March 18, 2024
Japan Investment Corporation
JIC Capital, Ltd.
Announcement Regarding Commencement of Tender Offer
for JSR Corporation (Securities Code: 4185)

This is to announce the "Announcement Regarding Commencement of Tender Offer for JSR Corporation(Securities Code: 4185)" by JICC-02, Ltd. (“JICC-02”) attached hereto today. All of the issued shares of
JICC-02 are held by JIC PEF1 Limited Partnership and JIC PEFJ1 Limited Partnership both managed by
JICC.
End

(Attachment)“Announcement Regarding Commencement of Tender Offer for JSR Corporation (Securities Code: 4185)”

Press Contact
Japan Investment Corporation and JIC Capital, Ltd.
Email: press@j-ic.co.jp
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/

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[Translation]
March 18, 2024
Company Name:
Representative:

JICC-02, Ltd.
Osamu Itabashi, Representative Director

Announcement Regarding Commencement of Tender Offer
for JSR Corporation (Securities Code: 4185)
As announced in the “Announcement Regarding Planned Commencement of Tender Offer for
JSR Corporation (Securities Code: 4185)” dated June 26, 2023 (as amended; the “Offeror’s
Press Release of June 26, 2023”), on June 26, 2023, JICC-02, Ltd. (the “Offeror”) decided toacquire the share certificates, etc. of JSR Corporation (Securities Code: 4185, Prime Market of
the Tokyo Stock Exchange, Inc. (the “Tokyo Stock Exchange”); that company, the “Target
Company”) through a tender offer (the “Tender Offer”) under the Financial Instruments andExchange Act (Act No. 25 of 1948, as amended; the “Act”).
Because the procedures and steps required under domestic and foreign competition laws andforeign investment control laws and regulations would take time to complete, the Offeror
planned 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 theTender Offer 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”) are satisfied (or waived (Note 2) at the discretion of the Offeror) and(ii) separately notified to the Target Company in advance by the Offeror. The Offeror aimed tocommence the Tender Offer on or around late December 2023 and has been conducting theprocedures and steps required under domestic and foreign competition law and foreign
investment control laws and regulations for the purpose of implementing the Tender Offer.
However, as announced in the “Announcement Concerning Progress of the Tender Offer for the
Shares of JSR Corporation (Securities Code: 4185)” (the “Offeror’s Press Release of December
19, 2023”), the procedures and steps required under Chinese competition law had not been
completed as of that date due to the time required for such procedures and steps in China. A
prior notification regarding the acquisition of the common shares in the Target Company (the“Target Company Shares”) by the Offeror through the Tender Offer (the “Share Acquisition”)
was submitted to the State Administration for Market Supervision of the People’s Republic ofChina on September 14, 2023 (local time). However, because the threshold for requiring a priornotification under the Anti-Monopoly Law of the People’s Republic of China was revised
upward on January 22, 2024, the Share Acquisition no longer requires the submission of a priornotification. Thus, based on the fact that the Offeror filed an application to withdraw the priornotification regarding the Share Acquisition on February 19, 2024 (local time) and suchapplication to withdraw the prior notification was accepted as of February 19, 2024 (local time),
the Offeror has now confirmed that all of the Tender Offer Conditions Precedent have beensatisfied or are certain to be satisfied by March 19, 2024; therefore, the Offeror has determinedthat it is now possible to conduct the Tender Offer, and has decided to commence the Tender
Offer from March 19, 2024.
Note 1:The Tender Offer Conditions Precedent are as follows: (i) all clearances (Note 3)
have been obtained; (ii) the board of directors of the Target Company has, at the1time of announcement of the Tender Offer and at the time of commencement of theTender Offer, adopted a resolution with the unanimous approval of all directors to
the effect that, if the Tender Offer commences, it will express an opinion in supportof the Tender Offer and that it will recommend that the Target Company’s
shareholders and the Stock Acquisition Right Holders (as defined in “(1) Summaryof the Tender Offer” in “1. Purpose of the Tender Offer” below) tender their sharesand stock acquisition rights, respectively, in the Tender Offer, and that the holders
of ADRs (as defined in “(iii) Depositary receipts for share certificates, etc.” in “(3)Price of tender offer” under “2. Outline of the Tender Offer” below; hereinafter thesame) tender their shares in the Tender Offer upon withdrawing the Target Company
Shares pertaining to the ADSs (as defined in “(iii) Depositary receipts for sharecertificates, etc.” in “(3) Price of tender offer” under “2. Outline of the Tender Offer”
below; hereinafter the same) represented by those ADRs in advance (the“Supporting Opinion”), such resolution has been published, and the Supporting
Opinion has not been changed or withdrawn; (iii) the Special Committee (as definedin “(a) Background to the establishment of the review system” in “(iii) Decisionmaking 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” under “1. Purpose of the Tender Offer” below;
hereinafter the same) established in connection with the Tender Offer has, at thetime of announcement of the Tender Offer and at the time of commencement of theTender Offer, reported to the board of directors of the Target Company with theunanimous approval of all members of the Special Committee that it is appropriate
for the board of directors of the Target Company to express the Supporting Opinion
and the report has not been changed or withdrawn; (iv) (a) there is no judgment by
any governmental agency that restricts or prohibits the Transactions (as defined in“(1) Summary of the Tender Offer” in “1. Purpose of the Tender Offer” below;
hereinafter the same) and (b) no petition, action, or proceeding is pending before
any governmental agency that seeks to restrict or prohibit the Transactions; (v) the
Target Company has performed and complied with, in all material respects, allobligations under the Tender Offer Agreement (Note 4) that are required to be
performed and complied with by it; (vi) all of the representations and warranties of
the Target Company (Note 5) are true and correct in all material respects; (vii) there
is no unpublished material fact regarding the Target Company and the Target
Company has provided a document confirming this matter to the Offeror; (viii) nomaterial adverse effect has been identified or has occurred since the date of
execution of the Tender Offer Agreement; (ix) no exemption event (Note 6) has
occurred; (x) if the Tender Offer has commenced on or after the date of executionof the Tender Offer Agreement, no circumstances have arisen in the Target
Company that would allow the withdrawal of the Tender Offer pursuant to theprovisions of the proviso of Article 27-11, Paragraph 1 of the Act (except in cases
where such circumstances have been resolved by the day preceding the Tender
Offer Commencement Date without any adverse effect on the overall business,financial condition, assets, liabilities, operating results, or cash flow of the Target
Company Group (as defined in “(i) The Target Company’s business environment,etc.” in “(2) Background, purpose, and decision-making process leading to thedecision to conduct the Tender Offer, and management policy following the Tender
Offer” under “1. Purpose of the Tender Offer” below) and it is reasonably expectedthat such circumstances are not likely to arise again); and (xi) it is expected to be
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Note 2:
Note 3:Note 4:Note 5:Note 6:1.

reasonably certain that the balance in the deposit accounts of the Target Company
and its subsidiaries as of the end of the expiration date of the purchase period of theTender Offer (the “Tender Offer Period”) is at least a total of 74 billion yen. Pleaserefer to “(6) Matters relating to material agreements regarding the Tender Offer” in“1. Purpose of the Tender Offer” below for details of the Tender Offer Agreement.
The Tender Offer Agreement stipulates that any or all of the Tender Offer
Conditions Precedent may be waived at the discretion of the Offeror.
“Clearance” means, individually or collectively, with respect to filings undercompetition laws and regulations and investment control laws and other procedureswith governmental agencies that the Offeror reasonably determines to be necessaryor desirable for the implementation of the Transactions, (i) if there is a waiting
period under those laws and regulations, the expiration of the waiting period(including any extended period if the waiting period is extended by thegovernmental agency having jurisdiction over such procedures) and (ii) if it isnecessary to obtain the judgment of a governmental agency, the obtainment of thejudgment from such governmental agency.
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 Target
Company’s obligations under the Tender Offer 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 the Target Company under the Tender Offer Agreement.
“Exemption event” means, with regard to the financial institution that will become
the lender in the borrowings (including mezzanine borrowings or capital
contributions) by the Offeror or its parent company for the purpose of financing theTransactions, (i) any natural disaster, war, or outbreak of terrorism, (ii) any
breakdown or failure of electric, communication or various clearing systems, (iii)any event where, in the Tokyo Interbank Market, a loan of yen funds cannot be
executed, and (iv) any other event that is similar to (i) through (iii) above for any
reason not attributable to the financial institution for which the financial institution
makes a determination that it is objectively and reasonably impossible to conduct
the financing due to that event.

Purpose of the Tender Offer(1)

Summary of the Tender Offer
The Offeror is a stock company (kabushiki kaisha) established on June 15, 2023
and whose business primarily consists of controlling and managing the businessactivities of the Target Company through the acquisition and holding of the sharecertificates, etc. of the Target Company after the completion of the Tender Offer. Asof that date, JIC Capital, Ltd. (“JICC”), which is a wholly-owned subsidiary ofJapan Investment Corporation (“JIC”), held all of the issued shares of the Offeror.
As of today, all of the issued shares of the Offeror are held by JIC PEF1 Limited
Partnership and JIC PEFJ1 Limited Partnership (collectively, the “JICC Funds”)
both managed by JICC. In addition, during the period from the completion of theTender Offer to the time of settlement of the Tender Offer, the Offeror willcommence procedures for a capital contribution by a third-party allotment ofcommon shares through which shares are allotted by the Offeror to the JICC Funds(that capital contribution, the “Contribution”) and procedures for a capital increase3

by a third-party allotment of preferred shares (non-voting shares) through whichshares are allotted to Mizuho Bank, Ltd. (“Mizuho Bank”) and Development Bankof Japan Inc. (“DBJ”; that capital increase, the “Capital Increase by Third-Party
Allotment”) for the purpose of providing for the funds necessary to execute theTransactions. JIC, JICC, and the Offeror do not hold any Target Company Shares
as of today.
JICC is a wholly-owned subsidiary of JIC, which is a corporation established togenerate a virtuous cycle of risk capital to support next-generation industries inJapan. To achieve this vision, JIC promotes open innovation (Note 1) as a means ofsupporting the growth and enhancing the competitiveness of businesses. JIC
approaches these challenges by stimulating private sector investments through theprovision of funds while fostering the development of investment professionals.
JICC aims to achieve both a financial return and the policy objectives of promoting
business portfolio transformation to enhance the international competitiveness ofJapanese industries, creating new businesses and industries to realize Society 5.0(Note 2), establishing next-generation social infrastructure to promote Digital
Transformation (DX) (Note 3), solving social issues, and serving as a catalyst for
private sector investment through the supply of large-scale, long-term, neutral risk
capital.
Note 1: “Open innovation” refers to the intentional and proactive utilization of theflow of internal and external resources, such as technologies and ideas, inand out of the organization to promote internal innovation and thendeploying the resulting internal innovations outside the organization toincrease market opportunities.
Note 2: “Society 5.0” was proposed in the 5th Science and Technology Basic Planapproved by the Cabinet on January 22, 2016 as a future society that Japan
should aspire to. It refers to a human-centered society that balances
economic advancement with the resolution of social problems by a systemthat highly integrates cyberspace (virtual space) and physical space (realspace).
Note 3: “Digital Transformation (DX)” refers to, in the case of business enterprises,
the response to rapid changes in the business environment and reforms to
a company’s products, services, and business model in response tocustomer and social needs by utilizing data and digital technology. At thesame time, it involves the implementation of reforms in the business
operation itself, the organization, business processes, corporate culture andclimate, in order to establish a competitive advantage.
Since its establishment in September 2020, JICC has studied investment
opportunities as a fund responsible for buyout investments (Note 4) and large
growth investments (Note 5) within the JIC Group (collectively referring to JIC andits subsidiaries and affiliates). Specifically, as announced in August 2022, JICC
plans to acquire 80% of the voting stock of the new combined company in thebusiness 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 of overseas manufactured aluminum foils,
but it is believed that through this investment, it will be possible to streamline the
manufacturing structure in the short term, thereby securing a stable supply capacity4matching demand for further supply of aluminum foil (including lithium-ion batteryfoil), which will in turn support all industries in Japan. Through the planning of a
growth strategy and enhancing facilities in the medium term, JICC’s aim is torealize 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 tofurther enhance the presence and corporate value of Japan’s aluminum foil industry.
In addition to this, JICC has announced capital participation in Hitachi Astemo, Ltd.
in March 2023. Through JICC’s capital participation, JICC will utilize its extensive
track record of investment and support, including in the automotive industry, as wellas 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 4: “Buyout investment” refers to an investment strategy aimed at reforming
industrial structures and strengthening international competitivenessthrough reorganization and integration of domestic and foreign companies.
Note 5: “Large growth investment” refers to an investment strategy aimed atstrengthening the international competitiveness of a company by investingin domestic and foreign high-growth companies.
Furthermore, several members have joined JICC with investment experience atInnovative Network Corporation Japan (“INCJ”), in which JIC owns all shares andwhich 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 in adjacent fields, domestic
industry reorganization projects, as well as large-scale and complex projects asmentioned above.
As an example of investment in the digital solutions business 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 worldleading 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 the international competitiveness of Japan’s
semiconductor industry. Since INCJ made that investment, Renesas has establishedgovernance under a new shareholder structure while executing comprehensive
structural reforms encompassing production, operation, and talent management,
enabling the company to transform into a profit making entity. Furthermore, since2017, 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.
As announced in the Offeror’s Press Release of June 26, 2023, on June 26, 2023,
the Offeror entered into a tender offer agreement with the Target Company (the“Tender Offer Agreement”; for details of the Tender Offer Agreement, please referto “(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
5(excluding the treasury shares held by the Target Company; hereinafter the same),
the Stock Acquisition Rights (the “Stock Acquisition Rights” and the name of eachof the Stock Acquisition Rights are defined in “(ii) Stock acquisition rights” in “(3)Price of tender offer” under “2. Outline of the Tender Offer” below; hereinafter thesame), and the ADRs on the Tender Offer Commencement Date, as part of the seriesof transactions aimed at making the Offeror the sole shareholder of the Target
Company and taking the Target Company Shares listed on the Prime Market ofTokyo Stock Exchange private (the “Transactions”) on the condition that the Tender
Offer Conditions Precedent are satisfied or, at the discretion of the Offeror, waived.
The Offeror has been conducting the procedures and steps required under domestic
and foreign competition law and foreign investment control laws and regulations
for the purpose of implementing the Tender Offer. However, as announced in theOfferor’s Press Release of December 19, 2023, the procedures and steps required
under Chinese competition law had not been completed as of that date due to thetime required for such procedures and steps in China. The prior notification
regarding the Share Acquisition was submitted to the State Administration forMarket Supervision of the People’s Republic of China on September 14, 2023 (localtime). However, because the threshold for requiring a prior notification under the
Anti-Monopoly Law of the People’s Republic of China was revised upward on
January 22, 2024, the Share Acquisition no longer requires the submission of a priornotification. Thus, based on the fact that the Offeror filed an application to withdraw
the prior notification regarding the Share Acquisition on February 19, 2024 (localtime) and such application to withdraw the prior notification was accepted as ofFebruary 19, 2024 (local time), the Offeror has now confirmed that all of the Tender
Offer Conditions Precedent have been satisfied or are certain to be satisfied byMarch 19, 2024; therefore, the Offeror has determined that it is now possible toconduct the Tender Offer, and has decided to commence the Tender Offer fromMarch 19, 2024. There are no changes to the terms and conditions of the Tender
Offer as announced in the Offeror’s Press Release of June 26, 2023.
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 (138,507,100 shares, ownership percentage (Note 6): 66.67%), thenthe Offeror will not purchase any of the Tendered Share Certificates, Etc. Since thepurpose is to acquire all of the Target Company Shares, the Stock Acquisition
Rights, and the ADRs as part of the Transactions, the minimum number has been
set to ensure that the Transactions will be carried out given that a special resolution
in the shareholders’ meeting as provided for in Article 309, Paragraph 2 of theCompanies Act (Act No. 86 of 2005, as amended, the “Companies Act”) is requiredfor carrying out the procedures for the Share Consolidation (as defined in “(ii) Share
Consolidation” in “(4) Policy for organizational restructuring after the Tender Offer(matters relating to a so-called “Two-Step Acquisition”)” below) as described in“(4) Policy for organizational restructuring after the Tender Offer (matters relating
to a so-called “Two-Step Acquisition”)” below. However, because the purpose of
the Transactions is to acquire all of the Target Company Shares, the Stock
Acquisition Rights, and the ADRs, the Offeror has not set a limit on the maximum
number of shares to be purchased, and if the total number of Tendered Share
Certificates, Etc. is equal to or greater than the minimum number of the shares tobe purchased (138,507,100 shares), then the Offeror will purchase all of the6Tendered Share Certificates, Etc.
Note 6: “Ownership percentage” means the percentage (rounded to two decimal
places) of the number of shares (207,760,664 shares) (the “Total Numberof Shares After Considering Potential Shares”) equal to the sum(208,552,300 shares) of the total number of issued shares of the Target
Company as of December 31, 2023 (208,400,000 shares) as stated in the“Quarterly Securities Report for the First Nine Months of the 79th Fiscal
Year” submitted by the Target Company on February 13, 2024 (the “Target
Company’s Quarterly Securities Report for the First Nine Months”) and(i) the Target Company Shares (3,700 shares) underlying the First Stock
Acquisition Rights (37 stock acquisition rights), (ii) the Target Company
Shares (2,300 shares) underlying the Stock Acquisition Rights for 2006
(for Directors) (23 stock acquisition rights), (iii) the Target Company
Shares (800 shares) underlying the Stock Acquisition Rights for 2006 (forOfficers) (8 stock acquisition rights), (iv) the Target Company Shares(4,600 shares) underlying the Stock Acquisition Rights for 2007 (46 stockacquisition rights), (v) the Target Company Shares (9,600 shares)
underlying the Stock Acquisition Rights for 2008 (96 stock acquisitionrights), (vi) the Target Company Shares (18,400 shares) underlying the
Stock Acquisition Rights for 2009 (184 stock acquisition rights), (vii) the
Target Company Shares (22,900 shares) underlying the Stock Acquisition
Rights for 2010 (229 stock acquisition rights), (viii) the Target Company
Shares (32,200 shares) underlying the Stock Acquisition Rights for 2011
(322 stock acquisition rights), (ix) the Target Company Shares (38,200
shares) underlying the Stock Acquisition Rights for 2012 (382 stockacquisition rights), (x) the Target Company Shares (9,000 shares)
underlying the Stock Acquisition Rights for 2013 (90 stock acquisitionrights), and (xi) the Target Company Shares (10,600 shares) underlying the
Stock Acquisition Rights for 2014 (106 stock acquisition rights), in eachcase remaining as of February 29, 2024 and as reported by the Target
Company, less the treasury shares (791,636 shares) owned by the Target
Company as of December 31, 2023 as stated in the “Consolidated
Financial Results for the First Nine Months of the Fiscal Year Ending
March 31, 2024 (under IFRS)” released by the Target Company on
February 5, 2024 (the “Target Company’s Financial Results for the First
Nine Months”). This applies hereinafter in the calculation of the ownership
percentage.
If the Tender Offer has been successfully completed, but the Offeror is unable toacquire all of the Target Company Shares, the Stock Acquisition Rights, and the
ADRs in the Tender Offer, then the Offeror intends to carry out the series ofprocedures described in “(4) Policy for organizational restructuring after the Tender
Offer (matters relating to a so-called “Two-Step Acquisition”)” below (the“Squeeze-Out Procedures”) in order for the Offeror to make the Target Company awholly-owned subsidiary of the Offeror after the successful Tender Offer.
If the Tender Offer is successfully completed, the Offeror plans to procure funds
through borrowing from Mizuho Bank and DBJ (the “Bank Loan”) in addition to
the Contribution and the Capital Increase by Third-Party Allotment. The Offeror
7

