[Translation]
December 12, 2023
Japan Investment Corporation
JIC Capital, Ltd.
Announcement Regarding Planned Commencement of Tender Offer
for Shinko Electric Industries Co., Ltd.
JIC Capital, Ltd. (head office: Minato-ku, Tokyo; President and Representative Director: Shogo
Ikeuchi; “JICC”), which is a wholly-owned subsidiary of Japan Investment Corporation (headoffice: Minato-ku, Tokyo; President and Representative Director: Keisuke Yokoo), hereby
announces that it decided today to acquire the share certificates, etc. of Shinko ElectricIndustries Co., Ltd. (head office: Nagano City, Nagano; Representative Director of Board,
President: Susumu Kurashima; “Shinko Electric”) through a tender offer (the “Tender Offer”)
under the Financial Instruments and Exchange Act through JICC-04, Ltd., a wholly-owned
subsidiary of JICC (the “Offeror”). As of today, the Offeror aims to commence the Tender Offerin late August 2024, but since it is difficult to accurately estimate the amount of time required
for the procedures involving foreign competition authorities and authorities having jurisdiction
over investment control laws and regulations, the detailed schedule for the Tender Offer will
be promptly announced as soon as it is decided.

Summary of the Tender Offer
Tender offer price

5,920 yen per share of common stock

Number of share certificates,etc. to be purchased

67,530,488 shares

Total amount of purchaseprice (planned)

Approximately 399.8 billion yen

Minimum number of shares
to be purchased (planned)

22,491,400 shares (ownership percentage to the total
number of issued shares minus treasury shares: 16.65%)

Tender offer period

20 business days

Purpose of Tender Offer
With the spread of 5G, the increasing use of AI and IoT, and the progression of digitaltransformation (DX), etc., society and the economy are becoming digitized, and consequently,
the applications for semiconductors are expected to keep growing, further increasing thedemand over the medium to long term, as well as the need for even higher functionality andperformance. On the other hand, global competition is expected to intensify, requiring thatdevelopment and production systems that can adapt rapidly and flexibly to such needs be setup.

1Against this background, in order to enable Shinko Electric to promote initiatives that
contribute to the enhancement of corporate value from a medium-to-long-term perspective
without being affected by short-term business performance, JICC will seek to make Shinko
Electric a private entity through the Tender Offer and an acquisition of shares from Fujitsu (the“Transaction”). As such, JICC believes that it will be able to strongly support thecommercialization of the field of advanced semiconductor packaging, such as chiplet
technology and photonic-electronic integration technology, based on the diverse semiconductor
packaging technologies that Shinko Electric has cultivated to date.
Structure of the Tender Offer
For the Tender Offer, funds operated and managed by JICC (the “JICC Funds”, including thefund in which Hachijuni Sustainability No. 1 Fund (general partner: Hachijuni Investment Co.,
Ltd. (head office: Nagano-shi, Nagano; President and Representative Director: Takehiko
Maeda)) will invest) will, together with Dai Nippon Printing Co., Ltd. (head office: Shinjukuku, Tokyo; President and Representative Director: Yoshinari Kitajima; “DNP”), and Mitsui
Chemicals, Inc. (head office: Chuo-ku, Tokyo; President and Representative Director: Osamu
Hashimoto; “Mitsui Chemicals”), make investment in the Offeror and carries out theTransaction. With respect to the voting rights ratio of the Offeror, JICC Funds will own 80%,
DNP will own 15% and Mitsui Chemicals will own 5%.
* The structure diagram after completion of the Transaction.

For the details of the Transaction including the Tender Offer, please see the attached“Announcement Regarding Planned Commencement of Tender Offer for Shinko ElectricIndustries Co., Ltd. (Securities Code: 6967).”
Disclaimer
The financial advisors to JICC, the JICC Funds, DNP, Mitsui Chemicals, the Offeror, andShinko Electric as well as the tender offer agent (including their affiliates) may, within theirordinary course of business, engage during the Tender Offer Period in the purchase of, or an
arrangement to purchase, the shares in Shinko Electric for their own account or for theircustomers’ accounts outside the Tender Offer in accordance with Rule 14e-5(b) of the U.S.
Securities Exchange Act of 1934, to the extent permitted under Japanese securities regulations
2and other applicable laws and regulations. Such purchases, etc. may be made at the market
price through market transactions or at a price determined by negotiation outside the market.
In the event that information regarding such purchases, etc. is disclosed in Japan, suchinformation will also be disclosed in a similar manner in the U.S.
Press contacts
Japan Investment Corporation and JIC Capital, Ltd.
PR department staff: Okumura (070-3960-3640), Nonomiya (080-1339-5207)
Tokyo Toranomon Global Square, 1-3-1 Toranomon, Minato-ku, Tokyo
Website of Japan Investment Corporation: https://www.j-ic.co.jp/en/
Website of JIC Capital, Ltd.: https://www.jiccapital.co.jp/en/3Notice: This document is a translation of the original Japanese document and is only forreference purposes. In the event of any discrepancy between this translated document and theoriginal Japanese document, the latter shall prevail.
[Translation]
December 12, 2023
Company Name:
Representative:

JICC-04, Ltd.
Osamu Itabashi

Announcement Regarding Planned Commencement of Tender Offer
for SHINKO ELECTRIC INDUSTRIES CO., LTD. (Securities Code: 6967)
JICC-04, Ltd. (the “Offeror”) hereby announces that, on December 12, 2023, it decided toacquire the common stock of SHINKO ELECTRIC INDUSTRIES CO., LTD. (Securities
Code: 6967, Prime Market of the Tokyo Stock Exchange, Inc. (the “Tokyo Stock Exchange”);
the company is hereinafter referred to as the “Target Company,” and its common stock, the“Target Company Shares”) through a tender offer (the “Tender Offer”) under the Financial
Instruments and Exchange Act (Act No. 25 of 1948, as amended; the “Act”).
Because the procedures and steps required under domestic and foreign competition laws (atpresent, while it is believed that procedures will be required in Japan and foreign countries
including China and South Korea and that procedures may be required in Vietnam, the decisionon whether it is necessary to take procedures may change in the future depending on further
confirmation of facts concerning the Target Company’s business or assets and views expressedby relevant authorities; hereinafter the same) and foreign investment control laws andregulations (at present, while it is believed that procedures may be required in the U.S., thedecision on whether it is necessary to take procedures may change in the future depending on
further confirmation of facts concerning the Target Company’s business or assets and views
expressed by relevant authorities; hereinafter the same) will take time to complete, the Offeror
plans to commence the Tender Offer on the following date (the “Tender Offer Commencement
Date”): a date that is (i) within 10 business days after the aforementioned procedures and steps
are completed and other conditions precedent (Note 1) set out in the Master Transaction
Agreement (as defined in “(1) Summary of the Tender Offer” in “1. Purpose of the Tender Offer”
below; hereinafter the same) (those conditions precedent, the “Tender Offer Conditions
Precedent”) (excluding those to be satisfied on the commencement date of the Tender Offer)
are satisfied (or waived at the discretion of the Offeror (Note 2)) (however, if a Counter Proposal(as defined in “(6) Matters relating to material agreements regarding the Tender Offer” in “1.
Purpose of the Tender Offer” below; hereinafter the same) has been made as of such date, thenthe earlier of (a) the date on which 20 business days have elapsed since the date on which Fujitsu
Limited (“Fujitsu”) makes a request to the Offeror for consultation regarding changing theTender Offer Price and the Repurchase Price or (b) the date on which Fujitsu covenants inwriting that it will not accept the Counter Proposal) and (ii) determined by the Offeror upon
consultation with Fujitsu. As of today, the Offeror aims, based on discussions with local law
firms concerning such procedures, to commence the Tender Offer in or around late August 2024,
but since it is difficult to accurately estimate the amount of time required for the procedures
involving foreign competition authorities and authorities having jurisdiction over investment
control laws and regulations, the detailed schedule for the Tender Offer will be promptly
announced as soon as it is decided. Any changes to the expected timing of the commencement1

of the Tender Offer will be also announced promptly.
Note 1:

Under the Master Transaction Agreement, the Tender Offer Conditions Precedent
are stipulated as follows: (i) the permanent Special Committee (as defined in “(B)Procurement by the Target Company of a written report from an independent special
committee” in “(3) Measures to ensure the fairness of the Tender Offer Price andavoid conflicts of interest, and other measures to ensure the fairness of the Tender
Offer” in “1. Purpose of the Tender Offer” below), established by the Target
Company on June 17, 2022 based on the Corporate Governance Code published by
the Tokyo Stock Exchange, has reported to the board of directors of the Target
Company that it is appropriate for the board of directors of the Target Company toexpress its opinion in favor of the Transactions (as defined in “(1) Summary of theTender Offer” in “1. Purpose of the Tender Offer” below; hereinafter the same) andto recommend that the shareholders of the Target Company tender their shares in
the Tender Offer, and the report has not been changed or withdrawn; (ii) the boardof directors of the Target Company has adopted a resolution with the unanimous
approval of all disinterested directors to express its opinion in favor of the Tender
Offer and to recommend that the shareholders of the Target Company tender theirshares in the Tender Offer, and that opinion has been publicly announced inaccordance with laws and regulations and has not been changed or withdrawn, andno resolution in contradiction therewith has been passed; (iii) no judgment has been
made or is likely to be made by any judicial or administrative agency that restricts
or prohibits the Transactions; (iv) Fujitsu has performed and complied with, in allmaterial respects, all of its obligations under the Master Transaction Agreement(Note 3), and there has been no breach of Fujitsu’s representations and warranties
under the Master Transaction Agreement (Note 4) that would have a material
adverse effect (Note 5) (however, Fujitsu shall be given an opportunity to cure any
nonperformance, noncompliance, or breach in advance, and if the nonperformance,
noncompliance, or breach is cured within a reasonable period of time, the foregoingconditions shall be deemed satisfied); (v) the acquisition of Clearance (Note 6) has
been completed; (vi) confirmation has been obtained in writing from the Target
Company that, as of the business day immediately preceding the Tender Offer
Commencement Date, there is no material fact regarding the business, etc.
(excluding those publicly announced in accordance with Article 166, Paragraph 4of the Act of the Target Company as provided for in Article 166, Paragraph 2 of theAct, except for matters relating to the Transactions including the Tender Offer to beannounced on that date by the Target Company; (vii) no settlement failure event(Note 7) has occurred with regard to the financial institution that will become thelender in the borrowings (including mezzanine borrowings) by the Offeror or its
parent company for the purpose of financing the Transactions; (viii) the“Memorandum of Understanding Regarding Tender Offer” (the “MOU”) between
the Offeror and the Target Company dated as of the date of execution of the MasterTransaction Agreement remains in effect, and the Target Company has performed
and complied with, in all material respects, all of its obligations under the MOU(however, the foregoing conditions shall be deemed satisfied unless a breach ofsuch obligations has a material adverse effect); (ix) if the Tender Offer hascommenced on or after the date of execution of the Master Transaction Agreement,
no circumstances have arisen in the Target Company that would allow thewithdrawal of the Tender Offer pursuant to the provisions of the proviso of Article
27-11, Paragraph 1 of the Act (however, limited to the circumstances set out in2

Note 2:
Note 3:Note 4:Note 5:Note 6:

Article 14, Paragraph 1, Item 3 of the Order for Enforcement of the Financial
Instruments and Exchange Act (Cabinet Order No. 321 of 1965, as amended)) (theforegoing condition shall be deemed satisfied unless the circumstances have amaterial adverse effect); and (x) no proposal for a dividend of surplus to be
implemented on or after the execution date of the Master Transaction Agreement
has been approved at any shareholders’ meeting of the Target Company. If any
Counter Proposal is made before the commencement of the Tender Offer, theOfferor shall not bear an obligation to commence the Tender Offer unless Fujitsu
covenants in writing not to accept the Counter Proposal or the Offeror changes theTender Offer Price (as defined in “(1) Summary of the Tender Offer” in “1. Purposeof the Tender Offer” below) to an amount higher than the consideration proposedin the Counter Proposal and changes the Repurchase Price (as defined in “(1)Summary of the Tender Offer” in “1. Purpose of the Tender Offer” below) to an
amount that, taking tax effects into account, is in substance higher than theconsideration proposed in the Counter Proposal. Further, since the MasterTransaction Agreement sets out termination events (Note 8), the Offeror will notbear an obligation to commence the Tender Offer in the event that the MasterTransaction Agreement terminates. Please refer to “(6) Matters relating to material
agreements regarding the Tender Offer” in “1. Purpose of the Tender Offer” below
for details of the Master Transaction Agreement.
The Master Transaction Agreement stipulates that any or all of the Tender Offer
Conditions Precedent may be waived at the discretion of the Offeror.
Please refer to “(6) Matters relating to material agreements regarding the Tender
Offer” in “1. Purpose of the Tender Offer” below for details of Fujitsu’s obligations
under the Master Transaction Agreement.
Please refer to “(6) Matters relating to material agreements regarding the Tender
Offer” in “1. Purpose of the Tender Offer” below for details of the representations
and warranties of Fujitsu under the Master Transaction Agreement.
“Material adverse effect” means any material adverse effect on the business,financial condition, assets, liabilities, operating results, or cash flow of the Target
Company and its subsidiaries as a whole or on the execution of the Transactions, or
any specific risk thereof.
“Clearance” means the obtainment (including the expiration of the applicablewaiting period without objection from the relevant authorities) of permits andauthorizations, etc. (meaning a permit, authorization, license, approval, consent,
registration, notification, or any other similar act or procedure by the national
government, a local government, or any other public agency or administrative
agency as required by relevant laws and regulations; hereinafter the same) under
the competition laws and regulations of Japan, China, South Korea, and Vietnam
and notification to the Committee on Foreign Investment in the United States(however, after the execution of the Master Transaction Agreement, Fujitsu, theTarget Company, and the Offeror shall consult regarding that notification, and theOfferor shall determine whether or not it will be included in the scope of permits
and authorizations, etc. to be obtained for Clearance). If it is found that there areother permits and authorizations, etc. required for the execution or performance ofthe Master Transaction Agreement in addition to the above, and the Offeror
reasonably determines that such permits and authorizations, etc. are necessary, theOfferor may add such permits and authorizations, etc. to the scope of permits andauthorizations, etc. to be obtained for Clearance after discussion in good faith with
Fujitsu. Any additions will be disclosed in a timely manner.
3Note 7:Note 8:

1.

“Settlement failure event” means, with regard to the financial institutions that will
become the lenders in the borrowings by the Offeror or its parent company for the
purpose of financing the Transactions (referring to MUFG Bank, Ltd., Sumitomo
Mitsui Banking Corporation, The Hachijuni Bank, Ltd., and Aozora Bank, Ltd.), (i)any natural disaster, war, or outbreak of terrorism, (ii) any breakdown or failure ofelectric, communication or various clearing systems, (iii) any event where, in theTokyo Interbank Market, a loan of yen funds cannot be executed, and (iv) any otherevent that is similar to (i) through (iii) above for any reason not attributable to thefinancial institutions for which the financial institutions objectively and reasonably
determine that it is objectively impossible to conduct the settlement of the financing
due to that event.
Please refer to “(6) Matters relating to material agreements regarding the Tender
Offer” in “1. Purpose of the Tender Offer” below for details of termination events
set out in the Master Transaction Agreement.

Purpose of the Tender Offer(1)

Summary of the Tender Offer
The Offeror is a stock company (kabushiki kaisha) established on September 29,
2023 and whose business primarily consists of controlling and managing thebusiness activities of the Target Company through the acquisition and holding of
the share certificates, etc. of the Target Company after the completion of the Tender
Offer. As of today, JIC Capital, Ltd. (“JICC”), which is a wholly-owned subsidiaryof Japan Investment Corporation (“JIC”), holds all of the issued shares of theOfferor. During the period up to the time of settlement of the Tender Offer, JICC
will transfer all of the issued shares of the Offeror to JIC PEF1 Limited Partnership
and JIC PEFJ1 Limited Partnership, both managed by JICC. In addition, during theperiod from the completion of the Tender Offer to the time of settlement of theTender Offer, the Offeror will commence procedures for a capital contribution by athird-party allotment of common shares through which shares are allotted by theOfferor to the JICC Funds (meaning other investment limited partnerships or otherentities in which JICC or its subsidiaries or affiliates act as general partners,
including JIC PEF1 Limited Partnership and JIC PEFJ1 Limited Partnership; thesame shall apply hereinafter; investment limited partnerships included in the JICC
Funds include those in which Hachijuni Sustainability No. 1 Fund (general partner:
Hachijuni Investment Co., Ltd. (“Hachijuni Investment”)) will invest as a limited
partner), Dai Nippon Printing Co., Ltd. (“DNP”), and Mitsui Chemicals, Inc.
(“Mitsui Chemicals”; the JICC Funds, DNP, and Mitsui Chemicals are hereinaftercollectively referred to as the “JICC Alliance,” and the capital contribution, the“Contribution (Common Shares)”) and procedures for a capital increase by a thirdparty allotment of preferred shares (non-voting class shares with no conversion
rights to common stock) through which shares are allotted by the Offeror to DNP
and Mitsui Chemicals (the “Contribution (Preferred Shares)”; together with theContribution (Common Shares), the “Contributions”) for the purpose of providing
for the funds necessary to execute the Transactions. JIC, the JICC Alliance, and theOfferor do not hold any Target Company Shares as of today. After the Contributions,
the JICC Funds, DNP, and Mitsui Chemicals will hold 80.00%, 15.00%, and 5.00%
of common stock of the Offeror, respectively.
4

Today, the Offeror entered into a master transaction agreement with Fujitsu (the“Master Transaction Agreement”; for details of the Master Transaction Agreement,
please refer to “(6) Matters relating to material agreements regarding the Tender
Offer” below), and decided to conduct the Tender Offer for all of the Target
Company Shares (excluding the Target Company Shares held by Fujitsu (numberof shares held: 67,587,024 shares, ownership percentage (Note 9): 50.02%; the“Fujitsu Holding Shares”) and the treasury shares held by the Target Company) as
part of the series of transactions aimed at making the Offeror the sole shareholderof the Target Company and taking the Target Company Shares listed on the Prime
Market of Tokyo Stock Exchange as of today private (the “Transactions”) on thecondition that the Tender Offer Conditions Precedent are satisfied or, at thediscretion of the Offeror, waived.
Note 9: “Ownership percentage” means the ratio of the shares owned (rounded totwo decimal places) to the sum (135,117,512 shares) of the total number
of issued shares of the Target Company as of September 30, 2023
(135,171,942 shares) as stated in the “Summary of Consolidated Financial
Results for the Six Months Ended September 30, 2023 (based on JapaneseGAAP)” announced by the Target Company on October 26, 2023 (the“Target Company’s Financial Results for the Six Months”) minus thetreasury shares (54,430 shares) owned by the Target Company as of
September 30, 2023. This applies hereinafter in the calculation of theownership percentage.
The Transactions consist of the following procedures through which the Offeror
intends to ultimately make the Target Company a wholly-owned subsidiary of theOfferor:(A) the Tender Offer by the Offeror;(B) procedures for the Share Consolidation (as defined in “(4) Policy fororganizational restructuring after the Tender Offer (matters relating to a socalled “Two-Step Acquisition”)” below; hereinafter the same) to be
conducted by the Target Company in order to make the Offeror and Fujitsu
the only shareholders of the Target Company if the Offeror is not able toacquire all of the Target Company Shares (excluding the Fujitsu Holding
Shares and the treasury shares held by the Target Company) through theTender Offer (the “Squeeze-Out Procedures”);(C) (i) the provision of funds to the Target Company by the Offeror (which is
expected to be through a capital increase by a third-party allotment throughwhich shares are allotted to the Offeror or through a loan to the Target
Company (the “Financing”)) and (ii) a decrease in the amounts of the statedcapital, capital reserve, and retained earnings reserve of the Target Company
in accordance with Article 447, Paragraph 1 and Article 448, Paragraph 1 of
the Companies Act (Act No. 86 of 2005, as amended, the “Companies Act”)(the “Capital Decrease, Etc.”) (Note 10), each to be conducted by the Target
Company for the purpose of procuring funds and a distributable amountnecessary for conducting the Target Company’s acquisition of the Fujitsu
Holding Shares on the condition that the Share Consolidation becomes
effective (the “Share Repurchase”); and(D) the Share Repurchase.
5Please refer to “(4) Policy for organizational restructuring after the Tender Offer(matters relating to a so-called “Two-Step Acquisition”)” below for details of the
Share Consolidation.
Note 10: It is planned that, upon the Capital Decrease, Etc., the Target Company
will transfer (i) part or all of the decreased stated capital and capital reserveto other capital surplus and (ii) all of the decreased retained earnings
reserve to retained earnings carried forward.
In connection with the Tender Offer, the Offeror has executed the MasterTransaction Agreement with Fujitsu as of today, pursuant to which Fujitsu has
agreed (i) not to tender any of the Fujitsu Holding Shares that it holds in the Tender
Offer, and (ii) to sell all of the Fujitsu Holding Shares that it holds in response to
the Share Repurchase. For details of the Master Transaction Agreement, please referto “(6) Matters relating to material agreements regarding the Tender Offer” below.
If the total number of share certificates, etc. tendered in response to the Tender Offer(the “Tendered Share Certificates, Etc.”) is less than the minimum number of shares
to be purchased (22,491,400 shares (Note 11), ownership percentage: 16.65%)(Note 12), then the Offeror will not purchase any of the Tendered Share Certificates,
Etc. Since the purpose of the Transactions is to take the Target Company Shares
private, the minimum number has been set as the number of shares required to carryout the Transactions given that a special resolution in the shareholders’ meeting as
provided for in Article 309, Paragraph 2 of the Companies Act is required forcarrying out the procedures for the Share Consolidation as described in “(4) Policy
for organizational restructuring after the Tender Offer (matters relating to a socalled “Two-Step Acquisition”)” below and given that the Offeror has agreed with
Fujitsu that Fujitsu will not tender the Fujitsu Holding Shares in the Tender Offer
and that the Offeror and Fujitsu will vote in favor of each proposal regarding the
Squeeze-Out Procedures if the Tender Offer is successfully completed. On the other
hand, because the purpose of the Transactions is to take the Target Company Shares
private, the Offeror has not set a limit on the maximum number of shares to bepurchased, and if the total number of Tendered Share Certificates, Etc. is equal toor greater than the minimum number of the shares to be purchased (22,491,400
shares), then the Offeror will purchase all of the Tendered Share Certificates, Etc.
Note 11: The minimum number of shares to be purchased (22,491,400 shares) will
be set as the number of shares calculated by (i) subtracting the treasury
shares (54,430 shares) owned by the Target Company as of September 30,
2023 from the total number of issued shares of the Target Company as of
September 30, 2023 (135,171,942 shares) as stated in the Target
Company’s Financial Results for the Six Months, (ii) multiplying thenumber of voting rights (1,351,175 voting rights) represented by that
number of shares (135,117,512 shares) by two thirds, (iii) deducting fromthat number (900,784 voting rights, rounded up to the nearest whole
number) the number of voting rights (675,870 voting rights) represented
by the Fujitsu Holding Shares (67,587,024 shares), and then (iv)
multiplying that number (224,914 voting rights) by 100.
Note 12: The minimum number of shares to be purchased is temporary and depends
on the information as of today, and the actual minimum number of shares6to be purchased in the Tender Offer may differ from the number above due
to changes in the number of treasury shares held by the Target Company
and the number of Target Company Shares held by Fujitsu occurring
hereafter. While the final minimum number of shares to be purchased is tobe determined before the commencement of the Tender Offer based on thelatest information available as of the commencement of the Tender Offer,no changes are planned to the basic framework, including the method of
calculating the minimum number of shares to be purchased.
Diagrams summarizing the Transactions are provided below.
Before the implementation of the Tender Offer (current status)
As of December 12, 2023, Fujitsu holds 67,587,024 Target Company Shares(ownership percentage: 50.02%) and other shareholders (excluding the Target
Company) hold the remaining 67,530,488 shares (ownership percentage: 49.98%).

