee, and with the advice from Nagashima Ohno & Tsunematsu, nominated three35

persons, Ms. Akiko Kurokochi (Outside Director and Independent Director of the Target,
Representative of Kashiwagi Sogo Law Offices), Mr. Masayoshi Mochizuki (Target's former
Outside Director and Independent Director, Representative of Certified Public Accountant and Tax
Accountant Masayoshi Mochizuki Offices) and Mr. Norihisa Nakano (Target's Outside Auditor
and Independent Officer, Representative of Nakano Certified Public Accountant and Tax
Accountant Offices), as candidate members of the Special Committee.

Accordingly, the Target's board of directors established the Special Committee on June 2, 2020
comprised of Ms. Akiko Kurokochi (Outside Director and Independent Director of the Target,
Representative of Kashiwagi Sogo Law Offices), Mr. Masayoshi Mochizuki (Target's former
Outside Director and Independent Director, Representative of Certified Public Accountant and Tax
Accountant Masayoshi Mochizuki Offices) and Mr. Norihisa Nakano (Target's Outside Auditor
and Independent Officer, Representative of Nakano Certified Public Accountant and Tax
Accountant Offices) as the committee members for the purpose of eliminating arbitrariness in theTarget's decision-making concerning the Transaction (including the Target's board of directors tomake a decision to support the Tender Offer and recommend the Target's shareholders to tender in
the Tender Offer, and to consolidate the Target's Shares after the Tender Offer is completed (the"Share Consolidation")), ensuring fairness, transparency, and objectiveness in the decision-making
process, and avoiding doubts relating to conflicts of interests, and requested that the Special
Committee provide advice on the below matters ("Items for Advice") and submit a written reporton the Items for Advice.

(i)whether the purpose of the Transaction is reasonable (including whether the Transaction

will contribute to the enhancement of enterprise value);(ii)

whether the terms of the Transaction (including the Tender Offer Price) are appropriate

from the point of view of protecting the interests of the Target's minority shareholders;(iii)

whether due consideration was given to protecting the interests of the Target's minority

shareholders through fair procedures of the Transactions;(iv)

whether the Target's board of directors should support or object to the Tender Offer that is

the subject of the Transaction under the final terms, and whether it should recommend that theTarget's shareholders tender in the Tender Offer; and(v)

whether the Transaction (including the Target's opinion concerning the Tender Offer) is

disadvantageous to the Target's minority shareholders.

The Target, at its board of directors meeting described above, made a resolution with respect tothe decision concerning the Tender Offer by the Target's board of directors, that it would fully

36respect the judgment of the Special Committee, including the Special Committee's views on its
support or objection to the Tender Offer and recommendation to tender in the Tender Offer, and inparticular, that if the Special Committee determines that the purpose of the Transaction or the terms
and conditions of the Transaction are inappropriate, the Target will not support the Tender Offer
and will not recommend to tender in the Tender Offer. It was also resolved to grant to the Special
Committee the (a) authority to negotiate the terms and conditions of the Transaction, (b) authority
to approve the advisors chosen by the Target (financial advisor and legal advisor), (c) authority to
appoint, if necessary and at the Target's expense, an advisor (financial advisor, legal advisor, andother advisor) to solely advise the Special Committee, and authority to seek professional advice
from the Target's advisors (financial advisor and legal adviser), and (d) authority to acquire
information (authority to request the Target's officers and employees and the Offerors to provide
necessary information).

It was also resolved at the Target's board of directors meeting held on June 24, 2020 with respect
to the members of the Special Committee that due to the resignation of Mr. Masayoshi Mochizuki
from the office of the Target's outside director due to expiration of term as of the closing of the
91st annual general meeting of shareholders held on June 24, 2020, he should also resign as amember of the Special Committee on the same day, and Mr. Keiji Kabeya who was newly
appointed as the Target's Outside Director (Outside Director and Independent Director,
Representative of Kabeya Keiji Certified Public Accountant Offices) at the same general meetingof shareholders would assume office as member of the Special Committee.

At the Special Committee, Ms. Akiko Kurokochi was elected as the chairman of the Special
Committee through mutual election. Each member of the Special Committee will be paid
consideration for serving on the committee separately from remuneration as Outside Director andOutside Auditor, in an amount obtained by multiplying a certain hourly rate by the number of hours
spent on the committee work. Such remuneration as a member of the Special Committee does notinclude a performance fee conditional on announcement or completion of the Transaction.

The Special Committee held a total of 18 meetings from June 9, 2020 until November 10, 2020,
and it also held discussions and conducted reviews as necessary inside the committee on the Items
for Advice.

Specifically, at the first meeting of the Special Committee, the members confirmed that the legal
advisor retained by the Target, Nagashima Ohno & Tsunematsu, and the financial advisor retainedby the Target, Deloitte Tohmatsu Financial Advisory, were both professionally qualified and37independent, and both would be approved as the Target's legal advisor and financial advisor,
respectively, and the Special Committee had no objections to receiving professional advice fromthese two firms, and if the Special Committee determined it to be necessary, the Special Committee
would, at the expense of the Target, retain other lawyers, certified public accountants and otheradvisors as necessary and seek advice therefrom. The Special Committee also confirmed that asits policy for involvement in negotiations with the Offerors, it would conduct direct negotiations
through the Target and the Target's financial advisor, Deloitte Tohmatsu Financial Advisory, as theliaison, and proposals and other opinions from the Special Committee should be conveyed to theOfferors in principle through the Target or the Target's financial advisor, Deloitte Tohmatsu
Financial Advisory, and if the Special Committee requested, the Special Committee shall beauthorized to directly question and discuss with the Offerors, the Special Committee should
receive timely reports from the Target or the Target's financial advisor, Deloitte Tohmatsu Financial
Advisory, on the status of discussions with the Offerors, the Special Committee would determine
the policy for negotiating the terms if necessary, and may state and opinion thereto, and the Special
Committee could become substantially involved in the process of negotiation concerning the terms
for the Transaction through the above arrangements.

Accordingly, the Special Committee, from and after its second meeting, based on the materials
received from the Target, received explanation from the Target concerning the contents of the
proposal from the Offerors, the purpose and reason for conducting the Transaction, the effect of
the Transaction to the Target's enterprise value, the Target's requests to the Offerors upon executing
the Transaction, the Target's business plan (including the rationale and process of formulating theplan), the terms of the Transaction and how these terms were decided, and held a question andanswer session on the foregoing. The Special Committee received an explanation from Deloitte
Tohmatsu Financial Advisory concerning the calculation of the Target's share value and held aquestion and answer session on this issue, and received legal advice from Nagashima Ohno &Tsunematsu concerning the contents of measures to ensure fairness of the Transaction andmeasures to avoid conflicts of interests and other matters overall related to the Transaction andheld a question and answer session concerning the foregoing. Furthermore, the Special Committee
received an explanation from the Offerors concerning the purpose and reasons for conducting theTransaction, the Target's management policies after execution of the Transaction, and views
towards various terms of the Transaction, including the Tender Offer Price, and held a question
and answer session concerning the foregoing. The Special Committee is also receiving reports
from time to time from the Target and Deloitte Tohmatsu Financial Advisory concerning thesystem, circumstances, and contents of discussions and negotiation on the Transaction between theOfferors and the Target and are discussing on those contents.

38

The Special Committee determined with respect to the fact that the Offerors expect a so-called
indirect market check (Note 1) that, while the purchase period for the Tender Offer (the "Tender
Offer Period") is set to twenty (20) business days, which is the statutory minimum period, there isa long period of time from the date of publication of the Offerors' November 11, 2020 Press
Release to the actual commencement of the Tender Offer, and it could therefore be said that a
relatively long period of time is ensured after the announcement, and that no agreement will be
executed that restricts competitive potential purchasers from contacting the Target, such as anagreement, etc. that contains a provision to protect the transaction by prohibiting the Target fromcontacting competitive potential purchasers, an indirect market check is properly functioning andfairness of the Transaction is not undermined.

(Note 1) An “indirect market check” is a term used in the “Fair M&A Guidelines:
Enhancing Corporate Value and Securing Shareholders’ Interests” dated June 28, 2019 by the
Ministry of Economy, Trade and Industry meaning an arrangement to conduct M&A byannouncing the M&A and creating an environment to allow other potential purchasers tomake competitive proposals after the announcement.

Furthermore, after the Target received a proposal from the Offerors on October 9, 2020 that theTender Offer Price would be set at 1,550 yen per share, the Special Committee received a reportfrom time to time on the circumstances and contents of discussion and negotiation for theTransaction between the Target and the Offerors, and discussed how to proceed. On October 19,
2020, the Offerors proposed a Tender Offer Price of 1,760 yen per share, and on October 26, 2020,
the Offerors proposed a Tender Offer Price of 1,800 yen per share, and based on advice from
Deloitte Tohmatsu Financial Advisory from a financial perspective that includes analysis of thepremium in a recent case that is similar to the Transaction, the Special Committee discussed andreviewed the proposed price and requested the Offerors to raise the Tender Offer Price, thereby
involving itself in the process of negotiation with the Offerors. As a result, on November 5, 2020,
the Target accepted the proposal from the Offerors to set the Tender Offer Price at 1,830 yen per
share.

The Special Committee received an explanation on the Target's draft November 11, 2020 Press
Release, and, having received advice from Nagashima Ohno & Tsunematsu, confirmed thatdetailed informative disclosure would be made concerning the Transaction.

Accordingly, the Special Committee, after carefully and repeatedly discussing and reviewing the39Items for Advice, by unanimous resolution, submitted its November 10, 2020 Written Report
substantially as described below on the Items for Advice to the Target's board of directors on
November 10, 2020.