intends to apply these funds to the settlement of the Tender Offer and the like. The
details of the loan terms of the Bank Loan will be specified in the loan agreement
for the Bank Loan upon separate consultation with Mizuho Bank and DBJ. 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, the assets heldby the Target Company and its consolidated subsidiaries will be provided as
security after the Squeeze-Out Procedures are completed.
According to the “Announcement of Opinion in Support of the Planned
Commencement of Tender Offer for Shares, etc. of JSR Corporation by JICC-02,
Ltd. and Recommendation to Tender Shares” released by the Target Company on
June 26, 2023 (the “Target Company’s Press Release of June 26, 2023”), at theboard of directors meeting of the Target Company held on June 26, 2023, a
resolution was adopted to the effect that, if the Tender Offer commences, theposition of the Target Company as of June 26, 2023 is that it will express an opinion
in support of the Tender Offer and that it will recommend that the Target Company’s
shareholders and holders of Stock Acquisition Rights (the “Stock Acquisition Right
Holders”) tender their shares and stock acquisition rights, respectively, in theTender Offer, and that the holders of ADRs tender their shares in the Tender Offer
upon delivering their ADRs to the Depositary Banks (defined in “(iii) Depositary
receipts for share certificates, etc.” in “(3) Price of tender offer” under “2. Outlineof the Tender Offer” below, hereinafter the same) and withdrawing the Target
Company Shares represented by ADSs that are represented by those ADRs.
Furthermore, according to the “Announcement of Opinion in Support of the Tender
Offer for Shares, etc. of JSR Corporation by JICC-02, Ltd. and Recommendation
to Tender Shares” released by the Target Company on March 18, 2024 (the “Target
Company’s Press Release of March 18, 2024”; together with the Target Company’s
Press Release of June 26, 2023, the “Target Company’s Press Releases”), at theboard of directors meeting of the Target Company held on March 18, 2024, a
resolution was again adopted to the effect that the board of directors will express
an opinion in support of the Tender Offer and that it will recommend that the Target
Company’s shareholders and the Stock Acquisition Right Holders tender theirshares and stock acquisition rights, respectively, in the Tender Offer, and that theholders of ADRs tender their shares in the Tender Offer upon delivering their ADRs
to the Depositary Banks and withdrawing the Target Company Shares represented
by ADSs that are represented by those ADRs.
For the details of the resolution of the Target Company’s board of directors
meetings held on June 26, 2023 and March 18, 2024, please refer to the Target
Company’s Press Releases and “(iv) Approval of all directors who have no interestin the Target Company and no objection from all corporate auditors” in “(3)Measures to ensure the fairness of the Tender Offer Price and avoid conflicts ofinterest, 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
8

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 Releases, and explanations received from the Target Company.
(i)

The Target Company’s business environment, etc.
The Target Company was established as Japan Synthetic Rubber Co., Ltd. in
December 1957 under the Special Measures Law for the Synthetic Rubber
Manufacturing industry, which was funded by the government and privatecompanies for the purpose of nationalizing production of synthetic rubber,and has expanded and diversified its business in the semiconductor materials
industry and life science industry, which are the mainstay of the Target
Company’s growth strategy as of today. In October 1970, the Target
Company was listed on the Second Section of the Tokyo Stock Exchange andthe Osaka Securities Exchange, and in August 1971, it was re-listed on theFirst Section of the Tokyo Stock Exchange and the Osaka Securities
Exchange. Following the reorganization of the Tokyo Stock Exchange, theTarget Company is listed on the Prime Market of the Tokyo Stock Exchange
as of today. The Target Company became a purely private company following
the Law on the Abolition of the Special Measures Law Concerning the Japan
Synthetic Rubber Co., Ltd. in 1969.
Although the current global economy continues to be in an uncertain state dueto the changes in the international situation and geopolitical fluctuations suchas the growing tension in Ukraine, suppression of demand due to the spreadof price increases in various countries, and the impact of foreign exchange
rates due to interest rate policies in various countries, the Target Company
expects the business environment to be supported by the recovery of
economic activities due to the settlement of the pandemic of the COVID-19
infection, and favorable employment conditions and financial markets in theU.S.
Under these circumstances, although there has been a temporary adjustment
in operations in the semiconductor materials market in which the Target
Company is expanding its business, the semiconductor materials market is
expected to grow strongly as a business indispensable to society, supported
by demand from various electronics and information industries in response to
the progress of digitalization, with some surveys predicting growth at anannual rate of about 10% toward 2030. The Target Company believes that thebiopharmaceutical market will also remain strong due to the aging of society,the development of personalized medicine, and the increasing efficiency indeveloping medical products. In addition, the Target Company expects theautomotive market (being the main market for its plastics business) to recoverfrom the supply chain disruption caused by the spread of the COVID-19
disease and the tight supply and demand for semiconductor materials.
The Target Company’s corporate mission is “Materials Innovation: We create
value through materials to enrich society, people and the environment.” As aleading technology company always pursuing cutting-edge technological9innovation, the Target Company aims to continuously create corporate value
through efficient, transparent, and sound management and to become an
attractive company that is trusted by and satisfactory to all of its stakeholders.
Based on this fundamental policy, the Target Company has designated theDigital Solutions business and the Life Sciences business described below as
the Target Company’s core businesses, which are important for the future
development of society, have the potential for market growth, are highly
demanding in terms of technological innovation and in which the Target
Company Group will demonstrate its strengths, and the Target Company has
positioned the Digital Solutions business as “growth driver business” and theLife Sciences business as “high-growth, revenue-generating business.” The
Target Company intends to actively pursue R&D and business investment in
the Digital Solutions business and to reinvest the cash flow generated by theestablishment of a profitable basis in the Life Sciences business for further
business growth in order to become a corporate entity that is both resilient(Note 1) and sustainable (Note 2), even in a global economy that continues toface uncertainties.
(a)

Digital Solutions Business
The Digital Solutions business of the Target Company Group (whichrefers to the Target Company and its subsidiaries and affiliates;
hereinafter the same) provides semiconductor materials, display
materials, edge computing-related materials, and other products.

(b)Life Science Business
The Life Sciences business of the Target Company Group includes theprovision of bioprocess materials, diagnostic materials, and drug
discovery support services that cater to cutting-edge medical needs suchas biopharmaceuticals.

Note 1: “Resilience” refers to the ability to overcome and recover fromdifficulties and threats while adapting flexibly to them.
Note 2: “Sustainability” refers to the concept of striving to maintain thenatural environment, human society and other systems in goodcondition without losing their functions and systems over the longterm from the perspectives of the environment, society, and theeconomy.
Regarding the Digital Solutions business, with a focus on the semiconductormaterials sector, the Target Company’s goal is to maintain and expand its
share of the global market by placing greater emphasis on cutting-edge
processes, including EUV photoresists (Note 3) for the 3-nanometer
generation (Note 4) and beyond. Recent initiatives (such as making Inpria
Corporation, a global leader in the design, development and manufacture ofmetal-based photoresists (Note 5) for EUV lithography (Note 6), a whollyowned subsidiary, expanding the product portfolio of process materials andpackaging materials, constructing a new building for expanding production
capacity of cutting-edge lithography materials, including EUV resists, at theTarget Company’s main Yokkaichi facility, and establishing local
subsidiaries in Singapore and Taiwan to enhance marketing and customer
10

support capabilities) are in line with this management policy. Given thedesignation of semiconductors as a specified critical commodity under the
Economic Security Promotion Act, aimed at ensuring a stable supply, and thegovernment’s policy of mobilizing public and private sector investment todevelop and mass-produce next-generation semiconductor-related
technologies and establish design and manufacturing infrastructure in the late
2020s, the semiconductor materials market is expected to expand in the future.
The Target Company’s proactive stance aligns with this trend.
In addition, as competition to develop next-generation technologies insemiconductor manufacturing intensifies, semiconductor manufacturers andequipment manufacturers are expanding their corporate scale andstrengthening their bargaining power with semiconductor material
manufacturers. Under these circumstances, overseas semiconductor material
manufacturers are increasing their competitiveness in terms of funds, humanresources, and technology through large-scale mergers and acquisitions, andthe Target Company believes that domestic semiconductor material
manufacturers that have not yet been experienced sufficient merges andacquisitions must further strengthen their competitiveness. Furthermore, there
are semiconductor materials in which the Target Company still has a low
market share, such as process materials and packaging materials for 5G
technology, and there are also many semiconductor materials that the Target
Company has not yet entered the market even though high market growth isexpected. Therefore, in the semiconductor materials industry where there aremany promising domestic manufacturers, the Target Company believes,beyond research and development to maintain and expand the current
competitiveness advantage, it is necessary to strengthen its international
competitiveness through a bolder industry restructuring to gain a high market
share in a wide range of semiconductor materials lineup, to achieve
technological integration with other companies, and to enhance its resources
to obtain new human resources and technologies.
Note 3: “EUV photoresist” refers to a photoresist, which reacts to EUV(Note 7).
Note 4: “3-nanometer generation” refers to a genericsemiconductors in the 3-nanometer process rule class.

term

for

Note 5: “Photoresist” refers to a liquid chemical agent used in thesemiconductor wiring manufacturing process that reacts to light andwithstands subsequent surface processing.
Note 6: “EUV lithography” refers to the method of manufacturing
semiconductors by transferring circuit patterns onto a substrate using
EUV light when manufacturing semiconductors.
Note 7: “EUV” refers to Extreme Ultraviolet, being ultraviolet rays withshort wavelengths.
Regarding the Life Sciences business, the Target Company’s goal is toprovide high-quality services and products to improve people’s health andensure that those suffering from various diseases around the world receive
better and faster treatment. Specifically, the Target Company will focus on
11

CDMO business (Note 8) by KBI Biopharma, Inc. and Selexis SA, as well as
CRO business (Note 9) by Crown Bioscience International. Through the
optimization of the biopharmaceutical drug discovery process, including
improving development success rates, shortening development timelines, andreducing costs, the Target Company will expand its portfolio of new contracts
and competitive services. In addition, the Target Company will work towards
expanding its customer base through initiatives such as pipeline expansion,
enhancing productivity and investment efficiency, optimizing clinical trial
plans to deliver tailored treatments to specific patient populations,strengthening diagnostic reagents development at Medical & Biological
Laboratories Co., Ltd. and promoting collaboration among Digital
Transformation (DX) and other group companies. Through these efforts, theTarget Company aims to achieve business expansion as a unified group andfurther enhance profitability. KBI Biopharma, Inc. will fully operationalize
the Target Company’s new facilities in North Carolina, USA, and Geneva,
Switzerland. This will enable the Target Company to capture the growing
demand in the biopharmaceutical market and establish a stable businessfoundation. Furthermore, while the Target Company’s life science businessprimarily operates in advanced regions such as Europe and the United States,
the Target Company believes there is potential for market development andbusiness expansion in Asia, including China (being the world’s secondlargest healthcare spender (Note 10)), and Japan (being the fourth-largest
healthcare spender (Note 10)).
Note 8: “CDMO business” refers to contract
manufacturing organization of biologics.

development

andNote 9: “CRO business” refers to contract research organization ofpharmaceutical products.
Note 10:Source: GLOBAL NOTE, “World Healthcare Expenditures:
Rankings and Trends by Country” (https://www.globalnote.jp/post10286.html)

The plastics business is being developed through Techno-UMG Corporation,
which has been reorganized as a joint venture between the Target Company,
UBE Corporation and Mitsubishi Chemical Corporation. The Target
Company is working towards transforming Techno UMG Corporation into arobust organization and securing stable profits while operating with the goals
of expanding sales of strategic products, controlling fixed costs and capital
investment, and realizing integration synergies.
Considering the business environment surrounding the Target Company as
described above, the Target Company has been deliberating on a range ofmanagement strategies aimed at bolstering its corporate value. On this front,
the Target Company has been diligently examining capital policies andassessing potential partners as the Target Company strives to construct arobust organization that can readily adapt to any shifts in the businesslandscape.
(ii)

Background, purpose, and decision-making process leading to the Offeror’s
decision to conduct the Tender Offer12

As stated in “(1) Summary of the Tender Offer” above, 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, establishing next-generation social infrastructure to promote Digital
Transformation (DX), solving social issues, and serving as a catalyst for
private sector investment. JICC, which was established based on thisphilosophy, aims to conduct the Transactions for the main purposes of (a)enhancing the Target Company’s corporate value by making it a private entitythat is not limited by its current capital structure and is not affected by shortterm fluctuations in business performance, thus becoming a more resilient andsustainable entity and (b) providing an opportunity for industry
reorganization and acquisition of private funds to strengthen the international
competitiveness of the semiconductor materials industry in which the Target
Company operates.
As stated in “(i) The Target Company’s business environment, etc.” above,
the Target Company has examined various measures to enhance its corporate
value for the future, and considered that in order to achieve further growthand increased corporate value for the Target Company, it would be beneficial
to realize industry reorganization in the semiconductor materials industry.
Under these circumstances, in mid-November 2022, the Target Company
approached JICC regarding capital policies to resolve structural issues in thedomestic semiconductor materials industry, and JICC held meetings with theTarget Company in response to the approach. Through these meetings, theTarget Company and JICC came to the conclusion that, in order to resolve
structural issues in the domestic semiconductor materials industry and toachieve an increase in the corporate value of the Target Company over the
medium-to-long-term, it would be desirable to take the Target Company
Shares private and change the Target Company’s structure so that it can makemanagement decisions flexibly and promptly from a medium-to-long-term
perspective without being affected by short-term fluctuations in businessperformance, thereby promoting structural reforms and industry
reorganization. In late November 2022, JICC commenced discussions with
the Target Company regarding a series of transactions for the purpose of
taking the Target Company Shares private. Subsequently, JICC conducted
initial studies based on the outlook of the Target Company’s business andinformation on management policies and other similar matters provided by
the Target Company, and on February 22, 2023, JICC submitted a non-legallybinding letter of intent proposing to take the Target Company Shares private
through a tender offer for the Target Company Shares and squeeze-out
procedures in order to increase the Target Company’s corporate value from a
medium-to-long-term perspective (the “Initial Letter of Intent”).
The Target Company responded to JICC in relation to the Initial Letter ofIntent on March 9, 2023, allowing JICC to initiate due diligence. Also, in theTarget Company’s response, it was stated that the board of directors of the13

Target Company discussed the Initial Letter of Intent presented by JICC andapproved assigning the Special Committee to evaluate the proposal.
JICC conducted due diligence on the Target Company from mid-March 2023
to early May 2023 to develop a deeper understanding of the Target
Company’s businesses, management environment, growth strategies, andmanagement issues, as well as to confirm accounting, tax, legal, andenvironmental matters involving the Target Company. At the same time,through multiple discussions with the Target Company, JICC confirmed its
understanding that the Transactions are valuable opportunities to work with
the Target Company in maintaining the Target Company’s position as aworld-leading entity with even greater resilience and sustainability.
Furthermore, JICC strongly believes that as a government-affiliated fund thatis able to provide large-scale, long-term, neutral risk capital in the midst of anuncertain economic environment, JICC is the best partner for the Target
Company to promote initiatives that contribute to the enhancement ofcorporate value from a medium-to-long-term perspective without being
affected by short-term fluctuations in business performance. JICC believes
that, after the Transactions, it will be able to work together with the Target
Company to realize synergies including those described below.
•

JICC believes that its support in promoting business expansion andindustry reorganization, including with respect to the digital solutions
business centering on the semiconductor materials business, throughacquisitions by the Target Company, will further contribute to thesmooth promotion of the Target Company’s growth strategy.
Specifically, JICC anticipates that the Target Company will be able tomaximally utilize JICC’s support, etc. in the formulation of M&A
strategies, selection of targets, due diligence, contract negotiation,
financing, PMI, and governance structures.

