Company name:
Representative:
Security Code:Contact:

Company name:
Representative:
Security Code:Contact:

Ube Industries, Ltd.
Michio Takeshita
President and Representative Director
4208 (shares listed on First Section,
Tokyo Stock Exchange and Fukuoka
Stock Exchange)
Yasuko Sakamoto
General Manager, IR/PR Department
Tel: +81-3-5149-6110
Ube Material Industries, Ltd.
Kenichi Abe
President and Representative Director
5390 (shares listed on Second Section,
Tokyo Stock Exchange and Fukuoka
Stock Exchange)
Koichi Kato
Executive Officer, General Manager,
Corporate Planning Dept.
Tel: +81-836-31-0190

Ube Industries, Ltd. to Make Ube Material Industries, Ltd.
a Wholly Owned Subsidiary through Share Exchange
NOTICE TO U.S. SHAREHOLDERS
THIS SHARE EXCHANGE IS MADE FOR THE SECURITIES OF A FOREIGN COMPANY. THE OFFER IS SUBJECTTO DISCLOSURE REQUIREMENTS OF JAPAN THAT ARE DIFFERENT FROM THOSE OF THE UNITED STATES.
FINANCIAL STATEMENTS INCLUDED IN THE DOCUMENTS, IF ANY, HAVE BEEN PREPARED IN
ACCORDANCE WITH JAPANESE ACCOUNTING STANDARDS THAT MAY NOT BE COMPARABLE TO THE
FINANCIAL STATEMENTS OF UNITED STATES COMPANIES.
IT MAY BE DIFFICULT FOR YOU TO ENFORCE YOUR RIGHTS AND ANY CLAIM YOU MAY HAVE ARISINGUNDER THE FEDERAL SECURITIES LAWS, SINCE THE ISSUER IS LOCATED IN A FOREIGN COUNTRY, AND
SOME OR ALL OF ITS OFFICERS AND DIRECTORS MAY BE RESIDENTS OF A FOREIGN COUNTRY. YOU MAY
NOT BE ABLE TO SUE A FOREIGN COMPANY OR ITS OFFICERS OR DIRECTORS IN A FOREIGN COURT FOR
VIOLATIONS OF THE U.S. SECURITIES LAWS. IT MAY BE DIFFICULT TO COMPEL A FOREIGN COMPANY AND
ITS AFFILIATES TO SUBMIT THEMSELVES TO A U.S. COURT’S JUDGMENT.
YOU SHOULD BE AWARE THAT THE ISSUER MAY PURCHASE SECURITIES OTHERWISE THAN UNDER THE
EXCHANGE OFFER, SUCH AS IN OPEN MARKET OR PRIVATELY NEGOTIATED PURCHASES.