Other shareholders

Fujitsu

50.02%

49.98%

Target Company

The Tender Offer by the Offeror
The Offeror will conduct the Tender Offer for all of the Target Company
Shares (excluding the Fujitsu Holding Shares and the treasury shares held by
the Target Company).
*Includes funds in which Hachijuni Investment invests

JICC Funds*

DNP

80.00%

15.00%

Mitsui Chemicals
5.00%

Fujitsu will not tender its shares in
the Tender Offer

FujitsuOthershareholders

50.02%

Tender Offer for aminimumof 16.65%
49.98%

Target Company

OfferorAfter the Tender Offer, the combined
equity interest of the Offeror andFujitsu will be two thirds or more

* Investment limited partnerships included in the JICC Funds include those inwhich Hachijuni Investment will invest as a limited partner. The same shall apply
hereinafter.
7

The Squeeze-Out Procedures through the Share Consolidation by the Offeror
If the Tender Offer has been successfully completed, but the Offeror is unable toacquire all of the Target Company Shares (excluding the Fujitsu Holding Sharesand the treasury shares held by the Target Company) in the Tender Offer, then theOfferor intends to request the Target Company to conduct the Share Consolidationand carry out procedures for making the Offeror and Fujitsu the only shareholdersof the Target Company.
*Includes funds in which Hachijuni Investment invests

DNP

JICC Funds*
80.00%

Mitsui Chemicals

15.00%

5.00%

Implementation ofsqueeze-out transaction

Other
shareholders

Fujitsu

Offeror33.33% or less→0%

Target Company

The Financing and the Capital Decrease, Etc. to be conducted for the purposeof procuring funds for the Share Repurchase and a distributable amount
After the Target Company Shares are delisted and the Share Consolidation
takes effect, the Offeror will provide the Financing to the Target Company,
and the Target Company will conduct the Capital Decrease, Etc. in order toprocure funds required for the Share Repurchase and a distributable amount.
*Includes funds in which Hachijuni Investment invests

DNP

JICC Funds*
80.00%

Mitsui Chemicals

15.00%

Fujitsu

5.00%

OfferorTarget Company
Capital Decrease, Etc.

8

FinancingThe Share Repurchase from Fujitsu by the Target Company
After the Capital Decrease, Etc. has been completed, the Target Company will
use the funds and distributable amount procured by the Funding and Capital
Decrease, Etc. to conduct the Share Repurchase to acquire all of the Fujitsu
Holding Shares.
*Includes funds in which Hachijuni Investment invests

JICC Funds*

DNP

80.00%

Mitsui Chemicals
5.00%

15.00%

Fujitsu

OfferorTarget Company
Share Repurchase-

While there is a possibility that the Share Repurchase will be conducted after
the Share Consolidation prior to the approval of the exemption from theobligation to file an annual securities report, the Share Repurchase is intended
to be conducted after the delisting of the Target Company Shares. As thedelisted shares will not constitute “listed share certificates, etc.” (Article 246, Paragraph 1 of the Act and Article 4-3 of the Order for Enforcement of the
Financial Instruments and Exchange Act), which would be subject to a tender
offer of treasury shares (Article 27-22-2 of the Act), a tender offer oftreasury shares is not planned to be conducted upon the execution of the Share
Repurchase.

After the Transactions
After the Transactions, the Offeror will hold all of the issued shares of theTarget Company (excluding the treasury shares held by the Target Company).
*Includes funds in which Hachijuni Investment invests

DNP

JICC Funds*

Mitsui Chemicals

Offeror100%

TargetCompany

The Offeror plans to cover the funds required for settlement of the Tender Offer
through the Contributions and borrowing from MUFG Bank, Ltd., Sumitomo
9Mitsui Banking Corporation, The Hachijuni Bank, Ltd., and Aozora Bank, Ltd. (the“Bank Loan”). The Offeror intends to receive the Contributions and the Bank Loanby the business day immediately preceding the commencement date of settlementof the Tender Offer subject to the successful completion of the Tender Offer andother conditions. The details of the loan terms of the Bank Loan will be specified
in the loan agreement for the Bank Loan upon separate discussion with each bank.
The loan agreement for the Bank Loan will stipulate that all of the issued shares of
the Offeror to be held by the JICC Funds and certain assets, including the Target
Company Shares to be acquired by the Offeror through the Tender Offer, will be
provided as security. Of the assets to be provided as security for the Bank Loan, theassets held by the Target Company and its consolidated subsidiaries will be
provided as security after the Squeeze-Out Procedures are completed.
In addition, although the Share Repurchase will be conducted within the limit ofthe distributable amount of the Target Company, the Offeror intends to provide the
Financing after the Share Consolidation, taking into account the funds required for
the Share Repurchase, the amount of deposits held by the Target Company, and thelevel of deposits required for business operations after the Share Consolidation.
Additionally, the purchase price in the Tender Offer (the “Tender Offer Price”) andthe consideration for the repurchase of treasury shares in the Share Repurchase (pershare prior to share consolidation; the “Repurchase Price”) were calculated so that(i) the amount calculated as the after-tax earnings of Fujitsu if the Share Repurchasewere to be conducted at the Repurchase Price is equal to (ii) the amount of earnings
that Fujitsu would receive if it were to tender its shares in the Tender Offer at theTender Offer Price. Accordingly, Fujitsu will not receive greater benefits than theminority shareholders of the Target Company.
According to the “Announcement of Opinion in Support of the Planned
Commencement of Tender Offer for Shares of JSR Corporation by JICC-04, Ltd.
and Recommendation to Tender Shares” released by the Target Company on
December 12, 2023 (the “Target Company’s Press Release”), at the board of
directors meeting of the Target Company held on December 12, 2023, a resolution
was adopted to the effect that, if the Tender Offer commences, the current positionof the Target Company is that it will express an opinion in support of the Tender
Offer and that it will recommend that the Target Company’s shareholders tendertheir shares in the Tender Offer.
In addition, the Tender Offer is scheduled to commence within 10 business days
from the date on which the Tender Offer Conditions Precedent (excluding those to
be satisfied on the commencement date of the Tender Offer) are satisfied (or waived
by the Offeror; however, if a Counter Proposal has been made as of such date, thenthe earlier of (a) the date on which 20 business days have elapsed since the date on
which Fujitsu makes a request to the Offeror for consultation regarding changing
the Tender Offer Price and the Repurchase Price or (b) the date on which Fujitsu
covenants in writing that it will not accept the Counter Proposal), and as of today,
the Offeror aims to commence the Tender Offer in or around late August 2024, butsince it is difficult to accurately estimate the amount of time required for theprocedures involving foreign competition authorities and authorities having
jurisdiction over investment control laws and regulations, the Target Company also
resolved at the aforementioned board of directors meeting that it will express its
10

opinion on the Tender Offer anew at the time the Tender Offer commences. For
details of the resolution of the Target Company’s board of directors meeting, pleaserefer to “(v) Approval of all directors who have no interest in the Target Company”
in “(3) Measures to ensure the fairness of the Tender Offer Price and avoid conflictsof interest, and other measures to ensure the fairness of the Tender Offer” below.
(2)

Background, purpose, and decision-making process leading to the decision to
conduct the Tender Offer, and management policy following the Tender Offer
The background, purpose, and decision-making process leading to the decision to
conduct the Tender Offer as well as the management policy following the Tender
Offer are described below. The description of the Target Company included below
is based on information released by the Target Company, the Target Company’s
Press Release, and explanations received from the Target Company.
(A) The Target Company’s business environment, etc.
The Target Company was founded in February 1946 as Nagano Katei Denki
Saisei-jo with the main goal of recycling household lightbulbs, and it
reorganized and renamed itself SHINKO ELECTRIC INDUSTRIES CO.,LTD. in September of the same year to expand operations. In 1957, thanks tocapital funding from Fujitsu, the Target Company newly expanded its
operations into the semiconductor field. As a leading company ofsemiconductor packaging in the ever-advancing electronics industry, theTarget Company has developed, manufactured, and sold products based on awide range of semiconductor packaging technologies. Specifically, as oftoday, the Target Company group, comprising the Target Company and ninesubsidiaries (the “Target Company Group”), engages in the following main
businesses with an integrated production system (from development/design
to shipment): development, manufacture, and sale of various semiconductor
packages, such as flip-chip type packages (Note 13), plastic BGA substrates(Note 14), and leadframes (Note 15), each of which has a world-leading
market share; assembly and sale of ICs; and development, manufacture, andsale of ceramic electrostatic chucks (Note 16) for semiconductor
manufacturing equipment. Furthermore, the Target Company Shares came tobe listed on the Second Section of the Tokyo Stock Exchange in December
1984, reassigned to the First Section in September 1996, and after the
reorganization of the Tokyo Stock Exchange, they came to be listed on thePrime Market of the Tokyo Stock Exchange.
The Target Company Group aims for “Progress without Limits” in theelectronics industry, which is expected to grow in the medium to long term,by supporting the evolution of semiconductors, working to create productsthat enrich the lives of people around the world based on technology that links
the superb functions of semiconductors with people’s lives, and developing,
manufacturing, and selling superb products that start with the needs ofcustomers. Furthermore, the Target Company Group upholds as its corporate
visions “Global Outlook” and “Responsibility to Individual,” in addition to“Technology Leadership” and “Long Term Vision”; in accordance with thesevisions, the Target Company Group is committed to coexisting and prospering
11

in the international community as a global company that engages in businesswith customers around the world and operates offices in various regions,striving to create an environment that brings together the talents of diverse
human resources and enables each and every employee to achieve personal
growth, and promoting business with a management stance that takes into
consideration “respect for the global environment and humanity,” thereby
aiming to contribute to the healthy development of society and creation of abrighter future.
Note 13: Flip-chip type packages are semiconductor packages used for highperformance semiconductors, such as CPUs for computers andservers, that meet the need for higher speed and higher density
semiconductors with fine line patterning, multilayered structures,and excellent electrical characteristics.
Note 14: Plastic BGA substrates are semiconductor packages used primarily
for semiconductor memory for smartphones and micro-control units(MCU) for automobiles that meet the need for size reduction as wellas thinner and higher density semiconductors with fine line
patterning and multilayered structures.
Note 15:Leadflames are widely used in smartphones, computers, automobiles,
and home appliances. The Target Company provides various typesof leadflames through stamping using precise dies and etchingprocesses.
Note 16: Ceramic electrostatic chucks are parts used for semiconductor
manufacturing equipment such as etching; they adsorb and fix
silicon wafers using static electricity, and meet the need for higher
performance in semiconductor manufacturing equipment.
Economic and societal structures are being changed by the spread of fifthgeneration mobile communications systems (5G) and the progression of
Digital transformation (DX) (Note 17) due to the increasing use of big data,
artificial intelligence (AI), the Internet of things (IoT), and other advanced
technologies. These technologies have the potential to create innovation on adifferent order of magnitude than ever before. It is expected that
semiconductors, as the key technology for achieving this potential, willcontinue to evolve. At the same time, the importance of semiconductors is
growing from a strategic perspective. Moreover, the markets forsemiconductors are expected to continue expanding in the future, includingin the automotive market, where technological developments, such as
autonomous driving and EVs, are accelerating, as well as in the medical field
to support people’s health. In addition, semiconductor needs are expected to
become more sophisticated and diverse as key devices that speed up thetransition to a decarbonized society and support the evolution of technologies
that is essential for realizing green transformation (GX). Meanwhile, in termsof the semiconductor manufacturing process, progress in miniaturization
during the upstream process of forming circuit patterns on wafers previously
led to improvements in semiconductor performance. In recent years, however,
the importance of the downstream packaging process has increased to meetthe need for more advanced and multifunctional semiconductors. In particular,
the Target Company’s main business of semiconductor packages, beginning
12with flip-chip type packages used in high-performance semiconductors such
as CPUs for computers and servers, is increasing needs and attracting
attention in the semiconductor industry, as core products indispensable forsemiconductors with advanced functionality and speed as well as powersaving.
Note 17: “Digital transformation (DX)” refers to, in the case of businessenterprises, the response to rapid changes in the businessenvironment and reforms to a company’s products, services, andbusiness model in response to customer and social needs by utilizing
data and digital technology. At the same time, it involves theimplementation of reforms in the business operation itself, theorganization, business processes, corporate culture and climate, inorder to establish a competitive advantage.
In such industry, the Target Company Group is committed to developing
highly competitive products and innovating the art of manufacturing,
beginning with various semiconductor packages that have a leading productshare in the industry based on diverse, cutting-edge semiconductor packaging
technologies that it has cultivated to date. The Target Company Group strives
to provide customers with high-value products and services in terms offunction/performance, cost, and quality, and to support their success. Throughthese initiatives, the Target Company Group pursues its own development andgrowth. In addition, the Target Company Group focuses on cash flow and on
building a solid management foundation able to continually generate profits,
as well as fulfilling corporate governance, while executing a management
strategy that emphasizes “focus on growth areas,” “building a robust
production system” and “promoting the Shinko Way.”As for the future business environment, in the U.S., personal consumption is
expected to remain firm due to solid employment and incomes. In Japan, agradual recovery is expected as socioeconomic activities normalize. However,
the global and Japanese economies are expected to remain uncertain due tosoaring energy and raw material prices, as well as concerns about economic
recessions caused by the prolonged Russia-Ukraine conflict and ongoing
global inflation, monetary tightening in the U.S. and Europe, and the slowing
Chinese economy, among others.
The semiconductor industry is expected to face a severe market environment:
Negative growth is expected in the semiconductor market in 2023 due tofactors such as the decline in demand for PCs and smartphones and prolonged
inventory adjustments due to the underlying global economic slowdown andthe backlash from COVID-related special demand, as well as the impact ofsemiconductor export restrictions. On the other hand, with the spread of 5G,
the increasing use of AI and IoT, and the progression of Digital
Transformation (DX), etc., society and the economy are becoming digitized.
Consequently, the applications for semiconductors are expected to keep
growing, further increasing the demand over the medium to long term, as wellas the need for even higher functionality and performance. Moreover, thesignificance of semiconductors as key technologies to support the promotion
13

of green transformation (GX), including the transition to renewable energy
and advancements in energy conservation, is growing while efforts to achievea decarbonized society accelerate. At the same time, global competition is
expected to intensify, requiring that development and production systems that
can adapt rapidly and flexibly to increasingly sophisticated and diverse
market needs and changing demand be set up.
In such a severe environment, the Target Company Group is working hard,across the board, to boost productivity and cut costs. The Target Company
Group also developed proactive sales drives to generate consistent revenues.
The Target Company Group has been making continual, focused capital
investments in markets with promising growth and has augmented its
production capacity to increase sales. The Target Company Group’s focus ison steadily making capital investments in and technological developments forthese growing markets, with sights set on the Target Company Group’s future
development. For flip-chip type packages, which meet the need forsemiconductors with enhanced functionality, speed, and power saving, theTarget Company Group is committed to reinforcing its production system andbroadening the customer base in view of the expansion of the cutting-edge
semiconductor market, especially for servers. The Target Company Group is
focusing on the construction, which started last year, of its Chikuma Plant(Chikuma City, Nagano Prefecture), the Target Company’s sixth production
plant, with operations set to begin in fiscal year 2024. Furthermore, in order
to meet the needs of the high-performance computing (HPC) market, whichis expected to experience significant growth in the medium to long term, theTarget Company plans to make further capital investments in the Chikuma
Plant to launch next-generation flip-chip type packages developed by theTarget Company, beginning with i-THOP® (integrated Thin film Highdensity Organic Package). This plan is certified as a “plan for ensuring supply”
under the Act on the Promotion of Ensuring National Security throughIntegrated Implementation of Economic Measures (the “Economic Security
Promotion Act”). As the semiconductor manufacturing equipment market
continues to grow, the Target Company anticipates steady demand for ceramicelectrostatic chucks as a key component. Accordingly, the Target Company istrying to expand its mass production system through the construction of a newbuilding and introduction of a production facility in its Takaoka Plant(Nakano City, Nagano Prefecture). Further, at its Arai Plant (Myoko City,
Niigata Prefecture), the Target Company has begun construction planning for
a new building to increase the production capacity of its plastic BGA
substrates to meet the demand for semiconductor memory with higher speeds
and lager capacities, aiming to further develop the market for its products that
contribute to higher performance semiconductors.
In addition, in order to further strengthen its earnings base in this severebusiness environment, the Target Company strives to establish a production
system that can provide a stable supply of superb products by ensuring quality
at all stages, from development and design to production, and is focusing on
the development and commercialization of highly-competitive new products
based on its diverse semiconductor packaging technologies that it has
cultivated to date, while accurately identifying market trends.
14

In the above described business environment surrounding the Target
Company, in order to identify the potential for medium- to long-term market
growth of its products and technologies and aim for “Progress without Limits,”
it will become increasingly important to develop technologies that anticipate
market needs and to make flexible capital investments, and the size of funds
required for these investments is expected to increase as well. In an
increasingly severe competitive environment, the Target Company has been
considering various measures to achieve continued enhancement of its
corporate value, including its capital structure, such as faster decision-making,diversification of financing methods, and expansion of human capital, which
is fundamental to the promotion of its business, while taking into
consideration minority shareholder interests.
(B)

Background, purpose, and decision-making process leading the Offeror to
conduct the Tender Offer
JICC aims to achieve both a financial return and the policy objectives ofpromoting business portfolio transformation to enhance the international
competitiveness of Japanese industries, creating new businesses andindustries to realize Society 5.0, establishing next-generation social
infrastructure to promote digital transformation (DX), solving social issues,and serving as a catalyst for private funds. JICC, which was established basedon this philosophy, aims to conduct the Transactions for the main purposes of(a) enhancing the Target Company’s corporate value by making it a private
entity that is not limited by its current capital structure and is not affected byshort-term fluctuations in business performance and (b) thereby providing an
opportunity for acquisition of private funds to strengthen the international
competitiveness of the semiconductor industry in which the Target Company
operates.
JICC is a wholly-owned subsidiary of JIC, which is a corporation establishedto generate a virtuous cycle of risk capital to support next-generationindustries in Japan. To achieve this vision, JIC promotes open innovation(Note 18) as a means of supporting the growth and enhancing thecompetitiveness of businesses. JIC approaches these challenges bystimulating private sector investments through the provision of funds while
fostering the development of investment professionals. JICC aims to achieveboth a financial return and the policy objectives of promoting businessportfolio transformation to enhance the international competitiveness ofJapanese industries, creating new businesses and industries to realize Society
5.0 (Note 19), establishing next-generation social infrastructure to promote
DX, solving social issues, and serving as a catalyst for private sector
investment through the supply of large-scale, long-term, neutral risk capital.
Note 18: “Open innovation” refers to the intentional and proactive utilizationof the flow of internal and external resources, such as technologies
and ideas, in and out of the organization to promote internalinnovation and then deploying the resulting internal innovations
outside the organization to increase market opportunities.
15

Note 19: “Society 5.0” was proposed in the 5th Science and Technology Basic
Plan approved by the Cabinet on January 22, 2016 as a future societythat Japan should aspire to. It refers to a human-centered society thatbalances economic advancement with the resolution of social
problems by a system that highly integrates cyberspace (virtual
space) and physical space (real space).
Since its establishment in September 2020, JICC has studied investment
opportunities as a fund responsible for buyout investments (Note 20) andlarge growth investments (Note 21) within the JIC Group (collectively
referring to JIC and its subsidiaries and affiliates). Specifically, as announcedin August 2022, JICC plans to acquire 80% of the voting stock of the new
combined company in the business combination of Toyo Aluminium K.K. and
UACJ Foil Corporation. The domestic aluminum foil industry finds itself
confronting increasingly difficult challenges due to the increase in imports ofoverseas manufactured aluminum foils, but it is believed that through thisinvestment, it will be possible to streamline the manufacturing structure in the
short term, thereby securing a stable supply capacity matching demand forfurther supply of aluminum foil (including lithium-ion battery foil), which
will in turn support all industries in Japan. Through the planning of a growthstrategy and enhancing facilities in the medium term, JICC’s aim is to realize
technical development and manufacturing capacity that will withstandinternational competition, and it will support the new combined company inestablishing its position as a globally competitive aluminum foil manufacturer
to further enhance the presence and corporate value of Japan’s aluminum foil
industry. In addition to this, JICC has completed its capital participation in
Hitachi Astemo, Ltd. in October 2023. Through JICC’s capital participation,
JICC will utilize its extensive track record of investment and support,
including in the automotive industry, as well as its knowledge and information
network based on that experience to support Hitachi Astemo, Ltd. in realizing
sustained growth by leveraging its competitive software development
technology with accelerating investment in advanced fields.
Note 20: “Buyout investment” refers to an investment strategy aimed atreforming industrial structures and strengthening international
competitiveness through reorganization and integration of domestic
and foreign companies.
Note 21: “Large growth investment” refers to an investment strategy aimed atstrengthening the international competitiveness of a company byinvesting in domestic and foreign high-growth companies.
Additionally, in the semiconductor materials field, JICC announced on June
26, 2023 that it intends to take JSR Corporation (“JSR”) private through atender offer. Through the privatization of JSR, JICC, as a partner of JSR, will
support the smooth restructuring and integration of the semiconductormaterials industry in Japan by taking advantage of its neutral position as agovernment-affiliated fund and will also support JSR in achieving increased
corporate value by promoting structural reforms without being affected byshort-term fluctuations in business performance.
16