•

By utilizing JICC’s network cultivated through the collection of
information and the exchange of opinions on overseas markets andpersonnel exchanges with domestic and foreign institutional investors
and private business operators, JICC believes that it will be able tosupport the planning and execution of global growth strategies,
including the recruitment of new global talent.

•

JICC will be able to assist the Target Company in developing a mediumto-long-term growth strategy, including financing, research anddevelopment, capital investment, and M&A based on a relatively long
investment period. By providing assistance in formulating growthstrategies and equity stories, collaborating with experts, and othersupport services, JICC will be able to assist in establishing a capital
policy that will best contribute to the continuous creation of corporate
value for the Target Company.

Based on the examinations above, JICC made a first proposal in writing to
the Target Company on June 1, 2023 to set the purchase price in the Tender
Offer (the “Tender Offer Price”) per Target Company Share at 4,200 yen
14(4,200 yen represents (i) a premium of 24.81% (rounded to two decimal
places; the same applies for calculations of premium rates hereinafter) on
3,365 yen, the closing price of the Target Company Shares on the Prime
Market of the Tokyo Stock Exchange as of May 31, 2023 (which was thebusiness day immediately preceding the submission date of the First Proposal(June 1, 2023)), (ii) a premium of 31.66% on 3,190 yen (rounded to thenearest whole yen; the same applies for calculations of simple average closing
prices hereinafter), the simple average closing price for the preceding onemonth period ending on that date, (iii) a premium of 34.27% on 3,128 yen,
the simple average closing price for the preceding three-month period endingon that date, and (iv) a premium of 39.67% on 3,007 yen, the simple averageclosing price for the preceding six-month period ending on that date), theTender Offer Price per Stock Acquisition Right (the “Stock Acquisition
Rights Tender Offer Price”) at 419,900 yen, and the Tender Offer Price pershare of ADSs represented by the ADRs at 4,200 yen (the “First Proposal”).
In response to the First Proposal by JICC, on June 5, 2023, the Target
Company requested JICC to increase the Tender Offer Price because theTender Offer Price in the First Proposal did not adequately reflect the fairvalue of the Target Company.
In response to the request from the Target Company, JICC made a second
proposal in writing to the Target Company on June 6, 2023 to set the Tender
Offer Price per Target Company Share at 4,285 yen (4,285 yen represents (i)a premium of 26.85% on 3,378 yen, the closing price of the Target Company
Shares on the Prime Market of the Tokyo Stock Exchange as of June 5, 2023
(which was the business day immediately preceding the proposal date of June
6, 2023), (ii) a premium of 33.16% on 3,218 yen, the simple average closing
price for the preceding one-month period ending on that date, (iii) a premiumof 36.42% on 3,141 yen, the simple average closing price for the preceding
three-month period ending on that date, and (iv) a premium of 41.98% on
3,018 yen, the simple average closing price for the preceding six-month
period ending on that date), the Stock Acquisition Rights Tender Offer Priceat 428,400 yen, and the Tender Offer Price per share of ADSs represented by
the ADRs at 4,285 yen in the Tender Offer (the “Second Proposal”). In
response to the Second Proposal by JICC, the Target Company requested
JICC to increase the Tender Offer Price again because the Tender Offer Pricein the Second Proposal still did not adequately reflect the fair value of theTarget Company as of June 8, 2023.
In response to the request from the Target Company, JICC made a third
proposal in writing to the Target Company on June 9, 2023 to set the Tender
Offer Price per Target Company Share at 4,340 yen (4,340 yen represents (i)a premium of 35.71% on 3,198 yen, the closing price of the Target Company
Shares on the Prime Market of the Tokyo Stock Exchange as of June 8, 2023
(which was the business day immediately preceding the proposal date of June
9, 2023), (ii) a premium of 34.12% on 3,236 yen, the simple average closing
price for the preceding one-month period ending on that date, (iii) a premiumof 37.82% on 3,149 yen, the simple average closing price for the preceding
three-month period ending on that date, and (iv) a premium of 43.33% on
15

3,028 yen, the simple average closing price for the preceding six-month
period ending on that date), the Stock Acquisition Rights Tender Offer Priceat 433,900 yen, and the Tender Offer Price per share of ADSs represented by
the ADRs at 4,340 yen in the Tender Offer (the “Third Proposal”). In responseto the Third Proposal by JICC, the Target Company requested JICC to holddiscussions between JICC and the Target Company regarding financial termswith respect to the Tender Offer Price in the Third Proposal as of June 9, 2023.
Based on the abovementioned request from the Target Company, on June 15,2023, JICC and the Target Company held discussions on the financial terms,
asked questions and answered about the background leading to the First
Proposal through the Third Proposal and exchanged opinions about matterssuch as the growth strategy and management issues of the Target Company.
After those discussions, JICC received another request from the Target
Company to increase the Tender Offer Price.
Based on the abovementioned request from the Target Company and thediscussions between JICC and the Target Company held on June 15, 2023,
JICC made a final proposal in writing to the Target Company on June 16,2023 to set the Tender Offer Price per Target Company Share at 4,350 yen(4,350 yen represents (i) a premium of 28.77% on 3,378 yen, the closing priceof the Target Company Shares on the Prime Market of the Tokyo Stock
Exchange as of June 15, 2023 (which was the business day immediately
preceding the proposal date of June 16, 2023), (ii) a premium of 32.06% on
3,294 yen, the simple average closing price for the preceding one-month
period ending on that date, (iii) a premium of 37.57% on 3,162 yen, the simple
average closing price for the preceding three-month period ending on thatdate, and (iv) a premium of 42.81% on 3,046 yen, the simple average closing
price for the preceding six-month period ending on that date), the Stock
Acquisition Rights Tender Offer Price at 434,900 yen, and the Tender Offer
Price per share of ADSs represented by the ADRs at 4,350 yen in the Tender
Offer (the “Final Proposal”). In response to the Final Proposal by JICC, theTarget Company informed JICC that the position of the Target Company asof June 19, 2023 was that it would accept the Tender Offer Price in the Final
Proposal on June 19, 2023.
Based on the abovementioned deliberations by JICC and discussions andnegotiations with the Target Company, JICC determined at a meeting of theinvestment committee held on June 19, 2023 to set the Tender Offer Price per
Target Company Share at 4,350 yen, the Stock Acquisition Rights Tender
Offer Price at 434,900 yen, and the Tender Offer Price per share of ADSs
represented by the ADRs at 4,350 yen. In addition, with respect to the termsof the Tender Offer other than the Tender Offer Price (the minimum numberof shares to be purchased and the Tender Offer Period), JICC made a proposalin accordance with the terms set forth in the Offeror’s Press Release of June
26, 2023, and in response, the Target Company informed JICC that theposition of the Target Company as of June 26, 2023 was that it would accept
the proposal.
16

The Offeror has been conducting the procedures and steps required underdomestic and foreign competition law and foreign investment control laws
and regulations for the purpose of implementing the Tender Offer. However,as announced in the Offeror’s Press Release of December 19, 2023, theprocedures and steps required under Chinese competition law had not been
completed as of that date due to the time required for such procedures andsteps in China. The prior notification regarding the Share Acquisition was
submitted to the State Administration for Market Supervision of the People’s
Republic of China on September 14, 2023 (local time). However, because thethreshold for requiring a prior notification under the Anti-Monopoly Law of
the People’s Republic of China was revised upward on January 22, 2024, theShare Acquisition no longer requires the submission of a prior notification.
Thus, based on the fact that the Offeror filed an application to withdraw theprior notification regarding the Share Acquisition on February 19, 2024 (localtime) and such application to withdraw the prior notification was accepted asof February 19, 2024 (local time), the Offeror has now confirmed that all of
the Tender Offer Conditions Precedent have been satisfied or are certain to
be satisfied by March 19, 2024; therefore, the Offeror has determined that it
is now possible to conduct the Tender Offer, and has decided on March 18,2024 to commence the Tender Offer from March 19, 2024.
(iii) Decision-making process and reasons of the Target Company to issue theopinion to support the Tender Offer(a)

Background to the establishment of the review system
As described in “(ii) Background, purpose, and decision-making
process leading to the Offeror’s decision to conduct the Tender Offer”
above, the Target Company has examined various measures to enhance
its corporate value for the future, and considered that in order to achieve
further growth and increased corporate value for the Target Company,
it would be beneficial to realize industry reorganization in thesemiconductor materials industry. Under these circumstances, in midNovember 2022, the Target Company approached JICC regarding
capital policies to resolve structural issues in the domestic
semiconductor materials industry, and JICC held meetings with theTarget Company in response to the approach. Through these meetings,
the Target Company and JICC came to the conclusion that, in order toresolve structural issues in the domestic semiconductor materials
industry and to achieve an increase in the corporate value of the Target
Company over the medium-to-long-term, it would be desirable to takethe Target Company Shares private and change the Target Company’s
structure so that it can make management decisions flexibly andpromptly from a medium-to-long-term perspective without being
affected by short-term fluctuations in business performance, thereby
promoting structural reforms and industry reorganization. In responseto that, JICC began discussions with the Target Company in earnest to
take the Target Company Shares private in late November 2022, in
17

order to ensure the fairness of the Tender Offer Price and the fairness of
the Transactions including the Tender Offer, the Target Company
retained Mizuho Securities Co., Ltd. (“Mizuho Securities”) in early
December 2022, and Mitsubishi UFJ Morgan Stanley Securities Co.,
Ltd. (“Mitsubishi UFJ Morgan Stanley Securities”) in late December
2022 as financial advisors and third-party valuers independent from theOfferor and the Target Company, as well as Anderson Mori &Tomotsune as a legal advisor independent from the Offeror and theTarget Company in late December 2022.
In response to receiving the Initial Letter of Intent from JICC on
February 22, 2023, the Target Company established the Special
Committee independent from the Offeror, the Target Company andsuccess or failure of the Transactions, consisting of four external
directors, aiming to ensure fairness, eliminate arbitrariness andpotential conflicts of interest, and secure the integrity of the decisionmaking process of the Target Company’s board of directors in relation
to the Transactions, including the Tender Offer (for further details on
the background, considerations, and assessment, please see “(i)Establishment of an Independent Special Committee at the Target
Company and receipt of the SC Report from the Special Committee” 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).
(b)

Process of examination and negotiation
After establishing the framework above, the Target Company engaged
in several discussions and negotiations with the Offeror regarding thefeasibility of the Tender Offer, based on the negotiation policies andinstructions, requests, and opinions at critical stages of the negotiations,which were confirmed in advance by the Special Committee.
Throughout such process, the Target Company sought advice from
Anderson Mori & Tomotsune, Mizuho Securities, and Mitsubishi UFJ
Morgan Stanley Securities.
Specifically, on June 1, 2023, the Target Company received from JICC
the First Proposal in writing to set the Tender Offer Price per Target
Company Share at 4,200 yen (4,200 yen represents (i) a premium of
24.81% on 3,365 yen, the closing price of the Target Company Shareson the Prime Market of the Tokyo Stock Exchange as of May 31, 2023
(which was the business day immediately preceding the submission
date of the First Proposal (June 1, 2023)), (ii) a premium of 31.66% on
3,190 yen, the simple average closing price for the preceding onemonth period ending on that date, (iii) a premium of 34.27% on 3,128
yen, the simple average closing price for the preceding three-month
period ending on that date, and (iv) a premium of 39.67% on 3,007 yen,
the simple average closing price for the preceding six-month period
ending on that date), the Stock Acquisition Right Tender Offer Price at419,900 yen, and the Tender Offer Price per share of ADSs represented
by the ADRs at 4,200 yen.
18

In response to the First Proposal by JICC, on June 5, 2023, the Target
Company requested JICC to increase the Tender Offer Price because
the Tender Offer Price in the First Proposal did not adequately reflect
the fair value of the Target Company. JICC made the Second Proposal
in writing to the Target Company on June 6, 2023 to set the Tender Offer
Price per Target Company Share at 4,285 yen (4,285 yen represents (i)a premium of 26.85% on 3,378 yen, the closing price of the Target
Company Shares on the Prime Market of the Tokyo Stock Exchange asof June 5, 2023 (which was the business day immediately preceding the
proposal date of June 6, 2023), (ii) a premium of 33.16% on 3,218 yen,
the simple average closing price for the preceding one-month period
ending on that date, (iii) a premium of 36.42% on 3,141 yen, the simple
average closing price for the preceding three-month period ending onthat date, and (iv) a premium of 41.98% on 3,018 yen, the simple
average closing price for the preceding six-month period ending on that
date), the Stock Acquisition Rights Tender Offer Price at 428,400 yen,and the Tender Offer Price per share of ADSs represented by the ADRs
at 4,285 yen in the Tender Offer. In response to the Second Proposal by
JICC, the Target Company requested JICC to increase the Tender Offer
Price again because the Tender Offer Price in the Second Proposal still
did not adequately reflect the fair value of the Target Company as ofJune 8, 2023. JICC made the Third Proposal in writing to the Target
Company on June 9, 2023 to set the Tender Offer Price per Target
Company Share at 4,340 yen (4,340 yen represents (i) a premium of
35.71% on 3,198 yen, the closing price of the Target Company Shareson the Prime Market of the Tokyo Stock Exchange as of June 8, 2023
(which was the business day immediately preceding the proposal dateof June 9, 2023), (ii) a premium of 34.12% on 3,236 yen, the simple
average closing price for the preceding one-month period ending on thatdate, (iii) a premium of 37.82% on 3,149 yen, the simple averageclosing price for the preceding three-month period ending on that date,and (iv) a premium of 43.33% on 3,028 yen, the simple average closing
price for the preceding six-month period ending on that date), the Stock
Acquisition Rights Tender Offer Price at 433,900 yen, and the Tender
Offer Price per share of ADSs represented by the ADRs at 4,340 yen in
the Tender Offer. In response to the Third Proposal by JICC, the Target
Company requested JICC to hold discussions between JICC and theTarget Company regarding financial terms with respect to the Tender
Offer Price in the Third Proposal as of June 9, 2023. Based on theabovementioned request from the Target Company, on June 15, 2023,
JICC and the Target Company held discussions on the financial terms,
asked questions and answered about the background leading to the First
Proposal through the Third Proposal and exchanged opinions about
matters such as the growth strategy and management issues of theTarget Company. JICC made the Final Proposal in writing to the Target
Company on June 16, 2023 to set the Tender Offer Price per Target
Company Share at 4,350 yen (4,350 yen represents (i) a premium of
28.77% on 3,378 yen, the closing price of the Target Company Shareson the Prime Market of the Tokyo Stock Exchange as of June 15, 2023
19

(which was the business day immediately preceding the proposal dateof June 16, 2023), (ii) a premium of 32.06% on 3,294 yen, the simple
average closing price for the preceding one-month period ending on thatdate, (iii) a premium of 37.57% on 3,162 yen, the simple averageclosing price for the preceding three-month period ending on that date,and (iv) a premium of 42.81% on 3,046 yen, the simple average closing
price for the preceding six-month period ending on that date), the Stock
Acquisition Rights Tender Offer Price at 434,900 yen, and the Tender
Offer Price per share of ADSs represented by the ADRs at 4,350 yen in
the Tender Offer. The Target Company informed JICC that the positionof the Target Company as of June 19, 2023 was that it would accept theTender Offer Price in the Final Proposal on June 19, 2023.
(c)