TOKYO, May 10, 2013 — We hereby announce that Ube Industries, Ltd. (“UbeIndustries”), and Ube Material Industries, Ltd. (“Ube Material”), resolved, at theirrespective Board of Directors Meetings held on May 10, 2013, to implement a shareexchange (hereafter, the “Share Exchange”) pursuant to a share exchange agreement
entered into by Ube Industries and Ube Material today (hereafter, the “Share Exchange
Agreement”), under which Ube Industries will become a parent company holding 100%
ownership of Ube Material and Ube Material will become a wholly owned subsidiary of
Ube Industries.
The Share Exchange for Ube Industries is scheduled to be implemented pursuant to ashort-form share exchange procedure provided in Article 796, Paragraph 3, of theCompanies Act for which approval at Ube Industries’ General Meeting of Shareholders
is not required. Moreover, the Share Exchange for Ube Material is scheduled to become
effective as of August 1, 2013, subject to the approval of the Share Exchange
Agreement at Ube Material’s Scheduled General Meeting of Shareholders scheduled tobe held on June 25, 2013.
Prior to the effective date of the Share Exchange (scheduled for August 1, 2013), theshare of Ube Material will be delisted on July 29, 2013 (the last trading date will be July26, 2013), from the Second Section of Tokyo Stock Exchange Group, Inc. (hereafter,“Tokyo Stock Exchange”) and the Securities Membership Corporation Fukuoka Stock
Exchange (hereafter, “Fukuoka Stock Exchange.”).
1. Purpose of the Share Exchange
The UBE Group, composed of Ube Industries as the parent company and Ube
Industries’ subsidiaries and affiliates including Ube Material, widely engages inbusinesses in a variety of fields centering on chemicals such as construction materials,
machinery, and energy & environment.
The UBE Group addresses to increase the Group’s corporate value toward the
medium- to long-term goal of sustainable growth. The Group therefore promotes
business expansion in growth fields and endeavors to strengthen its businessfoundations to ensure stable earnings and cash flows. In addition, the Group abides by
the policy of reinforcing close collaboration within the Group in promoting various
measures to this end.
Ube Material engages in the calcia and magnesia business and the fine materials
business. Calcia and magnesia products are widely used in the steel, chemical, civilengineering and agricultural industries, whereas fine materials products are used forelectronic material and optical glass applications, as well as for plastic fillers and foodadditives, thereby supporting Japan’s leading-edge products in diverse fields.
For the Ube Material’s core business’ calcia and magnesia business, a decline inmedium- to long-term demand is expected in the steel and chemical industries, which
are its main user categories. Furthermore, a harsh business environment is forecasted formagnesia clinker, which is manufactured only by Ube Material in Japan, in the near
future due to intensifying competition from foreign products and other factors. To copewith such conditions, Ube Material faces challenging tasks such as cost reduction andefficiency improvement, as well as sales expansion by taking advantage of new business
opportunities. Meanwhile, in the fine materials business that is deemed a pillar for
renewed growth, enhanced technological innovation, new product development andspeeding up new application development are increasingly required in view of rapidchanges in the business environment, principally in the electronics-related fields,
despite the favorable adoption of its products by customers, supported by highly
acclaimed technical capabilities.
Given the aforementioned circumstances, Ube Industries and Ube Material haverespectively carried out various measures with the aim of increasing the corporate value.
However, both companies concluded that unifying business strategies and speeding-up
decision making in their combined business activities through the conversion of Ube
Material into a wholly owned subsidiary of Ube Industries and the pursuit of higher
corporate value by Ube Material to maximize synergies with Ube Industries willcontribute to raising the corporate value of the whole UBE Group.
The companies concluded as follows:(i) Raise profit-making capability in the “limestone chain”
Ube Industries mines limestone and Ube Material develops the calcia andmagnesia business with limestone as a raw material.
Both companies shall promote business strategies in the pursuit of optimization
as a whole by, for example, unifying their relevant strategies regarding thelimestone chain and pursuing an advantageous product mix to further increase theadded value of their products.
In production, Ube Material will be able to achieve further cost reductions by
integrating the operating and maintenance know-how and techniques regarding theequipment and facilities owned by both companies. As for procurement andlogistics, Ube Material shall pursue extensive utilization of the UBE Group’s global
network for procurement of raw materials and fuels, as well as cost synergies interms of raw materials and fuels and purchased goods due to advantages of scale.
As for business operation, Ube Material’s business capability shall bestrengthened through the effective utilization of trade assets, including a valuablenetwork with a wide variety of customers, application information and personalconnections, all of which are owned by the UBE Group that widely develops
diverse business operations, as well as through the exploitation of new markets
worldwide by drawing on the Group’s overseas network.
(ii) Promote commercialization of the specialty inorganic materials businessIn the specialty inorganic materials field, one of the promising businessexpansion areas of the UBE Group, UBE Group Business Promotion Office on
Inorganic Specialty Products was established as a cross-sectional organization in
the Group to promote activities with the aim of demonstrating the Group’s
comprehensive strengths. Both companies shall accelerate the development ofinnovative products toward the timely commercialization thereof by reinforcing thecollaboration of development, production, marketing and sales functions, which aredispersed among different departments and sections of both companies, via thein-depth promotion of this initiative.
After Ube Industries makes Ube Material a wholly owned subsidiary thereof, Ube
Industries will endeavor to strengthen group-wide collaboration in a variety of businessfields and promote the effective utilization of management resources while paying full
attention to the features of Ube Material’s businesses and full advantages in its
corporate management and operating system. Thus, both companies will jointly address
to further increase business value with the aim of growing together.

2. Outline of the Share Exchange(1) Schedule for the Share Exchange
Record Date for the Scheduled General Meeting of March 31, 2013
Shareholders (Ube Material)
Board of Directors Meeting to resolve the Share May 10, 2013
Exchange (Both companies)
Execution of the Share Exchange Agreement (Both May 10, 2013
companies)
Scheduled General Meeting of Shareholders to June 25, 2013 (Tentative)
approve the Share Exchange (Ube Material)
Last Trading Day (Ube Material)

July 26, 2013 (Tentative)

Date of Delisting (Ube Material)

July 29, 2013 (Tentative)

Scheduled date of the Share Exchange (Effective August 1, 2013 (Tentative)
Date)
Notes:
1. Pursuant to the short-form share exchange procedure provided in Article 796, Paragraph 3, of theCompanies Act, Ube Industries intends to implement the Share Exchange without obtaining approval at
the General Meeting of Shareholders.
2. The scheduled date of the Share Exchange (Effective date) may be changed upon agreement between
Ube Industries and Ube Material, in the event that it is necessary, depending on the progress ofprocedures for Share Exchange, etc.

(2) Method of the Share Exchange
Ube Industries will become a parent company holding 100% ownership of Ube
Material and Ube Material will become the wholly owned subsidiary of Ube Industries.
Pursuant to the short-form share exchange procedure provided in Article 796, Paragraph
3, of the Companies Act, Ube Industries intends to implement the Share Exchange
without obtaining approval at the General Meeting of Shareholders. Ube Material
intends to implement the Share Exchange upon obtaining the approval regarding theShare Exchange Agreement by resolution of the Scheduled General Meeting of
Shareholders scheduled to be held on June 25, 2013.