Furthermore, several members have joined JICC with investment experienceat Innovative Network Corporation Japan (“INCJ”), in which JIC holds all
shares and which has a similar mission to that of JICC. In addition to a wide
network of corporations and industries in Japan and overseas across private
and public sectors, JICC has accumulated knowledge through investments inadjacent fields, domestic industry reorganization projects and large-scale andcomplex projects, as mentioned above.
As an example of investment in the semiconductor field, in 2012, INCJ
invested in Renesas Electronics Corporation (“Renesas”), formerly thesemiconductor businesses of Mitsubishi Electric Corporation, Hitachi, Ltd.
and NEC Corporation. This investment was intended to support Renesas with
its world-leading technology in promoting reforms and growth investments
to build a solid earnings structure to thrive in the extremely volatile
semiconductor industry, thus aiming to restore and strengthen theinternational competitiveness of Japan’s semiconductor industry. Since INCJ
made that investment, Renesas has established governance under a newshareholder structure while executing comprehensive structural reforms
encompassing production, operation, and talent management, enabling thecompany to transform into a profit making entity. Furthermore, since 2017,
Renesas has acquired semiconductor companies, including Intersil
Corporation, Integrated Device Technology, Inc., and Dialog Semiconductor
Plc, and has succeeded in accelerating its growth as a global semiconductor
manufacturer by expanding its product lineup and customer base.
While the Target Company was deliberating various management strategies
to enhance its corporate value in the business environment stated in “(A)The Target Company’s business environment, etc.” above, in response to
Fujitsu’s plan to sell all or part of the Fujitsu Holding Shares Fujitsu
announced in September 2021, in January 2021, the Target Company began
to have discussions with Fujitsu concerning the specific method of selling the
Fujitsu Holding Shares. Subsequently, Fujitsu held meetings with multiple
potential buyer candidates and deliberated on various options, such as meansof carve-out from the Fujitsu Group and a capital and business alliance withpotential buyer candidates. During this time, although there were intermittent
discussions, there was no progress in the discussions as there were no specificnegotiations between Fujitsu and the Target Company. However, as the Target
Company subsequently received a specific proposal from Fujitsu in June 2022,
in July 2022, the Target Company appointed Mitsubishi UFJ Morgan Stanley
Securities Co., Ltd. (“MUMSS”) as its financial advisor and third-party
valuation organization, SMBC Nikko Securities Inc. (“SMBC Nikko”) as its
financial advisor, and Nishimura & Asahi (currently Nishimura & Asahi(Gaikokuho Kyodo Jigyo); “N&A”) as its legal advisor.
The Target Company then carefully deliberated the various options, including
maintaining its listed status in order to both maximize the interests of its
minority shareholders in addition to those of the Fujitsu group and further
enhance the Target Company Group’s corporate value in light of the
discussions it engaged in with Fujitsu from July 2022 to March 2023. As aresult, the Target Company reached the decision that it would be desirable for17the Target Company and its shareholders to implement a bidding procedurein relation to the Target Company’s capital policy by selling all Fujitsu
Holding Shares to multiple candidates who are expected to show a strong
interest in the Target Company’s business (the “Bidding Process”). Based on
this decision, since late March 2023, the Target Company and Fujitsu havebeen making initial approaches to potential buyers, including a businesscompany and investment funds with a sufficient investment track record in
the Japanese market, which were assumed to be interested in collaboratingwith the Target Company in light of business synergies, , and commenced theprimary bidding process for one business company and eight investment
funds (including JICC) who showed an interest in participating in the Bidding
Process.
JICC had been continually exchanging opinions regarding various investment
opportunities, including investment in the Target Company, through meetings
with Fujitsu, and as part of the primary bidding process, JICC was approachedby Nomura Securities Co., Ltd. (“Nomura Securities”), Fujitsu’s financial
advisor, regarding participation in that bidding process and decided toparticipate.
In response to being approached, JICC conducted initial studies based on
information on the outlook of the Target Company’s business, management
policies, and other similar matters provided by the Target Company, and on
May 12, 2023, JICC submitted a non-legally binding letter of intent proposing
to take the Target Company Shares private through a tender offer for theTarget Company Shares and squeeze-out procedures in order to increase theTarget Company’s corporate value from a medium-to-long-term perspective(the “Initial Letter of Intent”).
Because multiple candidates, including the Offeror, submitted letters of intent
premised on a transaction method involving the acquisition of Fujitsu sharesfrom Fujitsu in late May of the same year, after carefully deliberating theircontent, the Target Company and Fujitsu selected four investment funds,
including JICC, to whom they would make initial approaches concerning
their participation in the secondary bidding process.
After that, the Target Company and Fujitsu started the secondary bidding
process in late June of the same year, and after due diligence on the Target
Company by the candidates, the Target Company and Fujitsu received awritten non-legally binding proposal from JICC in September of the same
year, a written non-legally binding final proposal from another candidate in
October of the same year, and a written legally binding final proposal from
JICC in November of the same year. Since no legally binding final proposal
was submitted by the other candidates, the Target Company and Fujitsu
comprehensively reviewed the proposals of each candidate, and as a result,later in the same month, the Target Company and Fujitsu decided to select
JICC as the final candidate from among JICC and the other candidates, withthe transaction price, transaction certainty, and transaction speed as the main
decision-making criteria, and began discussions and deliberations toward
implementing the Transactions, including the Share Repurchase, with JICC.
18

After submitting the Initial Letter of Intent, in late June 2023, JICC received
notification from Nomura Securities, the financial advisor of Fujitsu, and
MUMSS, the financial advisor of the Target Company, that it had successfully
cleared the primary bidding process and was asked to confirm whether it
intended to participate in the secondary bidding process. Additionally, JICC
had been exchanging information with DNP and separately with Mitsui
Chemicals since before the commencement of the Bidding Process in orderto jointly examine new investment opportunities, including investments incorporations other than the Target Company. As part of that informationexchange, they also identified the Target Company as a potential investment
opportunity and exchanged information in regard thereto, and when doing so,taking into account the publication of a speculative article by Bloomberg
regarding the sale of Fujitsu’s subsidiaries on June 1, 2023, they began
specific discussions in regard to cooperating to conduct the Transactions.
Subsequently, when considering the Transactions in the secondary bidding
process, in late June 2023, JICC requested the Target Company and Fujitsu toallow cooperation between JICC, DNP, and Mitsui Chemicals and received
notification approving that request. Taking these facts into account, in orderto further increase the likelihood of procuring funds for the Transactions,maximize the corporate value of the Target Company by leveraging theknowledge of DNP and Mitsui Chemicals, and obtain further understanding
from stakeholders, JICC began considering participating in the secondary
bidding process in cooperation with DNP and Mitsui Chemicals. JICC
conducted due diligence on the Target Company from late July to midSeptember 2023 in cooperation with DNP and Mitsui Chemicals to develop a
deeper understanding of the Target Company’s businesses, management
environment, growth strategies, and management issues, as well as to confirm
accounting, tax, legal, and environmental matters involving the Target
Company. While conducting due diligence, JICC, DNP, and Mitsui
Chemicals confirmed their understanding that the Transactions are valuable
opportunities to work with the Target Company in maintaining the Target
Company’s position as a world-leading entity and came to strongly believethat the Offeror, a consortium composed of JICC, DNP, and Mitsui Chemicals,
was the best partner for the Target Company. Specifically, the JICC, DNP, andMitsui Chemicals believe that by JICC, which is a government-affiliated fundthat is able to provide large-scale, long-term, neutral risk capital, playing thelead role in taking the Target Company private, the Offeror would promote
initiatives that contribute to the enhancement of corporate value from a
medium-to-long-term perspective without being affected by short-term
fluctuations in business performance even in the midst of an uncertain
economic environment. In the business environment surrounding the Target
Company, JICC expects that it will become increasingly important to develop
technologies that anticipate market needs and to promptly make capital
investments and that the funds required to do so will grow larger in scale aswell, and therefore, JICC believes that it is particularly important to expedite
initiatives and decision-making from a medium-to-long-term perspective
without being affected by short-term fluctuations in business performance bytaking the Target Company private. Additionally, JICC, DNP, and Mitsui
Chemicals believe that DNP would contribute to the next-generation19

semiconductor business that the Target Company aims to achieve by
combining DNP’s micromachining technology, fine coating technology, andmaterial development technology developed over many years with the Target
Company’s semiconductor package technology, and that Mitsui Chemicals
would aim to strengthen and maintain the Target Company’s market
competitiveness in the field of next-generation semiconductor package
substrates and strengthen its ability to provide solutions to customers by
integrating the semiconductor package substrate technology of the Target
Company and the materials technology of Mitsui Chemicals. Accordingly,
JICC, DNP, and Mitsui believe that it will be able to greatly contribute toimproving the corporate value of the Target Company over the medium tolong term that they work together on the matters stated above.
JICC believes that there are no particular significant demerits to taking theTarget Company private. Specifically, although the possible effects of theTarget Company leaving the Fujitsu group include a loss of thecreditworthiness that the Target Company possesses as a member of the
Fujitsu group and a loss of operational support from Fujitsu, JICC believes
that it will be possible to supplement the creditworthiness of the Target
Company even after taking it private through JICC, a fund affiliated with thegovernment of Japan, and DNP and Mitsui Chemicals, major corporations inJapan, becoming shareholders of the Target Company, and that operational
support from Fujitsu can be replaced through outsourcing and other suchmeans even after taking the Target Company private. Therefore, JICC
believes that there are no significant demerits to the Target Company leaving
the Fujitsu group.
Additionally, in late August 2023, JICC received communication from The
Hachijuni Bank, Ltd., with which JICC was engaged in discussions as a
candidate to provide funding for the Tender Offer, to the effect that it wished
to also cooperate in the Transactions through Hachijuni Investment, its groupcompany, in order to provide more multi-faceted support for the increase of
the corporate value of the Target Company over the medium to long term. In
early September 2023, JICC received notification from the Target Company
and Fujitsu that they would allow Hachijuni Investment to cooperate in theTransactions, and in late September 2023, Hachijuni Investment conducted
due diligence on the Target Company, as a result of which Hachijuni
Investment decided to invest in the JICC Funds as a limited partner throughHachijuni Sustainability No. 1 Fund.
Through achieving the privatization of the Target Company, which isconsidered to be one of the companies that fulfills a central role in thedevelopment of advanced semiconductors in Japan, JICC desires to create away to contribute to the further development of industry in Japan by fully
drawing out the latent growth potential of each business of the Target
Company, thereby maintaining and evolving its globally top-leveltechnologies. Specifically, JICC believes that the Target Company holds animportant position as a components and materials company that will support
technological innovation in the future from the perspective of strengthening
20

the foundations of semiconductor manufacturing as envisioned by the
Ministry of Economy, Trade and Industry.
With the spread of 5G, the increasing use of AI and IoT, and the progressionof digital transformation (DX), etc., society and the economy are becoming
digitized, and consequently, the applications for semiconductors are expected
to keep growing, further increasing the demand over the medium to long term,
as well as the need for even higher functionality and performance. On theother hand, global competition is expected to intensify, such as requiring thatdevelopment and production systems that can adapt rapidly and flexibly tosuch needs be set up.
Against this background, in order to enable the Target Company to promote
initiatives that contribute to the enhancement of corporate value from a
medium-to-long-term perspective without being affected by short-termbusiness performance, JICC believes that through the Tender Offer and theprivatization of the Target Company, together with DNP, Mitsui Chemicals,and Hachijuni Investment, it would strongly support the commercializationof the field of advanced semiconductor packaging, such as chiplet technology
and photonic-electronic integration technology, based on the diverse
semiconductor packaging technologies that the Target Company has
cultivated to date.
JICC believes that by doing so, the businesses and technologies of the Target
Company will be able to greatly contribute to technological development inadvanced fields centered around fine-lining competition and threedimensional packaging for semiconductor processes and to achieving
practical implementation of next-generation semiconductor technologies
such as photonic-electronic integration ahead of other countries.
In this way, the JICC Alliance consisting of JICC, DNP, and Mitsui Chemicals
believes that by means such as providing knowledge based on its richinvestment experience in related industries, offering referrals to portfolio
companies, and engaging in technical cooperation, it is possible to maximize
the interests of the Target Company as well as its shareholders, management,
and other stakeholders.
Based on the examinations above, JICC made a non-legally binding proposal
in writing to Fujitsu and the Target Company on September 15, 2023 to set
the Tender Offer Price per Target Company Share at 6,000 yen and theRepurchase Price per Target Company Share at 4,320 yen. (The proposal of
the Tender Offer Price per Target Company Share at 6,000 yen represents (i)a discount of 0.25% (rounded to two decimal places; the same applies in thecalculations of premium and discount rates below) on 6,015 yen, the closing
price of the Target Company Shares on the Prime Market of the Tokyo Stock
Exchange as of September 14, 2023, which is the business day immediately
preceding the date on which the proposal was made (September 15, 2023),(ii) a premium of 1.57% on 5,907 yen, the simple average closing price forthe preceding one-month period ending on that date (rounded to the nearest
whole yen; the same applies in the calculations of simple average closing
21

prices below), (iii) a premium of 3.13% on 5,818 yen, the simple averageclosing price for the preceding three-month period ending on that date, and(iv) a premium of 17.49% on 5,107 yen, the simple average closing price forthe preceding six-month period ending on that date.)
Following that, in response to receiving a request from Fujitsu to consider
raising the Tender Offer Price and the Repurchase Price on September 21,
2023, JICC made a non-legally binding proposal in writing to Fujitsu and theTarget Company on September 26, 2023 to raise the Tender Offer Price per
Target Company Share at 6,100 yen and the Repurchase Price per Target
Company Share at 4,391 yen. (The proposal of the Tender Offer Price per
Target Company Share at 6,100 yen represents (i) a premium of 3.48% on
5,895 yen, the closing price of the Target Company Shares on the Prime
Market of the Tokyo Stock Exchange as of September 25, 2023 (which is thebusiness day immediately preceding the date on which the proposal was made
(September 26, 2023)), (ii) a premium of 2.99% on 5,923 yen, the simple
average closing price for the preceding one-month period ending on that date,(iii) a premium of 4.40% on 5,843 yen, the simple average closing price forthe preceding three-month period ending on that date, and (iv) a premium of
17.02% on 5,213 yen, the simple average closing price for the preceding sixmonth period ending on that date.) At that time, among the methods ofprocuring the funds necessary for the Transactions, the Offeror had not
obtained commitment letters from investors for contributions throughcommon stock and contributions through non-voting class preferred sharesand had not obtained commitment letters from financial institutions for seniorloans.
Subsequently, on October 18, 2023, JICC received an explanation from theTarget Company regarding the latest outlook on its business performance forthe third quarter of the fiscal year ending March 2024 and thereafter (the“October 18, 2023 Business Performance Explanation”). In the October 18,
2023 Business Performance Explanation, the Target Company explained thatbased on the latest market conditions, the recovery in the Target Company’sbusiness performance would be delayed beyond the initial outlook, and that
therefore the outlook including sales for the fiscal year ending March 2024
had been revised downwards. Taking the content of that explanation into
consideration, JICC repeatedly engaged in continual discussions andnegotiations with Fujitsu regarding the contents of the proposal, the Tender
Offer Price, and the Repurchase Price, as a result of which JICC determinedthat the cash flows that could be created by the Target Company had
decreased, particularly in the short term, and that as a result, the capability of
the Target Company to make additional investments in future upsides had
declined. Therefore, on November 7, 2023, ahead of the submission of a final
proposal, JICC made a proposal to Fujitsu to lower the Tender Offer Price to5,700 yen per Target Company Share. (The proposal of the Tender Offer Price
per Target Company Share at 5,700 yen represents (i) a premium of 6.64% on
5,345 yen, the closing price of the Target Company Shares on the Prime
Market of the Tokyo Stock Exchange as of November 6, 2023, which is thebusiness day immediately preceding the date on which the proposal was made(November 7, 2023), (ii) a premium of 4.86% on 5,436 yen, the simple
22

average closing price for the preceding one-month period ending on that date,(iii) a discount of 0.26% on 5,715 yen, the simple average closing price forthe preceding three-month period ending on that date, and (iv) a premium of
2.61% on 5,555 yen, the simple average closing price for the preceding sixmonth period ending on that date.) Following that, on November 7, 2023,
JICC received a request from Fujitsu to consider raising the Tender Offer
Price, and on November 7, 2023, JICC made a proposal to Fujitsu to raise theTender Offer Price to 5,900 yen per Target Company Share as a price that iswithin the range considered appropriate by JICC. (The proposal of the Tender
Offer Price per Target Company Share at 5,900 yen represents (i) a premiumof 10.38% on 5,345 yen, the closing price of the Target Company Shares on
the Prime Market of the Tokyo Stock Exchange as of November 6, 2023,
which is the business day immediately preceding the date on which theproposal was made (November 7, 2023), (ii) a premium of 8.54% on 5,436
yen, the simple average closing price for the preceding one-month period
ending on that date, (iii) a premium of 3.24% on 5,715 yen, the simple averageclosing price for the preceding three-month period ending on that date, and(iv) a premium of 6.21% on 5,555 yen, the simple average closing price forthe preceding six-month period ending on that date.) Additionally, Fujitsu
subsequently made a request to JICC on November 8, 2023 to again consider
raising the Tender Offer Price, and in response, on November 8, 2023, JICC
made a proposal to Fujitsu to raise the Tender Offer Price to 5,910 yen per
Target Company Share as a price that is within the range consideredappropriate by JICC. (The proposal of the Tender Offer Price per Target
Company Share at 5,910 yen represents (i) a premium of 16.87% on 5,057
yen, the closing price of the Target Company Shares on the Prime Market of
the Tokyo Stock Exchange as of November 7, 2023, which is the business day
immediately preceding the date on which the proposal was made (November
8, 2023), (ii) a premium of 9.10% on 5,417 yen, the simple average closing
price for the preceding one-month period ending on that date, (iii) a premiumof 3.68% on 5,700 yen, the simple average closing price for the preceding
three-month period ending on that date, and (iv) a premium of 6.45% on 5,552
yen, the simple average closing price for the preceding six-month period
ending on that date.)
Following that, on November 11, 2023, JICC made a non-legally binding
proposal in writing to Fujitsu and the Target Company to set the Tender Offer
Price at 5,910 yen per Target Company Share and the Repurchase Price at
4,211 yen per Target Company Share. (The proposal of the Tender Offer Price
per Target Company Share at 5,910 yen represents (i) a premium of 10.94%
on 5,327 yen, the closing price of the Target Company Shares on the Prime
Market of the Tokyo Stock Exchange as of November 10, 2023, which is thebusiness day immediately preceding the date on which the proposal was made(November 11, 2023), (ii) a premium of 9.81% on 5,382 yen, the simple
average closing price for the preceding one-month period ending on that date,(iii) a premium of 4.18% on 5,673 yen, the simple average closing price forthe preceding three-month period ending on that date, and (iv) a premium of
5.91% on 5,580 yen, the simple average closing price for the preceding sixmonth period ending on that date.) Based on the opinion of the Special
Committee after it considered the content of that proposal, on November 16,
23

2023, the Target Company requested JICC to raise the Tender Offer Price on
the grounds that it could not be concluded to be at a sufficient level to ensure
the interests of the minority shareholders of the Target Company, but on
November 20, 2023, JICC made a legally binding final proposal (the “Final
Proposal”) in writing to Fujitsu and the Target Company to set the Tender
Offer Price at 5,910 yen per Target Company Share and the Repurchase Price
at 4,211.1 yen per Target Company Share. (The proposal of the Tender Offer
Price per Target Company Share at 5,910 yen represents (i) a premium of
8.14% on 5,465 yen, the closing price of the Target Company Shares on thePrime Market of the Tokyo Stock Exchange as of November 17, 2023 (whichis the business day immediately preceding the date on which the proposal was
made (November 20, 2023)), (ii) a premium of 11.22% on 5,314 yen, thesimple average closing price for the preceding one-month period ending onthat date, (iii) a premium of 4.69% on 5,645 yen, the simple average closing
price for the preceding three-month period ending on that date, and (iv) a
premium of 5.10% on 5,623 yen, the simple average closing price for thepreceding six-month period ending on that date.) When submitting the Final
Proposal, among the methods of procuring the funds necessary for theTransactions, JICC had finished obtaining commitment letters from investors(namely, JICC, DNP, Mitsui Chemicals, and Hachijuni Investment) for
contributions through common stock and contributions through non-votingclass preferred shares and had finished obtaining commitment letters fromfinancial institutions (namely, MUFG Bank, Ltd., Sumitomo Mitsui Banking
Corporation, The Hachijuni Bank, Ltd., and Aozora Bank, Ltd.) for seniorloans. Based on the opinion of the Special Committee after it considered thecontent of the Final Proposal, on November 21, 2023, the Target Company
again requested JICC to raise the Tender Offer Price on the grounds that adecrease in the price was undesirable given that the medium-to-long-term
outlook of the Target Company’s business had not changed and that the pricecould not be concluded to be at a sufficient level to ensure the interests of theminority shareholders of the Target Company, but JICC determined that it was
not necessary to revise the Tender Offer Price based on a comprehensive
judgment in light of factors such as the latest semiconductor market
conditions.
Subsequently, following the submission of the Final Proposal, as JICC,
Fujitsu, and the Target Company repeatedly engaged in continual discussions
and negotiations regarding the content of the Final Proposal, the Tender Offer
Price, and the Repurchase Price, on November 27, 2023, JICC received awritten inquiry from the Special Committee regarding the views and reasonson which the Offeror based its proposed Tender Offer Price of 5,910 yen per
Target Company Share and regarding the reasons for the Tender Offer Priceand the Repurchase Price in the Final Proposal being lower than those set out
in the proposal dated September 26, 2023. In response, on November 30, 2023,
JICC replied in writing to the Special Committee stating (i) that based on
factors such as financial information and other materials disclosed by theTarget Company and the results of the due diligence conducted by JICC
regarding the Target Company from late July to mid-September 2023, JICC
conducted a multifaceted and comprehensive analysis of the Target
Company’s business and financial status, prepared a financial model24