Decision
Based on the aforementioned process, on June 26, 2023, the Target
Company received the share valuation report dated June 26, 2023 from
Mizuho Securities (the “Share Valuation Report (Mizuho Securities)”)and the share valuation report dated June 26, 2023 from Mitsubishi UFJ
Morgan Stanley Securities (the “Share Valuation Report (Mitsubishi
UFJ Morgan Stanley Securities)”). The Target Company has thoroughly
reviewed and taken into consideration the content of such sharevaluation reports, as well as the legal advice provided by its legal
advisor, Anderson Mori & Tomotsune, regarding key considerations for
decision-making in relation to the Transactions, including the Tender
Offer. The Target Company has also given the utmost respect to thecontent of the response report submitted by the Special Committee (the“SC Report of June 26, 2023”) (see “(i) Establishment of an
Independent Special Committee at the Target Company and receipt of
the SC Report from the Special Committee” in “(3) Measures to ensure
the fairness of the Tender Offer Price and avoid conflicts of interest, andother measures to ensure the fairness of the Tender Offer” below for a
description of the contents of the SC Report of June 26, 2023). The
Target Company conducted careful discussions and assessments of theTransactions, considering its potential to enhance corporate value andthe reasonableness of the terms and conditions.
As a result, the Target Company has concluded that the Transactions
will contribute to the enhancement of its corporate value based on thefollowing considerations. Additionally, the Target Company has
determined that the terms and conditions of the Transactions arereasonable.
(A) Digital Solutions BusinessAs described in “(i) The Target Company’s business environment, etc.”
above, for the purpose of expanding the market and ensuring a stablesupply of semiconductors in Japan, the Target Company has madestrategic investments in its digital solutions business, with a focus on
the semiconductor materials sector. These investments include theacquisition of Inpria Corporation and the construction of a new building20

in Yokkaichi facility, etc.
On the other hand, in order to enjoy a further high market growth of thesemiconductor market in the future where pioneer advantage isimportant, the Target Company is required to have advanced
technological capabilities to steadily respond to “miniaturization” andthe “increasing complexity of the packaging process.” Specifically,
technological advancements are needed to address miniaturization(beyond 2 nanometers (Note 11)) in the front-end process (Note 12) andto handle the mounting of 3D packaging (Note 13) in the back-end
process (Note 14), among other requirements. Given the rapid pace oftechnological progress, active investment in advanced technologies isessential to maintain a consistently high level of technologicalcompetitiveness. Therefore, it is imperative to proactively invest in
cutting-edge technologies to sustain and enhance the Target Company’s
technological competitiveness.
In addition, as competition to develop next-generation technologies insemiconductor
manufacturing
intensifies,
semiconductor
manufacturers and equipment manufacturers are expanding theircorporate scale and strengthening their bargaining power withsemiconductor material manufacturers. In this situation, overseas
semiconductor material manufacturers are increasing theircompetitiveness in terms of funds, human resources, and technology
through large-scale mergers and acquisitions and the Target Company
believes that domestic semiconductor material manufacturers, whohave not yet engaged in mergers and acquisitions, must further
strengthen their competitiveness. Furthermore, the Target Company
still has a low market share in certain semiconductor materials, such asprocess materials, and packaging materials for 5G technology.
Additionally, there are many semiconductor materials in which theTarget Company has not yet entered the market, despite high market
growth potential. Therefore, in the field of semiconductor materials inwhich, it is believed that in order to maintain and expand the Target
Company’s current competitive advantage, not only research anddevelopment, and capital investment must be considered but also bolder
industry restructuring should be pursued. This will enable the Target
Company to acquire a high market share in a wide range ofsemiconductor materials lineup, achieve technological integration withother companies, and enhance its international competitiveness byenhancing its resources, including acquiring new talent and technology.
Note 11: “Beyond 2 nanometers” refers to next-generation
semiconductors with process rules of 2 nanometer class or lower.
Note 12: “Front-end process” refers to the process of processing andforming electronic circuits and electrodes on silicon wafers (Note
15).
Note 13: “3D packaging” refers to an advanced packaging
technology for semiconductor chips in which two or more layersof active electronic components are stacked and interconnectedvertically and horizontally to function as a single device.
21

Note 14: “Back-end process” refers to the process of cutting out thehundreds of chips made on silicon wafers one by one andfinishing them into the final product.
Note 15: “Silicon wafer” refers to a substrate made by thinly slicing
a single-crystal ingot of polycrystalline silicon, which is a blockof ultra-pure silicon, through crystal growth.
Where the Offeror is a fund established for the purpose of “promoting
business restructuring to enhance the international competitiveness ofdomestic industries through the supply of large-scale, long-term,
neutral money invested in high risk/high return,” etc., the Target
Company believes that the Offeror can be expected to make acommitment to the industry restructuring that the Target Company
aspires to. In fact, JICC, which owns all of the outstanding shares of theOfferor through the JICC Funds managed by JICC as of today, also
includes several members who have investment experience in INCJ,
which JIC owns all of its shares and has a similar mission to that of
JICC. INCJ has an extensive track record of investments for industry
restructuring, such as Renesas in the semiconductor industry, Sumika
Sekisui Films, Inc. and Kureha Battery Materials Japan Co. The Target
Company believes that by utilizing the Offeror’s beneficial resources
related to industry restructuring, it can expect to formulate and executebusiness strategies for the Target Company’s further growth.
Furthermore, with the Offeror (which has industry restructuring as its
objective) becoming the parent company of the Target Company, theTarget Company’s intention regarding industry restructuring will
become clear, and the effect of facilitating discussions with potential
industry restructuring partners can be anticipated. In addition, theTarget Company believes that the Offeror’s neutral position as agovernment-affiliated fund can be used to adjust opinions and interests
among stakeholders, and the absence of direct competition between theOfferor and the Target Company’s business can be expected to enhancethe effectiveness of the restructuring/integration and facilitate thesmooth implementation of the restructuring/integration by allowing theTarget Company to receive the benefits of compliance with procedures
related to domestic and foreign regulations. In addition, the Target
Company believes that by becoming a wholly-owned subsidiary of theOfferor through the Transactions, the Target Company can expect toreceive from the Offeror the support for funds raising necessary for
research and development, capital investment, and mergers andacquisitions. In addition, since the Offeror is a subsidiary of JIC, agovernment-affiliated fund, the Offeror invests with a relatively longer
investment period than that of a private equity fund, and the Target
Company believes that it will be able to consider and implement
flexible strategic investments, structural reforms and industry
restructuring from a medium-to-long-term perspective.
(B) Life Science BusinessIn the Life Sciences business, as described in “(i) The Target
Company’s business environment, etc.” above, the Target Company
22believes that it will be necessary to obtain new entrustments byaccelerating development process of biopharmaceutical, expand
competitive services, strengthen biopharmaceutical development andmanufacturing services, mainly in the CDMO and CRO businesses,
strengthen diagnostics development, and develop markets and expand
business in Europe, America and Asia.
Furthermore, the development of new modalities (Note 16) and theadoption of new analytical and manufacturing technologies require
extensive time for verification of their safety and efficacy. The Target
Company recognizes the importance of strengthening and expanding its
CDMO business, CRO business, and value delivery platform for theapproval and launch (Note 17) of diagnostics, while focusing on thelong-term development of products and services for new modalities
such as gene therapy (Note 18) and the microbiome (Note 19).
Additionally, the Target Company intends to proactively engage inactivities to acquire new foundation and technologies for a range ofprocesses. Furthermore, with regard to market development andbusiness expansion in Europe, America and Asia, the Target Company
believes that various activities such as capital investment, will benecessary.
Note 16: “Modality” refers to the type of therapeutic means such as
small molecule drugs, antibody drugs, nucleic acid drugs, celltherapy, gene cell therapy, and gene therapy.
Note 17: “Launch” refers to the bringing to market of a new drug thathas been approved after research and development.
Note 18:“Gene therapy” refers to methods of treating or preventing
diseases using genes.
Note 19: “Microbiome” refers to the totality of microorganisms(bacteria, fungi, viruses, etc.) that coexist in the human body.
Under such circumstances, the Target Company confirmed with theOfferor the Target Company’s thoughts on the above issues in the Life
Sciences business and was told that the Offeror intends to support theTarget Company’s intentions with respect to the Life Sciences business,and specifically, the Offeror intends to provide expertise in theformulation of growth strategies for establishment of profit base andsteady business expansion, and in the preparation of action plans basedon such strategies. Specifically, the Offeror intends to provide support
regarding the formulation of growth strategies for market expansion
and business expansion and the preparation of action plans based onsuch strategies. Therefore, the Target Company has come to believe that
the Target Company and the Offeror are in agreement in the directionthat the Target Company should aim for in the Life Sciences business,and that the Target Company can achieve growth in the Life Sciencesbusiness together with the Offeror.
During such review process, the Target Company also considered thepossibility of maintaining the Target Company’s listing. For the Target
Company’s further growth in the semiconductor materials business, as23

mentioned above, the Target Company believes it will be necessary to
make bold, medium-to-long-term strategic investments, structuralreforms and industry restructuring in a flexible manner, without beingbound by the short-term impact on business performance. In the Life
Sciences business, since the period from investment to return is
expected to be long, the Target Company believes that it will be
desirable to expand the business over the medium-to-long-term until theTarget Company secures enough profit potential to absorb short-term
performance fluctuations, without being obsessed with short-term
performance. If the Target Company maintains its listing in
implementing these measures, even bold strategic investments,
structural reforms, or industry restructuring that would improveshareholder value in the medium-to-long-term would be difficult toadopt as a strategy because they may damage shareholder value in the
short term due to decline in profit level or deterioration of cash flow,
etc. from the perspective of protecting general shareholder interests,
and the Target Company believes that it is expected to take time to makedecisions. Therefore, the Target Company has come to believe thatgoing private under a strategic partner would be an effective way for
the Target Company to flexibly and promptly promote each of theTarget Company’s initiatives to enhance competitiveness andprofitability in the medium-to-long-term.
In addition, each of the possible alternative scenarios, such as going
private under a PE fund or a business company, a third-party allotmentof new shares, or maintaining the status quo, have concerns as towhether any of the alternatives would achieve the Target Company’s
objective of taking the lead in restructuring the semiconductor materials
industry, when compared based on various factors, including the levelof understanding of the Target Company’s management strategy,whether or not and how effective it would be in facilitating discussions
with potential industry restructuring partners, the difficulty of obtaining
clearance for the industry restructuring from the regulatory authorities,
and the acceptability to the Target Company’s employees, suppliers,and other stakeholders, and from the perspective of such relative
comparisons, since there were concerns as to whether any of thepossible alternative scenarios could achieve the Target Company’s
objective of taking the lead in restructuring the semiconductor materials
industry, the Target Company has come to believe that the Transactions
is suitable for the Target Company’s objectives.
If the Target Company Shares become private, there is a possibility that
this may affect the Target Company’s social recognition that the Target
Company has enjoyed as a listed company, the Target Company’s
ability to secure excellent human resources through the high namerecognition, public trust and financing from capital markets. However,as described in “(iv) Management policy after the Tender Offer,” theTarget Company will establish a system in which the Target Company’s
officers and employees work together with the Offeror to enhance thelong-term corporate value, including the introduction of incentive plans
24

for officers and employees, and will continue to appropriately disclose
corporate information in consultation with the Offeror in accordancewith the policy of industry restructuring and future re-listing. The Target
Company believes that it is possible for the Target Company to maintainname recognition by taking these measures, and, considering the social
credibility and fund-raising capabilities, etc., as a whole obtained bybecoming a member of the JICC Group (which refers to JICC and its
subsidiaries and affiliates; the same applies hereinafter) by becoming apart of the JICC Group, the disadvantages associated with going private
are limited.
The Target Company has been conscious of measures to maximize
shareholder value over the medium-to-long-term through businessexpansion and to enhance value for other stakeholders (customers,
employees, suppliers, and society), which are important sources ofbusiness expansion. Even after taking the Target Company Shares
private, the Target Company aims to increase value not only forshareholders over the medium-to-long-term, but for all global
stakeholders, and focus on building a stronger business foundation andincreasing value.
Based on the above, the Target Company has concluded that theTransactions will contribute to the enhancement of the Target
Company’s corporate value and that going private is the best option for
the Target Company Shares.
Taking in light that, based on the results of the valuation of the Target
Company Shares in the Share Valuation Report (Mizuho Securities) andthe Share Valuation Report (Mitsubishi UFJ Morgan Stanley Securities),
as described in “(iii) Obtaining share valuation reports fromindependent financial advisors and third-party appraisers at the Target
Company” in “(3) Measures to ensure the fairness of the Tender Offer
Price and avoid conflicts of interest, and other measures to ensure thefairness of the Tender Offer” below, the Tender Offer Price of 4,350 yen
per share (i) exceeds the results of the calculations by Mizuho Securities
and Mitsubishi UFJ Morgan Stanley Securities using the market priceanalysis, (ii) is within the range of the results of the calculations byMizuho Securities using the comparable companies analysis andexceeds the range of the results of the calculations by Mitsubishi UFJ
Morgan Stanley Securities using the comparable companies analysis,(iii) is within the range of the results of the calculations by Mizuho
Securities and Mitsubishi UFJ Morgan Stanley Securities using thediscounted cash flow analysis (“DCF analysis”), (iv) is the price after
adding a premium of 34.51% to the closing price of the Target Company
Shares on the Tokyo Stock Exchange Prime Market on June 23, 2023
(being one business day immediately preceding the announcement dateof the scheduled commencement of the Tender Offer) of 3,234 yen,which equals (x) the price after adding a premium of 30.47% of thesimple average of the closing price of the shares for the past month of
3,334 yen, (y) the price after adding a premium of 36.66% of the simple
25

average of the closing price for the past three months of 3,183 yen and,(z) the price after adding a premium of 41.42% of the simple averageof the closing price for the past six months of 3,076 yen, in each case,until the date of that closing price, respectively, and such premium levelis comparable to other similar deals, (v) as of June 26, 2023, exceeds
3,795 yen (as of August 1, 2022), which is the highest price of the Target
Company’s shares for the last 52 weeks; and (vi) is the price aftersufficient negotiation with the Offeror with the Special Committee’s
substantial involvement upon the measures to ensure the fairness of theTender Offer as described in “(3) Measures to ensure the fairness of theTender Offer Price and avoid conflicts of interest, and other measures
to ensure the fairness of the Tender Offer,” a considerable increase wasmade from the price originally offered by the Offeror, and the Target
Company believes that the price was determined based on a process ofnegotiations aimed at making the terms of the Transactions as favorable
as possible for shareholders, the Target Company has determined that
the Tender Offer Price is reasonable and provides the shareholders of
the Target Company with a reasonable opportunity to sell the Target
Company Shares. The Stock Acquisition Rights Tender Offer Price is
expected to be calculated by multiplying the difference between theTender Offer Price and the exercise price per one Stock Acquisition
Right by the number of the Target Company Shares to be issued upon
exercise of each such Stock Acquisition Right (100 for each Stock
Acquisition Right), and, since the Tender Offer Price is expected to beevaluated as an amount that does not negate the appropriateness of theprice as stated above and the Stock Acquisition Rights Tender Offer
Price is calculated based on the difference between the Tender Offer
Price and the exercise price per one Stock Acquisition Right, the Target
Company has determined that the Stock Acquisition Rights Tender
Offer Price is also not at a level where the appropriateness of the pricecan be denied.
Based on the above, the board of directors of the Target Company helda meeting on June 26, 2023, and in reflection of the opinion of theTarget Company at that point in time made a resolution to express its
favorable opinion towards the Tender Offer. The board of directors also
recommended that the holders of the Target Company Shares and theStock Acquisition Rights Holders tender their shares and stockacquisition rights, respectively, in the Tender Offer and the holders of
the ADRs deliver the ADRs to the Depositary Banks in advance, receive
the Target Company Shares represented by the ADRs before tendering
for the Tender Offer and tender their shares, subject to its
commencement.
Further, during the aforementioned board of directors meeting, theTarget Company further resolved to make a request to the Special
Committee (which was established by the Target Company) when theTender Offer commences. The request entails the Special Committee
considering whether there have been any changes in the opinion
expressed in the SC Report of June 26, 2023. If the previous opinion
26

remains unchanged, the Target Company’s board of directors will
formally state its continued support of that opinion. Alternatively, if
there have been any revisions to the opinion, the Target Company’sboard of directors will articulate the updated stance. Additionally, theTarget Company decided that it will express its opinion on the Tender
Offer anew at the time the Tender Offer commences, based on the
aforementioned opinion provided by the Special Committee.
In addition, the prior notification regarding the Share Acquisition was
submitted by the Offeror to the State Administration for Market
Supervision of the People’s Republic of China on September 14, 2023
(local time). However, because the threshold for requiring a priornotification under the Anti-Monopoly Law of the People’s Republic ofChina was revised upward on January 22, 2024, the Share Acquisition
no longer requires the submission of a prior notification. Thus, basedon the fact that the Offeror filed an application to withdraw the priornotification regarding the Share Acquisition on February 19, 2024
(local time), the Offeror has now confirmed that the procedures andsteps required under domestic and foreign competition law and foreign
investment control laws and regulations have been completed and all of
the Tender Offer Conditions Precedent have been satisfied or are certain
to be satisfied by March 19, 2024; therefore, the Offeror has determinedthat it is now possible to conduct the Tender Offer, and notified theTarget Company on February 20, 2024 that it intends to commence theTender Offer from March 19, 2024. Consequently, on February 26,
2024, the Target Company requested the Special Committee to consider
whether or not the opinion in the SC Report of June 26, 2023 should bechanged, and to report to the board of directors of the Target Company
to that effect if the previous opinion should not be changed, or toprovide a revised opinion if it should be changed. The Special
Committee has verified the facts concerning whether any materialchange in the situation that could have an impact on the Transactions
has occurred on or after June 26, 2023, and as a result of considering
the above-mentioned advisory matters, it has confirmed that in light ofthe circumstances from June 26, 2023 through March 18, 2024, there
were no circumstances that would require a change in the contents of
the report that the Special Committee made to the board of directors of
the Target Company on June 26, 2023. On March 18, 2024, the Special
Committee submitted to the board of directors of the Target Company
the SC Report of March 18, 2024 to the effect that it believes that there
is no need to change the contents of the above-mentioned report basedon a unanimous resolution by all members of the Special Committee.
Based on this, the Target Company again carefully considered the termsof the Tender Offer based on the Target Company’s businessperformance and the environment surrounding the Transactions, while
respecting the contents of an additional SC Report (the “SC Report ofMarch 18, 2024”) submitted by the Special Committee to the maximum
possible extent; as a result, the Target Company concluded that as ofMarch 18, 2024, there are no factors to change its opinion regarding theTender Offer as of June 26, 2023.
27