(3) Content of Allotment with Respect to the Share Exchange
Company NameUbe Industries, Ltd.
(wholly owning parent
company in shareexchange)

Allotment with Respect to
the Share Exchange
Number of Shares to be
Allocated under the Share
Exchange

1

Ube Material Industries,
Ltd.
(wholly owned subsidiaryin share exchange)
1.4

Ordinary share of Ube Industries : 52,840,933 Shares(Anticipated)

Notes:
1. Allotment ratio of shares
1.4 shares of Ube Industries will be delivered by allotment for each one (1) share of Ube Material.
However, shares will not be allotted through the Share Exchange for 43,144,345 shares of Ube Material
held by Ube Industries (as of May 10, 2013).
2. Number of shares to be allocated under the Share Exchange
In the Share Exchange, Ube Industries is scheduled to newly issue 52,840,933 ordinary shares of Ube
Industries and to allocate them to the shareholders (not including Ube Industries) of Ube Material as of
the time (hereinafter referred to as “Base Time”) immediately prior to Ube Industries’ acquisition of all ofUbe Material’s issued shares (not including Ube Material’s ordinary shares owned by Ube Industries) as aresult of the Share Exchange. Based on resolution at the board of directors meeting of Ube Material to beheld by the day before the effective date of the Share Exchange, Ube Material is scheduled to cancel, by
the Base Time, all of its treasury shares (including treasury shares to be acquired by Ube Material bypurchasing shares concerning demands by dissenting shareholders for share purchase, to be exercised
concerning the Share Exchange) that it will be owning by the Base Time. The number of shares issued
and allocated in the Share Exchange may be changed due mainly to the cancellation of treasury shares by
Ube Material.
3. Handling of shares representing less than one unit
As a result of the Share Exchange, shareholders of Ube Material who will be possessing less than one unitof Ube Industries shares (less than 1,000 shares) may apply the following systems concerning Ube
Industries’ ordinary shares. Shares less than one unit may not be sold in the stock market.
1) Buyback of shares representing less than one unit (sale of shares representing less than one
thousand (1,000) shares)
Pursuant to Article 192, Paragraph 1, of the Companies Act, shareholders holding shares
representing less than one unit of Ube Industries’ share may demand that Ube Industries buy back

such shares; and
2) Additional purchase relating to shares representing less than one unit (additional purchase to makea whole unit of one thousand (1,000) shares)
Pursuant to Article 194, Paragraph 1, of the Companies Act and the relevant provisions of the
Articles of Incorporation of Ube Industries, shareholders holding shares representing less than one
unit of Ube Industries’ share may demand that Ube Industries sell to them the number of shares that,when added to such shareholders’ shares representing less than one unit, will equal to a unit of one
thousand (1,000) shares.
4. Treatment of Fractions of Less than One ShareWith respect to shareholders of Ube Material who will be allocated fractional Ube Industries ordinary
shares less than one (1) share as a result of the Share Exchange, the number of Ube Industries sharesequivalent to the total sum of such fractions (fractions less than one (1) share in such total shall be
rounded off) shall be sold off and the proceeds from the sell off shall be provided to the said shareholders
according to such fractions, in accordance with Article 234 of the Companies Act and other associatedlaws and regulations.

(4) Handling of Stock Acquisition Rights and Bonds with Stock Acquisition Rights
Ube Material has not issued any stock acquisition rights or bonds with stockacquisition rights.
3. Grounds for Calculation, etc., Concerning Allotment under the Share Exchange(1) Basis of Calculation
To ensure the fairness of the share exchange ratio for the Share Exchange, each of theparties decided to request a separate independent third-party valuation institution to
calculate a share exchange ratio. For this purpose, Ube Industries appointed Nomura
Securities Co., Ltd. (hereafter, “Nomura Securities”) and Ube Material appointed
Deloitte Touche Tohmatsu LLC (hereafter, “Deloitte Tohmatsu”) as each of their third
party valuation organizations concerning the calculation of the share exchange ratio(hereafter, the “Share Exchange Ratio”).
With respect to Ube Industries, Nomura Securities conducted calculations based on
the average market price method (with May 8, 2013, the base date of calculation as thebase date, the closing price on the base date of calculation, the average closing priceduring the five business day period from April 30 to the base date of calculation, theaverage closing price during the one-month period from April 9, 2013 to the base dateof calculation, the average closing price during the three-month period from February

