June 24, 2022
Press Release
Company name JFE Holdings, Inc.
Representative President and CEO Koji Kakigi(Code: 5411, TSE Prime Market)
Contact
Hiroki Watanabe, Manager,
Public Relations Section,
Investor Relations andCorporate Communications Department
Phone:+81-3-3597-3842

Notice Regarding Disposition of Treasury Shares by Third-Party Allotment(Acquisition of Parent Company Shares Pursuant to Article 800 of the Companies Act)JFE Holdings, Inc. (“JFE Holdings”) today announced that it has formally decided to dispose of treasury shares(the “Disposition of Treasury Shares”) through a third-party allotment to its wholly owned subsidiary JFE SteelCorporation (“JFE Steel”). This Disposition of Treasury Shares is being undertaken to enable JFE Steel toacquire the consideration it requires to carry out a share exchange that will make JFE Steel the wholly owningparent company and JFE Container Co., Ltd. (“JFE Container”) its wholly owned subsidiary, with shares ofcommon stock of JFE Holdings being allotted as consideration for the share exchange (the “Share Exchange”),
as disclosed in the May 6, 2022 press release titled “Notice Regarding the Execution of Share Exchange
Agreement (Simplified Share Exchange) for JFE Steel Corporation, a Wholly Owned Subsidiary of JFE
Holdings, Inc., to Make JFE Container Co., Ltd. its Wholly Owned Subsidiary.”
1. Outline of disposition(1)

Disposal dateJuly 14, 2022

(2)

No. of shares disposed

5,127,997 shares of JFE Holdings’ common stock(3)

Disposal price

1,541 yen per share(4)

Funds raised

7,902,243,377 yen(5)Offering or disposal
method (intended allottee)

All shares to be allotted to JFE Steel through a third-party allotment

(6)

Other

Each of the above items is subject to the relevant notifications coming
into effect under the Financial Instruments and Exchange Act.

2. Purpose of and reason for disposal
The purpose of the Disposition of Treasury Shares is to enable the wholly owning parent company in the Share
Exchange to acquire the consideration required to carry out the Share Exchange. JFE Steel’s acquisition of JFE
Holdings shares through this transaction corresponds to an acquisition of parent-company shares pursuant to
Article 800 of the Companies Act. The capital relationships between the Company, JFE Steel and JFE Container
before and after the Disposal of Treasury Shares and the Share Exchange are and will be as follow:
Before the Disposal of Treasury Shares and the Share Exchange:After the Disposal of Treasury Shares and the Share Exchange:

3. Amount of funds raised, intended use, and intended date of use(1) Amount of funds raised(i) Total amount paid in

7,902,243,377 yen(ii) Approximate issuance costs—(iii) Approximate amount remaining after deduction