reflecting that analysis, and calculated a tender offer price that secures a returnon investment as required by JICC and (ii) that JICC lowered the Tender Offer
Price and the Repurchase Price due to a comprehensive judgment based not
only on the October 18, 2023 Business Performance Explanation and thesecond quarter financial results announced on October 26, 2023 but also on
uncertainties in the macro environment, such as the latest semiconductor
market conditions and interest rate trends.
Additionally, on November 28, 2023, JICC received from Fujitsu a written
request to raise the Tender Offer Price. Moreover, on December 4, 2023,JICC
received a document from the Target Company stating the views of theTarget Company and the Special Committee and requesting that the Tender
Offer Price be raised. Taking into consideration the opinion of the Special
Committee after it considered JICC’s response regarding the views andreasons on which the Tender Offer Price was based and the reasons forlowering the price, that document requested that the Tender Offer Price beraised on grounds such as (i) that there had been no change in the mediumto-long-term business outlook of the Target Company, which is the basis of
the Target Company’s intrinsic value on which the Target Company and theSpecial Committee place emphasis when making decisions, (ii) that although
the Target Company revised its business performance forecast for the fiscal
year ending March 2024 due to an expected delay in the recovery of thesemiconductor market, that delay would not have any substantial impact on
the intrinsic value of the Target Company, and (iii) that although the Target
Company and the Special Committee believed that a significant amount ofconsideration must be given to the premiums based on the share price of thebusiness day preceding the announcement of the Tender Offer, at the level ofpremiums based on the current Tender Offer Price of 5,910 yen, there wereconcerns regarding the likelihood of the Tender Offer being successfullycompleted.
Subsequently, on December 5, 2023, JICC received a further written inquiry
from the Special Committee regarding matters such as the reasons forlowering the Tender Offer Price despite there being no change in the mediumto-long-term business outlook of the Target Company and whether there had
been a change in JICC’s evaluation of the macro environment, such as
semiconductor market conditions and interest trends, in the short period from
September 26 to November 20, 2023, the day on which the Final Proposal
was submitted.
In response, on December 6, 2023, JICC replied to the Target Company inwriting that it would maintain the Tender Offer Price at 5,910 yen. In that
reply, JICC stated that lowering the price was appropriate due to factors suchas (i) the Target Company’s financial results for the second quarter, therevision to the performance forecast for the entire year, and the risk thatgrowth investment would be delayed due to that downward revision, (ii)macro environment considerations such as delayed recovery and volatility inthe semiconductor market, unpredictable interest rate trends, and potential
geopolitical risks due to an unstable global situation, and (iii) the views
regarding premiums in past transactions in regard to which speculative media
25

reports had been made, and that therefore, JICC would maintain the Tender
Offer Price at 5,910 yen.
Additionally, on December 7, 2023, JICC responded to the inquiry from theSpecial Committee to the effect that lowering the price was appropriate basedon the macro environment considerations stated above.
Following that, on December 8, 2023, JICC received a document from theTarget Company stating the views of the Target Company and the Special
Committee and requesting that the Tender Offer Price be raised. Taking into
consideration the opinion of the Special Committee after it considered thecontent of JICC’s response, that document requested that the Tender Offer
Price be raised on grounds such as (i) that the short-term changes in macro
economic conditions asserted by JICC would not have any substantial impact
on the intrinsic value of the Target Company and (ii) that at the level ofpremiums based on the current Tender Offer Price of 5,910 yen, there wereconcerns regarding the likelihood of the Tender Offer being successfullycompleted.
In response, on December 10, 2023, JICC sent a reply in writing to the Target
Company stating that it would maintain the Tender Offer Price at 5,910 yen
due to a comprehensive judgment based not only on the medium-to-long-termbusiness outlook but also the impact on future upsides caused by the worsened
short-term business outlook, macro factors such as the semiconductor market
outlook and macro economic conditions, and other such factors.
Subsequently, on December 12, 2023, taking into consideration the opinionof the Special Committee after it considered the content of JICC’s response,
JICC received an oral explanation from the Target Company and Fujitsu
regarding the views of the Target Company, the Special Committee, andFujitsu and requesting that the Tender Offer Price be raised on grounds suchas that although the previous responses from JICC could be found to bereasonable to a certain extent, it remained difficult to conclude that theinterests of the minority shareholders of the Target Company had been
sufficiently ensured.
In response to these requests from the Target Company, the Special
Committee, and Fujitsu, on December 12, 2023, JICC made a proposal inwriting to the Target Company and Fujitsu to set the Tender Offer Price at
5,920 yen per Target Company Share and the Repurchase Price at 4,218.1 yen
per Target Company Share in order to increase the likelihood of the Tender
Offer being successfully completed while setting a price within the evaluatedrange of the Target Company’s intrinsic value on the grounds that JICC had
received repeated requests from the Special Committee, the Target Company,
and Fujitsu. Following that, on December 12, 2023, JICC received a responsein writing from the Target Company and Fujitsu agreeing to JICC’s proposal.
The Tender Offer Price of 5,920 yen represents (i) a premium of 12.98%(rounded to two decimal places; the same applies for calculations of premium
rates hereinafter) on 5,240 yen, the closing price of the Target Company
26

Shares on the Prime Market of the Tokyo Stock Exchange as of December 11,
2023 (which was the business day immediately preceding the submission dateof the proposal (December 12, 2023)), (ii) a premium of 10.10% on 5,377 yen(rounded to the nearest whole yen; the same applies for calculations of simple
average closing prices hereinafter), the simple average closing price for thepreceding one-month period ending on that date, (iii) a premium of 7.60% on
5,502 yen, the simple average closing price for the preceding three-month
period ending on that date, and (iv) a premium of 4.63% on 5,658 yen, thesimple average closing price for the preceding six-month period ending onthat date. Additionally, the Tender Offer Price represents (i) a premium of
18.88% on 4,980 yen, the closing price of the Target Company Shares as of
the business day immediately preceding the publication of a speculative
article by Bloomberg regarding the sale of Fujitsu’s subsidiary on June 1,
2023 that triggered changes in the share price of the Target Company due to
expectations that the Fujitsu group would undergo a reorganization, (ii) a
premium of 31.00% on 4,519 yen, the simple average closing price for thepreceding one-month period ending on that date, (iii) a premium of 44.60%
on 4,094 yen, the simple average closing price for the preceding three-month
period ending on that date, and (iv) a premium of 51.87% on 3,898 yen, thesimple average closing price for the preceding six-month period ending onthat date.
That proposal set out the scheme for the Transactions after setting the Tender
Offer Price and the Repurchase Price based on the belief that it is possible toboth maximize the Tender Offer Price and ensure fairness among shareholders
by increasing the amounts distributed to the minority shareholders of theTarget Company, taking into consideration that it is expected that theprovisions of the Corporation Tax Act on excluding deemed dividends fromgross profits will be applied in regard to Fujitsu. Additionally, the Tender
Offer Price and the Repurchase Price were calculated so that (i) the amountcalculated as the after-tax earnings of Fujitsu if the Share Repurchase were to
be conducted at the Repurchase Price is equivalent to (ii) the amount of
earnings that Fujitsu would receive if it were to tender its shares in the Tender
Offer at the Tender Offer Price. Accordingly, Fujitsu will not receive greater
benefits than the minority shareholders of the Target Company.
(C)

Decision-making process and reasons of the Target Company to issue theopinion to support the Tender Offer
As stated in “(B) Background, purpose, and decision-making process leading
the Offeror to conduct the Tender Offer” above, while the Target Company
was deliberating various management strategies to enhance its corporate
value in the business environment, as described in “(A) The Target
Company’s business environment, etc.” above, in response to Fujitsu’s plan
to sell all or part of the Target Company Shares held by Fujitsu, as announced
in September 2021, in January 2022, the Target Company began to havediscussions with Fujitsu concerning the specific method of sale of the Fujitsu
Holding Shares. Subsequently, Fujitsu held meetings with multiple potential
buyer candidates and deliberated on various options, such as means of carveout from the Fujitsu Group, and a capital and business alliance with potential
27

buyer candidates. During this time, although there were intermittent
discussions, there was no progress in the discussions as there were no specificnegotiations between Fujitsu and the Target Company. However, as the Target
Company subsequently received a specific proposal from Fujitsu in June 2022,
in July 2022, the Target Company appointed MUMSS as its financial advisor
and third-party valuation organization, SMBC Nikko as its financial advisor,
and N&A as its legal advisor. Then, in light of the discussions the Target
Company engaged in with Fujitsu from July 2022 to March 2023, the Target
Company carefully deliberated the various options in relation to its capital
policy in order to both maximize the interests of its minority shareholders in
addition to those of the Fujitsu group and further enhance the Target
Company’s corporate value, and reached the decision that it would bedesirable for the Target Company and its shareholders to implement the
Bidding Process, and commenced the same. To be specific, since late March
2023, the Target Company and Fujitsu have commenced a Bidding Process
comprised of the primary and secondary bidding processes and conducted thebidding processes, including due diligence covering multiple candidates anddiscussions with each candidate. Subsequently, the Target Company andFujitsu received a written non-legally binding proposal from JICC in
September of the same year, a written non-legally binding final proposal fromanother candidate in October of the same year and a written legally binding
final proposal from JICC in November of the same year. However, as nolegally binding final proposal was submitted by the other candidates, as aresult of a comprehensive review of the proposals of each candidate, JICC
was selected as the final purchase candidate from among JICC and the othercandidates later in the same month, with the transaction price, transaction
certainty and transaction speed as the main decision-making criteria, theTarget Company and JICC commenced discussions and deliberations on theimplementation of the Transactions, including the Share Repurchase.
To be specific, Fujitsu and the Target Company received a non-legally binding
proposal in writing from JICC on September 26, 2023 to raise the Tender
Offer Price per Target Company Share at 6,100 yen and the Repurchase Price
per Target Company Share at 4,391 yen.
Subsequently, on October 18, 2023, the Target Company provided theOctober 18, 2023 Business Performance Explanation to JICC. In the October18, 2023 Business Performance Explanation, the Target Company explainedthat based on the latest market conditions, the recovery in the Target
Company’s business performance would be delayed beyond the initial
outlook, and that therefore the outlook of sales for the fiscal year ending
March 2024 had been revised downwards.
Following that, on November 11, 2023, Fujitsu and the Target Company
received a non-legally binding proposal in writing from JICC to set the Tender
Offer Price at 5,910 yen per Target Company Share and the Repurchase Price
at 4,211 yen per Target Company Share. Based on the opinion of the Special
Committee after it considered the content of that proposal, on November 16,
2023, the Target Company requested JICC to raise the Tender Offer Price on
the grounds that it could not be concluded to be at a sufficient level to ensure
28

the interests of the minority shareholders of the Target Company, but on
November 20, 2023, Fujitsu and the Target Company received a legallybinding final proposal in writing from JICC to set the Tender Offer Price at
5,910 yen per Target Company Share and the Repurchase Price at 4,211.1 yen
per Target Company Share.
Following the submission of the Final Proposal, as JICC, Fujitsu, and theTarget Company repeatedly engaged in continual discussions andnegotiations regarding the content of the legally binding Final Proposal, basedon the opinion of the Special Committee after it considered the content of the
Final Proposal, on November 21, 2023, the Target Company again requested
JICC to raise the Tender Offer Price on the grounds that a decrease in the price
was undesirable given that the medium-to-long-term outlook of the Target
Company’s business had not changed and that the price could not be
concluded to be at a sufficient level to ensure the interests of the minority
shareholders of the Target Company, but received communication from JICC
to the effect that JICC had determined that it was not necessary to revise theTender Offer Price.
Subsequently, on November 27, 2023, the Special Committee submitted awritten inquiry to JICC regarding the underlying idea and rationale for thetender offer price and the reasons for the price reduction, and received
answers in writing from JICC on November 30, 2023. On November 28, 2023,
JICC received from Fujitsu a written request to raise the Tender Offer Price.
Moreover, on December 4, 2023, JICC received a document from the Target
Company stating the views of the Target Company and the Special Committee
and requesting that the Tender Offer Price be raised. Taking into consideration
the opinion of the Special Committee after it considered JICC’s response
regarding the views and reasons on which the Tender Offer Price was based
and the reasons for lowering the price, that document requested that theTender Offer Price be raised on grounds such as that there had been no change
in the medium-to-long-term business outlook of the Target Company, whichis the basis of the Target Company’s intrinsic value on which the Target
Company and the Special Committee place emphasis when making decisions,at the level of premiums based on the current Tender Offer Price of 5,910 yen,
there were concerns regarding the likelihood of the Tender Offer being
successfully completed. Subsequently, on December 5, 2023, the Special
Committee submitted a further written inquiry to JICC regarding matters suchas the reasons for lowering the Tender Offer Price despite there being nochange in the medium-to-long-term business outlook of the Target Company
and whether there had been a change in JICC’s evaluation of the macro
environment, such as semiconductor market conditions and interest trends, inthe short period from September 26 to November 20, 2023, the day on which
the Final Proposal was submitted. In response, on December 6, 2023, theTarget Company received a reply in writing from JICC that it would maintainthe Tender Offer Price at 5,910 yen. In that reply, JICC stated that lowering
the price was appropriate due to factors such as (i) the Target Company’s
financial results for the second quarter, the revision to the performance
forecast for the entire year, (ii) macro environment considerations such as
delayed recovery and volatility in the semiconductor market, unpredictable29interest rate trends, and potential geopolitical risks due to an unstable global
situation, and (iii) the views regarding premiums in past transactions in regard
to which speculative media reports had been made, and that therefore, JICC
would maintain the Tender Offer Price at 5,910 yen. Additionally, on
December 7, 2023, in response to its second inquiry, the Special Committee
received a reply from JICC to the effect that lowering the price wasappropriate based on the macro environment considerations stated above.
Following that, on December 8, 2023, the Target Company again sent JICC adocument stating the views of the Target Company and the Special
Committee and requesting that the Tender Offer Price be raised. Taking into
consideration the opinion of the Special Committee after it considered thecontent of JICC’s response, that document requested that the Tender Offer
Price be raised on grounds such as (i) that the short-term changes in macro
economic conditions asserted by JICC would not have any substantial impact
on the intrinsic value of the Target Company and (ii) that at the level ofpremiums based on the current Tender Offer Price of 5,910 yen, there wereconcerns regarding the likelihood of the Tender Offer being successfullycompleted. On December 10, 2023, the Target Company received a reply in
writing from JICC stating that it would maintain the Tender Offer Price at
5,910 yen due to a comprehensive judgment based not only on the mediumto-long-term business outlook but also the impact on future upsides causedby the worsened short-term business outlook, macro factors such as thesemiconductor market outlook and macro economic conditions, and othersuch factors. Subsequently, on December 12, 2023, taking into consideration
the opinion of the Special Committee after it considered the content of JICC’s
response, the Target Company provided an oral explanation to JICC regarding
the views of the Target Company, the Special Committee, and Fujitsu andrequesting that the Tender Offer Price be raised on grounds such as that
although the previous responses from JICC could be found to be reasonable
to a certain extent, it remained difficult to conclude that the interests of theminority shareholders of the Target Company had been sufficiently ensured.
Subsequently, on December 12, 2023, the Target Company and Fujitsu
received a proposal in writing from JICC to set the Tender Offer Price at 5,920
yen per Target Company Share and the Repurchase Price at 4,218.1 yen per
Target Company Share in order to increase the likelihood of the Tender Offer
being successfully completed while setting a price within the evaluated rangeof the Target Company’s intrinsic value on the grounds that JICC had received
repeated requests from the Special Committee, the Target Company, andFujitsu. Based on this proposal, on December 12, 2023, the Target Company
and Fujitsu sent a response in writing to JICC agreeing to JICC’s proposal asstated in “(B) Background, purpose, and decision-making process leading theOfferor to conduct the Tender Offer.”
In light of the possibility that the interests of Fujitsu and those of the Target
Company’s minority shareholders do not necessarily align, as stated in “(3)Measures to ensure the fairness of the Tender Offer Price and avoid conflictsof interest, and other measures to ensure the fairness of the Tender Offer”
below, the Target Company consulted with the permanent special committee
30

established on June 17, 2022 in accordance with the Corporate Governance
Code established by the Tokyo Stock Exchange (the “Special Committee”)
on April 14, 2023, immediately after commencing the primary bidding
process, regarding matters such as fairness and appropriateness of theprocedures concerning the Transactions in order to eliminate any arbitrarinessin the Target Company’s decision-making in relation to the Transactions andthe candidate selection process during the Bidding Process, and enhance its
corporate value and ensure the interests of its minority shareholders, as wellas to deliberate and make decisions as to the justification and reasonablenessof the purpose of the Transactions, fairness of the procedures concerning theTransactions, and fairness of the terms of the Transactions (for details of thecomposition of the Special Committee and the specific matters of inquiry,
please refer to “(B) Procurement by the Target Company of a written reportfrom an independent special committee” in “(3) Measures to ensure thefairness of the Tender Offer Price and avoid conflicts of interest, and othermeasures to ensure the fairness of the Tender Offer” below). Additionally, theTarget Company took the measures stated in “(3) Measures to ensure thefairness of the Tender Offer Price and avoid conflicts of interest, and othermeasures to ensure the fairness of the Tender Offer” below, in light of thecontent of the share valuation report obtained from MUMSS, the Target
Company’s financial advisor and third-party valuation organization, as wellas the legal advice from N&A, the Target Company’s legal advisor, the Target
Company carefully discussed and deliberated matters such as whether it isappropriate for the board of directors to express an opinion to support theTender Offer and recommend that the Target Company’s shareholders tenderin the Tender Offer, and whether implementing the Transactions is
disadvantageous to the Target Company’s minority shareholders, giving theutmost respect to the written report submitted by the Special Committee on
December 12, 2023 (the “Written Report”).
Specifically, the Target Company conducted the Bidding Process andcomprehensively deliberated on the final proposal by the candidates who
participated in the secondary bidding process, taking into consideration theperspectives such as: the assessed value of the share value, the Tender Offer
Price, the transactional structure, the ability to raise funds/conditions forraising funds, and the management strategy after implementation of theTransactions and the structure to support the same, including the measures toenhance corporate value; management policy and other terms and conditions
such as employee compensation and governance structure, the certainty ofprocedures such as obtaining clearances under competition laws and otherapplicable laws and regulations; and the perspective of maximizing theinterests of minority shareholders. As a result, in light of the fact that only the
final proposal presented by JICC on December 12, 2023 was a legally-binding
proposal and the presented assessed value of the share value and the Tender
Offer Price being 5,920 yen, the Offeror would be the best partner for theTarget Company to aim for “Progress without Limits” in light of the measures
to enhance corporate value, the management strategy after implementation of
the Transactions and the structure to support the same, including valueincreasing measures; and that it is important to have an accurate
understanding of the potential for medium- to long-term market expansion for31the Target Company’s products and technologies, and to make flexible andagile management decisions in the semiconductor industry, where market
conditions change rapidly, the Target Company came to conclude that bypromoting measures such as the expansion of human capital, which isfundamental to the promotion of our business, will contribute to increasing
our corporate value in the future. By conducting the Transactions with atender offeror that is focused on JICC as a government-affiliated fund, whichbasically supports the Target Company’s business policy of focusing on
capital investment and technological development in growth markets, theTarget Company will be able to promote initiatives that contribute toenhancing corporate value from a medium- to long-term perspective, without
being swayed by short-term fluctuations in business performance as its
partner, and since the Target Company is planning to execute the Transactions
with JICC as a partner, the Target Company will be able to make decisions
more quickly than before, and promote measures such as the expansion ofhuman capital, which is fundamental to the promotion of the Target
Company’s business, which will contribute to future enhancement ofcorporate value. The Target Company also believes that the superb, unique
technologies of DNP and Mitsui Chemicals, combined with the Target
Company’s semiconductor packaging technologies, will contribute topromotion of the next-generation semiconductor business the Target
Company aims to pursue, and reinforce the Target Company’s market
competitiveness in next-generation products, thereby contributing to theenhancement of the Target Company’s medium- to long-term corporate value.
In light of the above, the Target Company determined that the Transactions
would contribute to the enhancement of the Target Company’s corporate
value.
Furthermore, the Target Company determined that the Tender Offer provides
the Target Company’s shareholders with a reasonable opportunity to sellshares, in light of the following factors relating to the Tender Offer Price(5,920 yen):(a)
As stated above, the assessed value of the share value and the Tender
Offer Price presented by JICC was the only proposal presented as alegally binding proposal and the Tender Offer Price was 5,920 yen.
(b)
Among the results of the Target Company Shares calculated by
MUMSS, as stated in “(D) Procurement by the Target Company of ashare valuation report from an independent financial advisor andthird-party valuation organization” of “(3) Measures to ensure thefairness of the Tender Offer Price and avoid conflicts of interest, andother measures to ensure the fairness of the Tender Offer,” the Tender
Offer Price is above the upper end of the range of calculation
results using market share price analysis and the mid-point of therange calculated by the comparable companies analysis, and close to
the median of the range of the results of the calculation based on the
Discounted Cash Flow analysis (“DCF analysis”).
(c)
The Tender Offer Price includes: a premium of 18.88% on 4,980 yen,
the closing price of the Target Company Shares as of May 31, 2023,
which is the business day immediately preceding June 1, 2023, the32date on which the leaked report on the Transactions that triggered afluctuation in the Target Company Shares was published; a premiumof 31.00% on 4,519 yen, the simple average closing price for the past
one month (from May 1 to 31, 2023); a premium of 44.60% on 4,094
yen, the simple average closing price for the past three months (fromMarch 1 to May 31, 2023); and a premium of 51.87% on 3,898 yen,
the simple average closing price for the past six months (fromDecember 1, 2022 to May 31, 2023), respectively. Furthermore, theTender Offer Price includes: a premium of 12.98% on 5,240 yen, theclosing price of the Target Company Shares on the Tokyo Stock
Exchange as of December 11, 2023, which is the business day
immediately preceding the day implementation of the Tender Offer
was announced; a premium of 10.10% on 5377 yen, the simple
average closing price for the past one month; a premium of 7.60%
on 5,502yen, the simple average closing price for the past threemonths; and a premium of 4.63% on 5,658 yen, the simple averageclosing price for the past six months, respectively. Under thecircumstances where it is not unreasonable to assume that the shareprice before the publication of the leaked media report and thesubsequent multiple speculative reports had a considerable impact
on the expected value of the Transaction, etc., if the share price isused as the basis for the price before the publication of the leaked
media report, it is not unreasonable to assume that the premium issufficiently reasonable in comparison with the level of premiums in
185 cases of other takeover bids for listed companies aiming to go
private since the publication of the “Guidelines on Fair M&A Towards enhancing corporate value and securing shareholderinterests-” by the Ministry of Economy, Trade and Industry, issufficiently reasonable in comparison with the level of premiums in
185 cases of other tender offers for the purpose of taking listedcompanies private after 28 June 2019, the date of the publication of
the said article (Note 22). The premium level for the closing price on
the reference date and the simple average closing price for the last
one month on the reference date, which are sensitive to the shareprice fluctuations in the immediate past, is relatively low, while thepremium level for the simple average closing price for the last threemonths on the reference date and the last six months on the referencedate, which reflect more medium- to long-term share price trends, isrelatively high. The share price of the Target Company increased by
25.60% from December 1, 2022, which is six months prior to May
31, 2023 (the “Reference Date”), the business day immediately
preceding the publication of the leaked media report. However, since
95.10% of this 25.60% increase is accounted for by the 24.34%
increase from April 3, 2023 (which is two months prior to theReference Date) to the Reference Date, it can be confirmed that theincrease within two months prior to the Reference Date wasparticularly significant. While such a rapid increase is considereddifficult to explain rationally, even in light of the information
disclosed by the Target Company, it is appropriate to consider thelevel of the premium on the market share price by considering the
33

(d)

average value over a longer period of time, rather than judging it inlight of the simple average closing price on the current reference dateand over the most recent one month. It is not unreasonable toconsider that it is appropriate to consider the premium level of theTender Offer Price in light of the simple average of the closing prices
for the three months preceding the current reference date or the six
months preceding the current reference date, and that the premium
level of the Tender Offer Price is sufficiently reasonable.
The measures to ensure fairness of Tender Offer stated in “(3)Measures to ensure the fairness of the Tender Offer Price and avoid
conflicts of interest, and other measures to ensure the fairness of theTender Offer” below have been taken, and therefore the interests ofgeneral shareholders have been taken into consideration.