12, 2013 to the base date of calculation, and the average closing price during thesix-month period from November 9, 2012 to the base date of calculation) on grounds
that it is listed on the Tokyo Stock Exchange and Fukuoka Stock Exchange and there
exist market prices, and the comparable multiple valuation method on grounds that there
are numerous similar listed companies that can be compared with Ube Industries andanalogical reasoning is possible by comparing similar companies, as well as thediscounted cash flow method (hereinafter referred to as “DCF Method”) in order toreflect the situation of future business activities in valuation.
With respect to Ube Material, calculations were conducted based on the average
market price method (with May 8, 2013, the base date of calculation as the base date,the closing price on the base date of calculation, the average closing price during thefive business day period from April 30 to the base date of calculation, the averageclosing price during the one-month period from April 9, 2013 to the base date ofcalculation, the average closing price during the three-month period from February 12,2013 to the base date of calculation and the average closing price during the six-month
period from November 9, 2012 to the base date of calculation) on grounds that it islisted on the Tokyo Stock Exchange and Fukuoka Stock Exchange and there exist
market prices, and the comparable multiple valuation method on grounds that there are
numerous similar listed companies that can be compared with Ube Material andanalogical reasoning is possible by comparing similar companies, in addition to the
DCF Method in order to reflect the situation of future business activities in valuation.
The results of calculation based on each of the calculation methods, assuming that theequity price per one (1) Ube Industries share is 1, are as follows.
Method adopted

Results of calculation of Share Exchange Ratio

Average market price method

1.20～1.22

Comparable multiple valuation method 0.68～1.48
DCF Method
1.09～1.44
In calculating the Share Exchange Ratio, Nomura Securities used information
provided by the two companies and information, etc. available to the public, on theassumption that such information are all accurate and complete, and did not conduct
independent verification on the accuracy and completeness of such information. Further,
Nomura Securities did not conduct independent valuation, appraisal or assessment of
the assets or liabilities (including contingent liabilities) of Ube Industries, Ube Materialor their affiliates, as well as analysis and valuation of individual assets and liabilities,

and did not request a third party institution to conduct such assessment or appraisal aswell. Nomura Securities’ calculation of the Share Exchange Ratio reflects informationand financial conditions as of May 8, 2013, and the financial forecasts of Ube Industries
and Ube Material are on assumption that they have been reasonably considered or
prepared based on optimal forecasts and judgments that can be presently obtained fromUbe Industries and Ube Material.
With respect to Ube Industries, Deloitte Tohmatsu conducted calculations based on
the average market price method (with May 8, 2013, the base date of calculation as thebase date, the closing price on the base date of calculation, the average closing priceduring the five business day period from April 30 to the base date of calculation, theaverage closing price during the one-month period from April 9, 2013 to the base dateof calculation, the average closing price during the three-month period from February
12, 2013 to the base date of calculation, and the average closing price during thesix-month period from November 9, 2012 to the base date of calculation) on grounds
that it is listed on the Tokyo Stock Exchange and Fukuoka Stock Exchange and there
exist market prices, and the comparable multiple valuation method on grounds that there
are numerous similar listed companies that can be compared with Ube Industries andanalogical reasoning is possible by comparing similar companies, as well as the DCF
Method in order to reflect the situation of future business activities in valuation.
With respect to Ube Material, calculations were conducted based on the average
market price method (with May 8, 2013, the base date of calculation as the base date,the closing price on the base date of calculation, the average closing price during thefive business day period from April 30 to the base date of calculation, the averageclosing price during the one-month period from April 9, 2013 to the base date ofcalculation, the average closing price during the three-month period from February 12,2013 to the base date of calculation and the average closing price during the six-month
period from November 9, 2012 to the base date of calculation) on grounds that it islisted on the Tokyo Stock Exchange and Fukuoka Stock Exchange and there exist
market prices, and the comparable multiple valuation method on grounds that there are
numerous similar listed companies that can be compared with Ube Material andanalogical reasoning is possible by comparing similar companies, in addition to the
DCF Method in order to reflect the situation of future business activities in valuation.
The results of calculation based on each of the calculation methods, assuming that theequity price per one (1) Ube Industries share is 1, are as follows.