7,902,243,377 yen(2) Specific uses of funds raised
The purpose of the Disposition of Treasury Shares is to enable the wholly owning parent company in the
Share Exchange to acquire the consideration required to carry out the Share Exchange, but it is not intended asa means of raising funds. The approximate amount remaining after July 2022, 7,902,243,377 yen deduction is
to be allocated in full to a loan to JFE Steel, the intended allottee, and JFE Steel intends to allocate the funds toworking capital for uses including the purchase of raw and other materials needed in its steel productproduction operations, although the specific breakdown of amounts has yet to be decided. The funds will beheld in JFE Holdings’ bank account until they are allocated for the intended use.
4. View on reasonableness of funds usage
As described above in “2. Purpose of and reason for disposal” and in the subsection “3. (2) Specific uses offunds raised” the purpose of the Disposition of Treasury Shares is to enable the wholly owning parent company
in the Share Exchange to acquire the consideration required to carry out the Share Exchange, and it is notintended as a means of raising funds.
5. Reasonableness of disposal conditions etc.
(1) Basis for calculation of amount paid in
The disposal price for the Disposition of Treasury Shares is 1,541 yen (amounts less than one full yen are
rounded down). This is the simple average of the closing price of JFE Holdings’ common stock on the Tokyo
Stock Exchange over the month leading up to the trading day before the date of the board of directors’
resolution on the Share Exchange (May 24, 2022 – June 23, 2022).
JFE Holdings chose to use the average closing price of its common stock over the most recent month, rather
than the price on a specific base date, because averaging over a period of time is more stable and thus
eliminates special factors such as the impact of temporary fluctuations in share price. The company believes
this provides a reasonable and highly objective basis for calculating the price. Also, the company chose to use
the average for the most recent month, as opposed to the most recent three months or six months, because it
believes it is rational to use the period that is closest to the most recent market price for the stock. Given that the
purpose of the Disposition of Treasury Shares is to enable the wholly owning parent company in the Share
Exchange to acquire the consideration required to carry out the Share Exchange, no discount will be applied tothe simple average of the closing price of JFE Holdings’ common stock on the Tokyo Stock Exchange over themonth leading up to the trading day before the date of the board of directors’ resolution on the Share Exchange.
The disposal price represents a premium of 9.4% (rounded to the nearest second decimal place, as below aswell) versus the closing price of 1,408 yen for JFE Holdings’ common stock on the Tokyo Stock Exchange onJune 23, 2022, the trading day before the date of the board of directors’ resolution on the Disposition ofTreasury Shares; a discount of 3.2% versus the simple average of the closing price for JFE Holdings’ common
stock over the most recent three months 1,592 yen; and a discount of 3.7% versus the simple average of theclosing price for JFE Holdings’ common stock over the most recent six months 1,601 yen. The disposal pricefor the Disposition of Treasury Shares, as discussed above, is in conformance with the Japan Securities Industry
Association’s Guidelines for Handling Capital Increases by Third-Party Allotment with respect to the closing
price of JFE Holdings’ common stock on the day before the date of board of directors’ resolution on the
Disposition of Treasury Shares as well as with respect to the simple average of closing prices for those shares
over the one month, three months, and six months leading up to the date of said resolution, and JFE Holdings
does not believe that the disposal price has been set at a particularly advantageous level.
(2) Grounds for determining that the number of shares disposed of and the amount of equity dilution arereasonable
The Disposition of Treasury Shares involves the disposal of 5,127,997 shares of JFE Holdings’ common
stock, which, based on the number of JFE Holdings’ shares issued as of March 31, 2022 (614,438,399 shares),corresponds to a dilution rate of around 0.83%. Hence, some dilution will occur. However, the company
believes that the number of shares disposed of and the amount of equity dilution are reasonable given thatmaking JFE Container a wholly owned subsidiary of JFE Steel through the Share Exchange will contribute toboth companies’ earning and, thus, the value of the JFE group as a whole because of the following reasons: inthe domestic steel drum business, the move can be expected to lead to better profitability through the
optimization of production operations amid gradually declining demand, and it can be expected to facilitate
swift responses to increasingly sophisticated quality requirements; in the overseas steel drum business, it can be
expected to facilitate enhanced competitiveness and value in the China market through the development ofhigh-value-added products and better productivity; it can be expected to facilitate inroads into new regions
overseas and new fields through the use of the JFE group’s networks, human resources, and other businessresources; in the high-pressure gas container business, it can be expected to open up inroads into new fields andgreater opportunities for business creation through enhanced group collaboration in pursuit of decarbonizationand the creation of a hydrogen-based economy; the delisting of JFE Container will enable JFE Container toengage in swift, agile decision-making from a medium- to long-term perspective, unfettered by the short-term
perspectives of equity markets; and it will facilitate improvements in business efficiency and other benefits
through reduced overhead and other costs resulting from dissolution of the parent-subsidiary listing.

6. Reason for selecting the allottee, etc.
(1) Outline of the allottee
(i)

Name

JFE Steel Corporation(ⅱ)

Location

2-2-3 Uchisaiwaicho, Chiyoda-ku, Tokyo(ⅲ)

Representative

Yoshihisa Kitano, President and CEO(ⅳ)

Business

Manufacture and sale of steel products(ⅴ)

Capital239,644 million yen (as of March 31, 2022)(ⅵ)

Date of establishment

April 1, 2003

(ⅶ)

Number of issued shares

539,170,000 (as of March 31, 2022)(ⅷ)

End of fiscal year

March 31(ⅸ)

Number of employees(ⅹ)

Major trading partners(ⅺ)

Main banks(ⅻ)

Major shareholder and ratio(ⅹⅲ)

Relationships of companies(ⅹⅳ)

45,000 (consolidated; as of March 31, 2022)
JFE Shoji Corporation
Marubeni-Itochu Steel Inc.
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking Corporation
MUFG Bank, Ltd.
JFE Holdings, Inc. 100.00% (as of March 31, 2022)

CapitalJFE Holdings holds 100% of the voting rights in JFE Steel.

Personnel

One director of JFE Holdings serves concurrently as a director of JFE Steel.

Business

JFE Holdings receives operating costs from JFE Steel, and JFE Holdings lends
funds to JFE Steel. JFE Steel manages its temporary surplus funds using a cash
management system provided by JFE Holdings.

Status as
related party

JFE Holdings, as JFE Steel’s parent company, constitutes a related party.