Based on the above, at the board of directors meeting of the Target
Company held on March 18, 2024 a resolution was again adopted to theeffect that the board of directors will express an opinion in support of
the Tender Offer and that it will recommend that the Target Company’s
shareholders and the Stock Acquisition Right Holders tender theirshares and stock acquisition rights, respectively, in the Tender Offer,and that the holders of ADRs tender their shares in the Tender Offer
upon delivering their ADRs to the Depositary Banks and withdrawing
the Target Company Shares represented by ADSs that are represented
by those ADRs.
For details of each resolution of the board of directors above, pleaserefer to “(iv) Approval of all directors who have no interest in the Target
Company and no objection from all corporate auditors” 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.
(iv) Management policy after the Tender Offer
If the Tender Offer is successfully completed, the Offeror intends to make theTarget Company a wholly-owned subsidiary of the Offeror as stated in “(1)Summary of the Tender Offer” above. After the completion of the SqueezeOut Procedures, an absorption-type merger (the “Merger”) is scheduled to be
implemented between the Target Company and the Offeror, with the Offeror
as the surviving company. After the Merger takes effect, the JICC Funds,
Mizuho Bank, and DBJ will own shares of the Offeror.
After the Transactions are completed, JICC, together with the officers andemployees of the Target Company, will consider and promote growthstrategies, including inorganic initiatives through alliances with othercompanies and acquisitions of other companies (including industry
reorganization in the domestic semiconductor materials industry) utilizing
JICC’s network cultivated through the collection of information and theexchange of opinions on overseas markets and personnel exchanges withdomestic and foreign institutional investors and private business operators, its
financial capability, and its knowledge of the Target Company’s management
and industry environment, while leveraging the solid business foundation that
the Target Company has built thus far, with the aim of further improving theTarget Company’s business and enhancing its corporate value. 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.
The Offeror is considering appointing directors and corporate auditors of theTarget Company to be nominated by JICC after the Merger takes effect, but
the specific number and candidates for the directors and corporate auditors
have not yet been decided and will be decided upon consultation with theTarget Company.
28

The Offeror plans to introduce an incentive plan, such as stock options, forthe directors, corporate auditors, and employees of the Target Company. The
Offeror intends to establish an incentive scheme that properly incentivizes theofficers and employees of the Target Company to improve the long-term
corporate value of the Target Company.
(3)

Measures to ensure the fairness of the Tender Offer Price and avoid conflicts ofinterest, and other measures to ensure the fairness of the Tender Offer
The Tender Offer is not an MBO (meaning (i) a tender offer where the Offeror is adirector or officer of the Target Company or (ii) a tender offer where the Offeror
conducts the tender offer at the request of the directors or officers of the Target
Company and the Offeror shares its benefits with the directors or officers of theTarget Company) or a tender offer that falls under any of the “Significant
Transactions, etc. with Controlling Shareholder” set forth in the Code of Corporate
Conduct of the Tokyo Stock Exchange. However, considering that the Offeror
intends to take the Target Company Shares private through the Transactions
including the Tender Offer, the Offeror and the Target Company have taken thefollowing measures as measures to ensure the fairness of the Tender Offer Price andto avoid conflicts of interest, taking into account the impact on the shareholders of
the Target Company. The descriptions below, including the measures taken by theTarget Company, are based on the Target Company’s Press Releases andexplanations received from the Target Company.
(i)

Establishment of an Independent Special Committee at the Target Company
and receipt of the SC Report from the Special Committee(a)Background of establishment
According to the Target Company’s Press Release of June 26, 2023, inlight of the fact that the Tender Offer will be conducted as part of theTransactions for the purpose of taking the Target Company Shares
private, the board of directors of the Target Company established at its
meeting held on March 13, 2023, for the purpose of eliminating
arbitrariness in the decision-making of the board of directors of theTarget Company regarding the Transactions and ensuring the fairness,transparency and objectivity of the decision-making process, theSpecial Committee independent from the Offeror, the Target Company
and success or failure of the Transactions consisting of four outside
directors of the Target Company, being: Mr. Tadayuki Seki (anindependent outside director of the Target Company and Advisory
Member, ITOCHU Corporation), Mr. Masato Iwasaki (an independent
outside director of the Target Company and a representative director of
Takeda Pharmaceutical Company Limited etc.), Mr. Kazuo Ushida (anindependent outside director of the Target Company and a director of
Nikon Corporation) and Mr. David Robert Hale (an independent outside
director of the Target Company and a partner of ValueAct CapitalManagement, L.P.). The members of the Special Committee have notchanged since its establishment.
29

The board of directors of the Target Company then requested theSpecial Committee to consider (i) the legitimacy and reasonableness ofthe purpose of the Transactions (including whether the Transactions
will contribute to the enhancement of the corporate value of the Target
Company), (ii) the terms and conditions of the Transactions (including
the Tender Offer Price and the Stock Acquisition Rights Tender Offer
Price), (iii) fairness of the procedures for the Transactions, (iv) whether
the Transactions is not disadvantageous to the Target Company’s
minority shareholders (including the perspective of comparing themethod selected for the Transactions with other methods) and (v)whether or not the board of directors of the Target Company should
express its opinion in favor of the Tender Offer and recommend that theshareholders of the Target Company, the Stock Acquisition Rights
Holders, and holders of the ADRs tender their shares and stockacquisition rights, respectively, in the Tender Offer (collectively, the“Matters for Consultation”), and to submit a written report on the
Matters for Consultation to the Target Company.
In addition, the Target Company established the Special Committee on
the premise that the board of directors’ decision-making regarding theTransactions, including approval or disapproval of the Tender Offer,
will respect the contents of the SC Report to the maximum extent
possible, and in particular, if the Special Committee determines that theterms and conditions regarding the Transactions are not reasonable, theboard of directors of the Target Company shall not approve theTransactions under such terms and conditions (including not approvingof the Tender Offer). Further, the board of directors of the Target
Company gave the Special Committee authority to be substantiallyinvolved in the process of negotiations with the Offeror (including
giving instructions or making requests to the Target Company regarding
the negotiation policy with the Offeror, as necessary), authority to
appoint its own experts at the expense of the Target Company(including the power that the Special Committee may seek professional
advice from the Target Company’s advisors if the Special Committee
determines that there is no problem with the independence and expertiseof the advisors of the Target Company), and authority to receive
information necessary to consider and make decisions regarding theTransactions from the Target Company’s officers and employees. Afterconsideration by the Compensation Advisory Committee, theremuneration of the members of this Special Committee is fixedcompensation and no contingent fees contingent upon the closing of theTransactions have been adopted. Since the members of the Special
Committee are all outside directors of the Target Company and theirduties as the Special Committee members are considered to be includedin their responsibilities as outside directors, the Target Company did notinitially plan to grant them compensation as the Special Committee
members in addition to their compensation as outside directors.
However, because the duties of the Special Committee members require
a considerable amount of additional commitment in terms of time and30

effort compared to their normal duties as outside directors, theCompensation Advisory Committee reexamined at its meeting held on
April 27, 2023 and judged that, given the duties of the Special
Committee members, their compensation as outside directors alone
would not be sufficient. Considering the judgement of theCompensation Advisory Committee, the board of directors meeting
held June 16, 2023 resolved to pay fixed compensation to the Special
Committee members separately in addition to their compensation as
outside directors (one member of the Special Committee voluntarily
declined to receive the remuneration.). Also, the Special Committee
confirmed that there are no problems with the independence andexpertise of Mizuho Securities and Mitsubishi UFJ Morgan Stanley
Securities, the Target Company’s financial advisors and third-party
valuers, and Anderson Mori & Tomotsune, the Target Company’s legal
advisor, and the Special Committee approved them as the Target
Company’s financial advisors and legal advisor, respectively.
Furthermore, the Special Committee decided to be informed about
negotiation policy and the consideration status of the Target Company
from Mizuho Securities and Mitsubishi UFJ Morgan Stanley Securities
and to receive the share valuation reports the Target Company received
from Mizuho Securities and Mitsubishi UFJ Morgan Stanley Securities,
and to seek professional advice by relying on the Target Company’s
legal advisor and has not exercised its authority to appoint its own
experts. As described in “(a) Names of third-party valuation institutions
and their relationship with the Target Company and the Offeror” in “(iii)
Obtaining share valuation reports from independent financial advisors
and third-party appraisers at the Target Company” below, with respect
to Mizuho Securities, although Mizuho Bank, a group company, isscheduled to provide a loan to the Offeror for the funds required forsettlement of the Tender Offer and the preferred equity investment, inlight of the independence and expertise of Mizuho Securities, theSpecial Committee approved the appointment of Mizuho Securities asa third-party valuer of the Target Company.
(ii)

Consideration Process
Meetings of the Special Committee have been held a total of 13 times during
the period from March 13, 2023 to June 26, 2023, for a total of approximately
17 hours, and the Special Committee has also performed its duties related tothis consultation by reporting or sharing information through e-mail, etc.,
discussing and making decisions, etc. as necessary outside of meetings.
Specifically, the Special Committee requested the Target Company’s
management and personnel in charge of the Transactions to attend the Special
Committee meetings several times, where the Special Committee was briefed
on the significance and purpose of the Transactions, the timing and methodof the Transactions, the background leading to the consideration of theTransactions, and the management policy after the Transactions including
industry restructuring, and then conducted a question and answer session in
an interview format. Furthermore, the Special Committee presented theOfferor with questions regarding the significance and purpose of the31Transactions, the timing and method of implementation of the Transactions,the background leading to the consideration of the Transactions, themanagement policy after consummation of the Transactions including
industry restructuring, and the nature of JICC as a governmental fund, andreceived answers from the Offeror. After receiving responses from the Offeror,
the Target Company conducted a question-and-answer session in the form of
an interview.
In addition, the Special Committee has received explanations from the Target
Company’s management regarding the business plan prepared by the Target
Company (the “Target Company Business Plan”), including its contents,
material assumptions and the background of its preparation, and has
confirmed the reasonableness of these matters. On that basis, as described in“(iii) Obtaining share valuation reports from independent financial advisors
and third-party appraisers at the Target Company” below, the Special
Committee received from Mizuho Securities and Mitsubishi UFJ Morgan
Stanley Securities, the Target Company’s financial advisors, at the Target
Company’s request, respectively, the Share Valuation Report (Mizuho
Securities) and the Share Valuation Report (Mitsubishi UFJ Morgan Stanley
Securities) concerning the Target Company Shares and has received
explanations about the calculation method used for the valuation, the reasonsfor adopting such calculation method, the details of the calculation based oneach calculation method and important assumptions (including the basis forcalculating the discount rate in the DCF analysis and the reasons for selecting
comparable companies in the comparable companies analysis or comparable
enterprises analysis), held a question-and-answer session and considered its
contents. Through the above, the Special Committee confirmed thereasonableness of the process for preparing each share valuation report.
Furthermore, the Special Committee received explanations from the Target
Company, Mizuho Securities, Mitsubishi UFJ Morgan Stanley Securities, theTarget Company’s financial advisors, at the Target Company’s request andAnderson Mori & Tomotsune, the Target Company’s legal advisor, regarding
the measures to ensure the fairness of the Transactions in terms of procedures,the method and process of decision-making by the Target Company’s boardof directors regarding the Transactions, and other measures to avoid conflictsof interest. Based on such explanation, the Special Committee discussed anddeliberated on the measures to be taken to ensure the fairness of theprocedures in the Transactions.
In addition, as described in “(b) Process of examination and negotiation” in(iii) 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, after the Special
Committee received a proposal in writing from the Offeror on June 1, 2023
setting the Tender Offer Price at 4,200 yen per share, and each time the Target
Company received a proposal or communication from the Offeror regarding
the Tender Offer Price, the Special Committee received a report on the content
of the proposal or communication from the Target Company in a timely
32manner and deliberated and examined the content of the proposal orcommunication after hearing the Target Company’s opinion based on theadvice from a financial viewpoint received from Mizuho Securities and
Mitsubishi UFJ Morgan Stanley Securities, the Target Company’s financial
advisors, and at important junctures the Special Committee had stated its
opinion regarding the terms and conditions of the Transactions, including theTender Offer Price. The Special Committee was substantially involved in theoverall discussions and negotiations between the Target Company and theOfferor regarding the terms and conditions of the Transactions including theTender Offer Price by the above activities. As a result, on June 16, 2023, theTarget Company received the Final Proposal from the Offeror that included
the Tender Offer Price of 4,350 yen per share.
(iii) Contents of the Decision
Based on the above, and taking into consideration the explanation received
from Mizuho Securities and Mitsubishi UFJ Morgan Stanley Securities, theTarget Company’s financial advisors at the Target Company’s request thecontents of the Share Valuation Report (Mizuho Securities) and the Share
Valuation Report (Mitsubishi UFJ Morgan Stanley Securities), and the legal
advice received from Anderson Mori & Tomotsune, the Special Committee
has carefully discussed and deliberated on the Matters for Consultation. As aresult, the Special Committee unanimously submitted the SC Report of June
26, 2023 to the board of directors of the Target Company as of June 26, 2023,
with the following contents.
(a)Contents of the SC Report(A) The purposes of the Transactions including the Tender Offer canbe seen as legitimate and reasonable (the Transactions willcontribute to enhancing the corporate value of the Target
Company).
(B) The reasonableness of the terms and conditions of theTransactions, including the Tender Offer Price and the Stock
Acquisition Rights Tender Offer Price, can be seen as having
secured.
(C) The fairness of the procedures for the Transactions can be seen as
having secured.
(D) Taken in light of (A) through (C) above, the Transactions can beconsidered as not adverse to the interests of the minority
shareholders(E) Taken in light of (A) through (D) above, it is currently appropriate
for the board of directors of the Target Company to express an
opinion supporting the Tender Offer and to recommend that theshareholders of the Target Company Shares and the Stock
Acquisition Rights Holders tender their shares and stockacquisition rights, respectively, and the holders of the ADRs
deliver the ADRs to the Depositary Banks in advance, receive theTarget Company Shares represented by the ADRs before
tendering for the Tender Offer and tender their shares, if theTender Offer commences.
33

(b)

Reasons for the SC Report(A) Whether the purposes of the Transactions can be seen as
legitimate and reasonable (including whether the Transactions
will contribute to enhancing the corporate value of the Target
Company).
Taken in light of the followings, it is found that (i) the synergies
to be expected by the Transactions can be reasonable, there are nocontradictions or discrepancies between the assumptions made by
JICC and those made by the Target Company, and theimplementation of the Transactions will contribute to resolving
the management issues recognized by the Target Company; (ii) it
is appropriate to implement the Transactions, because the reasons
explained as the necessity of implementing the Transactions forpursuing strategic investments, structural reforms and industry
restructuring at the Target Company rather than maintaining thelisting of the Target Company, are reasonable; and (iii) there areno circumstances found that would materially hinder theenhancement of the Target Company’s corporate value throughthe Transactions. Therefore, the Transactions, including theTender Offer, will contribute to enhancing corporate value and its
purpose is seen legitimate and reasonable.
According to the Target Company, the Target Company has
designated the Digital Solutions business and the Life Sciencesbusiness as its core businesses, which are important for the future
development of society, have the potential for market growth, andare highly demanding in terms of technological innovation, andwhere the Target Company Group can demonstrate its strengths,
and plans to actively conduct research and development and makebusiness investment in the Digital Solutions business, as well as
reinvest the cash flow generated by establishing a profitablefoundation in the Life Sciences business, for further businessgrowth. The Target Company’s business environment andmanagement challenges are as follows: (i) in the Digital Solutions
business, in order to enjoy a further high market growth of thesemiconductor market in the future where pioneer advantage isimportant, the Target Company is required to have advanced
technological capabilities, and technological progress is rapid.
Therefore, active investment in advanced technologies is requiredin order to maintain continuously high technologicalcompetitiveness. In the semiconductor materials industry, it isnecessary not only for research and development and capital
investment to maintain and expand the current competitive
advantage, but also for the semiconductor materials industry,
which has a lot of promising manufacturers in Japan, to aim more
boldly for industry restructuring, thereby increasing its
international competitiveness by acquiring a high market share ina wide range of semiconductor materials lineups, integrating
technologies with other companies, and enhancing the resourcesto acquire new human resources and technologies; (ii) in the Life
34