Note22: The average premium is 41.46% of the closing price on the same day,
44.89% of the simple average closing price over the past month up
to the same day, 47.05% of the simple average closing price over the
past three months up to the same day and 47.57% of the simple
average closing price over the past six months up to the same day,using the business day before the day of publication as the reference
date. The median premium was 38.74% over the closing price on thesame day, 40.46% over the simple average closing price over the pastmonth up to the same day, 41.05% over the simple average closing
price over the past three months up to the same day and 44.59% overthe simple average closing price over the past six months up to thesame day.
For the reasons above, the Target Company resolved at its board of directors
meeting held today that it will express its current opinion that, if commenced,
it will express an opinion to support the Tender Offer and to recommend thatits shareholders tender their shares in the Tender Offer.
The Offeror plans to commence the Tender Offer on a date that is (i) within
10 business days after the Tender Offer Conditions Precedent (excluding
those to be satisfied on the commencement date of the Tender Offer) aresatisfied (or waived at the discretion of the Offeror) (however, if a Counter
Proposal has been made as of such date, then the earlier of (a) the date on
which 20 business days have elapsed since the date on which Fujitsu makesa request to the Offeror for consultation regarding changing the Tender Offer
Price and the Repurchase Price or (b) the date on which Fujitsu covenants inwriting that it will not accept the Counter Proposal) and (ii) separately notified
to the Target Company in advance by the Offeror. As of today, the Offeror
aims to commence the Tender Offer in or around late August 2024, based on
discussions with local law firms about the procedures and steps required
under domestic and foreign competition laws and foreign investment control
laws and regulations, but it is difficult to accurately estimate the amount oftime required for the procedures involving foreign competition authorities
and authorities having jurisdiction over investment control laws andregulations (please refer to the recitals of this document for details).
34

In light of the above circumstances, at the above board of directors meeting,
the Target Company also resolved (i) that when the Tender Offer iscommenced, the board of directors will request that the Special Committee(x) consider whether there are any changes in its opinion as expressed to theboard of directors as of today, and (y) if there are no changes, make astatement to that effect, or if there are changes, state the changed opinion, tothe board of directors; and (ii) that based on such opinion of the Special
Committee, the Target Company will express its opinions on the Tender Offeragain when the Tender Offer is commenced.
For details of the resolution at the board of directors meeting of the Target
Company above, please refer to “(E) Unanimous approval of all noninterested directors of the Target Company” in “(3) Measures to ensure thefairness of the Tender Offer Price and avoid conflicts of interest, and othermeasures to ensure the fairness of the Tender Offer” below.
(D) Management policy after the Tender Offer
As stated in “(1) Summary of the Tender Offer” above, if the Tender Offer issuccessfully completed, the Offeror intends to make Fujitsu and the Offeror
the only shareholders of the Target Company through the Squeeze-Out
Procedures. Following that, after the completion of the Squeeze-Out
Procedures, through the Target Company conducting the Share Repurchasefor all of the Target Company Shares owned by Fujitsu at that time, theOfferor will come to own 100% of the Target Company Shares (excluding
treasury shares).
After the Transactions are completed, JICC desires to create a way tocontribute to the further development of industry in Japan by fully drawing
out the latent growth potential of each business of the Target Company,
thereby maintaining and evolving its globally top-level technologies.
Specifically, JICC believes that the Target Company holds an important
position as a components and materials company that supports technologicalinnovation from the perspective of strengthening the foundations ofsemiconductor manufacturing, and that its businesses and technologies cangreatly contribute to (i) technological development in advanced fields
centered around three-dimensional packagings for semiconductor processesand (ii) the practical implementation of next-generation semiconductor
technologies such as photonic-electronic integration. Additionally, JICC,
together with the officers and employees of the Target Company, will aim tofurther grow the Target Company’s business and enhance its corporate value
by utilizing the solid business foundation that the Target Company has built
thus far and, given that several members have joined JICC with investment
experience at INCJ, which has a similar mission to that of JICC, by utilizing
the knowledge and networks gained through INCJ’s extensive investment
experience in the semiconductor and electrical component industry. JICC’s
basic policy is to re-list the Target Company Shares after business growth andenhancement of corporate value are realized for the Target Company throughthe Transactions.
35

Additionally, the Target Company conducts its business based on its corporate
vision regarding technology leadership, the art of manufacturing, long-term
vision, global outlook, and responsibility to individuals as well as its
founder’s philosophy of economizing and achieving innovation through the
manufacturing site. After the Transactions are completed, the Offeror will aim
to achieve a leap in the growth of the Target Company that enables it to further
contribute to international society and regional communities by supporting
the business operation of the Target Company while giving priority torespecting the corporate vision and philosophy and also taking into
consideration DNP’s group vision, “The DNP Group connects individuals andsociety and provides new value,” and Mitsui Chemicals’ management vision,“Contributing to society by providing high-quality products and services tocustomers through innovation and the creation of materials while remaining
in harmony with the global environment.” The Offeror intends to promote apartnership that can provide new value to society by combining the strengths
possessed by the Target Company, JICC, DNP, and Mitsui Chemicals.
After the Transactions are completed, in order to increase management
efficiency, the Offeror plans to transition the Target Company from acompany with an audit and supervisory committee to a company withcorporate auditors and to appoint persons nominated by JICC as directors andcorporate auditors of the Target Company, but the specific number andcandidates for the directors and corporate auditors have not yet been decided
and will be decided upon consultation with the Target Company moving
forward. Additionally, after the Transactions are completed, the Offeror plans
to appoint one person nominated by DNP as a director of the Target Company,
but as the specific candidate and other such details have not yet been decided,
they will also be decided upon consultation with the Target Company moving
forward.
For the time being after the completion of the Transactions, the Offeror plans
to make efforts to continue the employment of the employees who areemployed by the Target Company as of the completion of the Transactions
and to maintain their working conditions. The Offeror also plans to introduce
an incentive plan, such as stock options, for the officers and employees of theTarget Company and to establish a system that has the Offeror and the officers
and employees of the Target Company aim to improve the long-term
corporate value of the Target Company together. Additionally, after theTransactions, the Offeror will continue to respect the business relationships
between the Target Company and its material clients and business partners.
(3)

Measures to ensure the fairness of the Tender Offer Price and avoid conflictsof interest, and other measures to ensure the fairness of the Tender Offer
As of today, the Target Company is not a subsidiary of the Offeror, and theTender Offer does not fall under a tender offer by a controlling shareholder.
Furthermore, the Tender Offer is not a tender offer for which the Offeror is an
officer of the Target Company or a person who is conducting the tender offer
at the request of an officer of the Target Company and who has a common
interest with the Target Company’s officers. The Transactions, including the36

Tender Offer, also do not fall under a so-called management buy-out (MBO)
transaction.
However, since the Transactions are transactions proposed by Fujitsu, as thecontrolling shareholder (parent company) of the Target Company, and in lightof the possibility that the interests of Fujitsu and those of the Target
Company’s minority shareholders do not necessarily align, the Offeror andthe Target Company implemented the following measures to ensure fairnessof the Tender Offer Price and to avoid conflicts of interest.
Since Fujitsu, the parent company of the Target Company, holds 67,587,024
Target Company Shares (ownership percentage: 50.02%) as stated in “(1)Summary of the Tender Offer” above, and given that setting a so-called“majority of minority” minimum number of shares to be purchased may makethe completion of the Tender Offer uncertain because the minimum numberof shares to be purchased in the Tender Offer would be high, and doing so
may cause the Tender Offer not to contribute to the interests of minority
shareholders wishing to tender their shares therein, the Offeror has not set a“majority of minority” minimum number of shares to be purchased in theTender Offer. The Offeror believes that the interests of the Target Company’s
minority shareholders are sufficiently taken into consideration because theOfferor and the Target Company have carried out the measures described
below.
Also, of the measures described below, descriptions regarding those
implemented by the Offeror are based on the Target Company’s Press Releaseand explanations received from the Offeror.
(A) Implementation of bidding procedure
As stated in “(B) Background, purpose, and decision-making process leading
the Offeror to conduct the Tender Offer” in “(2) Background, purpose, anddecision-making process leading to the decision to conduct the Tender Offer,and management policy following the Tender Offer” above, the Target
Company and Fujitsu implemented the Bidding Process, which targeted
multiple candidates, including business companies and investment funds witha sufficient investment track record in the Japanese market, which wereassumed to be interested in collaborating with the Target Company in light ofbusiness synergies, starting from late March 2023, and commenced the firstbidding process for one business company and eight investment funds thatwere interested in participating in this bidding process. In late May, 2023 of
the same year, several candidates, including the Offeror, submitted letters ofintent premised on a transaction method involving the acquisition of Fujitsu
shares from Fujitsu, and after careful consideration of the contents, four
investment funds, including the Offeror, were selected to participate in thesecond bidding process. Subsequently, after due diligence from late June to
mid-September, 2023, the Target Company and Fujitsu received non-legallybinding proposal from JICC in September of the same year, a written nonlegally binding final proposal from another candidate in October of the same
year and a written legally binding final proposal from JICC in November of37

the same year. However, as no legally binding final proposal was submitted
by the other candidates, as a result of a comprehensive review of the proposals
of each candidate, JICC was selected as the final purchase candidate fromamong JICC and the other candidates later in the same month, with thetransaction price, transaction certainty and transaction speed as the main
decision-making criteria, JICC and the Offeror commenced discussions anddeliberations on the implementation of the Transaction, including the Share
Repurchase. Subsequently, JICC, Fujitsu and the Target Company held
ongoing discussions and negotiations again regarding the terms of the legallybinding final proposal, the Tender Offer Price, and the Repurchase Price, andas a result, in light of the fact that only the final proposal presented by JICC
on December 12, 2023 was a legally-binding proposal and the presented
assessed value of the share value and the Tender Offer Price being 5,920 yen,
the Target Company decided that, the Offeror is the best partner for the Target
Company to aim for “unlimited development” in terms of the proposedmanagement strategy and support system after implementation of theTransaction, including measures to enhance corporate value, and the Offeror
is also the best partner for the Target Company in the semiconductor industry
where the market environment is changing rapidly and the Target Company’s
products and technologies have the potential to expand the market in themedium to long term. Based on the recognition that it is important toaccurately grasp the potential for medium- and long-term market expansion
for the Target Company’s products and technologies and to make flexible andagile management decisions, the Offeror basically supports the Target
Company’s business policy of focusing on capital investment and technology
development for growth markets and, as a government-affiliated fund, will
not be swayed by short-term fluctuations in business performance and will
promote initiatives that contribute to the enhancement of corporate value froma medium- and long-term perspective. The Target Company reached theconclusion that executing the Transactions with the Offeror as a partner,
which consists mainly of JICC, which is capable of promoting initiatives that
contribute to the enhancement of corporate value from a medium- to longterm perspective without being swayed by short-term performancefluctuations as a sovereign wealth fund, and promoting measures such as the
expansion of human capital, which is fundamental to the promotion of ourbusiness, to accelerate decision-making even further, will contribute toenhancing our corporate value in the future. The decision was reached toaccelerate the decision-making process even more than before. In addition,by combining the excellent proprietary technologies of DNP and Mitsui
Chemicals with the semiconductor packaging-related technologies of theTarget Company, the Target Company believes that it will be possible to makea significant contribution to the medium- to long-term corporate value of theTarget Company by promoting the next-generation semiconductor businessand strengthening the market competitiveness of next-generation products,
which are the goals of the Target Company.
In light of the above, the Target Company determined that the Transactions
would contribute to the enhancement of the Target Company’s corporate
value, and no candidate existed that offered more favorable terms to the Target
Company’s shareholders compared to the proposal made by JICC.
38

(B)

Procurement by the Target Company of a written report from an independent
special committee
According to the Target Company’s Press Release, in light of the fact that theTender Offer is part of the Transactions for the purpose of delisting the Target
Company Shares, on April 14, 2023, immediately after commencement of the
primary bidding process, the board of directors of the Target Company
consulted with the Target Company’s permanent Special Committee,
established based on the Corporate Governance Code published by the Tokyo
Stock Exchange and composed of three members—Mr. Jun Niimi (Outside
Director of the Target Company), Ms. Namiko Araki (Outside Director and
Audit and Supervisory Committee Member of the Target Company), and Mr.
Kunikazu Kobayashi (Outside Director and Audit and Supervisory
Committee Member of the Target Company)—independent of the Offeror, theTarget Company, and completion of the Transactions, as to the following
matters, in order to secure fairness of the Tender Offer Price, eliminate
arbitrariness in the Target Company’s decision making regarding theTransactions, ensure fairness, transparency, and objectivity of the Target
Company’s decision-making process, and avoid conflicts of interest: (i)justification and reasonableness of the purpose of the Transactions (including
whether the Transactions contribute to enhancement of the Target Company’s
corporate value), (ii) fairness of the procedures concerning the Transactions,(iii) fairness and appropriateness of the terms of the Transactions, (iv) whether
it is appropriate for the board of directors of the Target Company to express
an opinion to support the Tender Offer and recommend that the Target
Company’s shareholders tender in the Tender Offer, and (v) whether
implementing the Transactions (including the board of directors expressing
an opinion to support the Tender Offer and recommending that the Target
Company’s shareholders tender in the Tender Offer) is disadvantageous to theTarget Company’s minority shareholders (collectively referred to as the“Matters of Inquiry”). Also, the board of directors of the Target Company
entrusted the Special Committee with submitting to the Target Company awritten report regarding the Matters of Inquiry. The Special Committee wasestablished on June 17, 2022 as a permanent special committee, based on the
Corporate Governance Code (Supplementary Principle 4.8.3) published by
the Tokyo Stock Exchange, without taking the Transactions as an opportunity,
for the purpose of deliberating on material transactions and actions that may
give rise to conflicts of interest between the controlling shareholder andminority shareholders and reporting to the board of directors. The membersof the Special Committee have not changed since the establishment thereof.
Furthermore, regardless of the particulars of the report, a fixed amount of
remuneration will be paid to each member as consideration for their duties.
In addition, the Target Company has also resolved that the board of directorsof the Target Company will make decisions concerning the Transactions
while respecting the opinions of the Special Committee to the utmost extent
and that it will oppose the Transactions (and the Tender Offer) if the Special
Committee decides that the transaction terms of the Transactions are notappropriate. Moreover, the board of directors of the Target Company resolved
39

to grant to the Special Committee (i) the authority to independently appoint
an attorney-at-law, third-party valuation organization, certified public
accountant, and other advisors and (ii) the authority to get substantiallyinvolved in the process of negotiating the transaction terms by confirming in
advance the policy for negotiating the transaction terms of the Transactions,
receiving reports on the status of the negotiations in a timely manner, andstating opinions and making instructions or requests on material aspects.
However, the Special Committee has not exercised its authority to
independently appoint advisors, because each of MUMSS (the Target
Company’s financial advisor and third-party valuation organization), SMBC
Nikko (financial advisor), and N&A (legal advisor) have no issues regarding
independence or expertise.
The Special Committee held meetings during the period from April 14, 2023
to December 12, 2023, 13 times in total. In addition, the Special Committee
carefully considered the Matters of Inquiry by collecting information anddeliberating as necessary.
Specifically, the Special Committee approved the appointment of MUMSS(the Target Company’s financial advisor and third-party valuation
organization), SMBC Nikko (financial advisor), and N&A (legal advisor)
after confirming that there were no issues regarding their independence orexpertise.
MUMSS is not a related party of the Offeror, Fujitsu, or the Target Company
and does not have any material interest in the Transactions, including theTender Offer, that is required to be disclosed. In addition, same as MUFG
Bank, Ltd. (“MUFG Bank”), MUMSS is a member of the Mitsubishi UFJ
Financial Group companies and MUFG Bank conducts financing transactions
for the Target Company as part of a series of ordinary banking transactions,and plans to provide the Offeror with funds for settlement of the Tender Offer.
According to MUMSS, in compliance with the applicable provisions ofArticle 36, Paragraph 2 of the Act and Article 70-4 of the Cabinet Office
Order on Financial Instruments Business (Cabinet Office Order No. 52 of
2007; as amended), MUMSS, the Target Company’s financial advisor, andMUFG Bank have, between them and within each company, established andimplemented a means to prevent adverse effects, including an appropriate
management structure for conflicts of interest, such as an information barrier
to strictly manage information regarding the Target Company. Therefore,
MUMSS has performed its duties as a financial advisor without being affected
by MUFG Bank’s decisions and has calculated the Target Company’s sharevalue in a position that is independent from MUFG Bank’s position as a lender.
Based on the fact that a strict information management structure has been
established for information management between MUMSS and MUFG Bankand within each of them, as well as the fact that MUMSS was formerly athird-party valuation organization for a similar transaction, the Target
Company has appointed MUMSS as its financial advisor and third-party
valuation organization independent from the Offeror and the Target Company.
40

Furthermore, SMBC Nikko is not a related party of the Offeror, the Target
Company, or Fujitsu, and does not have any material interest in theTransactions, including the Tender Offer, that is required to be disclosed. Like
Sumitomo Mitsui Banking Corporation, SMBC Nikko is a member of thegroup companies of Sumitomo Mitsui Financial Group, Inc. The Target
Company appointed SMBC Nikko as a financial advisor in accordance withSMBC Nikko’s actual performance as a financial advisor, and based on thefact that (a) as a measure to prevent adverse effects, the required information
barrier has been implemented between the department providing financial
advisory services and the other departments at SMBC Nikko, and Sumitomo
Mitsui Banking Corporation, (b) SMBC Nikko’s independence as a financial
advisor is secured because the transaction has been conducted between theTarget Company and SMBC Nikko on transaction terms similar to those ofgeneral clients, and (c) SMBC Nikko is not a related party of the Offeror, theTarget Company, or Fujitsu. The compensation payable to SMBC Nikko inconnection with the Transactions includes contingent compensation payablesubject to completion of the Transactions, including the Tender Offer, andother conditions; however, by taking into consideration general customary
practices in similar types of transactions, the Target Company has appointed
SMBC Nikko as the Target Company’s financial advisor with thecompensation structure described above.
Based on the background stated above, as a result of carefully deliberating
and considering the Matters of Inquiry, taking into consideration each of the
explanations above, advice from each advisor, and other explanatory
materials for consideration, the Special Committee submitted to the board of
directors of the Target Company the Written Report mainly to the following
effect, as of December 12, 2023, with the unanimous consent of its members,
based on certain conditions precedent, such as the contents of the explanation
given by the Special Committee and the contents of the disclosed material
being true and correct.
(i)

Justification and reasonableness of the purpose of the Transactions(including whether it contribute to the enhancement of the Target
Company’s corporate value)

Given the business environment surrounding the Target Company, the Target
Company believes that in order to identify the potential for medium- to longterm market growth of its products and technologies and to aim for “Progress
without Limits,” it will become increasingly important to develop
technologies that anticipate market needs and to make flexible capital
investments, and the size of funds required for these investments is expected
to increase as well. In this increasingly severe competitive environment, theTarget Company came to the conclusion that it could enhance its corporate
value through faster decision-making and expansion of human capital, which
is fundamental to the promotion of its business, and that with JICC as agovernment-affiliated fund, which basically supports the Target Company’sbusiness policy of focusing on capital investments and technologicaldevelopments in growth markets, the Target Company will be able to promote
initiatives that contribute to enhancing corporate value from a medium- to
41

long-term perspective, without being swayed by short-term fluctuations inbusiness performance as a government-affiliated fund, and that since theTarget Company is planning to execute the Transactions with the Offeror,
consisting mainly of JICC as a partner, the Target Company will be able to
make decisions more quickly than before, and promote measures such as
expansion of human capital, which is fundamental to the promotion of theTarget Company’s business, which will contribute to future corporate valueenhancement. The Target Company also believes that the superb, unique
technologies of DNP and Mitsui Chemicals, combined with the Target
Company’s semiconductor packaging technologies, will contribute topromotion of the next-generation semiconductor business the Target
Company aims to pursue, and reinforce the Target Company’s market
competitiveness in next-generation products, thereby contributing toenhancement of the Target Company’s medium- to long-term corporate value.
Fujitsu and the Target Company’s management team, are not deemed to beusing their positions to benefit themselves or third parties at the expense ofgeneral shareholders (the term “general shareholder” is synonymous with“minority shareholder” in Rule 441-2 of the Securities Listing Regulations of
the Tokyo Stock Exchange; the same applies hereinafter), and theTransactions are considered reasonable because they will lead to thesustainable development of the Target Company Group, improve its earnings,
and enhance the corporate value of the Target Company’s group.
Furthermore, the growth strategy and corporate value enhancement plan
expected by JICC do not contain any unreasonable points that raise suspicion
concerning the possibility of realizing them and are considered to bereasonable because it is assumed that they will to contribute to faster decisionmaking and further expansion of human capital than before. There are noother points in the management policy explained by JICC that might beunreasonable.
Based on the foregoing, the Transactions are believed to contribute toenhancement of the Target Company’s corporate value.
On the other hand, the following are believed to be matters with regard towhich the Transactions may have an adverse effect on enhancement of theTarget Company’s corporate value: (i) the effects of dissolution of the capital
relationship with Fujitsu, (ii) the effects of going private, (iii) the effects of
the Target Company’s liabilities, etc., and (iv) the effects on existingcustomers and business partners of the JICC Affiliate becoming a shareholderof the Target Company. However, since appropriate measures for handlingand resolving all of these matters can be taken, it is considered that they will
not have a material adverse effect on the Target Company’s corporate value.
As referenced above, the Transactions have the possibility of contributing toenhancement of the Target Company’s corporate value, and the purpose of theTransactions is considered to be justifiable and reasonable.
(ii)