Method adopted

Results of calculation of Share Exchange Ratio

Average market price method
1.14～1.27
Comparable multiple valuation method 0.66～1.35
DCF Method
0.78～1.74
In calculating the Share Exchange Ratio, Deloitte Tohmatsu used information
provided by the two companies and information, etc. available to the public, on theassumption that such information are all accurate and complete, and did not conduct
independent verification on the accuracy and completeness of such information. Further,
Deloitte Tohmatsu did not conduct independent valuation, appraisal or assessment of theassets or liabilities (including contingent liabilities) of Ube Industries, Ube Material or
their affiliates, as well as analysis and valuation of individual assets and liabilities, anddid not request a third party institution to conduct such assessment or appraisal as well.
Deloitte Tohmatsu’s calculation of the Share Exchange Ratio reflects information andfinancial conditions as of May 8, 2013, and the financial forecasts of Ube Industries andUbe Material are on assumption that they have been reasonably considered or preparedbased on optimal forecasts and judgments that can be presently obtained from Ube
Industries and Ube Material.
Financial projections prepared by Ube Industries for the use of Nomura Securities
and Deloitte Tohmatsu in applying the DCF Method included the fiscal years when asignificant increase or decrease in earnings is expected, which is due to recovery of
earnings resulting from the cease of caprolactam production at Sakai Facility, as well as
expansion of earnings led by increase of sales volume in specialty products and finematerials for which Ube Industries has invested with expecting the growth in demand.
In addition, Financial projections prepared by Ube Material for the use of Nomura
Securities and Deloitte Tohmatsu in applying the DCF Method included the fiscal years
when a significant increase or decrease in earnings is expected, which is due to increaseof sales led by promotion of sales and recovery of demand in some part, as well as
improvement of profitability led by reduction of manufacturing costs and administrative
costs.
(2) Background of Calculation
Ube Industries and Ube Material engaged in negotiations and discussions in goodfaith based on the analysis results and advice regarding the share exchange ratio, which
was provided by the above third-party valuation institutions, and bearing in mind theirrespective financial conditions, performance trends and share price movements, etc. As
a result, Ube Industries and Ube Material determined that the share exchange ratio set
forth in 2. (3) above was reasonable and advantageous to the shareholders of bothcompanies, and decided to implement the Share Exchange with the Share Exchange
Ratio at the respective Board of Directors Meeting held on May 10, 2013. On the samedate, Ube Industries and Ube Material subsequently entered into the Share Exchange
Agreement.
In the event of significant changes in the various conditions serving as the basis of
calculation, the Share Exchange Ratio may possibly be subject to change upon
discussion between the two companies.
(3) Relationships with the Valuation Institutions
Nomura Securities and Deloitte Tohmatsu are independent of both Ube Industries andUbe Material, and neither is a related party (defined under the Ordinance of Company
Accounting in Japan) to Ube Industries or Ube Material. There are no significant
conflicts of interest.
(4) Expectation of Delisting and the Reason Therefore
Upon the Share Exchange, Ube Material will become a wholly-owned subsidiary of
Ube Industries on the effective date of the Share Exchange (scheduled for August 1,2013) and Ube Material’s ordinary share will be delisted on July 29, 2013 (the last
trading day is July 26, 2013) in accordance with the delisting standards of the Tokyo
Stock Exchange and the Fukuoka Stock Exchange. After delisting, Ube Material’s
ordinary shares will no longer be traded on the Tokyo Stock Exchange or Fukuoka
Stock Exchange. However, Ube Material’s ordinary shareholders, excluding Ube
Industries, shall be allocated Ube Industries’ ordinary shares as indicated in Section 2.
(3) above in accordance with the Share Exchange Agreement.
The purpose of the Share Exchange is as indicated in Section 1. above. As a result of
the Share Exchange, ordinary shares of Ube Material are scheduled to be delisted. Even
after Ube Material’s ordinary shares are delisted, because Ube Industries’ ordinary
shares to be delivered as consideration for the Share Exchange are listed on the Tokyo
Stock Exchange and Fukuoka Stock Exchange, some shareholders who possess not lessthan 715 ordinary shares of Ube Material and are allocated not less than one unit, that is
one thousand (1,000) shares, of Ube Industries’ ordinary shares due to the Share
Exchange, where it will be possible to continue transactions of shares of one or moreunits in the stock market and we believe that share liquidity will be maintained. Besides

such shares not less than one unit, these shareholders may possibly be allocated lessthan one unit share as well, corresponding to the number of shares possessed.
However, shareholders possessing less than 715 Ube Material ordinary shares shallbe allocated less than one unit of Ube Industries ordinary shares.
Although shares less than one unit cannot be sold in the stock market, based on theshareholder’s request, the buyback system or purchasing system may be applied. Pleaserefer to (note 3) of Section 2. (3) above with respect to the details concerning thesesystems.
Also, please refer to (note 4) of Section 2. (3) above with respect to the details
concerning the handling of fractional shares accruing.
Ube Material’s ordinary shareholders may trade Ube Material ordinary shares thatthey possess in the Tokyo Stock Exchange and Fukuoka Stock Exchange as usual until
July 26, 2013 (scheduled) and may also exercise legitimate rights set forth in the
Companies Act and other relevant laws and regulations.
(5) Measures to Ensure Fairness
Since Ube Industries already possesses 53.30% of the total issued shares of Ube
Material, it was determined necessary to ensure the fairness in considering the Share
Exchange.
Thus, from the viewpoint of ensuring the fairness of the Share Exchange Ratio in the
Share Exchange, as indicated in Section 3. (1) above, each of the two companies
requested an independent, third party valuation institution to conduct calculation of the
Share Exchange Ratio in implementing the Share Exchange. Using the results of suchcalculations as reference, the two companies held negotiations and discussions in goodfaith and resolved, at each of their board of directors’ meetings held on May 10, 2013,
to implement the Share Exchange based on the agreed Share Exchange Ratio indicatedabove.
Neither Ube Industries nor Ube Material received an opinion as to the fairness of the
Share Exchange Ratio, the so-called fairness opinion, from its third-party valuation
institution.
In addition, Ube Industries has retained Nishimura & Asahi as its legal advisor andUbe Material has retained Anderson Mori & Tomotsune as its legal advisor for the
Share Exchange and each company has been advised from a legal perspective withrespect to the board of directors’ decision making method and process, etc. including
various procedures in the Share Exchange.