-

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Sciences business, since developing new modalities anddisseminating new analytical and manufacturing technologies
take a long time to verify their safety and effectiveness, the Target
Company itself will develop products and services for newmodalities from a long-term perspective, while taking measuresto acquire new technologies and developing markets andexpanding business in Europe, the United States and other Asian
countries. In general terms, the capital policy and businessalliance with partners, which the Target Company has been
considering as part of its strategies to resolve these management
issues, with the aim of building a resilient organization that canadapt to all kinds of environmental changes, will be considered tocontribute to enhancing the Target Company’s corporate value.
According to JICC, synergies with the Transactions contemplated
by JICC are that: (i) it will be able to smoothly promote the Target
Company’s growth strategy through JICC’s support for the
expansion of its digital solutions business and other businesses
centered on the semiconductor materials business, throughacquisitions to which the Target Company is a party, and for thepromotion of industry restructuring; (ii) JICC’s network createdthrough collection and exchange of information and opinions on
overseas markets and personnel exchanges with domestic andforeign institutional investors and private businesses can beutilized to support the planning and execution of global growthstrategies of the Target Company, including the recruitment of
new global human resources; and (iii) JICC can support the Target
Company to formulate medium to long-term growth strategies,
including fundraising, research and development, capital
investment, and mergers and acquisitions based on relatively long
investment periods. JICC believes that JICC can support theTarget Company to establish a capital policy most conducive tothe ongoing creation of the Target Company’s corporate value
through supporting its improvement strategies, equity story andcollaboration with experts and other support services. The Target
Company states that the Target Company can expect to generate
the aforementioned synergies through the Transactions. The
content of the above assumed synergies is considered to bereasonable because there are no contradictions between eachother or obvious contradictions to objective facts.
According to the Target Company, in order for the Target
Company to flexibly promote each of its initiatives to enhance its
competitiveness and profitability in the medium-to-long-term,even bold strategic investments, structural reforms and industry
restructuring that will increase shareholder value in the medium
to long term may damage shareholder value in the short term dueto the temporary decline in profit level and deterioration of the
cash flow. Therefore, as it is difficult to adopt such measures as a
strategy from the viewpoint of protecting the interests of generalshareholders and it is assumed that decision making will needtime, if the Target Company maintains a listing upon35

-

implementing measures for further growth, it has come to theconclusion that going private under the strategic partner would be
effective. According to the Target Company, the Target Company
is also concerned that each of the possible alternative scenarios,
such as going private under a PE fund or a business company, athird-party allotment of new shares, or maintaining the status quo,
have concerns as to whether any of the alternatives would achieve
the Target Company’s objective of taking the lead in restructuring
the semiconductor materials industry, when compared based on
various factors, including the level of understanding of the Target
Company’s management strategy, whether or not and how
effective it would be in facilitating discussions with potential
industry restructuring partners, the difficulty of obtaining
clearance for the industry restructuring from the regulatory
authorities, and the acceptability to the Target Company’s
employees, suppliers, and other stakeholders, and from theperspective of such relative comparisons, the Target Company hascome to believe that the Transactions is suitable for the Target
Company’s objectives. According to the Target Company, if theTarget Company Shares become private, there is a possibility that
this may affect the Target Company’s social recognition that theTarget Company has enjoyed as a listed company, the Target
Company’s ability to secure excellent human resources throughhigh name recognition, public trust and financing from capital
markets. However, the Target Company believes that it ispossible for the Target Company to maintain name recognition bytaking these measures that the Target Company establish a system
in which the Target Company’s officers and employees work
together with the Offeror to enhance the long-term corporate
value, including the introduction of incentive plans for officers
and employees, and continue to appropriately disclose corporate
information in consultation with the Offeror in accordance withthe policy of industry restructuring and future re-listing and,considering the social credibility and fund-raising capabilities,
etc., as a whole obtained by becoming a member of the JICCGroup by becoming a part of the JICC Group, the disadvantages
associated with going private are limited. In view of the above, it
is considered reasonable to make a judgment that the parties seek
to resolve their management issues through the Transactions
without using other methods.
According to JICC, following the Transactions, the Offeror will,in principle, maintain the Target Company’s current employment
and conditions thereof, and through the introduction of incentive
plans such as stock options for the Target Company’s officers andemployees, plan to establish a system to make the Target
Company’s long-term corporate value improve as a collective
whole with the Offeror and the Target Company’s officers andemployees. No concern is anticipated that the Target Company’s
becoming a wholly-owned subsidiary of JICC, which is asovereign wealth fund, would result in the Target Company’s loss
36

(B)

-

-

of creditworthiness or brand, affect its relationships with business
partners, weaken its compliance and governance structure, affectits future funding, affect its future recruitment of human resources,
or undermine the Target Company’s employee morale, etc. No
financial constraints are anticipated on the achievement of theTarget Company’s business plan due to the Offeror’s liabilities(including borrowings from financial institutions in theTransactions). It is deemed that the future structural reforms andindustry restructuring will enable sufficient repayment andinterest payments in respect of the said borrowings, etc., and there
is only a limited risk that it will cause a material hindrance to thebusiness operation of the Target Company following theTransactions, and the purpose of improving the corporate valueof the Target Company will not be achieved by the Transactions.
Therefore, no circumstances that cause a material hindrance toimprove the corporate value of the Target Company are found.
Whether the appropriateness of the terms and conditions of theTransactions, including the Tender Offer Price and the Stock
Acquisition Rights Tender Offer Price, is ensured
Based on the following points, the Tender Offer Price and theStock Acquisition Rights Tender Offer Price are deemed to beappropriate and the conditions of the Transactions, including theTender Offer, are deemed to be appropriate, assuming theappropriateness of the negotiation and scheme of the Transactions.
With respect to the negotiation status of the Tender Offer Price,
the Tender Offer Price (4,350 yen per share) was determinedbased on the deliberations of the Special Committee, and as aresult of the negotiation with JICC while receiving advice from
Mizuho Securities and Mitsubishi UFJ Morgan Stanley Securities,
the Target Company drew a proposal to increase the purchaseprice from JICC on three occasions and reached a final agreement.
The series of negotiation process was shared and explained to theSpecial Committee by the Target Company, Mizuho Securities
and Mitsubishi UFJ Morgan Stanley Securities in a timely manner
via the Special Committee meeting or email. As a result, the final
Tender Offer Price has been substantially increased from the priceinitially quoted by the Offeror and the Target Company hasentered into negotiations with the intention of effecting theTransactions on terms as favorable to general shareholders as
possible. The same shall apply to the Stock Acquisition Rights
Tender Offer Price. Based on the above, it can be inferred that theagreement on the Tender Offer Price and the Stock Acquisition
Rights Tender Offer Price in the Transactions was reached as aresult of negotiations between the Target Company and JICC
based on objective and consistent discussions that are equivalent
to those at arm’s length, and no circumstances have been foundthat raise doubts about the transparency and fairness of theagreement process.
The Target Company Business Plan has been prepared on astandalone basis without assuming the implementation of the37-Transactions, and as such, it was under discussion and preparationby the Target Company without any change in the preparation
process before and after the receipt of the Initial Letter of Intent,
which can be referred to as a serious proposal regarding theTransactions, there are no implications of involvement or
influence on the preparation thereof by JICC or any of its
affiliates. Furthermore, although the Target Company has
provided certain explanations to JICC with respect to the Target
Company Business Plan during its negotiations with JICC, there
can be no doubt that such matters were developed or revised
under JICC’s instructions or with its intentions. Furthermore, theTarget Company provided the Special Committee with anopportunity to explain the details such as the basis for the Target
Company Business Plan and question-and-answer did not findany circumstances requiring amendment of the Target Company
Business Plan or any other circumstances which could give rise
to doubts about the reasonableness of the Target Company
Business Plan. Based on the foregoing, there were no findingsthat any pressure by the Offeror and JICC was exerted in theformulation process of the Target Company Business Plan, andthere are no facts that suggest the contents thereof are
unreasonable predictions.
Regarding the Share Valuation Report (Mizuho Securities) andthe Share Valuation Report (Mitsubishi UFJ Morgan Stanley
Securities), according to the hearings with Mizuho Securities and
Mitsubishi UFJ Morgan Stanley Securities, there were no
unreasonable points in the selection of the market price analysis,
the comparable companies analysis, and the DCF analysis, as wellas the calculation method and the basis for each method. The
Tender Offer Price of 4,350 yen per share is deemed to be theprice that (i) exceeds the calculation results of Mizuho Securities
and Mitsubishi UFJ Morgan Stanley Securities using the market
price analysis, (ii) is within the range of the calculation results ofMizuho Securities using the comparable companies analysis andexceeds the calculation results of Mitsubishi UFJ Morgan Stanley
Securities using the comparable companies analysis, and (iii) is
within the range of the calculation results of Mizuho Securities
and Mitsubishi UFJ Morgan Stanley Securities using the DCF
analysis. Furthermore, the Tender Offer Price of 4,350 yen per
share is set at a premium of 30.47%~41.42% against the closing
price of the Target Company shares on the Tokyo Stock Exchange
until June 23, 2023 (the closing price on the same day and theaverage closing price for the past one month, the past threemonths, and the past six months on the same day). Considering
the hearings, etc. with Mizuho Securities and Mitsubishi UFJ
Morgan Stanley Securities, it is deemed that the level of premiumthat is comparable to other similar transactions is secured under
the Tender Offer. Furthermore, as of June 26, 2023, the Tender
Offer Price is above 3,795 yen (as of August 1, 2022), the highest
price for the latest 52 weeks of the Target Company shares.
38-

According to the hearings, etc. with Mizuho Securities and
Mitsubishi UFJ Morgan Stanley Securities, the total trading
volume after July 1, 2022 is above the total number of issued
shares of the Target Company (excluding treasury stock). Thus,
the Target Company shareholders who acquired shares during thisperiod are expected to be offered an opportunity to sell theirshares at a price above the acquisition price. In light of the above,the level of the Tender Offer Price is not unreasonable. The Stock
Acquisition Rights Tender Offer Price is expected to be theamount calculated by multiplying the difference between theTender Offer Price and the exercise price per Target Company
Share of each Stock Acquisition Right by the number of the Target
Company Shares underlying each such Stock Acquisition Right(100 for each Stock Acquisition Right) and as described above,
the Tender Offer Price is not considered to be a level at which theappropriateness of the price is denied. The Stock Acquisition
Rights Tender Offer Price is calculated by the difference between
the Tender Offer Price and the exercise price of each Stock
Acquisition Right. Therefore, the Stock Acquisition Rights
Tender Offer Price is also considered to be a level at which theappropriateness of the price is denied.
The method of the Transactions, in which a tender offer is madein the first step and a demand for sale of share or shareconsolidation is made in the second step, is a method generally
employed for this type of non-public transaction, and a petition
for the determination of the sale price to the court or a petition bypricing following the exercise of appraisal rights can be made in
any of the procedures in the second step. Since the consideration
to be received by the shareholders and the Stock Acquisition
Rights Holders is cash, the method of the Transactions is desirable
in that it is easy to understand the consideration and has highstability and objectivity of the value. It is also desirable
considering the need for the Target Company to promptly become
a wholly-owned subsidiary and to secure opportunities and time
for general shareholders to make adequate judgments based on
sufficient information. This method of the Transactions isparticularly preferable to organizational restructuring such as ashare exchange in exchange for shares, etc. In addition, it has beenclarified that in the event of the delivery of cash to shareholders
and the Stock Acquisition Rights Holders who did not tender theirshares or stock acquisition rights, respectively, in the Tender Offer,
the amount of money equivalent to the Tender Offer Pricemultiplied by the number of the Target Company Shares held by
the Depositary Bank will be delivered. The Depositary Bank isentitled to cancel the ADRs in accordance with the provisions set
forth in the ADRs and deliver to each holder of the ADRs theamount of money converted from the amount received by the
Depositary Bank into US dollars, in accordance with the numberof the Target Company Shares represented by the ADRs, after
deducting fees and taxes of the Depositary Bank. Based on the39

above, it is reasonable to adopt the two-step acquisition methodwith a tender offer and to provide cash for the purchase price.
(C)

-

-

-

-

Whether the fairness of the procedures for the Transactions has
been ensured
In light of the following points, it is concluded that the fairness ofthe procedures relating to the Transactions has been secured since(i) a situation which is practically equivalent to that of arm’s
length transaction has been secured in the process of forming theterms and conditions of the Transactions, and (ii) substantial
fairness measures have been adopted and operated effectively
from the viewpoint of securing opportunities for generalshareholders to make informed and appropriate judgments.
The Target Company has established a Special Committee
consisting of independent outside directors of the Target
Company who are independent from the Offeror, the Target
Company and the success or failure of the Transactions. Judging
from the timing of establishment, authority and other aspects of
the Special Committee, it is deemed that the Special Committee
effectively functions as a fairness assurance measure.
The Target Company has no director who has special relationshipwith the Offeror or JICC and the Target Company board of
directors has determined that there are no directors who have a
special relationship with interest with respect to the Transactions.
All nine directors unanimously resolved to express an opinion in
support of the Transactions and to recommend that theshareholders, the Stock Acquisition Rights Holders, and holdersof the ADRs tender their shares and stock acquisition rights,
respectively, and all three statutory auditors will express theiropinions that they have no objection to the above resolution. The
Target Company board of directors conducts decision making
with the utmost respect for the Special Committee’s
determination and resolved not to support the Transactions if theSpecial Committee determines that the terms and conditions of
the Transactions are not appropriate. Therefore, the arbitrarinessof decision making of the Target Company with respect to theTransactions is excluded and it can be said that the fairness ofdecision making’s process, transparency and objectivity are
ensured.
The Target Company has received legal advice from Anderson
Mori & Tomotsune, legal advisors independent from the Offeror,
the Target Company, and the success or failure of the Transactions.
The Target Company has obtained the Share Valuation Report(Mizuho Securities) and the Share Valuation Report (Mitsubishi
UFJ Morgan Stanley Securities) as materials concerning the valueof the Target Company’s shares from Mizuho Securities and
Mitsubishi UFJ Morgan Stanley Securities, which are
independent from the Offeror, the Target Company and thesuccess or failure of the Transactions.
The tender offer period of the Tender Offer is expected to be 20
40

-

-

-

business days, the shortest period required by law. The Tender
Offer is a so-called pre-announced tender offer and a relatively
long period of time will be secured until the commencement of
the Tender Offer after the announcement of the series of terms andconditions including the Tender Offer Price. Accordingly, theshareholders of the Target Company, the Stock Acquisition Rights
Holders, and the holders of the ADRs have been provided with anappropriate opportunity to make a decision regarding tender of
the Tender Offer and an opportunity to make an acquisition
proposal by a counterparty offer proposer. No agreement which
would unduly restrict the Target Company’s contact with acounterparty offer proposer is entered into between the Target
Company, the Offeror, and JICC, and since the merger andacquisition is conducted after the announcement in anenvironment where other potential acquirers can makecounterproposals, it can be said that the so-called indirect market
checks are in place.
A lower limit on the number of shares to be purchased under theTender Offer will be set to exceed the amount equivalent to theso-called Majority of Minority Shares. The consummation of theTender Offer will require the consent (acceptance) of the majorityof general shareholders without interest in the Tender Offer,
which will lead to a greater emphasis on securing opportunities
for general shareholders to make decisions, and will contribute to
the merger and acquisition being conducted on the most favorable
terms possible for general shareholders.
In connection with the Transactions, each press release will
provide sufficient information on the details of the authority
granted to the Special Committee, the background of the
discussions at the Special Committee and the involvement in thenegotiation process for the terms of the Transactions with JICC,
the contents of the SC Report of June 26, 2023 and thecompensation structure of the members of the Special Committee,
the outline of the Share Valuation Report (Mizuho Securities) andthe Share Valuation Report (Mitsubishi UFJ Morgan Stanley
Securities), the process leading to the implementation of theTransactions and the negotiation process, and the contents of theagreement for the Transactions, and thus it is deemed thatimportant decision-making materials that contribute to the
judgment on the appropriateness of the terms of the Transactions
have been provided to the shareholders of the Target Company.
If the Offeror fails to acquire all of the Target Company Shares,
the Stock Acquisition Rights, and the ADRs in the Tender Offer,
the Offeror plans to implement the Squeeze-Out Procedures by
way of a demand for sale of shares, etc. or a reverse stock split.
Given that in these procedures, consideration has been given sothat the shareholders of the Target Company, the Stock
Acquisition Rights Holders, and the holders of the ADRs will not
be placed in a situation where they are expected to be treatedunfavorably, it is recognized that consideration has been given so41

that coercion will not occur.
(D) In light of (A) through (C) above, whether the Transactions is notdisadvantageous to the Target Company’s minority shareholders
Given that there are no issues with respect to any of (A) through(C) above, it is deemed that the execution of the Transactions is
not disadvantageous to the minority shareholders of the Target
Company.
(E) Whether or not it is reasonable for the board of directors of theTarget Company to express its opinion in favor of the Tender
Offer and recommend that the shareholders of the Target
Company and the Stock Acquisition Rights Holders tender theirshares and stock acquisition rights, respectively, and holders of
the ADRs deliver the ADRs to the Depositary Banks in advance,
receive the Target Company Shares represented by the ADRs
before tendering for the Tender Offer and tender their shares in
the Tender Offer
Given that none of (A) through (D) above is considered
problematic, it is reasonable for the Target Company board of
directors to express its opinion in support of the Tender Offer at
the time of the announcement of the proposed commencement of
the Tender Offer and to recommend to the shareholders of theTarget Company and the Stock Acquisition Rights Holders totender their shares and stock acquisition rights, respectively, andto recommend to the holders of the ADRs that they tender theirshares in the Tender Offer upon delivery of the ADRs to the
Depositary Banks in advance and delivery of the Target Company
Shares represented by the ADRs.
In addition, as described in “(c) Decision” in “(iii) Decisionmaking process and reasons of the Target Company to issue theopinion 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 prior notification regarding the Share
Acquisition was submitted by the Offeror to the State
Administration for Market Supervision of the People’s Republicof China on September 14, 2023 (local time). However, because
the threshold for requiring a prior notification under the AntiMonopoly Law of the People’s Republic of China was revised
upward on January 22, 2024, the Share Acquisition no longer
requires the submission of a prior notification. Thus, based on thefact that the Offeror filed an application to withdraw the priornotification regarding the Share Acquisition on February 19, 2024
(local time), the Offeror has now confirmed that the procedures
and steps required under domestic and foreign competition law
and foreign investment control laws and regulations has been
completed and all of the Tender Offer Conditions Precedent havebeen satisfied or are certain to be satisfied by March 19, 2024;
therefore, the Offeror has determined that it is now possible toconduct the Tender Offer, and notified the Target Company on
42

February 20, 2024 that it intends to commence the Tender Offerfrom March 19, 2024. Consequently, on February 26, 2024, theTarget Company requested the Special Committee to consider
whether or not the opinion in the SC Report of June 26, 2023
should be changed, and to report to the board of directors of theTarget Company to that effect if the previous opinion should not
be changed, or to provide a revised opinion if it should be changed.
The Special Committee verified the facts concerning whether any
material change in the situation that could have an impact on theTransactions occurred on or after June 26, 2023, and as a resultof considering the above-mentioned advisory matters, it
confirmed that in light of the circumstances from June 26, 2023
through March 18, 2024, there were no circumstances that would
require a change in the contents of the report that the Special
Committee made to the board of directors of the Target Company
on June 26, 2023. On March 18, 2024, the Special Committee
submitted to the board of directors of the Target Company the SC
Report of March 18, 2024 to the effect that it believes that there
is no need to change the contents of the above-mentioned reportbased on a unanimous resolution by all members of the Special
Committee.
(ii)

Obtaining advice from independent legal advisors to the Target Company
According to the Target Company’s Press Release of June 26, 2023, in orderto ensure the transparency and reasonableness of the decision-making processof the Target Company’s board of directors regarding the Transactions, theTarget Company appointed Anderson Mori & Tomotsune as a legal advisor
independent from the Offeror, the Target Company and success or failure of
the Transactions, as described above in “(i) Establishment of an Independent
Special Committee at the Target Company and receipt of the SC Report fromthe Special Committee.” The Target Company has received legal advice from
Anderson Mori & Tomotsune on the various procedures of the Transactions,
including the Tender Offer, the method and process of decision-making by theboard of directors of the Target Company, and other points to be noted in
making decisions regarding the Transactions.
Anderson Mori & Tomotsune is not a related party of either the Offeror or theTarget Company, and does not have any material interest in the Transactions,
including the Tender Offer.