(i)whether the purpose of the Transaction is reasonable (including whether the Transaction
will contribute to enhancement of enterprise value):(a) The Offerors' explanation of the purposes of the Transaction, the synergies of theTransaction, and the management policy after the Transaction are, in summary, as indicated abovein "(I) Background and purposes of the Tender Offer and decision-making process leading to theconsummation of the Tender Offer" and "(II) Management policy after the Tender Offer" under"(2) Background and purposes of the Tender Offer and decision-making process leading to theconsummation of the Tender Offer and management policy after the Tender Offer." However, theTarget's view of the purposes of the Transaction and synergies of the Transaction are, in summary,as indicated above in "(III) Decision-making process leading to and grounds for the opinion infavor of the Tender Offer by the Target" under "(2) Background and purposes of the Tender Offerand decision-making process leading to the consummation of the Tender Offer and management
policy after the Tender Offer."(b) (Concerning the purposes of the Transaction) The Target and the Offerors' views on thepresent state of the business environment surrounding the Target and the Target's managerial issues
are consistent with the contents of the general explanation given concerning the Target's current
business content and the market environment and the contents of the explanation and the contentsof the materials provided from the Target, and the Special Committee has no objections. The
purposes of the Transaction are understood to be: (i) whereas in a closed capital relationship of anequity method affiliate, there are issues of conflicts of interests with minority shareholders andrestrictions on efficient and proactive introduction and mutual use of managerial resources, theabove issues and restrictions could be resolved by making the Offerors the sole shareholders of
the Target through the Transaction, by achieving transition to a trinity management system with amore solid capital relationship, and (ii) to enhance the Target's enterprise value by creating synergy
as indicated above in "(III) Decision-making process leading to and grounds for the opinion infavor of the Tender Offer by the Target" under "(2) Background and purposes of the Tender Offerand decision-making process leading to the consummation of the Tender Offer and management
policy after the Tender Offer." Therefore, the purposes of the Transaction are reasonable.

(c) (Concerning synergy) The Target and Offerors' explanations concerning synergy of40

the Transaction are not unreasonable and they gave a concrete explanation of the basis for theTarget's business content and managerial conditions. Because there are also no facts that could
raise doubts from other materials provided to the Special Committee and explanations given fromthe Target and Offerors, the Transaction could be expected to create reasonable synergy instrengthening the Target's existing businesses and products, creation of new businesses andproducts, personnel development, and enhancement of a basis for sustainable development.

(d) (Concerning management system after the Transaction) In view of the Target's history
and corporate culture, in order for the Target to continue to contribute to society by introducing
products of value to customers, including in niche fields, it is important to ensure a certain levelof independence (autonomy) for the Target and to maintain motivation of the employees, which isthe source of enterprise value. Also, where Mitsui Chemicals and Mitsui & Co. will jointly operate
the business after the Transaction, it is important for a system to be established to enable these twocompanies to conduct the Target's business smoothly and quickly, and with consistency andcontinuity. In this regard, the Special Committee reviewed, from the perspective of operating thebusiness with independence, maintaining motivation of the employees, and operating businesssmoothly, quickly, consistently and continuously, how the privatization of the Target would affectthe officers and employees' motivation while maintaining the confidentiality of the businesscounterparties' secrets, how the business counterparties will react towards incorporation of theTarget into the Mitsui group, and how this would affect the systems, and the Special Committee
determined that reasonable measures were assumed from the perspective of business operation,and that the Target was given a certain level of freedom in its business operation, and that there
are no conspicuous or detrimental disadvantages in any other aspects.

Thus, the Special Committee believes that the Transaction will contribute to enhancing theenterprise value of the Target, and that the purposes of the Transaction are reasonable.

(ii)

whether the terms of the Transaction (including the Tender Offer Price) are appropriate fromthe view of protecting the interests of the Target's minority shareholders:(a) (Concerning the premises for calculating the value) The method for calculating theshare value per share of the Target's Shares by Deloitte Tohmatsu Financial Advisory, a third party
valuator, is the typical calculation method, and the reasons given for applying each of the average
market price method, comparable company analysis method, and the DCF Method are notunreasonable. Furthermore, because the results of calculation based on each of these calculation
methods are by Deloitte Tohmatsu Financial Advisory, a third-party valuator with extensive

41

experience, the results of calculation of share value per share of the Target's Shares do not seemunreasonable. There are also no unreasonable aspects with respect to financial forecast andpreconditions that are the bases for applying the above calculation methods and their calculation
results.

(b) (Appropriateness of the Tender Offer Price) The Tender Offer Price (1,830 yen per
share of the Target's Share) exceeds the maximum of the price range based on the average market
price method, is within the price range based on the comparable company analysis method andexceeds the median of the price range based on the DCF Method; (ii) the price accounts for a
41.86% premium (rounded to the second decimal place; hereinafter the same in calculation of thepremiums (%) over the stock prices) over the closing price (1,290 yen) of the Target's Shares on
the Second Section of the TSE as of November, 10, 2020, i.e. the business day immediately prior
to the date of publication of the Offerors' November 11, 2020 Press Release, a 43.64% premium
over the simple average closing price (1,274 yen) for the month ending November 10, 2020, a42.86% premium over the simple average closing price (1,281 yen) for the three (3) months ending
November 10, 2020, a 50.87% premium over the simple average closing price (1,213 yen) for thesix (6) months ending November 10, 2020, and such premiums stand comparison with premiums
adopted in recent transactions similar to the Transaction.'' In addition, the Tender Offer Price is theprice proposed as a result of repeated discussions and negotiations held among the Target and theOfferors, which was significantly increased from the initially proposed price (1,550 yen per shareof the Target's Share) from the Offerors and the price can be evaluated as having been determinedthrough sincere negotiations. In addition, the Tender Offer Price is an amount that exceeds 1,782
yen which is the book net asset value per share as of the six months ended September 2020. Thus,
the Tender Offer Price is considered to be appropriate.

(c)(Appropriateness of the terms other than the Tender Offer Price) The Offerors

anticipate that the so-called indirect market check will function, and they are scheduled to set theTender Offer Period to 20 business days, which is a statutory minimum period. However, because
there is a long period of time from the date of publication of the Offerors' November 11, 2020
Press Release to the actual commencement of the Tender Offer, the opportunities for generalshareholders of the Target to make appropriate judgments as to tendering to the Tender Offer andthe opportunities of parties other than the Offerors to purchase the Target's Shares are ensured.
Also, the Offerors and the Target have not made any agreement containing a transaction protection
clause that prohibits the Target from contacting competitive purchasers, or any agreement that
restricts contacts between such competitive offerors and the Target. Accordingly, an indirect
market check is correspondingly functioning for the Transaction, and fairness of the Transaction42

is not hindered. Furthermore, although the Offerors do not intend to set the minimum of the socalled "Majority of Minority" in the Tender Offer, the Offerors and the Target assumed themeasures stated in item (iii) below, so due consideration was given to the interests of the Target's
minority shareholders. In addition, the Offerors' November 11, 2020 Press Release is scheduled todisclose that, in this Transaction, squeeze out procedures are scheduled to be conducted promptly
after the settlement of the Tender Offer as a second step, and that the consideration to be issued in
the Share Consolidation, i.e., the squeeze out method, to each of the Target's shareholder who did
not tender in the Tender Offer is scheduled to be in the same amount as the Tender Offer Price.
Accordingly, due consideration was given to prevent pressuring the Target's minority shareholders.

Accordingly, the terms of the Transaction, including the Tender Offer Price, are appropriate fromthe perspective of protection of interests of the Target's minority shareholders.

(iii)

whether due consideration is given to protect the interests of the Target's minority
shareholders through fair procedures of the Transactions:(a) (Establishment of independent special committee) The Special Committee wasestablished promptly (on June 22, 2020) after receiving the proposal for the Transaction from theOfferors. The members, authority, compensation, advisory system, involvement in the course ofnegotiations on the terms of the Transaction with the Offerors, and the treatment of the Special
Committee's decisions at the Target's board of directors' meeting are as set forth in "(III)
Establishment of independent special committee at the Target and procurement of written reportfrom the said committee."(b) (Internal review system) At the Target, a project team comprised of seven (7) directorsof the Target (excluding Ms. Akiko Kurokochi and Mr. Keiji Kabeya, who are members of theSpecial Committee), two (2) auditors (excluding Messrs. Norihisa Nakano, who is a member of
the Special Committee, and Masafumi Takenaka, who concurrently holds an executive position at
Mitsui Chemicals), and eight (8) staff in charge, conducts reviews and negotiations for theTransaction by receiving advice and opinions, etc. from the Special Committee and each of theadvisors. As indicated below in "(V) Unanimous approval of all disinterested directors of theTarget and the opinion of all auditors that they have no objection," there are no conflicts of interests
with the Target, and no possibility for conflicts to occur as of November 10, 2020. Among theTarget's auditors, Mr. Masafumi Takenaka, due to his concurrent position held as executive ofMitsui Chemicals, did not participate in the discussions concerning the Transaction held at theTarget's board of directors' meeting, in the review of the Transaction from the Target's position, or43

in discussions and negotiations with the Offerors concerning the Transaction in order to eliminate
the possibility of being affected by the issue of structural conflicts of interest in this Transaction.
Furthermore, there are persons seconded from the Offerors among the above eight (8) staff, but
those staff members are indispensable in the review of the Transaction at the Target, and as thesestaff engage in operations relating to the Transaction as Target's personnel, the Target explainedthat they will not convey the Target's business information to the Offerors, which explanation
sounds reasonable.

(c) (Procurement of advice from legal advisor) As indicated below in "(IV) Advice
procured by the Target from an independent law firm," the Target retained Nagashima Ohno &Tsunematsu as its legal advisor independent from the Target and the Offerors and professionallyqualified. The Target is receiving necessary legal advice from the firm concerning the method andprocess of decision making by the Target's board of directors concerning the Transaction, including
the Tender Offer and other matters that must be noted.