(6) Measures to Avoid Conflicts of Interest
Since Ube Material falls under the consolidated subsidiary of Ube Industries, thefollowing steps have been taken in order to avoid conflicts of interest.
Among the directors of Ube Material, since Outside Director Mr. Tadashi Matsunami
also serves as an Executive Officer of Ube Industries and Outside Director Mr.
Kazuhiko Matsumoto also serves as an employee of Ube Industries, neither of them
have participated in the discussion and resolution of the Share Exchange at the Board of
Directors Meeting held on May 10, 2013, nor have they participated in the discussions
and negotiations with Ube Industries pertaining to the Share Exchange in a position ofUbe Material. Also, among the statutory auditors of Ube Material, since Outside
Statutory Auditor Mr. Hiroshi Yamamoto also serves as an employee of Ube Industries,
he has not participated in the discussion pertaining to the Share Exchange at the Boardof Directors Meeting held on May 10, 2013, nor has he taken any position on the matter,and has not participated in the discussions and negotiations with Ube Industries
pertaining to the Share Exchange in a position of Ube Material.
The proposal for the Share Exchange at the Board of Directors Meeting of Ube
Material has been approved by the unanimous vote of five members of the sevendirectors of Ube Material, except above-mentioned Messrs. Tadashi Matsunami and
Kazuhiko Matsumoto, and with the exception of the above-mentioned Mr. Hiroshi
Yamamoto, three out of the four statutory auditors of Ube Material attended and haveexpressed their opinions that they have no objection to the implementation of the Share
Exchange.
In addition, on March 27, 2013, in order to prevent as much as possible that the Share
Exchange is implemented under conditions detrimental to minority shareholders of Ube
Material, the Board of Directors of Ube Material has established a third-party
committee consisting of three members including Mr. Akito Takahashi(Attorney-at-Law, Takahashi Katayama Law Office) and Mr. Shinsuke Hasegawa(Certified Public Accountant and Licensed Tax Accountant, Hasegawa Certified Public
Accountant Office), independent outside experts who do not have an interest in Ube
Industries as the controlling shareholder, and Mr. Michio Ito (Certified Public
Accountant and Licensed Tax Accountant, Certified Public Accountant Ito Michio
Office), Outside Statutory Auditor of Ube Material (Designated and registered as
independent officers under the rules of the Tokyo Stock Exchange and Fukuoka Stock
Exchange) (hereinafter referred to as the "Third Party Committee"), and has consulted
the opinions of the Third Party Committee in considering the Share Exchange as to: (i)whether the Share Exchange contributes to the improvement of corporate value of Ube

Material, (ii) whether the fairness of the exchange condition for the Share Exchange(including the Share Exchange Ratio) has been secured, (iii) whether sufficientconsiderations are made with regard to the benefit of Ube Material's shareholders
through a fair procedure of the Share Exchange, and (iv) in addition to (i) through (iii),
whether the Share Exchange is detrimental to minority shareholders of Ube Material.
The Third Party Committee has made a careful examination on the above-mentioned
consulted matters through the meetings that were held four times in total from April 3,2013 through May 2, 2013 as well as the discussions held as necessary from time totime. Upon such examination, the Third Party Committee has been informed from Ube
Material about the purpose of the Share Exchange, the background leading to the Share
Exchange, Ube Material's attitude toward the Share Exchange and the description of thecorporate value of Ube Material expected to improve through the Share Exchange, andalso about the negotiation and decision-making process regarding the terms andconditions of the Share Exchange, including the Share Exchange Ratio; the Third Party
Committee has also referred to the calculation result of the Share Exchange Ratio that
Deloitte Tohmatsu has submitted to Ube Material and has been briefed on theassessment of the Share Exchange Ratio for the Share Exchange from Deloitte
Tohmatsu. In addition, from Anderson Mori & Tomotsune, the legal advisor of Ube
Material, Ube Material has been given explanation on the process and method ofdecision-making of the Board of Directors of Ube Material with respect to the Share
Exchange. Under such circumstances, based upon such explanations, calculation resultand other materials for examination, the Third Party Committee has submitted to theBoard of Directors of Ube Material, a written report that states that the Share Exchange
is not considered as being particularly detrimental to minority shareholders of Ube
Material as of May 8, 2013. For an overview of the opinions of the Third Party
Committee, please refer to 8. below.

4. Company Profile of the Parties to the Share Exchange (As of March 31, 2013)

(1)
(2)
(3)

(4)

(5)
(6)

Wholly Owning Parent
Company in Share Exchange
Ube Industries, Ltd.