(iii) Obtaining share valuation reports from independent financial advisors andthird-party valuers of the Target Company(a)Names of third-party valuation institutions and their relationship with
the Target Company and the Offeror
According to the Target Company’s Press Release of June 26, 2023, theTarget Company requested Mizuho Securities and Mitsubishi UFJ
Morgan Stanley Securities, third-party valuers who are not related
43

parties of either the Offeror or the Target Company and who do nothave any material interest in the Transactions including the Tender
Offer, to evaluate the value of the Target Company Shares. Although
Mizuho Securities is a member of the Mizuho Financial Group, as wellas Mizuho Bank, Mizuho Bank conducts loan transactions, etc. with theTarget Company as part of its ordinary banking transactions. While
Mizuho Bank is a shareholder of the Target Company and on the other
hand plans to provide the Offeror with a loan for the funds required forthe settlement of the Tender Offer and the preferred equity investment,
Mizuho Securities has established and implemented an appropriate
conflict of interest management system including measures to segregate
information between Mizuho Securities and Mizuho Bank inaccordance with the applicable laws and regulations of Article 36,
Paragraph 2 of the Act and Article 70-4 of the Cabinet Office Ordinanceon Financial Instruments and Exchange Business, etc. (Cabinet Office
Ordinance No. 52 of 2007, as amended), and has calculated the sharevalue of the Target Company from a standpoint independent of Mizuho
Bank as a lender to the Offeror. The Target Company has determinedthat Mizuho Securities has established and implemented an appropriate
conflict of interest management system for the calculation of the valueof the Target Company Shares, and has appointed Mizuho Securities asa third-party valuer. In any event, the Target Company has implemented
additional measures to safeguard the fairness of the Tender Offer Priceand mitigate potential conflicts of interest within the Transactions (forspecific details, please refer to “(i) Establishment of an Independent
Special Committee at the Target Company and receipt of the SC Reportfrom the Special Committee” above through “(vi) Measures to ensure
there is an opportunity to receive tender offers from other offerors”
below). Based on such measures, the Target Company believes that theinterests of its minority shareholders have been adequately taken into
consideration, and therefore, has not obtained a Fairness Opinion on theTender Offer Price. The compensation payable to Mizuho Securities
and Mitsubishi UFJ Morgan Stanley Securities for the Transactions
includes a contingency fee to be paid on the condition that theTransactions is consummated. Taking into consideration the generalpractice in similar transactions and the pros and cons of thecompensation system in which a reasonable amount of expenses will be
incurred by the Target Company even if the Transactions is
unsuccessful, the Target Company has determined that independence is
not compromised by the fact that the contingency fee will be paid on
the condition that the Tender Offer is completed is included in thecompensation payable to Mizuho Securities and Mitsubishi UFJ
Morgan Stanley Securities.
(b)

Overview of valuation
According to the Target Company’s Press Release of June 26, 2023, theTarget Company obtained the Share Valuation Report (Mizuho
Securities) dated June 26, 2023.

44

Mizuho Securities considered the calculation method for the Tender
Offer, and concluded that based on the premise that the Target
Company is a going concern, it is appropriate to evaluate the value of
the Target Company Shares from multiple perspectives, and used (i) themarket price analysis because the Target Company Shares are listed on
the Tokyo Stock Exchange Prime Market and a market price exists forthe shares, (ii) the comparable companies analysis because there areseveral comparable listed companies that can be compared with theTarget Company and it is possible to draw an analogy between themarket value of the Target Company Shares and the market value ofcomparable listed companies, and (iii) the DCF analysis to reflect theTarget Company’s future business activities in the calculation. The
range of per share values of the Target Company Shares calculated by
Mizuho Securities based on the above methods is as follows.
Market price analysis
Comparable companies analysis
DCF analysis

3,076 yen - 3,334 yen
3,223 yen - 4,532 yen
2,814 yen - 5,760 yen

Under the market price analysis, the per-share value of the Target
Company Share was calculated to be in the range of 3,076 yen and
3,334 yen based on the closing price of the Target Company Shares on
the Tokyo Stock Exchange Prime Market, being the closing price of theTarget Company Shares as of the base date of 3,234 yen, the simple
average of the closing price of the Target Company Shares for the mostrecent one month of 3,334 yen, three months of 3,183 yen, and six
months periods of 3,076 yen, respectively, on the calculation base date,
which was set on June 23, 2023. Under the comparable companies
analysis, the per-share value of the Target Company Shares wascalculated to be in the range of 3,223 yen to 4,532 yen, based on acomparison with the market share price and financial indicators of
profitability of listed companies engaged in relatively similarbusinesses to those of the Target Company. Under the DCF analysis,
the per-share value of the Target Company Shares was calculated to bein the range from 2,814 yen to 5,760 yen by discounting the free cash
flows that the Target Company is expected to generate in and after the
fiscal year ending March 31, 2024 by a certain discount rate to arrive at
a present value, based on the earnings forecasts and investment plans in
the Target Company’s business plan for the fiscal years ending March
31, 2024 through March 31, 2027.
In calculating the equity value of the Target Company Shares, Mizuho
Securities, in principle, used the information provided by the Target
Company and publicly available information as is, and assumed that all
such materials and information were accurate and complete, and did not
independently verify their accuracy and completeness. In addition, no
independent evaluation or appraisal of the assets and liabilities(including off-balance-sheet assets and liabilities and other contingent
liabilities) of the Target Company or its affiliates has been conducted,
and no request for appraisal or assessment has been made to any third
party. In addition, it is assumed in the calculation that the information45

regarding the Target Company’s financial forecasts (including the
aforementioned business plan) has been reasonably prepared based on
the best and most sincere forecasts and judgments available to theTarget Company at the time of calculation. With respect to suchfinancial forecasts, the Special Committee has questioned and answeredwith the Target Company and confirmed the reasonableness of theircontents and assumptions.
In the Target Company’s business plan referred by Mizuho
Securities in their DCF analysis, there are fiscal years in which asignificant increase in profit compared to the previous fiscal year is
expected. Specifically, a significant increase is expected for the
fiscal year ending March 31, 2025 compared to the fiscal year
ending March 31, 2024, and a further significant increase is
expected for the fiscal year ending March 31, 2026 compared to thefiscal year ending March 31, 2025. As mentioned in “(i) The Target
Company’s business environment, etc.” under “(2) Background,purpose, and decision-making process leading to the decision to
conduct the Tender Offer, and management policy following theTender Offer”, in the Digital Solutions business, although there has
been a temporary adjustment in operations in the semiconductormaterials market in which the Target Company is expanding its
business, the semiconductor materials market is expected to growstrongly as a business indispensable to society, supported bydemand from various electronics and information industries in
response to the progress of digitalization, and in the Life Sciencesbusiness, the biopharmaceutical market will also remain strong due
to the aging of society, the development of personalized medicine,and the increasing efficiency in developing medical products, andthrough the high technological capabilities of the Target Company,
the Target Company expects to achieve growth higher than that of
the market.
The Target Company also obtained the Share Valuation Report(Mitsubishi UFJ Morgan Stanley Securities) dated June 26, 2023.
Mitsubishi UFJ Morgan Stanley Securities considered the calculation
method for the Tender Offer and concluded that it was appropriate toevaluate the equity value of the Target Company Shares from multiple
perspectives, and used (i) the market price analysis because the Target
Company Shares are listed on the Prime Market of the Tokyo Stock
Exchange and a market price is available, (ii) the comparable
companies analysis because there are several listed companies engaged
in relatively similar businesses to the Target Company and it is possible
to infer the share value by comparing similar companies and (iii) the
DCF analysis to reflect the evaluation of the intrinsic value based on
future business activities.
The range of values per share of the Target Company Shares calculatedusing each of the above methods is as follows.
Market price analysis
46

3,076 yen - 3,334 yenComparable companies analysis
DCF analysis

3,304 yen - 3,993 yen
3,761 yen - 4,783 yen

In the market price analysis, the base date was set as June 23, 2023 (the“Base Date”) and the per-share value of the Target Company Shares
was calculated to range from 3,076 yen to 3,334 yen based on theclosing price of the Target Company Shares as of the base date of 3,234
yen, the simple average closing price of the Target Company Share on
the Tokyo Stock Exchange Prime Market for the one-month period
ending on the Base Date of 3,334 yen, the simple average closing pricefor the most recent three months ending on the Base Date of 3,183 yen,and the simple average closing price for the most recent six months
ending on the Base Date of 3,076 yen.
Under the comparable companies analysis, the per-share value of theTarget Company Shares was calculated to range from 3,304 yen to3,993 yen by comparing the market share price and financial indicatorssuch as profitability of listed companies engaged in relatively similarbusinesses to those of the Target Company.
Under DCF analysis, the business value is calculated by discounting thefree cash flows that the Target Company is expected to generate by acertain discount rate to arrive at a present value, taking into accountvarious factors such as the business plan prepared by the Target
Company for the fiscal years ending March 31, 2024 through March 31,
2027, recent performance trends, and publicly disclosed information.
The range of the per-share value of the Target Company Shares iscalculated to be 3,761 yen to 4,783 yen by analyzing the Target
Company’s corporate value and share value, making certain financial
adjustments such as adding the value of surplus cash and cash
equivalents, etc. held by the Target Company.
In evaluating the equity value of the Shares, in principle, Mitsubishi
UFJ Morgan Stanley Securities adopted, without any change, theinformation provided from the Target Company, publicly available
information, and other relevant materials, and, assuming that all of suchinformation and materials are accurate and complete, has notindependently verified the accuracy or completeness of suchinformation and materials. In addition, Mitsubishi UFJ Morgan Stanley
Securities assumes that the information related to the financial forecastsof the Target Company has been reasonably prepared by the Target
Company based on best forecasts and judgments available to them atthe time of calculation. With respect to the assets and liabilities(including off balance-sheet assets and liabilities, and other contingent
liabilities) of the Target Company and its affiliated companies,
Mitsubishi UFJ Morgan Stanley Securities has not independently
evaluated or assessed these assets or liabilities, or ordered any appraisal
or assessment from a third party institution. The evaluation by
Mitsubishi UFJ Morgan Stanley Securities reflects the afore-mentioned
information up to June 23, 2023.
47

In the Target Company’s business plan referred by Mitsubishi UFJ
Morgan Stanley in their DCF analysis, there are fiscal years in which asignificant increase in profit compared to the previous fiscal year is
expected. Specifically, a significant increase is expected for the fiscal
year ending March 31, 2025 compared to the fiscal year ending March
31, 2024, and a further significant increase is expected for the fiscal
year ending March 31, 2026 compared to the fiscal year ending March
31, 2025. As mentioned in “(i) The Target Company’s businessenvironment, etc.” under “(2) Background, purpose, and decisionmaking process leading to the decision to conduct the Tender Offer, andmanagement policy following the Tender Offer”, in the Digital
Solutions business, although there has been a temporary adjustment in
operations in the semiconductor materials market in which the Target
Company is expanding its business, the semiconductor materials
market is expected to grow strongly as a business indispensable tosociety, supported by demand from various electronics and informationindustries in response to the progress of digitalization, and in the Life
Sciences business, the biopharmaceutical market will also remainstrong due to the aging of society, the development of personalized
medicine, and the increasing efficiency in developing medical products,
and through the high technological capabilities of the Target Company,
the Target Company expects to achieve growth higher than that of themarket.

Given that, even in light of the circumstances during the period fromthe meeting of the board of directors held on June 26, 2023 to today,
there has been no particular change in the mid-to-long-term businessenvironment surrounding the Target Company Group or the industry,
the board of directors of the Target Company has determined that there
is no need to make any changes or updates to the contents of the Share
Valuation Report (Mizuho Securities) and the Share Valuation Report(Mitsubishi UFJ Morgan Stanley Securities).
(iv) Approval of all directors who have no interest in the Target Company and no
objection from all corporate auditors
According to the Target Company’s Press Release of June 26, 2023, the Target
Company, taking into consideration the share valuation reports from each ofMizuho Securities and Mitsubishi UFJ Morgan Stanley Securities, as well as
legal advice from Anderson Mori & Tomotsune and other related materials,
while respecting to the maximum extent the content of the decisions indicatedin the SC Report of June 26, 2023 submitted by the Special Committee,
carefully discussed and examined whether the Transactions would contributeto the enhancement of the Target Company’s corporate value, and whether
the terms and conditions of the Transactions (including the Tender Offer
Price) are reasonable.
As a result, as stated in “(iii) Decision-making process and reasons of the48

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 Target Company has determined that the Transactions would
contribute to improving the corporate value of the Target Company and thatthe terms and conditions of the Transactions are reasonable. At the board of
directors meeting held on June 26, 2023, a resolution was adopted by aunanimous vote of the nine non-interested directors present to the effect thatthe position of the Target Company as of the same date is that, if the Tender
Offer commences, it will express its opinion in favor of the Tender Offer andthat it will recommend that the shareholders of the Target Company and theStock Acquisition Rights Holders tender their shares and stock acquisitionrights, respectively, in the Tender Offer and the holders of the ADRs deliver
the ADRs to the Depositary Banks in advance, receive the Target Company
Shares represented by the ADRs before tendering for the Tender Offer andtender their shares. In addition, all three of the Target Company’s auditors
attended the above meeting of the board of directors, and all of the auditors
in attendance expressed that they had no objection to the above resolution.
At the aforementioned board of directors meeting, the Target Company also
resolved to request the Special Committee established by the Target Company
to consider at the time the Tender Offer commences whether or not theopinion in the SC Report of June 26, 2023 should be changed, and to reportto the board of directors to that effect if the previous opinion should not bechanged, or to provide a revised opinion if it should be changed, and to
express its opinion on the Tender Offer anew based on such revised opinion
at the time the Tender Offer commences.
In addition, as described in “(c) Decision” in “(iii) 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 prior notification regarding the Share
Acquisition was submitted by the Offeror to the State Administration forMarket Supervision of the People’s Republic of China on September 14, 2023
(local time). However, because the threshold for requiring a prior notification
under the Anti-Monopoly Law of the People’s Republic of China was revised
upward on January 22, 2024, the Share Acquisition no longer requires thesubmission of a prior notification. Thus, based on the fact that the Offeror
filed an application to withdraw the prior notification regarding the Share
Acquisition on February 19, 2024 (local time), the Offeror has now confirmedthat the procedures and steps required under domestic and foreigncompetition law and foreign investment control laws and regulations has been
completed and all of the Tender Offer Conditions Precedent have beensatisfied or are certain to be satisfied by March 19, 2024; therefore, theOfferor has determined that it is now possible to conduct the Tender Offer,and notified the Target Company on February 20, 2024 that it intends tocommence the Tender Offer from March 19, 2024. Consequently, on
February 26, 2024, the Target Company requested the Special Committee toconsider whether or not the opinion in the SC Report of June 26, 2023 had
49

changed, and to report to the board of directors of the Target Company to that
effect if the previous opinion had not changed, or to provide a revised opinion
if it had changed. The Special Committee verified the facts concerningwhether any material change in the situation that could have an impact on theTransactions occurred on or after June 26, 2023, and as a result of considering
the above-mentioned advisory matters, it confirmed that in light of thecircumstances from June 26, 2023 through March 18, 2024, there were no
circumstances that would require a change in the contents of the report that
the Special Committee made to the board of directors of the Target Company
on June 26, 2023. On March 18, 2024, the Special Committee submitted tothe board of directors of the Target Company the SC Report of March 18,2024 to the effect that it believes that there is no need to change the contentsof the above-mentioned report based on a unanimous resolution by all
members of the Special Committee. Based on this, the Target Company again
carefully considered the terms of the Tender Offer based on the Target
Company’s business performance and the environment surrounding theTransactions, while respecting the contents of the SC Report of March 18,2024 submitted by the Special Committee to the maximum possible extent;
as a result, the Target Company concluded that as of March 18, 2024, there
are no factors to change its opinion regarding the Tender Offer as of June 26,
2023.
Based on the above, at the board of directors meeting of the Target Company
held on March 18, 2024 a resolution was again adopted to the effect that theboard of directors will express an opinion in support of the Tender Offer andthat it will recommend that the Target Company’s shareholders and the Stock
Acquisition Right Holders tender their shares and stock acquisition rights,
respectively, in the Tender Offer, and that the holders of ADRs tender theirshares in the Tender Offer upon delivering their ADRs to the Depositary
Banks and withdrawing the Target Company Shares represented by ADSs
that are represented by those ADRs. In addition, all three of the Target
Company’s auditors attended the above meeting of the board of directors, andall of the auditors in attendance expressed that they had no objection to theabove resolution.
(v)