(d) (Procurement of Share Valuation Report from a third-party valuator) As indicated abovein "(II) Procurement of Share Valuation Report by the Target from an independent third-party
valuator," the Target retained Deloitte Tohmatsu Financial Advisory as its independent andprofessional financial adviser. The Target requested Deloitte Tohmatsu Financial Advisory, a thirdparty valuator, to calculate the share value of the Target's Shares and procured the Share Valuation
Report from the same on November 10, 2020.

(e) (Ensure opportunity for other purchasers to make purchase offer (market check),
establishment of Majority of Minority terms) As indicated above in "(ii) whether the terms of theTransaction (including the Tender Offer Price) is appropriate from the view of protecting theinterests of the Target's minority shareholders; (c)," the opportunities of general shareholders of
the Target to make appropriate judgments in tendering to the Tender Offer and the opportunitiesof parties other than the Offerors to purchase the Target's Shares are ensured, and the Offerors andthe Target have not made any agreement that would restrict contact by competitive purchasers with
the Target. Accordingly, an indirect market check is correspondingly functioning for theTransaction and the fairness of the Transaction is not hindered. Furthermore, the Offerors are notscheduled to set the minimum of the so-called "Majority of Minority" in the Tender Offer, but due
consideration will be given to the interests of the Target's minority shareholders because theOfferors and the Target assumed the measures in this paragraph.

(f) (Provision of detailed information to general shareholders and enhancement of44

transparency of the process) The Special Committee received an explanation concerning theTarget's November 11, 2020 Press Release and the Offerors’ November 11, 2020 Press Release,and having received advice from Nagashima Ohno & Tsunematsu, confirmed that a detailed
informative disclosure will be made concerning the Transaction.

(g) (Elimination of pressure) As indicated below in "(4) Policies on the organizational
restructuring, etc. after the Tender Offer (matters concerning "two-step acquisition")," after theTender Offer is successfully completed, the Offerors are scheduled to conduct Share Consolidation,
which shall be conducted promptly after completion of settlement for the Tender Offer.
Arrangements shall be made to allow the Target's shareholders who opposed the Share
Consolidation to claim for the Target to purchase all fractional shares of the Target that they own
at a fair price and to allow them to file with the court to determine the price of the Target's Shares.
In this respect, the Offerors are scheduled to disclose in the Offerors’ November 11, 2020 Press
Release that the consideration to be paid to each shareholder of the Target who did not tender in
the Tender Offer will be in the same amount as the Tender Offer Price.

Accordingly, due consideration was given to the interests of the Target's minority
shareholders by ensuring fair procedures in the Transaction.

(iv)

whether the Target's board of directors should support or object to the Tender Offer that is
the subject of the Transaction under the final terms, and whether it should recommend theTarget's shareholders to tender in the Tender Offer:

Based on the decisions made above in (i) to (iii), it is considered appropriate for the Target's
board of directors to support the Tender Offer under the final terms, and to recommend the Target's
shareholders to tender in the Tender Offer.

(v)whether the Transaction (including the Target's opinion concerning the Tender Offer) is
disadvantageous to the Target's minority shareholders:

Based on the decisions made above in (i) to (iii), the Transaction (for the Target's board of
directors to support the Tender Offer under the final terms, and to recommend the Target's
shareholders to tender in the Tender Offer above in (iv)) is not disadvantageous to the Target's
minority shareholders.

In early March 2021, the Target received contact from the Offerors that if the procedures

45

and actions required by the antitrust laws of Japan, the EU, China, Taiwan and Turkey werecompleted by early May 2021, the Offerors would commence the Tender Offer on May 17, 2021,
and the Target commenced preparations to again review the various terms of the Tender Offer andnotified the Special Committee to this effect. Having received this notice, the Special Committee,
beginning from mid-March, 2021, began preparations to review whether there were any changes
to be made on the contents of its November 10, 2020 Written Report by receiving advice from
Deloitte Tohmatsu Financial Advisory and Nagashima Ohno & Tsunematsu, and by collecting
information such as a confirmation by the Target regarding whether any material change to thecircumstances had occurred that could affect the Transaction.
Thereafter, on May 10, 2021, the Target received contact from the Offerors that they werescheduled to commence the Tender Offer from May 17, 2021 upon the satisfaction of theConditions, because the procedures and actions required by the antitrust laws of Japan, the EU,
China, Taiwan and Turkey had been completed. Having received this contact, on May 11, 2021,
the Target requested that the Special Committee established by the Target review whether there
were any changes to be made on the contents of the November 10, 2020 Written Report, and either(i) advise the Target accordingly if there is no need to make any changes thereto; or, (ii) if any
changes were necessary, state an opinion as to why it made those changes.
The Special Committee, having received the abovementioned request for review on May 11,
2021, again confirmed with the Target the facts regarding whether there had been any materialchange to the circumstances that could affect the Transaction since November 11, 2020, andconducted review on the above mentioned matters for which the review was requested, confirmedthat there are no reasons for which the contents of the November 10, 2020 Written Report should
be changed even after taking into account the situation from November 11, 2020 until May 13,2021 (including the contents of the Target's Earnings Forecast Revision Press Release), and on
May 13, 2021, with a unanimous resolution of the committee members, submitted to the Target's
board of directors the May 13, 2021 Written Report stating that the committee had no changes to
its above opinion.

(IV)

Advice procured by the Target from an independent law firm

The Target, in order to ensure fairness and appropriateness in the method and process ofdecision-making by the Target's board of directors concerning the Transaction, including
the Tender Offer, retained Nagashima Ohno & Tsunematsu as its legal advisor independent
from the Target and the Offerors. The Target is receiving necessary legal advice from thefirm concerning the method and process of decision making by the Target's board of
directors concerning the Transaction, including the Tender Offer, and other matters that46

must be noted.

Nagashima Ohno & Tsunematsu is not a related party of the Target and the Offerors andhas no material interests in the Transaction, including the Tender Offer. Nagashima Ohno
& Tsunematsu will be paid a fee calculated by multiplying the hours of service rendered byan hourly rate regardless of whether the Transaction is executed and its fee does not include
a performance fee conditioned on execution of the Transaction. The Special Committee
confirmed at its first meeting that Nagashima Ohno & Tsunematsu is independent andapproved this firm as the Target's legal advisor.

(V)

Unanimous approval of all disinterested directors of the Target and the opinion of all
auditors that they have no objection

The Target, based on legal advice received from Nagashima Ohno & Tsunematsu, and theShare Valuation Report received from Deloitte Tohmatsu Financial Advisory, and giving
full respect to the November 10, 2020 Written Report from the Special Committee (seeabove "(III) Establishment of independent special committee at the Target and procurementof written report from the said committee" concerning the members of the Special
Committee and its concrete activities), carefully reviewed the terms of the Transaction,
including the Tender Offer.

As a result, as indicated above in "(III) Decision-making process leading to and grounds
for the opinion in favor of the Tender Offer by the Target" under "(2) Background andpurposes of the Tender Offer and decision-making process leading to the consummation of
the Tender Offer and management policy after the Tender Offer," the Target's board of
directors determined that with respect to this Transaction, it could be expected that thisTransaction, including the Tender Offer, will enhance the Target's corporate value, theTender Offer Price and other terms of the Tender Offer are appropriate for the Target's
shareholders, and the Tender Offer provides a reasonable opportunity for the Target's
shareholders to sell their shares. At the Target's board of directors meeting held on
November 11, 2020, all of its nine (9) directors held a discussion and all of those nine (9)directors unanimously resolved that the Target's opinion as of the same date is that in theevent the Tender Offer is commenced, the Target will express its opinion in favor of theTender Offer and will recommend the Target's shareholders to tender in the Tender Offer.
At the board of directors meeting described above, three (3) auditors of the Target(excluding Mr. Masafumi Takenaka) participated and all of the auditors who participated47

stated an opinion that they have no objection to the above resolution.

Furthermore, in early March 2021, the Target received contact from the Offerors that if theprocedures and actions required by the antitrust laws of Japan, the EU, China, Taiwan andTurkey were completed by early May 2021, the Offerors would commence the Tender Offer
on May 17, 2021, and the Target commenced preparations to again review the various termsof the Tender Offer. Thereafter, on May 10, 2021, the Target received contact from theOfferors that they were scheduled to commence the Tender Offer from May 17, 2021 upon
the satisfaction of the Conditions, because the procedures and actions required by the
antitrust laws of Japan, the EU, China, Taiwan and Turkey had been completed.
Accordingly, the Target, at its board of directors meeting held on May 14, 2021, throughdiscussion by all of its nine (9) directors, having again carefully considered various terms
concerning the Tender Offer by taking into account the Target's business conditions(including the contents of the Target's Earnings Forecast Revision Press Release) and theenvironment surrounding the Transaction while giving maximum respect to the contents of
the May 13, 2021 Written Report submitted by the Special Committee, decided that, evenas of May 14, 2021, there were no reasons to change its opinion concerning the Tender
Offer as of November 11, 2020, and the nine (9) directors of the Target unanimously
resolved to again state the board’s opinion in favor of the Tender Offer and to recommendthat the Target's shareholders tender their shares in the Tender Offer. Three (3) auditors of
the Target (excluding Mr. Masafumi Takenaka) participated in the above board of directors
meeting and stated their opinion that they had no objection to the above resolution.