Fairness of the procedures concerning the Transactions

Based on facts like the various following measures being taken to secure the42fairness of the Transactions, the procedures relating to the Transactions are
deemed to be fair.
The procedures relating to the Transactions are believed to be fair, in light of
the following aspects of the Transactions: (a) the independent Special
Committee has been involved in the Transactions since the candidate’s initialpresentation of transaction terms in the primary bidding process and has been
granted the authority to appoint/approve advisors, and other relevant matters,
as well as to get substantially involved in the process of negotiating thetransaction terms and other aspects of the Transactions. Given that, aresolution was passed at the meeting of the board of directors of the Target
Company requiring that the Target Company make decisions concerning theTransactions while respecting the particulars of the report of the Special
Committee to the utmost extent. By exercising its authority, the Special
Committee was found to have been substantially involved in the process ofnegotiating the transaction terms of the Transactions between the candidate
and Fujitsu as relevant to the overall process, including the method by whichto conduct the Bidding Process. Moreover, no particular problems were foundwith the establishment of the Special Committee and the timing of
consultations, members of the Special Committee, the process forestablishment, consultation, and appointment of members of the Special
Committee, appointment of advisors, etc., information acquisition,compensation, and the Target Company’s internal consideration structure,etc.; (b) the Target Company selected N&A as its legal advisor independentof the Target Company, Fujitsu, the JICC Affiliate, the Offeror, and thecandidate, and has received various legal advice from N&A; (c) the Target
Company requested that MUMSS, the Target Company’s financial advisor
and a third-party valuation organization independent from the Target
Company, Fujitsu, the JICC Affiliate, the Offeror, and the candidate, calculate
the Target Company’s share value, and has acquired the Share Valuation
Report dated December 12, 2023; (d) the Bidding Process was carried out by
Fujitsu and the Target Company with the substantial involvement of theSpecial Committee, and it can be determined that the market check for the
Bidding Process was performed with proper consideration; (e) while thetender offer period for the Tender Offer is set at 20 business days, inconsideration of the fact that the Tender Offer is a tender offer with advancenotice, and a relatively long period was secured after the announcement of
the series of transaction terms and before commencement of the Tender Offer,
it can be determined that an appropriate opportunity for the Target Company’s
shareholders to decide whether to tender in the Tender Offer, as well as anopportunity for persons other than the Offeror to make competing tender
offers for the Target Company Shares, was secured; (f) the MOU contains an
obligation to maintain the Opinion (defined in “(B) Target Company’s
Memorandum of Understanding” in “(6) Matters Concerning Material
Agreements Related to Tender Offer” below) and an obligation not to enter
into agreements with third parties, offer to enter into agreements, invite offers,
or accept, discuss, negotiate, solicit, or provide information, etc. concerningcompeting transactions. If a serious acquisition proposal is made, dependingon the concreteness of the competing acquisition proposal and theappropriateness and realizability of its purpose, then the board of directors’43avoidance of serious consideration will be objectively and reasonably deemed
to constitute a breach of the duty of care of a prudent manager by Directors,
and the Target Company may either revoke or amend the Opinion, or pass a
resolution or carry out a conflicting transaction that contradicts the Opinion,
based on the following under the MOU: (i) if the Target Company reasonably
determines that Directors’ (a) maintaining the Opinion without making any
changes or (b) avoiding passing a resolution or carrying out a conflicting
transaction (in certain cases, including consulting or providing information
regarding suggestions concerning the conflicting transaction) contradictory to
the Opinion will constitute a breach by the Directors of their duty of care of
a prudent manager, then the Target Company should explain the details andreasons therefor to the Offeror in advance and engage in good faithconsultations with the Offeror to determine the handling thereof, and (ii) if,
even after good-faith consultations with the Offeror, the Target Company’s(a) maintaining the Opinion without making any changes or (b) avoiding
passing a resolution or carrying out a conflicting transaction contradictory to
the Opinion is still deemed to constitute a breach of the duty of care of aprudent manager by Directors, then the Target Company may revoke oramend the Opinion, or pass a resolution or carry out a conflicting transaction
contradictory to the Opinion. Also, the provisions above will contribute, to acertain extent, to enhancement of the stability of the Transactions, based on
the fact that the Target Company, Fujitsu, and the JICC Affiliate haveconducted the Bidding Process at a considerable amount of time and cost.
Therefore, the provisions are believed not to immediately and inappropriately
restrict competing acquisition proposals; and (g) attention has been paid to
not coercing general shareholders.
A “majority of minority” is not set for the Transactions. However, inconsideration of the fact that (a) Fujitsu, the Target Company’s parent
company, holds 67,587,024 Target Company Shares (ownership ratio:
50.02%), and if a “majority of minority” is set, then the lower limit of thenumber of shares planned to be purchased in the Tender Offer will become
high and successful completion of the Tender Offer would become uncertain,
resulting in the possibility of non-contribution to the interests of generalshareholders who wish to tender their shares in the Tender Offer; (b) measures
to secure fairness have been adopted, as stated above; and (c) the transaction
terms of the Transactions are considered to be fair and appropriate, as statedin (iii) below, the Target Company believes that the fairness of theTransactions will not be damaged by not establishing a “majority of minority.”(iii) Fairness and appropriateness of the terms of the Transactions
The transaction terms of the Transactions were agreed to as a result of the
Bidding Process conducted by the Target Company and Fujitsu, during which,pursuant to the Special Committee’s request, the Target Company, Fujitsu,
and JICC agreed on the Tender Offer Price after negotiating it multiple times
even after JICC submitted the legally-binding final proposal. Accordingly, theprocess of consultations and negotiations for the transaction terms of theTransactions is determined to be on fair terms negotiated between
independent parties, and circumstances were secured under which reasonable44

efforts were made to ensure that the Transactions were conducted on terms asfavorable as possible to general shareholders while enhancing corporate value.
Furthermore, according to the Share Valuation Report, the range of thecalculated share value per Target Company Share is 5,240 yen to 5,658 yen
using market share price analysis, 5,238 yen to 6,220 yen using comparable
companies analysis, and 5,077 yen to 6,780 yen using DCF analysis. The
Tender Offer Price of 5,920 yen exceeds the upper end of the range of
calculation results using market share price analysis and exceeds the midpointof the range of calculation results using the comparable companies analysis
and is close to the median of the range of calculation results using DCF
analysis.
The premium on the Target Company’s market share price based on thebusiness day immediately preceding the preparation date of the Written
Report is not necessarily high compared to premiums in past similar cases as
described in “(C) Decision-making process and reasons of the Target
Company to issue the opinion to support the Tender Offer” in “(2)Background, purpose, and decision-making process leading to the decision to
conduct the Tender Offer, and management policy following the Tender Offer”
above. However, considering that there were speculative media reports
containing observations concerning the sale of a Fujitsu subsidiary thatcaused a fluctuation in the market price of the Target Company Shares, it is
not irrational to consider that the share price during the period pertaining to
the above calculation of the premium was considerably impacted by
expectations about the sale of Fujitsu Holding Shares due to those speculative
media reports and multiple speculative media reports that followed.
Furthermore, compared to premiums in past similar cases as described in “(C)Decision-making process and reasons of the Target Company to issue theopinion to support the Tender Offer” in “(2) Background, purpose, anddecision-making process leading to the decision to conduct the Tender Offer,and management policy following the Tender Offer” above, considering afluctuation in the market price of the Target Company Shares, it is notunreasonable to conclude that it is appropriate to consider the average priceover a longer time period than in light of the simple average closing price on
the record date of May 31, 2023, which is the business day preceding the
speculative media report date, and the simple average closing price over themost recent one month, and the premium of the Tender Offer Price issufficiently reasonable in light of the simple average of the closing prices forthe three months immediately preceding the relevant reference date or the six
months immediately preceding the relevant reference date..
Moreover, the Transactions include the Share Consolidation, which is to takeplace after the Tender Offer. Sufficient consideration is found to have been
given to the interests of general shareholders after the Share Consolidationsuch that they will not be placed in a situation where they could expect to betreated unfavorably if they did not tender in the Tender Offer. Furthermore,
the Transactions include the Share Repurchase after the Share Consolidation,with the Repurchase Price of 4,218.1 yen. Adopting a scheme that involves a
combination of the Tender Offer and the Share Repurchase enables the priceof the Tender Offer in which general shareholders tender their shares to be set
45

higher compared to Fujitsu selling the Target Company Shares via the Tender
Offer. It can also be evaluated as a fair distribution of the tax benefits enjoyedby Fujitsu to general shareholders and thus would not be disadvantageous tothem. Accordingly, the transaction terms with a scheme involving the Share
Repurchase are not unfair or inappropriate. Additionally, the Offeror’s
financing would not have a material adverse impact on the Target Company’s
financial status.
Consequently, the Target Company’s corporate value has been appropriately
assessed, and the transaction terms of the Transactions, including the Tender
Offer Price, and the compensation to be paid upon the Share Consolidation to
the Target Company’s shareholders who did not tender their shares in theTender Offer, are assessed to have been set appropriately. Therefore, the termsof the Transactions are fair and appropriate.
(iv) Whether it is appropriate for the board of directors of the Target
Company to express an opinion to support the Tender Offer andrecommend that the Target Company’s shareholders tender in theTender Offer
As stated in (i) through (iii) above, because the Transactions contribute toenhancement of the Target Company’s corporate value, and the purpose of theTransactions is justified and reasonable, it is appropriate for the board of
directors to express an opinion to support the Tender Offer.
Furthermore, as appropriateness of the procedures for the Transactions has
been ensured, and thus the transaction terms of the Transactions are found tobe fair and appropriate, recommending that the Target Company’s
shareholders tender their shares in the Tender Offer is considered to beappropriate.
However, it is expected to take a considerable amount of time fromannouncement of the Tender Offer to its commencement. As such, otherconsiderations may become necessary if, for example, during the period
before commencement of the Tender Offer, there are fluctuations in the Target
Company’s market price causing it to exceed the Tender Offer Price.
Accordingly, the response to (iv) of the Special Committee’s Matters ofInquiry is premised on the situation as of the date of the Written Report(December 12, 2023).
(v)

Whether implementing the Transactions (including the board of
directors of the Target Company expressing an opinion to support theTender Offer and recommending that the Target Company’s
shareholders tender in the Tender Offer) is disadvantageous to theTarget Company’s general shareholders

As stated in (i) through (iv) above, the Target Company came to theconclusion that providing the Target Company’s general shareholders with anopportunity to sell their common shares of the Target Company at an
appropriate price through the Tender Offer would be the best option that takes
46

shareholder interests into consideration. Accordingly, the Transactions are
justifiable and reasonable, the appropriateness of procedures for theTransactions is ensured, and the transaction terms of the Transactions are fair
and appropriate. Therefore, conducting the Transactions (including the boardof directors passing a resolution to express an opinion to support the Tender
Offer and recommend that the Target Company’s shareholders tender in theTender Offer) is not considered to be disadvantageous to the Target
Company’s general shareholders.
(C)

Procurement of advice to the Target Company from an independent legal
advisor
In order to ensure fairness, transparency, and objectivity of the Target
Company’s decision-making concerning the Transactions, including theTender Offer, as stated in “(B) Background, purpose, and decision-making
process leading the Offeror to conduct the Tender Offer” in “(2) Background,purpose, and decision-making process leading to the decision to conduct theTender Offer, and management policy following the Tender Offer” above, theTarget Company selected N&A as its legal advisor independent of the Offeror,
Fujitsu, and the Target Company, and has received necessary legal advice
from the same in relation to decision-making methods and processes for theTransactions, as well as other points to note in decision-making concerning
the Transactions. Furthermore, N&A is not a related party of the Offeror,
Fujitsu, or the Target Company, and has no material interest in theTransactions, including the Tender Offer. Fees to N&A only consist of fees
based on hourly rates to be paid irrespective of whether or not theTransactions are consummated, and does not include any conditional fees
contingent upon consummation of the Transactions.

(D) Procurement by the Target Company of a share valuation report from an
independent financial advisor and third-party valuation organization(i)Name of third-party valuation organization and its relationship with theTarget Company and Offeror
In determining its opinion on the Tender Offer and as a measure toensure fairness, as stated in “(B) Background, purpose, and decisionmaking process leading the Offeror to conduct the Tender Offer” in “(2)Background, purpose, and decision-making process leading to thedecision to conduct the Tender Offer, and management policy following
the Tender Offer” above, the Target Company appointed MUMSS as its
financial advisor and third-party valuation organization independent
from the Offeror, Fujitsu, and the Target Company and received advice
from a financial viewpoint. The Target Company acquired a sharevaluation report (the “Share Valuation Report”) dated December 12,
2023 from MUMSS, subject to the conditions precedent set forth in (ii)below and certain other conditions.
As stated in “(B) Procurement by the Target Company of a written
report from an independent special committee” above, MUMSS is not47

a related party of the Offeror, Fujitsu, or the Target Company and does
not have any material interest in the Transactions, including the Tender
Offer, that is required to be disclosed. Also, as stated in “(B)Procurement by the Target Company of a written report from an
independent special committee” above, same as MUFG Bank, MUMSS
is a member of the Mitsubishi UFJ Financial Group companies and
MUFG Bank conducts financing transactions for the Target Company
as part of a series of ordinary banking transactions, and plans to provide
the Offeror with funds for settlement of the Tender Offer. However,based on the fact that a strict information management structure has
been established for information management between MUMSS andMUFG Bank and within each of them, as well as the fact that MUMSS
was formerly a third-party valuation organization for a similartransaction, the Target Company has appointed MUMSS as its financial
advisor and third-party valuation organization independent from theOfferor and the Target Company.
Furthermore, the compensation payable to MUMSS in connection with
the Transactions includes contingent compensation payable subject topublic announcement of the Transactions, including the Tender Offer,and completion of the Squeeze-Out Procedures. By taking into
consideration general customary practices in similar types oftransactions, as well as the propriety of a compensation system that
imposes a reasonable monetary burden on the Target Company when
the Transactions are not completed, the Target Company has decided
that MUMSS’s independence is not ruled out by the inclusion ofcontingent compensation payable subject to public announcement of
the Transactions, including the Tender Offer, and completion of the
Squeeze-Out Procedures.
In addition, in consideration of the interests of minority shareholders,the Target Company has implemented various measures as stated in“(A) Implementation of bidding procedure” through “(F) Measures toensure opportunities for purchase for parties other than the Offeror”
below, in the Offeror and the Target Company, to ensure fairness of theTender Offer. Therefore, the Target Company has not obtained fromMUMSS an opinion on fairness of the Tender Offer Price (fairness
opinion).
(ii)

Outline of Calculation
As a result of considering the valuation method for the Tender Offer,
MUMSS calculated the value of the Target Company Shares using eachof (i) the market share price analysis because the Target Company
Shares are listed on the Prime Market of the Tokyo Stock Exchange anda market share price exists, (ii) the comparable companies analysis
because there are multiple listed companies similar and comparable to
the Target Company and it is possible to infer by analogy the share valueof the Target Company by comparing the Target Company with such
similar listed companies, and (iii) the DCF analysis so as to reflect the48

Target Company’s intrinsic value based on the status of future businessactivities, from the perspective that it would be appropriate to assess theshare value of the Target Company Shares in multiple ways.
The ranges of the per-share value of the Target Company Sharescalculated using such methods are as follows:
Market share price analysis:
Comparable companies analysis:
DCF analysis:

5,240 yen to 5,658 yen
5,238 yen to 6,220 yen
5,077 yen to 6,780 yen

Under the market share price analysis, where December 11, 2023 was
the reference date, the per-share value of the Target Company Shares
was calculated as ranging from 5,240 yen to 5,658 yen, based on thefollowing prices of the Target Company Shares on the Prime Market of
the Tokyo Stock Exchange: the closing price as of the reference date
(5,240 yen); the simple average of the closing price for the one month
immediately preceding the reference date (5,377 yen); the simple
average of the closing price for the three months immediately preceding
the reference date (5,502 yen); and the simple average of the closing
price for the six months immediately preceding the reference date
(5,658 yen).
Under the comparable companies analysis, the per-share value of theTarget Company Shares was calculated as ranging from 5,238 yen to
6,220 yen, through comparison with market share prices and financial
indices indicating profitability, etc. of similar listed companies engaged
in business that is relatively similar to that of the Target Company.
Under the DCF analysis, the Target Company’s corporate value andshare value were calculated by making certain financial adjustments,
such as adding the values of the Target Company’s cash equivalents, etc.
(including excess cash and deposits held by the Target Company) to thebusiness values calculated by rebating the free cash flow that is
expected to be generated by the Target Company in the future at a
certain discount rate to the present value, in light of the Target
Company’s future projections in and after the fiscal year ending inMarch 2024, which takes into account various factors, such as theTarget Company’s business plan for fiscal years from the fiscal year
ending in March 2024 through the fiscal year ending in March 2028,
recent business result trends, and publicly available information. Using
this methodology, the per-share value of the Target Company Shares
was calculated as ranging from 5,077 yen to 6,780 yen.
MUMSS has used the information provided by the Target Company andpublicly available information in calculating the Target Company’s
share value, has assumed that that information is all accurate andcomplete, and has not independently verified the accuracy orcompleteness thereof. In addition, information regarding the Target
Company’s financial projections is assumed to have been reasonably49

prepared based on the Target Company’s best projections andjudgments currently available. With regard to the financial projections,questions have been asked to and answers have been received from theSpecial Committee, and the reasonability of the contents and conditions
precedent, etc. thereof has been confirmed. Furthermore, MUMSS has
not independently evaluated or appraised the assets and liabilities of theTarget Company (including off-balance sheet assets and off-balance
sheet liabilities, and other contingent liabilities) and has not requested
any appraisals or evaluations from third-party organizations. The
calculation by MUMSS reflects the above information as of December
11, 2023.
Moreover, the Target Company’s business plan, which MUMSS usedas the basis for the DCF analysis calculation, includes a fiscal year inwhich significant increases or decreases in profits are expected incomparison with the previous year. Specifically, the semiconductor
industry is expected to face a severe market environment; negative
growth is expected in 2023.
The Target Company has been making continual, focused capital
investments in markets with promising growth, and is committed toreinforcing its production system and broadening the customer base inview of the growing markets by: establishing the Chikuma Plant(Chikuma City, Nagano Prefecture) as a new production plant for flipchip type packages used in high-performance semiconductors;
expanding its mass production system through the construction of a newbuilding completed in 2023 at its Takaoka Plant (Nakano City, Nagano
Prefecture) for ceramic electrostatic chucks for semiconductor
manufacturing equipment; and beginning construction planning for a
new building at its Arai Plant (Myoko City, Niigata Prefecture) for
producing plastic BGA substrates for cutting-edge memories. In thebusiness plan prepared by the Target Company, although theconsolidated operating profit of approximately 35 billion yen for the
fiscal year ending March 31, 2024 is expected to decrease significantly
by approximately 50% year-on-year due to the sluggish semiconductor
market, the Target Company anticipates continuous growth with steadyyear-on-year increase by approximately 50% in the consolidated
operating profit, which will reach 52 billion yen in the fiscal year ending
March 31, 2025, due to the above initiatives as well as further
productivity improvement and cost reduction throughout the Target
Company. In addition, consolidated operating profit of approximately
87 billion yen for the year ending March 31, 2027 is expected toincrease significantly by approximately 40% compared to the previous
year. The consolidated free cash flow used in the DCF analysis is
expected to increase or decrease significantly in each financial year due
to the above increase and decrease in profits and the impact of the Target
Company’s capital expenditure. Specifically, the significant increase
and decrease in consolidated free cash flow due to the above-mentioned
increase/decrease in profits and the Target Company’s capital
expenditure is expected to be approximately -36 billion yen in the year50

ending March 31, 2024, a decrease of approximately 88 billion yen
compared to the previous year; approximately -4 billion yen in the year
ending 31 March 2025, an increase of approximately 32 billion yen
compared to the previous year; approximately 38 billion yen in the year
ending March 31, 2026, an increase of approximately 42 billion yen
compared to the previous year; 68 billion yen in the year ending March
31, 2027, a decrease of approximately 30 billion yen compared to theprevious year; and 42 billion yen in the year ending March 31, 2028, adecrease of approximately 26 billion yen compared to the previous year.
Further, since it is difficult to make a specific estimation of synergies
that are expected to be realized by executing the Transactions at present,such synergies were not taken into account in the business plan.
(E)

Unanimous approval of all non-interested directors of the Target Company
As stated in “(C) Decision-making process and reasons of the Target
Company to issue the opinion to support the Tender Offer” in “(2)Background, purpose, and decision-making process leading to the decision to
conduct the Tender Offer, and management policy following the Tender Offer”
above, the board of directors of the Target Company carefully discussed andconsidered whether the Transactions, including the Tender Offer, would
contribute to improvement of the Target Company’s corporate value andwhether the transaction terms related to the Transactions, including the Tender
Offer Price, were appropriate, taking into consideration the legal advice
received from N&A, the advice from a financial perspective received fromMUMSS, and the content of the Share Valuation Report, while giving theutmost respect to the Special Committee’s decision as shown in the Written
Report.
As a result, the Target Company determined that the transaction terms related
to the Transactions, including the Tender Offer Price, were appropriate as they
ensured the benefits that should be enjoyed by minority shareholders of theTarget Company and that the Tender Offer would provide minority
shareholders of the Target Company with a reasonable opportunity to sell theTarget Company Shares, and consequently adopted a resolution at the boardof directors meeting held today to express an opinion in support of the Tender
Offer and to recommend that shareholders of the Target Company tender theirshares in the Tender Offer via a unanimous decision of all seven of the eight
directors of the Target Company participating in the deliberations andresolutions, excluding Mr. Yasuhisa Makino as explained below. Furthermore,
as stated in “(C) Decision-making process and reasons of the Target Company
to issue the opinion to support the Tender Offer” of “(2) Background, purpose,and decision-making process leading to the decision to conduct the Tender
Offer, and management policy following the Tender Offer” above, the Tender
Offer is planned to be commenced promptly on a date that is (i) within 10
business days from the date on which the Tender Offer Conditions Precedent(excluding those to be satisfied on the commencement date of the Tender
Offer) are satisfied (or waived by the Offeror) (however, if a Counter Proposal
has been made as of such date, then the earlier of (a) the date on which 20
business days have elapsed since the date on which Fujitsu makes a request51

to the Offeror for consultation regarding changing the Tender Offer Price andthe Repurchase Price or (b) the date on which Fujitsu covenants in writingthat it will not accept the Counter Proposal) and (ii) separately notified to theTarget Company in advance by the Offeror, and as of today, the Offeror aims
to commence the Tender Offer around late August 2024 based on thediscussions with local law firms regarding necessary procedures andmeasures under domestic and foreign competition laws and foreign
investment control laws and regulations, etc.; however, it seems difficult toaccurately estimate the period required for, among others, procedures
involving foreign competition authorities and authorities supervising inward
direct investments. Therefore, at the board of directors meeting mentioned
above, the Target Company also resolved (i) that when the Tender Offer iscommenced, the board of directors will request that the Special Committee(x) consider whether there are any changes in its opinion as expressed to theboard of directors of the Target Company as of today, and (y) if there are nochanges in its opinion, make a statement to that effect, or if there are changes
in its opinion, state the changed opinion, to the board of directors of the Target
Company; and (ii) that based on such opinion of the Special Committee, theTarget Company will express its opinion on the Tender Offer again when theTender Offer is commenced.
Furthermore, in light of the fact that among the Target Company’s directors,
Mr. Yasuhisa Makino is originally from Fujitsu, and only two years havepassed since his employment at Fujitsu, he did not participate in any
deliberations or resolutions relating to the Transactions at board of directors
meetings, including the deliberations and resolutions at the board of directors
meeting mentioned above, nor did he, in the capacity as a representative of
the Target Company, participate in any discussions or negotiations with theOfferor, in order to avoid suspicions of conflicts of interest and to ensure
fairness of the Transactions. Moreover, Mr. Masami Fujita is originally from
Fujitsu and has acted as the Corporate Senior Executive Vice President andRepresentative Director of Fujitsu, and as the President and Representative
Director of Fujitsu Marketing Limited (currently Fujitsu Japan Limited)(“Fujitsu Marketing”), a wholly-owned Fujitsu subsidiary, as well as the
Executive Advisor of Fujitsu (until the end of March 2018) and the Executive
Advisor of Fujitsu Marketing (until the end of March 2019); however, he has
participated in deliberations and resolutions relating to the Transactions atboard of directors meetings, including the deliberations and resolutions at theboard of directors meeting mentioned above, and, in the capacity as arepresentative of the Target Company, participated in discussions andnegotiations with the Offeror, in light of facts such as five or more years
having passed since his employment at Fujitsu, and four or more years having
passed since he left Fujitsu Marketing, which therefore obviously makes it
impossible for him to be involved in Fujitsu’s decision-making, andsubsequently there has been no relationship between him and Fujitsu or
Fujitsu Marketing that could give rise to a conflict of interests with the Target
Company and therefore his relationship with Fujitsu seemingly being poor. In
addition, Mr. Takashi Ozawa is originally from Fujitsu, but he has participatedin deliberations and resolutions relating to the Transactions at board of
directors meetings, including the deliberations and resolutions at the board of52

directors meeting mentioned above, and, in the capacity as a representative of
the Target Company, participated in discussions and negotiations with theOfferor, in light of the fact that 20 or more years have passed since his
employment at Fujitsu, which therefore obviously makes it impossible forhim to be involved in Fujitsu’s decision-making, and subsequently there has
been no relationship between him and Fujitsu that could give rise to a conflictof interests with the Target Company and therefore his relationship with
Fujitsu seemingly being poor.
(F)

Measures to ensure opportunities for purchase for parties other than theOfferor
Although the offer period of the Tender Offer has been set at 20 business days,
which is the minimum period stipulated by law, the Tender Offer is a so-calledprior disclosure-type tender offer, where the transaction terms including theTender Offer Price are disclosed in advance. As a result, a relatively long
period is ensured from the announcement of the transaction terms until thecommencement of the Tender Offer. Further, the Offeror has not reached anagreement with the Target Company that would excessively restrict the Target
Company from contacting competing offerors. The Offeror therefore believes
that it has ensured that the Target Company’s shareholders have an
opportunity to properly determine whether to tender their shares, etc. in theTender Offer and that it has provided an opportunity for competing offerors
to make offers.