Operating performance and financial condition in last three years

Fiscal year ended:

March 2020

March 2021

March 2022

Consolidated net assets

1,208,539

1,215,102

1,466,733

Consolidated total assets

3,836,847

3,864,262

4,425,035

Consolidated net assets per share (yen)2,116.16

2,127.67

2,593.30

Consolidated sales

2,681,350

2,255,216

3,173,475

Consolidated operating income

1,500(54,270)

334,686

Consolidated recurring income

—

—

—

Net income attributable to owners of the parent(211,331)(62,940)

234,850

Consolidated net income per share (yen)(391.96)(116.74)435.58

67.73

—

65.34

Dividend per share (yen)(millions of yen, except where otherwise noted)

Note 1: JFE Steel prepares its consolidated financial statements in accordance with International Financial ReportingStandards (“IFRS”), so the values shown for “Consolidated net assets,” “Consolidated total assets,” “Consolidated
net assets per share,” “Consolidated sales,” “Consolidated operating income,” “Net income attributable to ownersof the parent company,” and “Consolidated net income per share” are respectively JFE Steel’s consolidated “Total
equity,” “Total assets,” “Equity attributable to owners of parent,” “Revenue,” “Business profit,” “Profit
attributable to owners of parent,” and “Basic earnings per share.” As there is no corresponding item for“Consolidated recurring income,” entries for this item are omitted.
Note 2: JFE Steel, the intended allottee, is a wholly owned subsidiary of JFE Holdings, which is listed on the Tokyo Stock
Exchange, Inc. (“Tokyo Stock Exchange”).

Note 3: As stated in a Corporate Governance Report (June 24, 2022) that JFE Holdings submitted to the Tokyo Stock
Exchange, the company has established the JFE Group Policies for Addressing Antisocial Forces, and in accord
with a basic policy of firmly resisting criminal groups in cooperation with the police and other relevantorganizations, the company seeks to establish sound corporate management based on an organized and unified
response to the issues within the framework of its compliance systems based on these group policies. The JFEGroup Standards of Business Conduct also state that all group personnel must “Firmly resist all elements andorganizations that threaten social order and stability, and refuse all illegal or improper demands,” and the company
has also established Regulations for Addressing Violence Directed at Companies to clarify the specific measuresthat should be taken against criminal groups, including an initial response manual. To ensure that all JFE group
executives and employees are fully aware of the JFE Group Policies for Addressing Antisocial Forces as well as
the specific measures that should be taken against criminal groups, the company provides e-learning sessions,distributes compliance guidebooks, and the like.
In light of the above, JFE Holdings believes that JFE Steel and its officers are in no way associated with criminalgroups and has submitted a confirmation letter to that effect to the Tokyo Stock Exchange.

(2) Reason for selecting the intended allottee
As discussed in the May 6, 2022 press release, “Notice Regarding the Execution of Share Exchange
Agreement (Simplified Share Exchange) for JFE Steel Corporation, a Wholly Owned Subsidiary of JFE
Holdings, Inc., to Make JFE Container Co., Ltd. its Wholly Owned Subsidiary,” by making JFE Container awholly owned subsidiary of JFE Steel, the Share Exchange is intended to increase the value of both companies
and thus the value of the JFE group as a whole.
The companies decided to use what is commonly referred to as the triangular share exchange method for the
Share Exchange with the consideration paid being not shares of JFE Steel stock but shares of common stock of
JFE Holdings, JFE Steel’s wholly owning parent company, because this would achieve the Share Exchange’s
objectives and because: (i) if shares of common stock of JFE Steel, an unlisted company, had been used asconsideration, JFE Container’s minority shareholders would have received low-liquidity shares; (ii) allocating
JFE Holdings stock to JFE Container shareholders as consideration for the Share Exchange would enable JFE
Holdings to provide JFE Container shareholders, through the holding of such shares, with the benefits ofsynergies likely to flow from the implementation of various measures after the Share Exchange as well as thedevelopment of the JFE group’s business and growth in its earnings driven by these synergies, and, as a result,opportunities to receive dividends on and benefit from increases in the price of JFE Holdings’ common stock;and (iii) the JFE group’s position was that JFE Holdings must remain the wholly owning parent company of
JFE Steel. Accordingly, JFE Holdings selected JFE Steel to be the allottee in the Disposition of Treasury
Shares.
(3) Shareholding policy of the intended allottee
Of the shares of JFE Holdings’ common stock allotted, the intended allottee will use as consideration for the
Share Exchange the number of shares required for that purpose.
Under the Share Exchange, if the number of shares of JFE Holdings’ common stock to be delivered to a JFE
Container shareholder includes a fractional amount of less than one share, or if a JFE Container shareholder
makes a share purchase demand, the allottee will not use the shares of JFE Holdings’ common stock involved
as consideration for the Share Exchange and will instead continue to hold those shares. The allottee plans todispose of these JFE Holdings common-stock shares promptly after the Share Exchange becomes effective
through the payment of dividends in kind to JFE Holdings or by other means.
(4) Information ascertained about whether the allottee has assets sufficient to cover the pay-in
Since the intended allottee does not have the cash and deposits required to cover the pay-in, JFE Holdings
intends to lend funds to the allottee, in an amount equivalent to the total pay-in under the Disposition ofTreasury Shares, and has confirmed that the allottee plans to have cash and deposits necessary and sufficient tocover the pay-in available on the pay-in date of July 14, 2022.
JFE Holdings has sufficient cash and deposits to make this loan (balance of cash and deposits of 16,140
million yen (non-consolidated) as of May 31, 2022).
7. Major shareholders and their ownership ratios after the disposition
Before the disposition (as of March 31, 2022)
The Master Trust Bank of Japan, Ltd. (Trust Account)

13.70%

Custody Bank of Japan, Ltd. (Trust Account)

5.18%

Nippon Life Insurance Company

2.88%

The Dai-ichi Life Insurance Company, Limited

2.14%

Mizuho Bank, Ltd.