Of the nine (9) directors of the Target, six (6) were employees of the Offerors within themost recent ten (10) years (Messrs. Yuji Fukuyama, Yoshiji Ohori, Hidebumi Kasuga,
Katsuya Okano, Nobuyoshi Ikeda, and Takuya Inagaki), and of the three (3) auditors of theTarget (excluding Mr. Masafumi Takenaka), one (1) (Mr. Yoshinori Ashida) was a former
employee of Mitsui Chemicals within the most recent ten (10) years. However, none ofthem concurrently holds offices in the Offerors nor are they in a position, or haverelationships that would cause them, to receive instructions, etc. from the Offerors as
officers of the Target as significant time has lapsed since they transferred to the Target, andtherefore, as of November 11, 2020 and May 14, 2021, they have no conflicting interests
with the Target or the Target's minority shareholders and there are no possibilities forconflicts of interest to occur. The Special Committee confirmed this point as stated abovein (iii) (b) under "(III) Establishment of independent special committee at the Target andprocurement of written report from the said committee" and the Special Committee

48submitted the May 13, 2021 Written Report indicating that it had no change to its opinion
stated in the November 10, 2020 Written Report concerning this point.

Mr. Masafumi Takenaka, the Target's outside statutory auditor, presently concurrently holds
an executive position at Mitsui Chemicals, and, therefore, he did not participate in thediscussions at each of the above board of directors meetings and refrained from stating his
opinion regarding the resolutions at each of the above board of directors meetings.

(VI)

Measures to ensure purchase opportunities for other purchasers

Given that there is a long period of time between the date of publication of the Offerors'
November 11, 2020 Press Release and the commencement of the Tender Offer, the Offerors
believe that the opportunities for general shareholders of the Target to make appropriate
judgments in tendering to the Tender Offer and the opportunities for parties other than theOfferors to purchase the Target's Shares are ensured.

In addition, the Offerors and the Target have not made any agreement containing atransaction protection clause that prohibits the Target from contacting competitive
purchasers, or any other agreement that restricts contacts between competitive purchasers
and the Target.

Because sufficient time is provided until commencement of the Tender Offer andopportunities are provided to allow competitive offers to be made, the Offerors are giving
due consideration to ensure fairness of the Tender Offer.

(4) Policies on the organizational restructuring, etc. after the Tender Offer (matters concerning "twostep acquisition")

As stated above in "(1) Outline of the Tender Offer," if the Offerors were unable to acquire all of
the Target's Shares in the Tender Offer, then after the successful completion of the Tender Offer,
the Offerors are scheduled to implement a series of procedures to make the Offerors the sole
shareholders of the Target as follows.

Promptly after completion of settlement for the Tender Offer, the Offers will request the Target toconvene an extraordinary shareholders' meeting (the "Extraordinary Shareholders' Meeting")
preferably in August 2021 at which the items for resolution shall include the Share Consolidation

49

and, on condition that the Share Consolidation takes effect, partial amendment of the articles ofincorporation to abolish the provision concerning unit shares. In this regard, the Offerors intend tovote in favor of both of the above proposals. If the proposal for the Share Consolidation is approvedat the Extraordinary Shareholders' Meeting, then on the date on which the Share Consolidation
takes effect, the shareholders of the Target will own the Target's Shares in the number
corresponding to the ratio of the Share Consolidation that was approved at the Extraordinary
Shareholders' Meeting. If any fraction of a share less than one share results from the Share
Consolidation, the shareholder will be paid a sum payable to such shareholder by selling to theTarget or to the Offerors the Target's Shares equivalent to the total number of such fractional shares(fractional shares resulting from aggregating those fractional shares shall be discarded) inaccordance with the procedures stipulated in Article 235 of the Companies Act and other relevantlaws and regulations. With respect to the sale price of the Target's Shares equivalent to such total
number of fractional shares, the Offerors are scheduled to set this price in such a way as to makesure that, as a result of selling these shares, the amount of money to be paid to each shareholder of
the Target who did not tender in the Tender Offer (excluding the Offerors and the Target) shall be
the same as the price that shall be obtained by multiplying the Tender Offer Price by the numberof the Target's Shares owned by such shareholder, and request the Target to file with the court toobtain permission for voluntary sale. The provisions of the Companies Act that protect the rightsof the minority shareholders in connection with the Share Consolidation stipulate that when a shareconsolidation is implemented and fractional shares in the number of shares arise as a result of shareconsolidation, the shareholders of the Target may request the Target to purchase all fractional sharesof the Target Company that they own at a fair price and that they may file with the court todetermine the price of the Target's Shares pursuant to Article 182-4 and Article 182-5 of theCompanies Act and other relevant laws and regulations. If such filing is made with the court, thepurchase price will ultimately be determined by the court.

The ratio of consolidation of the Target's Shares is undecided as of the date of this Press Release,
however, the Target shall be requested to decide such ratio based on the number of the Target's
Shares owned by the Offerors after the Share Consolidation to result in the Offerors being the sole
shareholders of the Target's Shares (excluding the treasury shares owned by the Target).

The Offerors are also scheduled to implement procedures so that after the Share Consolidation,
Mitsui Chemicals' and Mitsui & Co.'s percentage of voting rights held in the Target after it isprivatized will be 51% and 49%, respectively. As for a specific procedure, the Offerors plan to
jointly acquire and hold the total number of fractional shares of less than one share of the Target’s
Shares that will be generated from the Share Consolidation. Thereafter, the Offerors plan to50

promptly request that the Target implement a stock split in a ratio that would result in thepercentage of voting rights held by Mitsui Chemicals and Mitsui & Co. in the Target to be 51%
and 49%, respectively, and would further result in Mitsui Chemicals and Mitsui & Co. being thesole owners of the formerly jointly-held fractional Target's Shares. This procedure is scheduled to
be implemented at a price that will not undermine uniformity of the tender offer price.

The Tender Offer is not a solicitation for the Target's shareholders to vote in favor of the proposals
at the Extraordinary Shareholders' Meeting. The Target's shareholders are also requested toconfirm with professionals, such as tax accountants, at their responsibility concerning tax
treatment for tendering in the Tender Offer or in each of the other procedures above.

(5) Possibility of delisting and reason

The Target's Shares are listed on the Second Section of the TSE as of the date of this Press Release.
Because the Offerors did not set a maximum number of shares to be purchased in the Tender Offer,
the Target's Shares may become delisted through the prescribed procedures in accordance with
TSE's delisting criteria depending on the results of the Tender Offer. Also, even if such delisting
criteria are not met as of the time of establishment of the Tender Offer, if the Tender Offer isestablished, the Offerors intend to implement a series of procedures to make the Offerors the sole
shareholders of the Target thereafter as explained above in "(4) Policies on the organizational
restructuring, etc. after the Tender Offer (matters concerning "two-step acquisition")" where in suchcase, the Target's Shares will be delisted through the prescribed procedures in accordance with
TSE's delisting criteria. After the Target's Shares are delisted, the Target's Shares may no longer be
traded on the Second Section of the TSE.

(6) Matters concerning material agreements regarding the Tender Offer(I)

Shareholders Agreement

As indicated above in "(II) Management policy after the Tender Offer" under "(2)Background and purposes of the Tender Offer and decision-making process leading to theconsummation of the Tender Offer and management policy after the Tender Offer," as ofNovember 11, 2020, the Offerors executed the Shareholders Agreement containing thefollowing contents concerning joint operation of the Target Group. In this regard, it isstipulated that the Shareholders Agreement, excluding general provisions and some otherprovisions, shall take effect when the Offerors become the sole shareholders of the Target51

(excluding the Target and persons who have rights to fractional shares) in accordance withthe provisions of the Joint Tender Offer Agreement.

(i)Matters concerning the organization and operation of the Target (to provide thatafter the Transaction is completed: (a) the Target shall have no more than seven(7) directors, the Offerors are entitled to appoint three (3) directors respectively,
and one (1) director from the Target may be appointed by respecting the opinionof the representative directors of the Target, (b) the number of representative
directors of the Target will be two (2) and Mitsui Chemicals is entitled to appoint
the President and Representative Director and Mitsui & Co. is entitled to appoint
the Vice President and Representative Director, (c) the Target's Audit &Supervisory Board shall be abolished and the Target shall have three (3) auditors,
the Target is entitled to appoint one (1) full-time auditor and the Offerors areeach entitled to appoint one (1) part-time auditor, (d) the Offerors shall establish
a shareholder steering committee to smoothly and appropriately operate thebusiness of the Target, and the members of this committee shall be comprised of
the responsible persons of the Offerors and the persons appointed by the Offerors,and (e) matters that are subject to agreement with the Offerors concerning
operation of the Target Group, etc. (amendment of important internal regulations,
M&A transactions, capital strategies, major transactions, business plans andbudgets, employment of key employees, instituting and settling litigations, andother important matters), etc.);(ii)

Matters concerning the role, etc. of each party in operating the business of theTarget Group (After completion of the Transaction, for the Offerors to support
the Target Group in overall management, and enforce sales and marketing insideand outside of Japan to enhance the Target Group's enterprise value andmaximize its profits, etc.);(iii)

Matters concerning rights and obligations of the Offerors ((a) the rights andobligations of the Offerors when the Target Group requires financing (forexample, while the Offerors have no obligations to provide financing to theTarget Group, if the Target issues shares, the Offerors shall have a preemptive
right to subscribe to those shares in accordance with its respective ratio of voting
rights held in the Target as at the time of issuance of those shares), (b) obligations
to report when material events concerning the Target Group occur, and (c)matters concerning the Target's dividend policy); and(iv)

Matters concerning shares, etc. of the Target (in principle, to prohibit the transfer

52

of the Target's Shares owned by the Offerors for a certain period, and preemptive
purchase right and tag along right after lapse of a certain period, etc.).

(II)

Joint Tender Offer Agreement

As indicated above in "(1) Outline of the Tender Offer," the Offerors executed the Joint
Tender Offer Agreement that includes the following contents on November 11, 2020.