(4)

Policy for organizational restructuring after the Tender Offer (matters relating to aso-called “Two-Step Acquisition”)
As stated in “(1) Summary of the Tender Offer “ above, if the Offeror fails to acquire
all of the Target Company Shares (excluding Fujitsu Holding Shares and thetreasury shares owned by the Target Company) in the Tender offer, the Offeror will
request the Target Company, after the completion of the settlement of the Tender
Offer, to hold an extraordinary shareholders’ meeting at which the following
proposals will be submitted (the “Extraordinary Shareholders’ Meeting”): (i) to
conduct a consolidation of the Target Company Shares (the “Share Consolidation”)
under Article 180 of the Companies Act and (ii) to make a partial amendment to theTarget Company’s Articles of Incorporation to abolish the share unit number
provisions on the condition that the Share Consolidation becomes effective. The
Offeror and Fujitsu intend to approve each of those proposals at the Extraordinary
Shareholders’ Meeting. If the proposal for the Share Consolidation is approved at
the Extraordinary Shareholders’ Meeting, the shareholders of the Target Company
will come to own the number of Target Company Shares proportionate to the ratioof the Share Consolidation that is approved at the Extraordinary Shareholders’Meeting as of the effective date of the Share Consolidation. In such case, if, due tothe Share Consolidation, the number is a fraction less than one, each shareholder of
the Target Company who holds such fractional shares will receive an amount ofcash obtained by selling the Target Company Shares equivalent to the total numberof shares less than one unit (with such aggregate sum rounded down to the nearest
whole number; the same applies hereinafter) to the Target Company or the Offeror
as per the procedures specified in Article 235 of the Companies Act and other53relevant laws and regulations. The purchase price for the aggregate sum of theTarget Company Shares that are less than one unit will be valued so that the amountof cash received by each shareholder who did not tender its shares in the Tender
Offer as a result of the sale will be equal to the price obtained by multiplying theTender Offer Price by the number of Target Company Shares owned by each suchshareholder. The Offeror will request the Target Company to file a petition to thecourt for permission to purchase such Target Company Shares on this basis.
Although the ratio of the Share Consolidation of the Target Company Shares has
not been determined as of today, it is intended that the shares of shareholders who
did not tender their shares in the Tender Offer (excluding the Offeror, Fujitsu, andthe Target Company) will be classified as shares less than one unit in order for theOfferor and Fujitsu to become the sole owners of all of the Target Company Shares.
According to the provisions of the Companies Act that aim to protect the rights ofminority shareholders in relation to the Share Consolidation, the Companies Act
provides that if the Share Consolidation occurs and there are shares less than one
unit as a result thereof, each shareholder of the Target Company may request that
the Target Company purchase all such shares less than one unit at a fair price, andsuch shareholders may file a petition to the court to determine the price of the Target
Company Shares in accordance with the provisions of Articles 182-4 and 182-5 of
the Companies Act and other relevant laws and regulations. The purchase price pershare by this method will be finally determined by the court.
The Tender Offer is not intended to solicit the shareholders of the Target Company
to approve the proposal at the Extraordinary Shareholders’ Meeting.
With regard to the procedures described above, it is possible that, depending on
circumstances such as the interpretation of the relevant laws and regulations byauthorities, more time may be required or alternative methods may be utilized to
implement the procedures. However, even in such a case, the Offeror intends tomake the Target Company a wholly-owned subsidiary of the Offeror by a method
whereby the shareholders of the Target Company who do not tender their shares in
the Tender Offer (excluding the Offeror, Fujitsu, and the Target Company) will
ultimately receive cash consideration equal to the number of Target Company
Shares held by such shareholders multiplied by the Tender Offer Price.
The specific procedures, timing of implementation, and other such matters in thecase set out above will be announced promptly by the Target Company once it has
decided them after consultation with the Offeror. Shareholders of the Target
Company are requested to confirm with tax experts regarding tax treatment relating
to tendering in the Tender Offer and the procedures set out above at their own
responsibility.
(5)

Expected delisting and reasons therefor
The Target Company Shares are currently listed on the Prime Market of the Tokyo
Stock Exchange as of today. However, since the Offeror has not set a limit on the
maximum number of share certificates, etc. to be purchased in the Tender Offer, theTarget Company Shares may be delisted through prescribed procedures inaccordance with the stock delisting criteria of the Tokyo Stock Exchange,54depending on the result of the Tender Offer.
Also, even in the event that the delisting standards are not met upon completion of
the Tender Offer, if the Squeeze-Out Procedures are carried out as stated in “(4)Policy for organizational restructuring after the Tender Offer (matters relating to aso-called “Two-Step Acquisition”)” above after the successful completion of theTender Offer, then the Target Company Shares will be delisted through theprescribed procedures in accordance with the stock delisting criteria of the Tokyo
Stock Exchange. After delisting, the Target Company Shares will no longer be
traded on the Prime Market of the Tokyo Stock Exchange.
(6)

Matters relating to material agreements regarding the Tender Offer(A) Master Transaction Agreement
As stated in “(1) Summary of the Tender Offer” above, the Offeror has, inconnection with the Tender Offer, executed the Master Transaction
Agreement with Fujitsu regarding the Transactions on December 12, 2023. In
the Master Transaction Agreement, Fujitsu has agreed (i) that it will not tender
the Fujitsu Holding Shares in the Tender Offer and that it will not conduct any
transaction that competes, contradicts, or conflicts with the Tender Offer or
impedes or is likely to impede the implementation of the Tender Offer (a“Competing Transaction”), (ii) that it will not reach an agreement regarding
a Competing Transaction with a third party, make any application for suchagreement, or make any invitation for, approve, discuss, negotiate about,make any solicitation for, or exchange information about a Competing
Transaction, and (iii) that if it is engaged in any consultation or negotiation
regarding any Competing Transaction at the time of execution of the MasterTransaction Agreement, it will promptly suspend such consultation or
negotiation. However, in the case where Fujitsu receives a proposal on aCompeting Transaction from a third party other than the Offeror without any
breach of such agreement, if, by the last day of the Tender Offer Period (asdefined in “(2) Schedule” in “2. Outline of the Tender Offer” below;
hereinafter the same), Fujitsu reasonably determines that the proposal issincere and reasonably expected to lead to a tender offer to acquire all of theshares of common stock of the Target Company with no limit on the
maximum number of shares to be purchased through a transaction in which
the consideration is equivalent to an amount that exceeds the Tender Offer
Price by a certain percentage or more (a “Counter Proposal”), Fujitsu may
consult with or provide information to the third party with respect to the
proposal to the minimum extent necessary. If Fujitsu or the Target Company
receives a written proposal regarding a Competing Transaction during theperiod from the execution date of the Master Transaction Agreement until thelast day of the Tender Offer Period, Fujitsu shall immediately notify theOfferor to that effect and of the details of the proposal and, at the request of
the Offeror, consult with the Offeror to a reasonable extent regarding the
progress of the consultations and negotiations regarding the Competing
Transaction.
If a Counter Proposal is commenced by a third party set out above whom55

Fujitsu may consult with or provide information to by the last day of theTender Offer Period, Fujitsu may request the Offeror to consult regarding
changing the Tender Offer Price and the Repurchase Price, and, even taking
into account such consultation, if the Offeror does not, by the earlier of thedate on which 20 business days have elapsed since the date of the request or
the last day of the Tender Offer Period, change the Tender Offer Price to an
amount higher than the consideration proposed in the Counter Proposal andchange the Repurchase Price to an amount that, taking tax effects into account,is in substance higher than the consideration proposed in the Counter
Proposal, Fujitsu may accept the Counter Proposal in regard to all of the
Fujitsu Holding Shares, unless Fujitsu is in violation of its obligations set out
in the Master Transaction Agreement. If any Counter Proposal is made before
the commencement of the Tender Offer, the Offeror shall not bear an
obligation to commence the Tender Offer unless Fujitsu covenants in writing
not to accept the Counter Proposal or the Offeror conducts the acts set out
above.
Additionally, the Master Transaction Agreement sets out the conditions
precedent for the commencement of the Tender Offer (the “Tender Offer
Conditions Precedent” set out in the preamble), the representations andwarranties of the Offeror and Fujitsu (Note 1), obligations of Fujitsu (Note 2),
obligations of the Offeror (Note 3), and termination events (Note 4).
Note 1: In the Master Transaction Agreement, the Offeror represents andwarrants (i) its incorporation, existence, and the existence of thepower necessary for the execution and performance of the MasterTransaction Agreement, (ii) the validity and enforceability of the
Master Transaction Agreement, (iii) the obtainment or
implementation of permits and authorizations, etc. necessary for the
execution and performance of the Master Transaction Agreement,
except for the acquisition of Clearance, and the implementation of
the procedures necessary for the execution and performance of the
Master Transaction Agreement, (iv) the absence of any conflict withlaws and regulations regarding the execution and performance of the
Master Transaction Agreement, (v) the absence of any bankruptcy
procedures, (vi) that it is not an antisocial force and has no
relationship with any antisocial forces, and (vii) the sufficiency offunds necessary for the settlement of the Tender Offer and theexistence of reasonable prospects for securing such funds. In
addition, in the Master Transaction Agreement, Fujitsu represents
and warrants (i) its incorporation, existence, and the existence of thepower necessary for the execution and performance of the MasterTransaction Agreement, (ii) the validity and enforceability of the
Master Transaction Agreement, (iii) the obtainment or
implementation of permits and authorizations, etc. necessary for the
execution and performance of the Master Transaction Agreement
and the implementation of the procedures necessary for the
execution and performance of the Master Transaction Agreement,(iv) the absence of any conflict with laws and regulations regarding
the execution and performance of the Master Transaction Agreement,
56

(v) the absence of any bankruptcy procedures, (vi) that it does not
fall under an antisocial force and has no relationship with any
antisocial forces, (vii) matters relating to the legal and valid holding,etc. of the Fujitsu Holding Shares, (viii) matters relating to the Target
Company Shares, (ix) the accuracy of securities reports of the Target
Company filed after April 1, 2021, and (x) the accuracy of theinformation disclosed in due diligence.
Note 2: The following is a summary of the obligations owed by Fujitsu in
the Master Transaction Agreement: (i) obligation not to tender in theTender Offer or transfer or otherwise dispose of the Fujitsu Holding
Shares, (ii) obligation regarding the implementation of the SqueezeOut Procedures, (iii) obligation to cause the Target Company toconduct the Financing and the Capital Decrease, Etc., (iv) obligation
regarding the conduct of the Share Repurchase, (v) obligation tocooperate and make efforts for the satisfaction of the Tender Offer
Conditions Precedent, (vi) obligation to notify the Offeror if it
breaches any of its representations and warranties, breaches any of
its obligations, or finds that it might be unable to satisfy the Tender
Offer Conditions Precedent, (vii) obligation to cooperate and makeefforts for the prompt execution of the Transactions, (viii) obligation
to consult in good faith in regard to continuing the services provided
by Fujitsu and its subsidiaries to the Target Company Group for theperiod necessary to support transition procedures, (ix) obligation
regarding certain patents that the Target Company Group holds anduses, (x) obligation to take certain measures in relation to the Target
Company’s health insurance system and retirement pension system,(xi) non-competition obligations for a certain period after the date of
the Share Repurchase, (xii) obligation not to solicit the officers andemployees of the Target Company Group for a certain period after
the execution date of the Master Transaction Agreement, (xiii)
obligation to cooperate with the Offeror in financing, (xiv)obligation to cooperate in the acquisition of Clearance, (xv)
obligation to pay compensation if it breaches any of its
representations and warranties or breaches any of its obligations,(xvi) confidentiality obligations, (xvii) obligation to bear taxes andpublic charges and expenses it incurs, and (xviii) obligation not toassign any of its contractual rights and obligations.
Note 3: The following is a summary of the obligations owed by the Offeror
in the Master Transaction Agreement: (i) obligation to commence theTender Offer on or after the date on which the Conditions Precedent
are satisfied, (ii) obligation to make efforts to conduct all acts
necessary under laws and regulations for the acquisition ofClearance and efforts to complete the acquisition of Clearance, (iii)
obligation regarding the implementation of the Squeeze-Out
Procedures, (iv) obligation to cause the Target Company to conduct
the Financing and the Capital Decrease, Etc., (v) obligation
regarding the conduct of the Share Repurchase, (vi) obligation tocooperate and make efforts for the satisfaction of the Tender Offer
Conditions Precedent, (vii) obligation not to amend the MOU
57

without the prior written consent of Fujitsu, (viii) obligation not tomake any communication with any judicial or administrative agency
in relation to Fujitsu’s burdens arising out of or in connection with
the Transactions without the prior written consent of Fujitsu, (ix)obligation to notify Fujitsu if it breaches any of its representations
and warranties, breaches any of its obligations, or finds that it might
be unable to satisfy the Tender Offer Conditions Precedent, (x)obligation to cooperate and make efforts for the prompt execution of
the Transactions, (xi) obligation to take certain measures in relation
to the Target Company’s health insurance system and retirement
pension system, (xii) obligation not to solicit the officers andemployees of the Target Company Group for a certain period after
the execution date of the Master Transaction Agreement, (xiii)
obligation to pay compensation if it breaches any of its
representations and warranties or breaches any of its obligations,(xiv) confidentiality obligations, (xv) obligation to bear taxes andpublic charges and expenses it incurs, (xvi) obligation not to assign
any of its contractual rights and obligations, and (xvii) obligation to
make efforts in relation to the extension of the effective terms ofcommitment letters or the execution of new commitment letters (seeNote 4).
Note 4: Under the Master Transaction Agreement, the Offeror and Fujitsu
may terminate the Master Transaction Agreement by notifying theother party in writing by the end of the Tender Offer Period if (i)there is a breach of any of the other party’s representations andwarranties that may have a material adverse effect on theimplementation of the Transactions, (ii) the other party fails toperform or comply with any of its obligations under the MasterTransaction Agreement in any material respect and, despite being
requested in writing to remedy such nonperformance or
noncompliance, fails to remedy such nonperformance or
noncompliance within a reasonable period of time, (iii) a petition is
filed against the other party for commencement of bankruptcy
proceedings, (iv) the Tender Offer is not commenced by September
30, 2024 (however, if the effective term of a commitment letter
regarding the borrowings by the Offeror from a financial institution
necessary for the implementation of the Transactions is extended toa date after the same date, or if a substitute new commitment letteris executed with a financial institution, then the expiration date of
the extended commitment letter or the expiration date of the newcommitment letter) due to any event not attributable to itself (theOfferor shall use its reasonable best efforts to extend the effective
term of such commitment letter or to execute a new commitment
letter; if the Offeror commences consultation with a financial
institution regarding the extension of the effective term of suchcommitment letter or the execution of a new commitment letter, theOfferor shall provide Fujitsu with information regarding the statusof consultation with the financial institution; if the Offeror becomesaware of a specific risk that would make it difficult to extend theeffective term of the commitment letter or execute a new58

commitment letter, the Offeror shall promptly notify Fujitsu of suchrisk, as well as the details of relevant matters considered by theOfferor and the status of negotiations with the financial institution,and shall consult with Fujitsu in good faith regarding the response to
the situation before the Offeror exercises its termination right; JICC
has submitted to Fujitsu today a document to the effect that JICC
covenants these matters as summarized above), (v) the Tender Offer
is not commenced by June 30, 2025 due to any reason not
attributable to itself, or (vi) there is any change in a person who
directly or indirectly controls the Offeror through the exercise of
voting rights or the exercise of contractual rights or any other changeof control in relation to the Offeror. The Master Transaction
Agreement provides that the Master Transaction Agreement willautomatically terminate if any of the following events occurs: (i) the
Offeror lawfully withdraws the Tender Offer in accordance with the
Act and other applicable laws and regulations, (ii) a tender offer
under a Counter Proposal is commenced, Fujitsu becomes able toaccept the Counter Proposal, and Fujitsu announces that it will
accept the Counter Proposal, or (iii) the total number of sharecertificates, etc. tendered in response to the Tender Offer is less thanthe minimum number of shares to be purchased.
(B)

Memorandum of Understanding Regarding Tender Offer
Upon the Tender Offer, the Offeror and the Target Company have enteredinto the MOU regarding the Transactions on December 12, 2023. The MOU
sets out the obligations of the Target Company (Note 5), the obligations of
the Offeror (Note 6), and termination events (Note 8).
Note 5: The following is a summary of the obligations owed by the Target
Company in the MOU: (i) obligation to adopt a resolution to express
its opinion in support of the Tender Offer and recommending that
the Target Company’s shareholders tender their shares in the Tender
Offer (the “Opinion”) and maintain such resolution, and obligation
not to conduct any Competing Transaction (Note 7), (ii) obligation
to implement and cooperate in procedures necessary for the
implementation of the Transactions, (iii) obligation to cooperate in
the acquisition of Clearance, (iv) obligation to conduct its businesswithin the ordinary course thereof, (v) obligation to make efforts sothat the balance of its deposit account as of the end of the last day of
the Tender Offer Period is no less than a certain amount, (vi)obligation of the Target Company Group to maintain permits andauthorizations, etc. and comply with laws and regulations, (vii)
obligation to grant the Offeror access to information on the Target
Company Group and its officers and employees, (viii) obligation tocooperate with the Offeror in financing, (ix) obligation not to be
involved with anti-social forces or conduct any anti-social act, (x)obligation to make efforts to obtain consent from certain business
partners in relation to the Transactions, (xi) obligation to notify
certain business partners of the Transactions, (xii) obligation to59

provide explanations, etc. regarding the Transactions to the Shinko
Electric Workers Union, (xiii) obligation to cooperate in thetendering of shares in the Tender Offer by a directors and officers
shareholding association or employees shareholding association of
the Target Company or a member thereof, (xiv) obligation to makeindemnity if it breaches any of its obligations, (xv) confidentiality
obligations, (xvi) obligation to bear taxes and public charges andother expenses it incurs, and (xvii) obligation not to assign any of its
contractual rights and obligations.
Note 6: In the MOU, the Offeror owes the obligations (i) to make efforts to,in principle, continue the employment and maintain the working
conditions of the Target Company Group’s employees for the
meantime after the completion of the Transactions, (ii) not topropose an amendment of the articles of incorporation to change in
the Target Company’s trade name for the time being after thecompletion of the Transactions, (iii) to respect business relationships
between the Target Company and its material clients and business
partners, (iv) to respect the Target Company Founder’s Philosophy
and Corporate Vision, etc., (v) to make efforts to complete theacquisition of Clearance, (vi) not to be involved with anti-social
forces or conduct any anti-social act, (vii) to make indemnity if it
breaches any of its obligations, (viii) to maintain confidentiality, (ix)to bear taxes and public charges and other expenses it incurs, and (x)not to transfer any of its contractual rights and obligations.
Note 7: The MOU sets out provisions regarding the maintenance of theOpinion and provisions that restrict the Target Company fromreaching an agreement regarding a Competing Transaction with athird party, making any application for such agreement, or making
any invitation for, approving, discussing, negotiating about, making
any solicitation for, or exchanging information about a Competing
Transaction. However, under the MOU, it is provided that if theTarget Company reasonably determines that it would violate thefiduciary duty of its directors to maintain the Opinion withoutchange, not to make a resolution that conflicts with the Opinion, or
not to conduct a Competing Transaction (including consultation or
information exchange regarding a proposal in relation to aCompeting Transaction in certain cases), the Target Company shallprovide the Offeror with prior explanation of the details and reasons
therefor and discuss in good faith with the Offeror regarding the
response to that situation. It is also provided that if, even after
discussion in good faith with the Offeror, it is objectively andreasonably considered that it would violate the fiduciary duty of theTarget Company’s directors to maintain the Opinion without change,
not to make a resolution that conflicts with the Opinion, or not to
conduct a Competing Transaction, the Target Company may
withdraw or change the Opinion, make a resolution that conflicts
with the Opinion, or conduct a Competing Transaction.
Note 8: The MOU provides that the MOU will automatically terminate in theevent that the Master Transaction Agreement terminates.
60

(C)

Shareholders’ agreement
Upon the Tender Offer, JICC, DNP, and Mitsui Chemicals plan to enter intoa shareholders’ agreement (the “Shareholders’ Agreement”) before thecommencement date of the Tender Offer and agree on matters regarding themanagement of the Offeror and the Target Company, the handling of shares,
and the like. Specifically, as matters relating to the Target Company, JICC,
DNP, and Mitsui Chemicals plan to agree on matters regarding thegovernance, etc. of the Target Company (Note 9), matters regarding thebusiness operation of the Target Company (Note 10), and matters regarding
the disposal, etc. of the Target Company Shares (Note 11). Matters regarding
the Target Company in the Shareholders’ Agreement shall be applicable fromthe time of completion of the Share Repurchase, except for certain provisions
such as prohibition of assignment of the Target Company Shares.
Note 9: The number of directors of the Target Company to be nominatedafter the completion of the Share Repurchase, matters requiring theprior consent of DNP and Mitsui Chemicals (the “Joint Investors”)
with respect to the Target Company’s decision making, and othersuch matters are planned to be set out in the Shareholders’
Agreement.
Note 10: The following matters are planned to be set out in the Shareholders’
Agreement: (i) JICC, DNP, and Mitsui Chemicals will not bear any
obligation to make additional contributions or warranties, etc. to theOfferor or the Target Company, (ii) JICC, DNP, and Mitsui
Chemicals will use their best efforts for the successful business
operation of the Target Company Group, and (iii) JICC, DNP, andMitsui Chemicals will consult regarding business collaboration
between each of the Joint Investors and the Target Company Group(including a business alliance between each of the Joint Investors
and the Target Company leveraging each other’s strengths, including
the development and expansion of next-generation technologies inthe semiconductor business) and cooperate toward the execution ofan agreement regarding such alliance, and other such matters.
Note 11: The following matters are planned to be set out in the Shareholders’
Agreement: (i) if the Target Company conducts an issuance, etc. ofshares, JICC, DNP, and Mitsui Chemicals will have preemptive
rights in accordance with their voting rights ratio, and (ii) the
assignment, etc. of the Target Company Shares will be prohibited fora certain period.