Wholly Owned Subsidiary inShare Exchange
Ube Material Industries, Ltd.

1978-96, O-Aza Kogushi,
Ube, Yamaguchi, Japan
Name and Title Michio Takeshita, Presidentofand Representative Director
Representative
Line of
Production and sale ofBusinesschemical products,
construction materials, andmachinery, etc., Import andsale of coal, Provision ofelectric power¥58,435 million
Capital

1985, O-Aza Kogushi, Ube,
Yamaguchi, Japan
Kenichi Abe, President andRepresentative Director

Company
Name
Location

Date of
Establishment(7) Number of
Outstanding
Shares(8) Fiscal
Year-End(9) Number of
Employees(10) Major
Customers

Production and sale ofmagnesia clinker, lime-related
products and fine materials,
etc.

¥4,047 million

March 10, 1942

September 8, 1949

1,009,165,006 shares

80,948,148 shares

End of March

End of March

11,090 (consolidated)

817 (consolidated)

Sales of chemicals,
construction materials,
machinery, coal and otherproducts to customers in Japanand other countries.
(11) Main Financial The Bank of Tokyo-Mitsubishi
Banks
UFJ, Ltd.
Mizuho Corporate Bank, Ltd.
Development Bank of JapanInc.
The Yamaguchi Bank, Ltd.
The Norinchukin Bank

Sales of magnesia clinker,
lime-related products and finematerials to customers inJapan and other countries.
The Yamaguchi Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
The Bank of Tokyo-Mitsubishi
UFJ, Ltd.

(12) Major
Shareholders
andShareholding
Ratio

The Master Trust Bank ofJapan, Ltd. (Trust account)
5.72%
Japan Trustee Services Bank,
Ltd. (Trust account)
5.07%
National Mutual Insurance
Federation of Agricultural
Cooperatives
3.47%
Japan Trustee Services Bank,
Ltd. (Trust account 9) 3.01%
JP Morgan Chase Bank
380055
2.52%
State Street Bank and Trust
Company
2.41%818517 NOMURA BANK(LUXEMBOURG) S.A. S/ANOMURA MULTICURRNCY JP STOCKLEADERS FD
2.01%
Nippon Life Insurance
Company
1.98%
Sumitomo Life Insurance
Company
1.98%
BBH 493025 BlackRock
Global Allocation Fund, Inc.
1.42%

Ube Industries, Ltd.
53.30%The Yamaguchi Bank, Ltd.
4.00%
Ube Material Customers’
Shareholding Association
1.56%
Japan Trustee Services Bank,
Ltd. (Trust account)
1.43%
Ube Material Employees’
Shareholding Association
1.11%
The Master Trust Bank ofJapan, Ltd. (Trust account)
0.94%
CGML-IPB CUSTOMERCOLLATERAL ACCOUNT
0.92%
Hagimori Industries, Ltd.
0.64%
Yamaguchi Industries Co.,
Ltd.
0.62%
UB Co., Ltd.
0.60%

(13) Relationship between the Parties
Ube Industries holds 43,144,345 Ube Material shares, whichcorresponds to 53.30% of the total issued shares of Ube
Material (80,948,148 shares).
Two Outside Directors of Ube Material also serve as an
Personnel
Executive Officer and an employee of Ube Industries. An
Relationship
Outside Statutory Auditor of Ube Material also serves as an
employee of Ube Industries. In addition, five employees of Ube
Industries are seconded to Ube Material, while two employeesof Ube Material are seconded to Ube Industries.
Ube Material purchases almost all limestone as a main raw
Transactional
material and part of electric power from Ube Industries, while
RelationshipUbe Material sells lime-related products and magnesiumhydroxide to Ube Industries.
Ube Material is a consolidated subsidiary of Ube Industries.
Situation
Ube Industries is a related party (defined under the Ordinanceregarding
Related Parties of Company Accounting in Japan) of Ube Material, and viceversa.
(14) Business Performance and Financial Position of the Parties for the Last Three (3)Years
Fiscal Year
Ube Industries (consolidated)
Ube Material (consolidated)
Ended
March
March
March
March
March
March
2011
2012
2013
2011
2012
2013
Net Assets
211,449 224,407 250,753
27,22827,80528,439
CapitalRelationshipTotal Assets

661,512664,965

685,884

41,76540,31640,395Net Assets per
Share (Yen)Sales

186.02

198.41214.35336.59343.74351.59616,062

638,653

626,02242,55040,91638,269Operating
IncomeOrdinary
IncomeNet Income

44,36346,00629,962

3,238

2,333

1,707

39,10040,80828,045

3,270

2,421

1,815

17,26722,969

8,265

1,667

1,253

1,153

Net Income per
Share (Yen)

17.18

22.85

8.22

20.62

15.50

14.26

Dividend per
Share (Yen)

5.0

5.0

5.0

8.0

7.0

7.0

Notes: 1. All amounts are in Millions of yen unless otherwise specified.