(i)

The Offerors shall consummate the Tender Offer jointly;(ii)

The commencement of the Tender Offer shall be conditional upon satisfactionof all of the following preconditions:(a) The Special Committee established by the Target issued a written report infavor of the Target (i) supporting the Tender Offer, (ii) recommending theshareholders of the Target to tender in the Tender Offer, and (iii)
implementing the Share Consolidation, and this report has not been
withdrawn;(b) The Target's board of directors, excluding directors who have, or may have,interest in the Offerors, reached an unanimous resolution to support theTender Offer and to recommend the Target's shareholders to tender in theTender Offer, and this resolution was publicly announced and no resolution
has been made to withdraw this opinion or which conflicts with this opinion;(c) It has been confirmed that there have been no material facts concerning theTarget's business (those facts stipulated in Article 166, Paragraph 2 of theAct) that have not been publicly disclosed (as defined in Article 166,
Paragraph 4 of the Act) by the Target;(d) The Offerors have agreed between themselves on the contents of thedisclosure documents to be filed or announced jointly by the Offerors by thedate of public notice concerning commencement of the Tender Offer;(e) Necessary procedures were performed, necessary arrangements were made,and waiting periods (if any) have lapsed (including to receive notice that nocease and desist order will be issued) pursuant to the antitrust laws of Japan,
Europe, China, Taiwan, and Turkey with respect to the Transaction, and it isreasonably projected that no measures or procedures will be assumed thatwould prevent the implementation of the Transaction by the antitrust
authorities and other judicial or administrative agencies concerning antitrust
laws of those countries or regions;53

(f) There are no filings, litigation or procedures pending at judicial oradministrative agencies that seek to restrict or prohibit any of theTransaction, and there is no judgment, or a concrete possibility of ajudgment, by any judicial or administrative agency that restricts or prohibits
any of the Transaction;(g) Written confirmations were received from the counterparties to theagreements executed by each company in the Target Group that arematerially important for business stating that those counterparties will not
exercise their rights upon execution and performance of the Joint Tender
Offer Agreement, and these confirmations have not been rescinded (Note1);(h) The Shareholders Agreement is executed between the Offerors and has beeneffective;(i) The representations and warranties (Note 2) made by the Offerors pursuant
to the Joint Tender Offer Agreement are true and accurate in all material
respects;(j) All obligations that must be performed or complied with by the Offerors by
15:00 on the business day immediately preceding the date of public noticeof commencement of the Tender Offer pursuant to the Joint Tender Offer
Agreement have been performed and complied with in all material respects;and(k) There has not been any material change in the business or property of theTarget or any of its subsidiaries, nor has there been any other circumstancethat would materially impede the achievement of the purpose of the tender
offer as provided in the proviso to Article 27-11, Paragraph 1 of the Act.
(iii)

On condition that the Tender Offer is established and the settlement is completed,promptly as practically possible after the settlement is completed, procedures
shall be assumed to cause Mitsui Chemicals and Mitsui & Co.'s percentage ofvoting rights held in the Target to become 51% and 49%, respectively.

(iv)

During the period from the date of execution of the Joint Tender Offer
Agreement until completion of the Transaction, the Offerors shall exercise careas prudent managers to cause the Target Group to, in principle, engage in its
ordinary business that it conducted prior to execution of the Joint Tender Offer
Agreement.

(Note 1) The "counterparties to the agreements that are materially important for54

business" were determined by the Offerors based on the results of due diligencethat were conducted towards the Target.
(Note 2) The Offerors made the following representations and warranties withrespect to themselves in the Joint Tender Offer Agreement: (a) that they are duly
and effectively established and are existing and have necessary power andauthority to conduct their business; (b) that the Shareholders Agreement and
Joint Tender Offer Agreement have been duly executed and procedures required
thereunder have been performed; (c) that they are in compliance with laws andregulations; (d) that there are no possibilities for compulsory execution; (e) thatthey acquired all necessary licenses and permits; (f) that they have legitimate
and effective ownership in the Target's Shares without any encumbrances; and(g) that they have no transactions with anti-social forces.

2. Summary of tender offer(1) Summary of the Target
(i)

Name

Honshu Chemical Industry Co., Ltd.

(ii)

Location

3-9, Nihombashi 3-chome, Chuo-ku, Tokyo

Name and title ofPresident and CEO, Yuji Fukuyama(iii)
representative
Manufacture and sale of materials for high-performance resins, suchas liquid crystal polymers, specialty polycarbonate resins and
Description of(iv)

specialty epoxy resins, as well as various chemicals that serve as
businessmaterials for electronic chemicals, pharmaceuticals and agriculturalchemicals
Amount of share

1,500,500,000 yen(v)
capitalMarch 23, 1949
(Note) Originating from its predecessor, Yuraseiko & Company,
Honshu Chemical Industry Co., Ltd. (the "Former Company")merged with Honshu Chemical Industry Co., Ltd. (the "New
Date ofCompany") in July 1963 for the purpose of reducing the par value ofincorporation

shares. In this merger, the Former Company was the absorbed(vi)
company and the New Company was the surviving company. For thisreason, the date of incorporation of the Target Company as registeredin its commercial register is March 23, 1949, which is the date that
New Company was registered.
55

Mitsui & Co., Ltd.
26.99%(Standing proxy: Custody Bank of Japan, Ltd.)
Mitsui Chemicals, Inc.

26.99%BBH FOR FIDELITY LOW-PRICED STOCK FUND
(PRINCIPAL ALL SECTOR SUBPORTFOLIO)

6.52%(Standing proxy: MUFG Bank, Ltd.)
Custody Bank of Japan, Ltd. (Trust account)

3.19%

Osamu Taneda

2.88%

The Master Trust Bank of Japan, Ltd. (Trust account)

2.33%

Major
shareholders andSTATE STREET BANK AND TRUST COMPANY
shareholding ratio
505224

(vii)

1.74%

(as of September(Standing proxy: Mizuho Bank, Ltd., Settlement Service
30, 2020)
Dept.)(Note)BNY GCM CLIENT ACCOUNT JPRD AC ISG (FEAC)

1.72%(Standing proxy: MUFG Bank, Ltd.)
Gakko-hojin Tanaka Ikuei-kai (incorporated educational
1.22%
institution)
BBH FOR FIDELITY GROUP TRUSTBENEFIT(PRINCIPAL ALL SECTOR SUBPORTFORIO)

1.09%(Standing proxy: MUFG Bank, Ltd.)(viii)

Relationships between the Offerors and the Target
Capital

As of the date of this Press Release, the Offerors each own 3,098,000

relationshipshares of the Target's Shares (Shareholding Ratio: 26.99%).
One among four auditors of the Target concurrently serves as an

Personal

employee of Mitsui Chemicals. Mitsui Chemicals also dispatches

relationshipfour employees to the Target and Mitsui & Co. dispatches two
employees to the Target.
The Target purchases raw materials from Mitsui Chemicals and sells

Business

products manufactured by consignment to the same. The Target

relationshippurchases raw materials from Mitsui & Co. and sells products to thesame.

Status as related
party

The Target is an equity method affiliate of each of the Offerors, andconstitutes a related party of the Offerors.

(Note) "Major shareholders and shareholding ratio (as of September 30, 2020)" is extracted from
"Major Shareholders" in the Quarterly Securities Report for the Second Quarter of the 92nd
56

Fiscal Year filed on November 13, 2020.

(2) Schedule(I)

Schedule

Date of resolution
Dateof public

May 14, 2021 (Friday)
noticeconcerning

May 17, 2021 (Monday)

commencement of the tender offer
Name of daily newspaper on which the

Public notice shall be given electronicallypublic notice is posted

and publication shall be made on the Nihon
Keizai Shimbun to the effect that public
notice was given.
(Electronic

noticeispostedonhttps://disclosure.edinet-fsa.go.jp/)
Date of submission of the tender offer

May 17, 2021 (Monday)

registration statement(II)

Tender offer period as of the submission date of the tender offer registration statement
From May 17, 2021 (Monday) through June 11, 2021 (Friday) (20 business days)(III)

Possibility of extending the above period upon request from the Target
If the Target submits a statement of opinion requesting an extension of the tender offer
period pursuant to Article 27-10, Paragraph 3 of the Act, the Tender Offer Period shall be
extended to June 25, 2021 (Friday) (30 business days).

(3) Price of tender offer

1,830 yen per share of the common stock(4) Basis of calculation of the price of tender offer(I)

Basis of calculation

Mitsui Chemicals retained SMBC Nikko Securities, Mitsui Chemicals' financial advisor, to57

serve as the third-party valuator independent from the Offerors and the Target to calculate
the stock value of the Target's Shares in order to determine the Tender Offer Price.

SMBC Nikko Securities considered several methods to apply in calculating the share valueof the Target Shares from among multiple share value calculation methods. SMBC Nikko
Securities decided to apply: (i) the average market price method given that the Target's
Shares are listed on the Second Section of the TSE and thus the market price thereof isavailable; and (ii) the DCF Method to reflect the future business activities of the Target invaluation. Mitsui Chemicals procured the Share Valuation Report (SMBC Nikko
Securities) from SMBC Nikko Securities on November 10, 2020. Mitsui Chemicals has not
obtained an opinion concerning fairness of the Tender Offer Price (fairness opinion) fromSMBC Nikko Securities.

According to the Share Valuation Report (SMBC Nikko Securities), the range of sharevalue per share of the Target's Shares calculated through each of the above methods is asfollows:

Average market price method:from 1,213 yen to 1,281 yen

DCF Method:from 1,718 yen to 2,082 yen

Pursuant to the average market price method, as of the reference date of calculation on
November 10, 2020, the share value range per share of the Target's Shares was calculated
to be 1,213 yen to 1,281 yen, based on the simple average closing price of 1,274 yen forthe most recent one (1) month through the reference date of calculation of the Target's
Shares on the Second Section of the TSE (from October 12, 2020 until November 10, 2020),
simple average closing price of 1,281 yen for the most recent three (3) months through thesame date (from August 11, 2020 until November 10, 2020), and the simple average closing
price of 1,213 yen for the most recent six (6) months through the same date (from May 11,2020 until November 10, 2020).