1.98%

JFE Employee Shareholding Association

1.75%

State Street Bank West Client – Treaty 505234 (Standing proxy: Settlement &Clearing Services Department, Mizuho Bank, Ltd.)

1.52%

JFE Business Partner Shareholding Association

1.41%

JPMorgan Securities Japan Co., Ltd.

1.27%

Tokio Marine & Nichido Fire Insurance Co., Ltd.

1.21%

Note 1: Based on the shareholder registry as of March 31, 2022. The ownership ratio is the number of shares held as aproportion of the total number of issued shares.
Note 2: The numbers of shares owned by The Master Trust Bank of Japan, Ltd. (Trust Account) and Custody Bank ofJapan, Ltd. (Trust Account) include shares associated with trust banking business.
Note 3: In addition to the above, JFE Holdings has 37,955,386 shares in treasury stock.
Note 4: As shares disposed of in the Disposition of Treasury Shares are not expected to be held long term, a list of postdisposal major shareholders and their ownership ratios is not shown.

8. Outlook
JFE Holdings believes that the impact of the Disposition of Treasury Shares on its consolidated financial
performance in the fiscal year ending March 2023 will be minor.
9. Matters concerning procedures under the Corporate Code of Conduct
Because the Disposition of Treasury Shares (i) has a dilution rate of less than 25% and (ii) does not involve achange of controlling shareholder, it is not subject to the requirement to obtain an opinion from an independent
third party to confirm shareholder intent under Article 432 of the Tokyo Stock Exchange’s Securities Listing
Regulations.
10. Financial performance and equity financing in last three years(1) Past three years (consolidated)
Fiscal year ended:

March 2020

March 2021

March 2022

3,729,717

3,227,285

4,365,145

37,899(12,911)

416,466

Profit attributable to owners of the parent(197,744)(21,868)

288,058

Basic earnings per share (yen)(343.39)(37.98)500.28

20.00

10.00

140.002,825.50

2,916.37

3,452.82

Revenue
Business profit

Dividend per share (yen)Equity attributable to owners of parent per share (yen)(millions of yen, except where otherwise noted)
Note: JFE Holdings prepares its consolidated financial statements in accordance with IFRS.
(2) Current number of issued shares and number of implied shares (as of March 31, 2022)
Number
As a percentageof sharesof issued shares
Issued shares

614,438,399

100.0%

Number of implied shares at the current
conversion price (execution price)——

Number of implied shares at the minimum
conversion price (execution price)——Number of implied shares at the maximum
conversion price (execution price)——(3) Recent share prices(i) Last three years
Fiscal year ended:

March 2020

March 2021

March 2022

Opening price

1,907.0 yen

702 yen

1,340 yenHigh

1,992.5 yen

1,424 yen

1,950 yenLow

699.0 yen

626 yen

1,206 yen

703 yen

1,363 yen

1,723 yen

Closing priceNote: Share prices are from the First Section of the Tokyo Stock Exchange.
(ii) Last six months
January

February

March

April

May

June*

Opening price

1,483 yen

1,472 yen

1,758 yen

1,701 yen

1,590 yen

1,590 yenHigh

1,741 yen

1,737 yen

1,875 yen

1,703 yen

1,608 yen

1,654 yenLow

1,400 yen

1,432 yen

1,583 yen

1,510 yen

1,427 yen

1,392 yen

Closing price

1,460 yen

1,720 yen

1,723 yen

1,595 yen

1,587 yen

1,408 yen

*Note: June 2022 share prices are for June 23, 2022.
(iii) Share prices on trading day before date of resolution to issue
June 23, 2022
Opening price1,400 yenHigh

1,421 yenLow

1,392 yen

Closing price

1,408 yen

(4) Equity financing in last three years:
Nothing to note
11. Overview of disposition(1) Type and number of shares disposed of 5,127,997 shares of common stock(2) Disposal price
1,541 yen per share(3) Offering or disposal method
Disposition of treasury shares by third-party allotment(4) Allottee
JFE Steel(5) Allotment dateJuly 14, 2022
(6) Each item above subject to relevant notifications under Financial Instruments and Exchange Act