5. Ube Industries’ Profile after the Share Exchange
Wholly Owning Parent Company in Share Exchange(1) Company NameUbe Industries, Ltd.

(2) Location

1978-96, O-Aza Kogushi, Ube, Yamaguchi, Japan(3) Name and Title ofRepresentative

Michio Takeshita, President and Representative
Director(4) Line of Business

Production and sale of chemical products,
construction materials, and machinery, etc., Importand sale of coal, Provision of electric power(5) Capital¥58,435 million(6) Fiscal Year-End

End of March(7) Net Assets

Not fixed at this time(8) Total Assets

Not fixed at this time

6. Outline of Accounting Procedures
The Share Exchange is expected to be a transaction under common control, etc., andnegative goodwill is expected to accrue. However, the amount of negative goodwill to
accrue has not been determined yet as of this point.
7. Forecasts
The impact of the Share Exchange on business performance for the current fiscal year
is not fixed at this time. If the necessity of revising business forecasts and/or any matterto be disclosed arises, such information shall be immediately disclosed.
8. Matters regarding Transaction, etc. with Controlling Shareholders
Since Ube Industries is the controlling shareholder who holds 53.30% of the total
issued shares of Ube Material, the Share Exchange falls under, in relation to Ube
Material, a transaction, etc. with controlling shareholders.
"The Guidelines for Protection of Minority Shareholders upon Transactions, etc. with
Controlling Shareholders" as indicated in the Corporate Governance Report disclosed
by Ube Material on July 5, 2012 is as follows.
"The transaction between the Company and the parent company is determinedthrough negotiations with reference to the market price just like other companies, andthus there is no transaction that is advantageous to the parent company, disadvantages to
the Company or its minority shareholders."

In this respect, as described in 3. (5) to (6) above, Ube Material has adopted measures
to ensure the fairness and to avoid conflicts of interest upon determining the exchange
ratio for the Share Exchange, as well as for the implementation of the Share Exchange.
Therefore, we believe that the Share Exchange meets the above-mentioned "Guidelines
for Protection of Minority Shareholders upon Transactions, etc. with Controlling
Shareholders" of Ube Material.
In addition, as stated in 3. (6) above, on March 27, 2013, in order to prevent as muchas possible that the Share Exchange is implemented under conditions detrimental tominority shareholders of Ube Material, the Board of Directors of Ube Material has
established the Third Party Committee. The Board of Directors of Ube Material
consulted the opinions of the Third Party Committee in considering the Share Exchange
as to: (i) whether the Share Exchange contributes to the improvement of corporate valueof Ube Material, (ii) whether the fairness of the exchange condition for the Share
Exchange (including the exchange ratio) has been secured, (iii) whether sufficientconsiderations are made with regard to the benefit of Ube Material's shareholders
through a fair procedure of the Share Exchange, and (iv) in addition to (i) through (iii),
whether the Share Exchange is detrimental to minority shareholders of Ube Material. As
a result, on May 8, 2013, the Board of Directors of Ube Material has received from theThird Party Committee a written report stating that (a) regarding (i) above, the Share
Exchange contributes to the improvement of corporate value of Ube Material, (b)regarding (ii) above, responses by Ube Material ensured the fairness of the exchange
conditions, including the exchange ratio of the Share Exchange, and there isreasonableness and rationality as a measure to eliminate the arbitrariness of thedecision-making process and decision of Ube Material in relation to these matter, (c)regarding (iii) above, it is considered that sufficient consideration to the interests of theUbe Material's shareholders through a fair procedure have been made in the Share
Exchange and Ube Material's responses to and examination process of making Ube
Material the wholly-owned subsidiary through the Share Exchange, and (d) regarding(iv) above, there is no circumstance resulting from the implementation of the Share
Exchange that is considered as being detrimental to minority shareholders of Ube
Material.

(Reference) Forecast of Consolidated Business Performance for the Current Fiscal Yearand Consolidated Business Performance for the Previous Fiscal Year
Ube Industries (Forecast of consolidated business performance for the (Millions ofcurrent fiscal year announced on May 10, 2013)
yen)
Consolidated
Net Sales

Consolidated
Operating
IncomeConsolidated
Ordinary
IncomeConsolidated
Net Income

Business
Performance
Forecast for the
675,000
34,00028,50014,500Fiscal YearEnding March
31, 2014
Business
Performancefor the Fiscal
626,022
29,962
28,045
8,265
Year
Ended March
31, 2013
ofUbe Material (Forecast of consolidated business performance for the (Millions
current fiscal year announced on May 10, 2013)
yen)
Consolidated
Net Sales
Business
Performance
Forecast for the
Fiscal YearEnding March
31, 2014
Business
Performancefor the Fiscal
Year
Ended March
31, 2013

Consolidated
Operating
IncomeConsolidated
Ordinary
IncomeConsolidated
Net Income

39,900

2,090

2,130

1,230

38,269

1,707

1,815

1,153