Pursuant to the DCF Method, the share value range per share of the Target's Shares wascalculated to be 1,718 yen to 2,082 yen, based on various elements, such as its businessplan from its Fiscal Year ending March 2021 to its Fiscal Year ending March 2024 that wereconfirmed by the Offerors, and information generally disclosed to the public, and by
discounting at a certain discount rate to the present value the free cash flow projected to begenerated by the Target from on and after its Fiscal Year ending March 2021. The Target's

58

future financial forecast that was referenced in the DCF Method does not include any fiscal
year in which a significant increase in profits is anticipated. Also, because the synergistic
effects that could be expected by executing the Transaction were difficult to estimate as of
the time of calculation, the contents of the Target's business plan do not take into accountthe synergies with the Offerors through the Transaction.

Mitsui & Co. retained Nomura Securities, Mitsui & Co.'s financial advisor, to serve as thethird-party valuator independent from the Offerors and the Target to calculate the stock
value of the Target's Shares in order to determine the Tender Offer Price.

Nomura Securities considered several methods to apply in calculating the share value of
the Target's Shares from among multiple share value calculation methods. Nomura
Securities decided to apply: (i) the average market price method given that the Target's
Shares are listed on the Second Section of the TSE; and (ii) the DCF Method to reflect the
future business activities of the Target in valuation. Mitsui & Co. procured the Share
Valuation Report (Nomura Securities) from Nomura Securities on November 10, 2020.
Mitsui & Co. has not obtained an opinion concerning fairness of the Tender Offer Price(fairness opinion) from Nomura Securities.

According to the Share Valuation Report (Nomura Securities), the range of share value pershare of the Target's Shares calculated through each of the above methods is as follows:

Average market price method:from 1,213 yen to 1,290 yen

DCF Method:from 1,358 yen to 1,979 yen

Pursuant to the average market price method, as of the reference date of calculation on
November 10, 2020, the share value range per share of the Target's Shares was calculated
to be 1,213 yen to 1,290 yen, based on the closing price of 1,290 yen as of the referencedate, simple average closing price of 1,284 yen for the most recent five (5) business days,
simple average closing price of 1,274 yen for the most recent one (1) month, simple averageclosing price of 1,281 yen for the most recent three (3) months, and the simple averageclosing price of 1,213 yen for the most recent six (6) months, of the Target's Shares on theSecond Section of the TSE.

Pursuant to the DCF Method, the share value range per share of the Target's Shares wascalculated to be 1,358 yen to 1,979 yen based on the Target's enterprise value and share59

value based on various elements such as profits projected in the Target's business plan andinvestment plan from its Fiscal Year ending March 2021 to its Fiscal Year ending March
2024, which were confirmed by the Offerors, and information generally disclosed to the
public, and by discounting at a certain discount rate to the present value the free cash flow
projected to be generated by the Target from on and after its Fiscal Year ending March 2021.
As a note, the Target's financial forecast based on the DCF Method does not include any
fiscal year in which a significant increase in profits is projected. Also, because thesynergistic effects that could be expected by executing the Transaction were difficult toestimate as of the time of calculation, the contents of the Target's business plan do not take
into account the synergies with the Offerors through the Transaction.

The Offerors comprehensively considered the results of valuation indicated in the Share
Valuation Report (SMBC Nikko Securities) and the Share Valuation Report (Nomura
Securities) respectively procured from SMBC Nikko Securities and Nomura Securities on
November 10, 2020, the results of due diligence conducted towards the Target during theperiod from mid-July 2020 until mid-September 2020, the actual examples of premiums
granted in determining the tender offer price in past tender offers, i.e., by a party other than
the issuer similar to the Tender Offer (examples of tender offer for equity method affiliate
on the basis of becoming delisted), the trends in market price of the Target's Shares in themost recent six (6) months prior to November 10, 2020, which is the business day
immediately prior to the date of publication of the Offerors' November 11, 2020 Press
Release, whether the Target's board of directors are in favor of the Tender Offer, and theprospects on tender towards the Tender Offer, and based on the results of discussions andnegotiations with the Target, decided to set the Tender Offer Price at 1,830 yen per share asof November 11, 2020.

Thereafter, the Offerors decided that (i) there had been no material change to the Target's
business conditions, the environment surrounding the Transaction, etc.; and (ii) based on
the results of additional due diligence towards the Target implemented from early March to
mid-May, 2021, among others, there had been no events that would materially affect theTarget's enterprise value and thus decided on May 14, 2021 that they would not change theTender Offer Price.

As a note, the Tender Offer Price of 1,830 yen is the price obtained by adding a premiumof 41.86% on the closing price of 1,290 yen of the Target's Shares on the Second Sectionof the TSE on November 10, 2020, which is the business day immediately prior to the date60

of publication of the Offerors' November 11, 2020 Press Release, is the price obtained byadding a premium of 43.64% on the simple average closing price of 1,274 yen for the mostrecent month, is the price obtained by adding a premium of 42.86% on the simple averageclosing price of 1,281 yen for the most recent three (3) months, is the price obtained byadding a premium of 50.87% on the simple average closing price of 1,213 yen for the mostrecent six (6) months.

(II)

Process of calculation(Background of decision to consummate the Tender Offer Price)
As indicated in "(2) Background and purposes of the Tender Offer and decision-making
process leading to the consummation of the Tender Offer and management policy after theTender Offer" under "1. Purposes of the Purchase," formal discussions and negotiations
were conducted several times with the Target concerning the management system andbusiness policies and terms for the Transaction since early July 2020. As a result of these
discussions and negotiations, the Offerors and the Target reached the same view that inorder to adapt to the difficult business environment in which customers' demands arediversifying and becoming more sophisticated, and to pursue growth strategies that have asense of speed ahead of competitors, the best method to contribute to the enhancement ofenterprise value of the Target is to have the Offerors jointly introduce various managerial
resources more flexibly than in the past, and to change to a privatized system where theOfferors are the sole shareholders of the Target that allows decisions on strategies andpolicies and flexible managerial decisions based on middle to long-term perspective, andimplement each of the above measures, and the Offerors each decided to jointly
consummate the Tender Offer targeting all of the Target's Shares, and the Tender Offer Pricewas decided from the below circumstances.

(a) Names of third parties from whom opinion was heard in the process of calculation

Mitsui Chemicals referred to the Share Valuation Report (SMBC Nikko Securities)
that was submitted from SMBC Nikko Securities, a third-party valuator independent
from the Offerors and the Target in determining the Tender Offer Price. Mitsui
Chemicals has not obtained an opinion concerning fairness of the Tender Offer Price(fairness opinion) from SMBC Nikko Securities.

Mitsui & Co. referred to the Share Valuation Report (Nomura Securities) that was

61submitted from Nomura Securities, a third-party valuator independent from theOfferors and the Target in determining the Tender Offer Price. Mitsui & Co. has not
obtained an opinion concerning fairness of the Tender Offer Price (fairness opinion)from Nomura Securities.

(b) Summary of those opinions

SMBC Nikko Securities calculated the share value of the Target's Shares by applying
each of the average market price method and the DCF Method and the range of sharevalue per share of the Target's Shares calculated through each method is as follows:

Average market price method:from 1,213 yen to 1,281 yen

DCF Method:from 1,718 yen to 2,082 yen

Nomura Securities calculated the share value of the Target's Shares by applying eachof the average market price method and the DCF Method and the range of share value
per share of the Target's Shares calculated through each method is as follows.

Average market price method:from 1,213 yen to 1,290 yen

DCF Method:from 1,358 yen to 1,979 yen(c) Circumstances leading to the decision of the purchase price based on those opinions

As indicated above in "(I) Basis of calculation," in addition to the results ofcalculation set forth in the Share Valuation Report (SMBC Nikko Securities) and theShare Valuation Report (Nomura Securities) that the Offerors respectively procured
from SMBC Nikko Securities and Nomura Securities on November 10, 2020, theOfferors comprehensively considered the results of due diligence conducted on theTarget during mid-July 2020 to mid-September 2020, actual examples of premiums
granted in determining the tender offer price in past tender offers, i.e., by a party
other than the issuer similar to the Tender Offer (examples of tender offer for equity
method affiliate or equity method subsidiary on the basis of becoming privatized),
trends in market share price of the Target's Shares in the recent six (6) months priorto November 10, 2020, which is the business day immediately prior to the date of
publication of the Offerors' November 11, 2020 Press Release, whether the Target's
board of directors are in favor of the Tender Offer, and prospects on tender towards

62the Tender Offer, and based on the results of discussions and negotiations with theTarget, decided on November 11, 2020 to set the Tender Offer Price at 1,830 yen per
share.

Thereafter, the Offerors decided that (i) there had been no material change to theTarget's business conditions, the environment surrounding the Transaction, etc.; and(ii) based on the results of additional due diligence towards the Target implemented
from early March to mid-May, 2021, among others, there had been no events thatwould materially affect the Target's enterprise value, and thus decided on May 14,
2021 that they would not change the Tender Offer Price.

(III)

Relationship with valuation agencies

SMBC Nikko Securities as a financial advisor and third-party valuator for Mitsui
Chemicals is not a related party of the Offerors or of the Target, and does not have any
material interest in the Transaction, including the Tender Offer.

Nomura Securities as a financial advisor and third-party valuator for Mitsui & Co. is not a
related party of the Offerors or of the Target, and does not have any material interest in theTransaction, including the Tender Offer.