2.

Outline of the Tender Offer(1)

Outline of the Target Company

(i)
(ii)
(iii)

Name
Address
Name and Title ofRepresentative

SHINKO ELECTRIC INDUSTRIES CO., LTD.
80 Oshimadamachi, Nagano City, Nagano
Susumu Kurashima, Representative Director of Board,
President
61

(iv)
(v)
(vi)
(vii)

(viii)(2)

Director
Businesses

Development, manufacturing, and sale of semiconductor
packages
Capital24,223 million yen (as of September 30, 2023)
Date of Foundation
September 12, 1946
Major Shareholders• Fujitsu – 50.02%
and Ownership• The Master Trust Bank of Japan, Ltd. (Trust Account) –Percentage, as of
9.48%
September 30, 2023 • Custody Bank of Japan, Ltd. (Trust Account) – 6.14%• MSIP Client Securities (Standing proxy: Morgan
Stanley MUFG Securities Co., Ltd.) – 2.23%• Goldman Sachs International (Standing proxy:Goldman Sachs Securities Co., Ltd.) – 1.59%• Nomura Securities Co., Ltd. – 1.58%• J.P. Morgan Securities Ltd. –1.36%• Hachijuni Bank, Ltd. – 1.36%• CGML PB CLIENT ACCOUNT/COLLATERAL(Standing proxy: Citibank, N.A., Tokyo Branch) –1.23%• BOFAS INC SEGREGATION ACCOUNT (Standing
proxy: BofA Securities, Inc.) – 1.01%
Relationships Between the Offeror and the Target Company
Capital Relationships Not applicable
Personnel
Not applicable
Relationships
Business
Not applicable
Relationships
Related Party
Not applicable
Relationships

Schedule
The Offeror plans to commence the Tender Offer on a date that is (i) within 10
business days after the Tender Offer Conditions Precedent (excluding those to besatisfied on the commencement date of the Tender Offer) are satisfied (or waived at
the discretion of the Offeror) (however, if a Counter Proposal has been made as ofsuch date, then the earlier of (a) the date on which 20 business days have elapsed
since the date on which Fujitsu makes a request to the Offeror for consultation
regarding changing the Tender Offer Price and the Repurchase Price or (b) the dateon which Fujitsu covenants in writing that it will not accept the Counter Proposal)and (ii) separately notified to the Target Company in advance by the Offeror. As oftoday, the Offeror aims to commence the Tender Offer in or around late August
2024, but since it is difficult to accurately estimate the amount of time required forthe procedures involving foreign competition authorities and authorities having
jurisdiction over investment control laws and regulations, the detailed schedule for
the Tender Offer will be promptly announced as soon as it is decided. The period of62

the tender offer (the “Tender Offer Period”) is expected to be set for 20 businessdays (Note).
Note: As the Offeror plans to ensure that the Tender Offer Period will be no lessthan 20 business days in the U.S., which is the minimum number of days
required for the Tender Offer Period under U.S. securities laws, the numberof days in the Tender Offer Period might exceed 20 business days.
(3)

Price of tender offer
Common stock: 5,920 yen per share of common stock(4)

Basis for the calculation of the Tender Offer Price(A) Basis of calculation
In determining the Tender Offer Price, JICC conducted a multifaceted andcomprehensive analysis of the Target Company’s business and financial statusbased on the Target Company’s disclosed financial information and othersimilar materials and the results of due diligence conducted with respect to
the Target Company from late July 2023 to mid-September 2023 and thenprepared a financial model reflecting that analysis. As a result, a tender offer
price that secures a return on investment as required by JICC has been
calculated. In light of the fact that the Target Company Shares are traded ona financial instruments exchange, in order to ascertain the valuation of theTarget Company’s corporate value by the equity market, JICC also referredto (i) the closing price (5,240 yen) of the Target Company Shares on the Prime
Market of the Tokyo Stock Exchange as of December 11, 2023, which was
the business day immediately preceding the announcement date of theplanned commencement of the Tender Offer (December 12, 2023), and (ii)the simple average closing prices of the Target Company Shares over thepreceding one-month period (from November 13, 2023 to December 11,2023), three-month period (from September 12, 2023 to December 11, 2023),
and six-month period (from June 12, 2022 to December 11, 2023) (5,377 yen,
5,502 yen, and 5,658 yen, respectively). Similarly, JICC referred to (i) the
closing price (4,980 yen) of the Target Company Shares on the Prime Marketof the Tokyo Stock Exchange as of May 31, 2023, which was the business
day immediately preceding the date of the speculative article published byBloomberg regarding the sale of Fujitsu’s subsidiaries (June 1, 2023) thattriggered changes in the share price of the Target Company due to
expectations that the Fujitsu group would undergo a reorganization, and (ii)the simple average closing prices of the Target Company Shares over thepreceding one-month period (from May 1, 2023 to May 31, 2023), threemonth period (from March 1, 2023 to May 31, 2023), and six-month period(from December 1, 2022 to May 31, 2023) (4,519 yen, 4,094 yen, and 3,898
yen, respectively).
As JICC has determined the price by comprehensively taking into
consideration the factors described above, JICC has not obtained a sharevaluation report from any third-party appraiser.
63

The Tender Offer Price per Target Company Share (5,920 yen) also represents(i) a premium of 12.98% on 5,240 yen, the closing price of the Target
Company Shares on the Prime Market of the Tokyo Stock Exchange as of thebusiness day immediately preceding the announcement date of the plannedcommencement of the Tender Offer (December 11, 2023), (ii) a premium of
10.10% on 5,377 yen, the simple average closing price for the preceding onemonth period ending on that date, (iii) a premium of 7.60% on 5,502 yen, thesimple average closing price for the preceding three-month period ending onthat date, and (iv) a premium of 4.63% on 5,658 yen, the simple averageclosing price for the preceding six-month period ending on that date.
In addition, the Tender Offer Price per Target Company Share (5,920 yen)also represents (i) a premium of 18.88% on 4,980 yen, the closing price of theTarget Company Shares on the Prime Market of the Tokyo Stock Exchange
as of May 31, 2023, which was the business day immediately preceding thedate of the speculative article published by Bloomberg regarding the sale of
Fujitsu’s subsidiaries (June 1, 2023), (ii) a premium of 31.00% on 4,519 yen,
the simple average closing price for the preceding one-month period endingon that date, (iii) a premium of 44.60% on 4,094 yen, the simple averageclosing price for the preceding three-month period ending on that date, and(iv) a premium of 51.87% on 3,898 yen, the simple average closing price forthe preceding six-month period ending on that date.
(B)

Process of calculation
On December 12, 2023, JICC decided on the Tender Offer Price per Target
Company Share of 5,920 yen based on the discussions and negotiations with
the Target Company while comprehensively taking into account the mattersstated in “(A) Basis of calculation” above as well as whether or not the Target
Company supports the Tender Offer and the prospect of the successful
completion of the Tender Offer. Since JICC decided on the Tender Offer Priceupon discussions and negotiations with the Target Company while taking into
consideration the factors described above, and JICC believes that sufficientconsideration has been given to the interests of the minority shareholders of
the Target Company since JICC and the Target Company have taken measures
to ensure the fairness of the Tender Offer Price and measures to avoid
conflicts of interest (specifically, the measures stated in “(A) Implementationof bidding procedure” through “(F) Measures to ensure opportunities forpurchase for parties other than the Offeror” in “(3) Measures to ensure thefairness of the Tender Offer Price and avoid conflicts of interest, and othermeasures to ensure the fairness of the Tender Offer” in “1. Purpose of theTender Offer” above), JICC did not obtain a share valuation report or fairness
opinion from a third-party appraiser.

(C)

Relationships with appraisers
As the Offeror did not obtain a share price valuation report or an opinion
regarding the fairness of the Tender Offer Price (fairness opinion) from any
third-party appraiser when determining the Tender Offer Price, this matter is64not applicable.
(5)

Number of shares certificates, etc. to be purchased

Class of sharecertificates, etc.

Number of shares tobe purchased

Minimum number ofshares to bepurchased

Maximum number ofshares to be purchased

Common stock

67,530,488 (shares)

22,491,400 (shares)

-

Total

67,530,488 (shares)

22,491,400 (shares)-

Note 1:

Note 2:

Note 3:Note 4:Note 5:(6)

If the total number of Tendered Share Certificates, Etc. is less than theminimum number of shares to be purchased (22,491,400 shares), theOfferor will not purchase any of the Tendered Share Certificates, Etc.
If the total number of Tendered Share Certificates, Etc. is equal to or
exceeds the minimum number of shares to be purchased (22,491,400
shares), the Offeror will purchase all of the Tendered Shares Certificates,
Etc.
In the Tender Offer, the Offeror has not set a maximum number ofshares to be purchased, so the number of shares to be purchased is statedas the maximum number of share certificates, etc. that can be acquiredby the Offeror through the Tender Offer (67,530,488 shares). Thismaximum number is equal to the sum (67,530,488 shares) of the total
number of issued shares of the Target Company as of September 30,
2023 (135,171,942 shares) as stated in the Target Company’s Financial
Results for the Second Quarter less the number of the treasury shares(54,430 shares) owned by the Target Company as of September 30,
2023 as set out in the Target Company’s Financial Results for theSecond Quarter and the number of the Fujitsu Holding Shares(67,587,024 shares).
Shares less than one unit are also subject to the Tender Offer. If a rightto request a purchase of shares less than one unit is exercised by theTarget Company’s shareholders in accordance with the Companies Act,the Target Company may purchase its own shares less than one unit
during the Tender Offer Period in accordance with procedures requiredby laws and regulations.
The Offeror does not intend to acquire the treasury shares held by theTarget Company through the Tender Offer.
The figures in “Number of shares to be purchased” and “Minimum
number of shares to be purchased” above are tentative figures that rely
on information as of today. Due to factors including fluctuations in thenumber of treasury shares held by the Target Company after the samedate, actual figures in the Tender Offer may differ from the figures
above. The “Number of shares to be purchased” and “Minimum numberof shares to be purchased” will be finally determined prior to thecommencement of the Tender Offer based on the latest information
available at the time of the commencement of the Tender Offer.

Changes to share ownership percentages due to the tender offer
65

Number of voting rights represented
by share certificates, etc. held by theOfferor prior to the tender offer
Number of voting rights represented
by share certificates, etc. held byspecial related parties prior to thetender offer
Number of voting rights represented
by share certificates, etc. held by theOfferor after the tender offer
Number of voting rights represented
by share certificates, etc. held byspecial related parties after thetender offer
Total number of voting rights of allshareholders of the Target Company
Note 1:

Note 2:

Note 3:- Ownership percentage of sharecertificates, etc. prior to the tender
offer: -%675,870 Ownership percentage of sharecertificates, etc. prior to the tender
offer: 50.02%
675,304 Ownership percentage of sharecertificates, etc. after the tender
offer: 49.98%
675,870 Ownership percentage of sharecertificates, etc. after the tender
offer: 50.02%
1,350,947

Although the number of voting rights represented only by the Fujitsu
Holding Shares (67,587,024 shares) held by Fujitsu is tentatively statedas the “Number of voting rights represented by share certificates, etc.
held by special related parties prior to the tender offer,” since theOfferor plans to confirm the number of the Target Company Shares heldby special related parties by the commencement of the Tender Offer, if
the “Number of voting rights represented by share certificates, etc. heldby special related parties prior to the tender offer” and thecorresponding “Ownership percentage of share certificates, etc. prior to
the tender offer” need to be corrected, the corrected figures will be
disclosed at the time of the commencement of the Tender Offer. Since
the share certificates, etc. held by special related parties, excluding the
Fujitsu Holding Shares held by Fujitsu and the treasury shares ownedby the Target Company, are also subject to purchase in the Tender Offer,the number of voting rights represented by the Fujitsu Holding Shares(67,587,024 shares) is stated as the “Number of voting rights
represented by share certificates, etc. held by special related parties
after the tender offer.”
The “Number of voting rights represented by share certificates, etc. heldby the Offeror after the tender offer” is the number of voting rights
represented by the number of shares to be purchased (67,530,488
shares) in the Tender Offer stated in “(5) Number of share certificates,etc. to be purchased” above.
The “Total number of voting rights of all shareholders of the Target
Company” is the number of voting rights of all shareholders, etc. as of
September 30, 2023 as stated in the Target Company’s Securities Reportfor the Second Quarter of the 89th Fiscal Year submitted by the Target
Company on November 13, 2023. However, since shares less than one
unit are also subject to the Tender Offer, when calculating the“Ownership percentage of share certificates, etc. prior to the tender
offer” and the “Ownership percentage of share certificates, etc. after thetender offer,” the number of voting rights (1,351,175) represented by
the sum (135,117,512 shares) of the total number of issued shares of the66

Note 4:

(7)

Target Company as of September 30, 2023 (135,171,942 shares) as
stated in the Target Company’s Financial Results for the Second Quarter
less the number of the treasury shares (54,430 shares) owned by theTarget Company as of September 30, 2023 is used as a denominator.
The “Ownership percentage of share certificates, etc. prior to the tender
offer” and the “ownership percentage of share certificates, etc. after thetender offer” have been rounded to the second decimal place.

Purchase price (planned)
399,780,488,960 yen
Note: The purchase price above has been calculated by multiplying the number ofshares to be purchased in the Tender Offer stated in “(5) Number of sharecertificates, etc. to be purchased” above by the Tender Offer Price (5,920 yen)
and is therefore subject to change if the actual number of shares to bepurchased in the Tender Offer is altered due to fluctuation, etc. hereafter.

(8)

Other conditions and methods of purchase(A) Other conditions and methods of purchase
As with “(2) Schedule” above, the Offeror will promptly announce themethod of settlement, the date of public notice of commencement of theTender Offer, and other conditions and methods of purchase (excluding
matters stated in “(B) Conditions set forth in each item of Article 27-13,
Paragraph 4 of the Act and the details thereof” and “(C) Other matters” below)
as soon as these details are determined. It is planned that Mizuho Securities
Co., Ltd. will be appointed as the tender offer agent.
(B)

Conditions set forth in each item of Article 27-13, Paragraph 4 of the Act andthe details thereof
If the total number of Tendered Share Certificates, Etc. is less than theminimum number of shares to be purchased (22,491,400 shares), the Offeror
will not purchase any of the Tendered Share Certificates, Etc. If the total
number of the Tendered Share Certificates, Etc. is equal to or exceeds theminimum number of shares to be purchased (22,491,400 shares), the Offeror
will purchase all of the Tendered Share Certificates, Etc.

(C)

Other matters
This press release has been prepared for the purpose of informing the publicof the Tender Offer and has not been prepared for the purpose of soliciting anoffer to sell, or making an offer to purchase, any securities. If shareholders
wish to make an offer to sell their shares in the Tender Offer, they should firstread the Tender Offer Explanation Statement for the Tender Offer and offer
their shares or stock options for sale at their own discretion. This press release
neither constitutes, nor constitutes a part of, an offer to sell or purchase, or asolicitation of an offer to sell or purchase, any securities; neither this press67release (or a part thereof) nor its distribution may be interpreted to be the basisof any agreement in relation to the Tender Offer; and this press release may
not be relied on at the time of entering into any such agreement.
The shares of the Target Company, which is a company incorporated in Japan,
are subject to the Tender Offer. The Tender Offer will be conducted inaccordance with the procedures and information disclosure standards
prescribed in the laws of Japan, which may differ from the procedures andinformation disclosure standards in the U.S. In particular, Section 13(e) andSection 14(d) of the U.S. Securities Exchange Act of 1934 (as amended;hereinafter the same) and the rules prescribed thereunder do not apply to theTender Offer, and the Tender Offer does not conform to those procedures andstandards. Financial information contained in this press release has been
prepared in accordance with Japanese accounting standards, which may bematerially different from the generally accepted accounting standards in the
U.S. or other countries. In addition, as the Offeror is a legal entity establishedoutside the U.S. and all or some of its officers are non-U.S. residents, it may
become difficult to exercise rights or requests which would be claimed under
U.S. securities laws. Furthermore, it may not be possible to commence legal
proceedings against the legal entity established outside the U.S. and its
officers in a non-U.S. court for violations of U.S. securities laws. Furthermore,
U.S. courts may not necessarily have jurisdiction over legal entities and theirrespective subsidiaries and affiliates outside the U.S.
Unless otherwise specified, all procedures relating to the Tender Offer are to
be conducted entirely in the Japanese language. If all or any part of adocument relating to the Tender Offer is prepared in the English language andthere is any inconsistency between the English-language documentation and
the Japanese-language documentation, the Japanese-language documentation
will prevail.
This press release includes statements that fall under a “forward-looking
statement” defined in Section 27A of the U.S. Securities Act of 1933 (asamended) and Section 21E of the U.S. Securities Exchange Act of 1934. Dueto the known and unknown risks and uncertainties, the actual results might
differ significantly from the statements that are implicitly or explicitly
forward-looking. The Offeror and its affiliates do not guarantee that the events
portrayed in such implicit and explicit forward-looking statements willmaterialize. The “forward-looking statements” in this press release wereprepared based on the information obtained by the Offeror as of the datehereof, and unless required by law, the Offeror and its affiliates are notobligated to amend or revise such forward-looking statements to reflect future
matters and situations.
The financial advisors to JICC, the JICC Alliance, the Offeror, and the Target
Company as well as the tender offer agent (including their respective
affiliates) may, within their ordinary course of business, engage during theTender Offer Period in the purchase of, or an arrangement to purchase, Target
Company Shares for their own account or for their customers’ accounts
outside the Tender Offer in accordance with Rule 14e-5(b) of the U.S.
68

Securities Exchange Act of 1934, to the extent permitted under Japanese
securities regulations and other applicable laws and regulations. Such
purchases, etc. may be made at the market price through market transactions
or at a price determined by negotiation outside of the market. In the event that
information regarding such purchases, etc. is disclosed in Japan, suchinformation will also be disclosed in a similar manner in the U.S.
If a right to request the purchase of shares less than one unit is exercised byshareholders in accordance with the Companies Act, the Target Company may
purchase its own shares less than one unit during the Tender Offer Period in
accordance with procedures required by laws and regulations.
3.

Post-tender offer policy, etc. and future outlook
For the policy, etc. after the Tender Offer, please refer to the section above titled “(iv)Management policy after the Tender Offer” under “(2) Background, purpose, anddecision-making process leading to the decision to conduct the Tender Offer, andmanagement policy following the Tender Offer” of “1. Purpose of the Tender Offer.”

4.

Other matters(1)

Agreements between the Offeror and the Target Company or its officers, and thecontents thereof(A) Expression of Support for the Tender Offer
According to the Target Company’s Press Release, at the board of directors
meeting of the Target Company held today, a resolution was adopted that if
the Tender Offer is commenced, the position of the Target Company as ofDecember 12, 2023 is that it will express an opinion in support of the Tender
Offer and recommend that the Target Company’s shareholders tender theirshares in the Tender Offer.
For details of the decision-making process of the Target Company’s board of
directors, please refer to “(E) Unanimous approval of all non-interested
directors of the Target Company” in “(3) Measures to ensure the fairness of
the Tender Offer Price and avoid conflicts of interest, and other measures toensure the fairness of the Tender Offer” under “1. Purpose of the Tender Offer”
above.
(B)

Memorandum of Understanding Regarding Tender Offer
Please refer to “(6) Matters relating to material agreements regarding theTender Offer” in “1. Purpose of the Tender Offer” above.

(2)

Other information considered necessary for investors to decide whether to tendertheir shares in the tender offer
Release of “Summary of Consolidated Financial Results for the Three Months
Ended September 30, 2023 (Based on Japanese GAAP)”
69

On October 26, 2023, the Target Company released the Target Company’s
Financial Results for the Second Quarter. The summary of the Target
Company’s Financial Results for the Second Quarter based on that release is
as follows. The content of those financial results has not been reviewed by anaudit corporation under the provisions of Article 193-2, Paragraph 1 of theAct. The outline below is a partial excerpt of the information released by theTarget Company, and for details, please refer to the release concerned.
(a)Profits and losses (consolidated)
Fiscal Year

Sales
Cost of sales
Selling, general, and administrative
expenses
Operating income
Ordinary income
Quarterly profit attributable to theshareholders of the parent company(b)

Fiscal Year Ended March 31, 2024
(Second Quarter of FY 2024)
105,109 million yen
86,639 million yen
6,998 million yen
11,470 million yen
14,073 million yen
9,780 million yen

Profits and losses per share (consolidated)
Fiscal Year Ended March 31, 2024 (Second
Quarter of FY 2023)

Fiscal Year
Quarterly earnings per share
attributable to the shareholdersof the parent company
Dividends per share

72.39 yen
25.00 yen

JICC’s financial advisor is BofA Securities, Inc., and JICC’s legal advisors are Mori
Hamada & Matsumoto and Davis Polk & Wardwell LLP.

70