(5) Number of shares to be purchased

Minimum number of
Number of tendered

Maximum number ofType of sharestendered shares to beshares to be purchased

shares to be purchased
purchased

Common stock

5,280,788 shares

1,455,200 shares

-

Total

5,280,788 shares

1,455,200 shares-(Note 1) If the total number of the Tendered Shares is less than the minimum number of tenderedshares to be purchased in the Tender Offer (1,455,200 shares), the Offerors will purchasenone of the Tendered Shares. If the total number of the Tendered Shares is no less thanthe minimum number of tendered shares to be purchased in the Tender Offer, the Offerors
will purchase all of the Tendered Shares.
(Note 2) The number of tendered shares to be purchased is the maximum number of the Target's
Shares (5,280,788 shares) that the Offerors will acquire by the Tender Offer. Thismaximum number is obtained by deducting the number of treasury shares owned by the63Target as of March 31, 2021 (23,212 shares), the number of shares owned by Mitsui
Chemicals on the same date (3,098,000 shares), and the number of shares owned by
Mitsui & Co. as of the same date (3,098,000 shares) from the total number of issued
shares of the Target as of the same date (11,500,000 shares) as stated in the Target's
Annual Earnings Briefing.
(Note 3) Shares less than one unit are also subject to the Tender Offer. If a shareholder exercises
the right to claim for purchase of shares less than one unit pursuant to the Companies Act,the Target may purchase its shares during the Tender Offer Period in accordance withstatutory procedures.
(Note 4) The treasury shares owned by the Target are not scheduled to be acquired through theTender Offer.
(Note 5) With respect to Mitsui Chemicals and Mitsui & Co.’s method of purchasing the Tendered
Shares, (a) if the total number of the Tendered Shares is 2,487,859 or more, Mitsui
Chemicals will purchase the Tendered Shares up to 2,640,394 shares and Mitsui & Co.
will purchase the remainder of the Tendered Shares up to the total number of the Tendered
Shares; and (b) if the total number of the Tendered Shares is less than 2,487,859, each of
the Offerors will purchase one half of the total number of the Tendered Shares (fractional
numbers, if any, shall be rounded up with respect to the shares to be purchased by Mitsui
Chemicals, and rounded down with respect to the shares to be purchased by Mitsui &Co.).
(6) Change in shareholding ratio after the Tender Offer

Numberofvotingrights(Shareholding Ratio before the Tender Offer

pertaining to the shares held by
61,96053.99%)

the Offerors before the Tender
Offer
Numberofvotingrights(Shareholding Ratio before the Tender Offer

pertaining to the shares held by
118

0.01%)

special related parties before
the Tender Offer
Numberofvotingrightspertaining to the shares held by(Shareholding

Ratio

after

the

Tender

114,767
the Offerors after the Tender

Offer

100.00%)Offer
Numberofvotingrights(Shareholding

pertaining to the shares, etc.

Ratio

after

the

Tender0
Offerheld by special related parties

64

0.00%)

after the Tender Offer

Total number of voting rights
of all shareholders of the114,671

Target(Note 1) "Number of voting rights pertaining to the shares held by special related parties before
the Tender Offer" is the total number of voting rights pertaining to shares, etc. held by
each special related party (excluding parties that shall be excluded from special relatedparties pursuant to Article 3, Paragraph 2, Item (i) of the Cabinet Office Ordinance on
Disclosure Required for Tender Offer for Share Certificates, etc. by Person Other Than
Issuer (Ordinance of the Ministry of Finance No. 38 of 1990, as amended; hereinafter the"Cabinet Office Ordinance") for the purpose of calculating the holding ratio of shares, etc.
set out in each item of Article 27-2, Paragraph 1 of the Act, and the Offerors which
mutually constitute a special related party of the other). As the shares, etc. held byspecial related parties (excluding the treasury shares held by the Target and the Target's
Shares held by the Offerors which mutually constitute a special related party of the other)
are also subject to the Tender Offer, the "Number of voting rights pertaining to the shares,
etc. held by special related parties after the Tender Offer" is indicated as 0.
(Note 2) "Total number of voting rights of all shareholders of the Target" is the number of the voting
rights of all shareholders as of September 30, 2020 as indicated in the Target's Quarterly
Securities Report for the Third Quarter of the 92nd Fiscal Year filed on February 10, 2021.
However, because less than unit shares are also subject to purchase in the Tender Offer,"Shareholding Ratio before the Tender Offer" and "Shareholding Ratio after the Tender
Offer" are calculated based on the denominator of voting rights (114,767) pertaining to thenumber of shares (11,476,788 shares) obtained by deducting the treasury shares (23,212
shares) held by the Target as of March 31, 2021 from the total number of issued shares(11,500,000 shares) as of the same day as indicated in the Target's Annual Earnings
Briefing.
(Note 3) "Shareholding Ratio before the Tender Offer" and "Shareholding Ratio after the Tender
Offer" are indicated by rounding to the second decimal place.
(7) Aggregate tender offer price

9,663,842,040 yen(Note) The aggregate tender offer price indicated is the amount obtained by multiplying thenumber of shares scheduled to be purchased in the Tender Offer (5,280,788 shares) by theTender Offer Price (1,830 yen).
(8) Method of settlement(I)

Name and location of head office of the financial instruments business operator or bank,etc. in charge of settlement of the tender offer

65

SMBC Nikko Securities Inc.

(II)

3-1, Marunouchi 3-Chome, Chiyoda-ku, Tokyo

Commencement date of settlement
June 18, 2021 (Friday)(Note) If the Target submits a statement of opinion requesting an extension of the tender
offer period pursuant to Article 27-10, Paragraph 3 of the Act, thecommencement date of settlement shall be July 2, 2021 (Friday).

(III)

Method of settlement
A written notice concerning purchase, etc. through the Tender Offer shall be sent by post to
the address or location of the tendering shareholders (or the standing proxy in the case of
non-resident shareholders) without delay after completion of the Tender Offer Period. The
notice shall be given electronically for tenders made through Nikko Easy Trade.

The purchase shall be made in cash. The sales proceeds for the purchased shares, etc. shallbe remitted from the tender offer agent to the location designated by the tendering
shareholders (or the standing proxy in the case of non-resident shareholders) without delay
after the commencement date of the settlement as instructed by the tendering shareholders(or the standing proxy in the case of non-resident shareholders).

(IV)

Method of returning the shares, etc.
If all of the Tendered Shares are not purchased pursuant to the conditions set out in "(I)Conditions in each item of Article 27-13, Paragraph 4 of the Act and contents thereof" or"(II) Conditions for withdrawal, etc. of the Tender Offer, contents thereof and method of
disclosing the withdrawal, etc." in "(9) Other conditions and method of the Tender Offer",
the tender offer agent will reinstate the shares, etc. that must be returned to the state whentender was made (i.e., the state when execution of the tender order for the Tender Offer wascanceled) in the tendering shareholders’ accounts held by the tender offer agent on thesecond business day after the last day of the Tender Offer Period (if the Tender Offer iswithdrawn, etc., on the day it is withdrawn, etc.).

(9) Other conditions and method of the Tender Offer(I)

Conditions in each item of Article 27-13, Paragraph 4 of the Act and contents thereof

If the total number of the Tendered Shares is less than the minimum number of tendered66

shares to be purchased in the Tender Offer (1,455,200 shares), the Offerors will purchasenone of the Tendered Shares. If the total number of the Tendered Shares is no less than theminimum number of tendered shares to be purchased in the Tender Offer (1,455,200 shares),the Offerors will purchase all of the Tendered Shares.

(II)

Conditions for withdrawal, etc. of the Tender Offer contents thereof and method of
disclosing the withdrawal, etc.

Upon the occurrence of any items provided in Article 14, Paragraph 1, Items (i) (a) to (j)and (m) to (s), Items (iii) (a) to (h) and (j), and Article 14, Paragraph 2, Items (iii) to (vi) of
the Order for Enforcement of the Financial Instruments and Exchange Act (Cabinet OrderNo. 321 of 1965, as amended; the "Order"), the Tender Offer may be withdrawn, etc. In theTender Offer, "the facts equivalent to those set forth in (a) to (i)" stipulated in Article 14,
Paragraph 1, Item (iii) (j) of the Order means: (1) discovery of a false statement concerninga material item or an omission of a statement concerning a material item that is required to
be stated in the statutory disclosure documents submitted by the Target in the past or (2)occurrence of any of the events listed in (a) to (g) of the same Item with respect to theTarget's important subsidiary.

If the Offerors withdraw, etc. the Tender Offer, they shall give a public notice electronicallyand publish a notice to that effect in the Nihon Keizai Shimbun. If it is difficult to make apublic notice by the last day of the Tender Offer Period, the Offerors shall make anannouncement by the method prescribed in Article 20 of the Cabinet Office Ordinance, andgive public notice immediately thereafter.

(III)

Conditions for reducing the price of tender offer, contents thereof and method of disclosing
the reduction.

If the Target conducts any act prescribed in Article 13, Paragraph 1 of the Order during theTender Offer Period, then pursuant to the provisions of Article 27-6, Paragraph 1, Item (i)of the Act, the Offerors may reduce the price of tender offer in accordance with thestandards prescribed in Article 19, Paragraph 1 of the Cabinet Office Ordinance.

If the Offerors decide to reduce the purchase price, they shall give a public noticeelectronically and publish a notice to that effect in the Nihon Keizai Shimbun. If it isdifficult to make a public notice by the last day of the Tender Offer Period, the Offerors

67shall make an announcement by the method prescribed in Article 20 of the Cabinet Office
Ordinance, and give public notice immediately thereafter.

If the price of tender offer is reduced, the Tendered Shares that were tendered on or before
the date of the relevant public notice shall also be purchased at the reduced price of tender
offer.

(IV)

Matters concerning the tendering shareholders' rights to cancel agreements

The tendering shareholders may cancel the agreement concerning the Tender Offer at any
time during the Tender Offer Period.

If a tendering shareholder intends to cancel agreement , the relevant tendering shareholder
is requested to deliver or send a written notice that he/she will cancel the agreement
concerning the Tender Offer (the "Cancellation Notice") to the party designated below nolater than 15:30 on the last day of the Tender Offer Period. (Please note that the businesshours vary for each sales office. Please confirm in advance the business hours of therelevant sales office.). If the Cancellation Notice is sent by post, it must reach the party
designated below no later than 15:30 on the last day of the Tender Offer Period (Please notethat the business hours vary for each sales office. Please confirm in advance the businesshours of the relevant sales office.).

When cancelling the agreement for a tender made through Nikko Easy Trade, please
complete the cancellation procedures by no later than 15:30 on the last day of the Tender
Offer Period by logging into Nikko Easy Trade and following the procedures shown on thescreen.

The designated party that is authorized to receive the Cancellation Notice:
SMBC Nikko Securities Inc.

3-1, Marunouchi 3-Chome, Chiyoda-ku, Tokyo(and its other sales offices in Japan)

The Offerors will not seek compensatory damages or penalties from the tendering
shareholders for cancelling the agreement. The Offerors will also bear the cost for returning
the Tendered Shares.

(V)

Method of disclosure if the terms, etc. for purchase are changed

68The Offerors may change the terms for purchase during the Tender Offer Period, excluding
the changes prohibited by Article 27-6, Paragraph 1 of the Act and Article 13 of the Order.

If the Offerors decide to change the terms for purchase, they shall give a public noticeelectronically on the contents of the change and publish a notice to that effect in the Nihon
Keizai Shimbun. If it is difficult to make a public notice by the last day of the Tender Offer
Period, the Offerors shall make an announcement by the method prescribed in Article 20 of
the Cabinet Office Ordinance, and give public notice immediately thereafter.

If the terms for purchase are changed, the Tendered Shares that were tendered on or before
the date of the relevant public notice shall also be purchased at the terms of purchase after
the change.

(VI)

Method of disclosure if amended tender offer registration statement is submitted

If the Offerors submitted an amended tender offer registration statement to the Director of
the Kanto Local Finance Bureau (excluding a submission pursuant to the proviso of Article
27-8, Paragraph 11 of the Act), they shall immediately announce the contents stated in theamended tender offer registration statement that relate to the contents stated in the public
notice by the method prescribed in Article 20 of the Cabinet Office Ordinance. The Offerors
must also immediately amend the tender offer explanatory statement and deliver theamended tender offer explanatory statement to the tendering shareholders who have alreadyreceived the tender offer explanatory statement. However, if the amendment is minor, theOfferors shall instead prepare a document stating the reasons for the amendment, the items
that were amended, and the contents after the amendment, and deliver that document to thetendering shareholders.

(VII) Method of disclosing the results of the Tender Offer

The Offerors will announce the results of the Tender Offer on the day immediately after thelast day of the Tender Offer Period by the method stipulated in Article 9-4 of the Order andArticle 30-2 of the Cabinet Office Ordinance.

(VIII) Others

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The Tender Offer is not, and will not be, made, directly or indirectly, in or to the U.S., or
by using the U.S. Postal Service or any other means or instruments of interstate or foreigncommerce (including, but not limited to telephone, telex, facsimile, e-mail, and internet
communication), or through any facilities of a securities exchange in the U.S. No one may
tender shares in the Tender Offer by any means or instruments above, or through any facility
above, or from the U.S.

In addition, the tender offer registration statement or other related documents are not, andmay not be, sent or delivered by the postal service or any other means in, to, or from the
U.S. Any tender of shares in the Tender Offer that directly or indirectly breaches any of therestrictions above will not be accepted.

Each person who tenders shares in the Tender Offer (or the standing proxy in the case of
non-resident shareholders) is required to represent and warrant the following: (i) the person
is not located in the U.S. at the time of tendering shares or sending the tender offer
acceptance form; (ii) the person did not receive or send any information regarding theTender Offer or any document regarding the purchase within, to or from the U.S.; (iii) the
person did not use, directly or indirectly, the U.S. Postal Service or any other means or
instruments of interstate or foreign commerce (including but not limited to telephone, telex,
facsimile, e-mail and internet communication) or facilities of a securities exchange in the
U.S. with respect to the purchase or to signing or delivering the tender offer acceptanceform; and (iv) the person is not acting as an attorney, a trustee or a mandatary without
discretion for any other person (except for the case where the latter provides all instructions
for the purchase outside the U.S.).

(10) Date of public notice of commencement of the tender offer
May 17, 2021 (Monday)(11) Tender offer agent
SMBC Nikko Securities Inc.

3-1, Marunouchi 3-Chome, Chiyoda-ku, Tokyo

3. Policies after the Tender Offer and perspectives

For our policies after the Tender Offer, see "(2) Background and purposes of the Tender Offer anddecision-making process leading to the consummation of the Tender Offer and management policy after
the Tender Offer," "(4) Policies on the organizational restructuring, etc. after the Tender Offer (matters70

concerning "two-step acquisition")" and "(5) Possibility of delisting and reason" under "1. Purposes of
the Purchase" above.

4. Others(1) Agreements between the Offerors and the Target or its directors and officers, and the details thereof

According to the Target's Press Release, it was resolved at the Target's board of directors' meeting
held on November 11, 2020 that if the Tender Offer is commenced, the Target will express its
opinion as of that date in favor of the Tender Offer and the Target will recommend the shareholdersof the Target to tender in the Tender Offer.

At the Target's board of directors meeting held on May 14, 2021, all nine (9) directors of the Target
held a discussion, and in view of the Target's business conditions and the environment surrounding
the Transaction, again carefully considered the various terms of the Tender Offer, decided that evenas of May 14, 2021 there were no factors to change its opinion concerning the Tender Offer as ofNovember 11, 2020, and those nine (9) directors of the Target resolved with a unanimous vote that
the Target will again express its opinion in favor of the Tender Offer and recommend to its
shareholders to tender their shares in the Tender Offer.

For the details of the process of decision-making by the board of directors of the Target at each ofits meetings held on November 11, 2020 and May 14, 2021, see "(V) Unanimous approval of all
disinterested directors of the Target and the opinion of all auditors that they have no objection"
under "(3) Measures to ensure the fairness of the Tender Offer, such as measures to ensure thefairness of the Tender Offer Price and measures to avoid conflicts of interest" under "1. Purposesof the Purchase" above.

(2) Other information considered to be necessary for investors to determine whether to tender theirshares in the Tender Offer(I)

Publication of "Consolidated Financial Results for the Fiscal Year Ended March 31, 2021
(Japanese GAAP)"The Target announced its Annual Earnings Briefing on May 14, 2021, which is summarized
as follows. The contents of these financial results were not audited by an audit corporation
pursuant to Article 193-2, Paragraph 1 of the Act. The following summary of the71announcement is an extract from of the contents announced by the Target. Please see theactual financial results for details.

(i) Consolidated profit and loss
Six month results

For the consolidated fiscal year ended March 31, 2021
(from April 1, 2020 to March 31, 2021)

Net sales

20,478 million yen

Cost of sales

14,726 million yen

Selling,

generaland

5,751 million yen

administrative expenses
Non-operating income

26 million yen

Non-operating expenses

79 million yen

Net income attributable to2,063 million yen

owners of parent(ii) Consolidated per share information

Six month results

For the consolidated fiscal year ended March 31, 2021
(from April 1, 2020 to March 31, 2021)(II)

Net income per share

179.77 yen

Dividends per share

12.00 yen

Publication of "Notice Concerning Change of Officers"

On May 14, 2021, the Target published "Notice Concerning Change of Officers." Thechange pertaining to this notice is as follows. Please see the actual notice for details.

Change of Auditor (Effective June 24, 2021)
Auditor who is scheduled to resign:
Name

Current Title

Yoshinori Ashida

Auditor (part-time)

END

72

Soliciting Regulations
This Press Release is intended to announce the Tender Offer to the public and has not been prepared for the purpose of soliciting
an offer to sell shares. If shareholders wish to make an offer to sell their shares, they should first read the Tender Offer Explanation
Statement concerning the Tender Offer and make an offer to sell their shares at their own discretion. This press release shall neitherbe, nor constitute a part of, an offer or solicitation to sell, or solicitation of an offer to purchase any securities, and neither thisPress Release (or a part of this Press Release) nor its distribution shall be interpreted to constitute the basis of any agreement inrelation to the Tender Offer, and this Press Release may not be relied upon at the time of entering into any such agreement.
Forward-Looking Statements
This information may contain expressions concerning future prospects for business of the Offerors and other companies, including"expect," "anticipate," "intend," "plan," "strongly believe," and "project." These expressions are based on the business prospectsof the Offerors at present, and are subject to change depending on the future circumstances. In respect of this information, theOfferors assume no obligation to update these expressions concerning future prospects to reflect actual performance and othercircumstances, and changes in the terms.
U.S. Regulations
The Tender Offer is not and will not be made, directly or indirectly, in or to the U.S., or by using the U.S. postal service or any
other means or instruments of interstate or foreign commerce (including but not limited to telephone, telex, facsimile, e-mail, andinternet communication), or through any facilities of a securities exchange in the U.S. No one can tender shares in the Tender Offer
by any means or instruments above, or through any facility above, or from the U.S. facilities within the U.S. The Tender Offer
may not be tendered using the above methods and means, through the above facilities, or from within the U.S. Furthermore, thepress release concerning the Tender Offer or other related documents are not and may not be sent or delivered by the postal service
or any other means in, to, or from the U.S. Any tender of shares in the Tender Offer that directly or indirectly breaches any of therestrictions above will not be accepted.
Solicitation to purchase securities or other equivalents is not conducted to residents in the U.S. or within the U.S., and those sent
to the Offerors by residents in the U.S. or from the U.S. will not be accepted.
Other Countries
The announcement, issuance, or distribution of this Press Release may be legally restricted in some countries or territories. In suchcase, shareholders should be aware of and comply with such restriction. The announcement, issue or distribution of this Press
Release shall not be interpreted as an offer to purchase or solicitation of an offer to sell shares concerning the Tender Offer, but
simply as a distribution of information.

73