Setting minimum number of shares to be purchased satisfying majority ofminority condition
As set forth in “(1) Summary of the Tender Offer” above, the minimum
number of shares to be purchased in the Tender Offer (138,507,100 shares;
ownership percentage: 66.67%) will exceed the number equal to the numberof shares (103,880,333 shares; ownership percentage: 50.00%) equal to amajority of the Total Number of Shares After Considering Potential Shares(207,760,664 shares), i.e., a majority of the number of Target Company
Shares owned by shareholders of the Target Company who do not have aninterest in the Offeror or a so-called “majority of minority.” The Offeror
believes that the Tender Offer gives serious consideration to the intention of
the minority shareholders of the Target Company, as the Tender Offer would
not be successfully completed if it does not obtain the support of a majorityof shareholders of the Target Company who do not have an interest in the50

Offeror.
(vi) Measures to ensure there is an opportunity to receive tender offers from otherofferors
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-called
pre-announced tender offer and has extended over a period approximatelynine months from the date of announcement of the Offeror’s Press Release ofJune 26, 2023 until the commencement of the Tender Offer. Further, theOfferor and JICC have not reached an agreement with the Target Company
that would excessively restrict the Target Company from contacting
competing offerors. The Offeror therefore believes that it has ensured that theTarget Company’s shareholders, Stock Acquisition Right Holders, andholders of ADRs have an opportunity to properly determine whether to tendertheir shares, etc. in the Tender 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”)
If the Offeror is unable to acquire all of the Target Company Shares, the Stock
Acquisition Rights, and the ADRs through the Tender Offer, then the Offeror
intends to take one of the following actions after the successful completion of theTender Offer to make the Target Company a wholly-owned subsidiary of the Offeror.
(i)

Demand for the Sale of Shares, Etc.
If the total number of voting rights represented by shares owned by theOfferor is equal to or exceeds 90% of the total number of voting rights of allshareholders of the Target Company after the successful completion of theTender Offer, the Offeror intends to demand, promptly after the settlement of
the Tender Offer, that all shareholders of the Target Company (excluding theOfferor and the Target Company) (“Selling Shareholders”) sell all of theTarget Company Shares that they own (“Shares to be Sold”) to the Offeror(the “Demand for the Sale of Shares”) and demand that all of the holders of
the Stock Acquisition Rights (excluding the Offeror) (the “Selling Stock
Acquisition Right Holders”) sell all of the Stock Acquisition Rights that theyown (“Stock Acquisition Rights to be Sold”) to the Offeror (the “Demand for
the Sale of Stock Acquisition Rights”; together with the Demand for the Saleof Shares, the “Demand for the Sale of Shares, Etc.”), pursuant to theprovisions of Article 172, Paragraphs 1 and 2 of the Companies Act. In theevent of a Demand for the Sale of Shares, the Offeror intends to determinethat each of the Shares to be Sold owned by the Selling Shareholders will be
exchanged for cash consideration equal to the Tender Offer Price, and in theevent of a Demand for the Sale of Stock Acquisition Rights, the Offeror
intends to determine that each of the Stock Acquisition Rights to be Sold
owned by the Selling Stock Acquisition Right Holders will be exchanged for
cash consideration equal to the Stock Acquisition Rights Tender Offer Price.
In such an event, the Offeror will notify the Target Company of the Demand51

for the Sale of Shares, Etc. and seek the Target Company’s approval thereof.
If the Target Company approves the Demand for the Sale of Shares, Etc. by aresolution of the board of directors, then, in accordance with the procedures
provided for in relevant laws and regulations and without requiring thespecific consent of the Selling Shareholders and the Selling Stock Acquisition
Right Holders, the Offeror will acquire all of the Shares to be Sold from the
Selling Shareholders and all of the Stock Acquisition Rights to be Sold fromthe Selling Stock Acquisition Right Holders on the acquisition date stipulatedby the Demand for the Sale of Shares, Etc. In this case, the Offeror will deliver
an amount of cash consideration per Target Company Share equal to theTender Offer Price to each Selling Shareholder and an amount of cash
consideration per unit of the Stock Acquisition Right equal to the Stock
Acquisition Rights Tender Offer Price to each Selling Stock Acquisition Right
Holder in exchange for the Target Company Shares owned by the Selling
Shareholders and the Stock Acquisition Rights owned by the Selling
Acquisition Right Holders. According to the Target Company’s Press Releaseof June 26, 2023, if the Offeror conducts a Demand for the Sale of Shares,
Etc., the Target Company intends to approve the Demand for the Sale ofShares, Etc.
Since the Target Company Shares subject to the Demand for the Sale ofShares include the Target Company Shares held by the Depositary Banks thatare represented by ADRs, if the abovementioned approval is made, cash equal
to the amount obtained by multiplying the Tender Offer Price by the numberof those Target Company Shares will be delivered to the Depositary Banks.
In this case, according to the ADR Registration Statements (as defined in “(iii)
Depositary receipts for share certificates, etc.” in “(3) Price of tender offer”
under “2. Outline of the Tender Offer” below; hereinafter the same), theDepositary Banks may terminate ADRs and deliver to each of the holders of
the ADRs, in proportion to the number of ADSs they hold and that are
represented by the ADRs, cash equal to the amount obtained by convertingthe cash delivered to the Depositary Banks into US dollars and deducting thefees of the Depositary Banks and taxes, etc. in accordance with the terms set
out in the ADRs.
According to the provisions of the Companies Act that aim to protect therights of minority shareholders in relation to the Demand for the Sale ofShares, Etc., the Selling Shareholders and the Selling Stock Acquisition Right
Holders will be able to file a petition with the court for a determination of thesale price for the Shares to be Sold and the Stock Acquisition Rights to be
Sold pursuant to the provisions of Article 179-8 of the Companies Act andother relevant laws and regulations. The sale price for the Shares to be Soldand Stock Acquisition Rights to be Sold by this method will be finallydetermined by the court.
If the holders of ADRs intend to file a petition for a determination of the saleprice, they are required to deliver their ADRs to the Depositary Banks andwithdraw the Target Company Shares deposited with the Depositary Banks
before filing the petition pursuant to the provisions of Article 179-8 of theCompanies Act and other relevant laws and regulations.
52

(ii)

Share Consolidation
If the total number of voting rights represented by shares owned by theOfferor is less than 90% of the total number of voting rights of allshareholders of the Target Company after the successful completion of theTender Offer, the Offeror will request the Target Company to hold anextraordinary 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”) and(ii) to make a partial amendment to the Target Company’s Articles ofIncorporation to abolish the share unit number provisions on the condition
that the Share Consolidation becomes effective and delete the provisions
regarding the record date for ordinary general meetings of shareholders. The
Offeror intends to approve each of those proposals at the Extraordinary
Shareholders’ Meeting. If the proposal for the Share Consolidation isapproved at the Extraordinary Shareholders’ Meeting, the shareholders of theTarget Company will come to own the number of Target Company Sharesproportionate to the ratio of the Share Consolidation that is approved at theExtraordinary Shareholders’ Meeting as of the effective date of the Share
Consolidation. In such case, if, due to the Share Consolidation, the number isa fraction less than one, each shareholder of the Target Company who holds
such fractional shares will receive an amount of cash obtained by selling theTarget Company Shares equivalent to the total number of 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 theprocedures specified in Article 235 of the Companies Act and other relevantlaws and regulations. The purchase price for the aggregate sum of the Target
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 theTender Offer as a result of the sale will be equal to the price obtained bymultiplying the Tender Offer Price by the number of Target Company Shares
owned by each such shareholder. The Offeror will request the Target
Company to file a petition to the court for permission to purchase such Target
Company Shares on this basis. Although the ratio of the Share Consolidationof the Target Company Shares has not been determined as of today, it isintended that the shares of shareholders who did not tender their shares in theTender Offer (excluding the Offeror and the Target Company) will beclassified as shares less than one unit in order for the Offeror to become thesole owner of all of the Target Company Shares.
Since the Target Company Shares subject to the Share Consolidation include
the Target Company Shares held by the Depositary Banks that are represented
by ADRs, if the abovementioned determination is made, the number of Target
Company Shares held by the Depositary Banks after the Share Consolidation
will also be a fractional number of less than one share. In this case, according
to the ADR Registration Statements, the Depositary Banks may terminate the
ADRs and deliver to each of the holders of the ADRs, in proportion to thenumber of ADSs they hold and that are represented by the ADRs, cash equal
to the amount obtained by converting the cash delivered to the Depositary53

Banks into US dollars and deducting the fees of the Depositary Banks andtaxes, etc. in accordance with the terms set out in the ADRs.
According to the provisions of the Companies Act that aim to protect therights of minority shareholders in relation to the Share Consolidation, theCompanies Act provides that if the Share Consolidation occurs and there areshares less than one unit as a result thereof, each shareholder of the Target
Company may request that the Target Company purchase all such shares lessthan one unit at a fair price, and such shareholders may file a petition to thecourt to determine the price of the Target Company Shares in accordance withthe provisions of Articles 182-4 and 182-5 of the Companies Act and otherrelevant laws and regulations. The purchase price per share by this method
will be finally determined by the court.
If the holders of ADRs intend to make a demand for purchase of shares andfile a petition for a determination of the sale price, they are required to deliver
their ADRs to the Depositary Banks and withdraw the Target Company
Shares deposited with the Depositary Banks before making the demand andfiling the petition pursuant to the provisions of Articles 182-4 and 182-5 of
the Companies Act and other relevant laws and regulations.
If the Tender Offer has been successfully completed but the Offeror does not
own at least 90% of the number of the voting rights of all shareholders of theTarget Company, and if the Offeror is unable to acquire all of the Stock
Acquisition Rights in the Tender Offer and any Stock Acquisition Rights
remain unexercised, then the Offeror plans either to request the Target
Company to implement, or to itself implement, the procedures reasonably
required for carrying out the Transactions, such as the acquisition of the Stock
Acquisition Rights by the Target Company or a recommendation by the Target
Company to the holders of the Stock Acquisition Rights to waive their Stock
Acquisition Rights.
With regard to the procedures described in (i) and (ii) above, it is possible that,
depending on circumstances such as the interpretation of the relevant laws
and regulations by authorities, more time may be required or alternative
methods may be utilized to implement the procedures. However, even in sucha case, the Offeror intends to make 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 theTarget Company) will ultimately receive cash consideration equal to thenumber of Target Company Shares held by such shareholders multiplied by
the Tender Offer Price. If cash is paid to the holders of Stock Acquisition
Rights of the Target Company who did not tender their Stock Acquisition
Rights in the Tender Offer, the amount of cash to be paid to each of those
holders of the Stock Acquisition Rights shall be calculated so that suchamount is equal to the amount obtained by multiplying the respective
purchase price per unit of the Stock Acquisition Rights in the Tender Offer by
the number of such Stock Acquisition Rights of the Target Company owned
by such holders of the Stock Acquisition Rights. In this case, it is expectedthat the same will apply to the amount of the money to be delivered to the54Depositary Banks in relation to the Target Company Shares that are held by
the Depositary Banks and represented by ADRs, and according to the ADR
Registration Statements, the Depositary Banks may terminate ADRs anddeliver to each of the holders of the ADRs, in proportion to the number of
ADSs they hold and that are represented by the ADRs, cash equal to theamount obtained by converting the cash delivered to the Depositary Banks
into US dollars and deducting the fees of the Depositary Banks and taxes, etc.
in accordance with the terms set out in the ADRs.
(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,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
As stated in “(1) Summary of the Tender Offer” above, the Offeror has, inconnection with the Tender Offer, executed the Tender Offer Agreement with theTarget Company regarding the Transactions on June 26, 2023. The Tender Offer
Agreement sets forth representations and warranties by the Offeror and the Target
Company (Note 1), the Target Company’s obligations (Note 2), and certain
covenants (Note 3), and also provides that the Offeror will conduct the Tender Offeron the condition that the Tender Offer Conditions Precedent are satisfied or, at thediscretion of the Offeror, waived.
Note 1: In the Tender Offer Agreement, the Offeror represents and warrants (i) thevalidity of its incorporation, existence, and authority, (ii) the existence of
the authority and power necessary for the execution and performance of
the Tender Offer Agreement, and performance of necessary procedures,(iii) the validity and enforceability of the Tender Offer Agreement, (iv) the
absence of any conflict with laws and regulations regarding the execution
and performance of the Tender Offer Agreement, (v) the nonexistence of
any antisocial forces and absence of involvement with any antisocial
forces, (vi) the absence of any bankruptcy procedures, and (vii) thesufficiency of funds necessary for the settlement of the Tender Offer. In
addition, in the Tender Offer Agreement, the Target Company represents
and warrants (i) the validity of its incorporation, existence, and authority,
55

(ii) the existence of the authority and power necessary for the execution
and performance of the Tender Offer Agreement, and performance ofnecessary procedures, (iii) the validity and enforceability of the Tender
Offer Agreement, (iv) the absence of any conflict with laws and regulations
regarding the execution and performance of the Tender Offer Agreement,(v) the nonexistence of any antisocial forces and absence of involvementwith any antisocial forces, (vi) the absence of any bankruptcy procedures,(vii) matters relating to the Target Company Shares, (viii) the accuracy of
securities reports filed after April 1, 2021, the absence of any material offbalance-sheet liabilities, the conduct of business in the ordinary course ofbusiness after April 1, 2022 and the absence of any material adverse effect(meaning any material adverse effect on the business, financial condition,
operating results, or cash flow of the Target Company Group, any material
adverse effect on the execution of the Transactions, or any likelihood
thereof (limited to that objectively and reasonably expected)), and theabsence of unpublished material facts, (ix) with respect to any material
agreement to which the Target Company Group has become a party, theabsence of any agreement with provisions that substantially prohibit or
restrict the conduct of business, such as non-competition obligations, towhich the Offeror and its related parties are subject, and the absence ofagreements under which the Offeror and its related parties bear guarantee
obligations, additional funding obligations, or similar obligations, (x) the
absence of a violation in any material respects by the Target Group of laws
and regulations or judgments of governmental agencies, and (xi) the
accuracy of the information disclosed in due diligence and the absence of
any omissions of material facts or misleading statements.
Note 2 The following is a summary of the obligations owed by the Target
Company in the Tender Offer Agreement: (i) obligation to express andannounce the Supporting Opinion and maintain the Supporting Opinion(provided, however, that if, after having discussions in good faith (Note 3),
it is unavoidable from the perspective of the duty of care of the directorsof the Target Company, it will be deemed that the Target Company
withholding, modifying, or withdrawing the Supporting Opinion will notconstitute a breach of those obligations, and if the Target Company
withdraws the Supporting Opinion in that case, it will not owe theobligations set out in (iii) through (xii) below following that), (ii)obligation not to reach an agreement, etc. on Competing Transactions(meaning any transaction or act that is reasonably considered likely tocompete with the Transactions or hinder the execution of the Transactions
under the Tender Offer Agreement, hereinafter the same) (Note 3), (iii)
obligation to conduct business in the ordinary course of business, (iv)
obligation to grant access to information on the Target Company Group to
the Offeror to a reasonable extent if that is reasonably considerednecessary for the implementation of the Transactions, (v) obligation tocooperate in financing by the Offeror to a reasonably practical extent, (vi)obligation to make a reasonable effort to obtain consent fromcounterparties to material contracts with provisions that require theconsent of the counterparty upon consummation of the Transactions, (vii)
obligation to make a reasonable effort to notify the counterparties of56

material contracts with provisions that require prior notification to thecounterparty upon consummation the Transactions, (viii) obligation to
make a reasonable effort to explain the Transactions to the Target
Company’s in-house labor union and to obtain their understanding of theTransactions, (ix) obligation to cooperate to a reasonably practical extent
with any recommendation that an officer shareholding association,
employee shareholding association, partner company shareholding
association, or business partner shareholding association of the Target
Company or a member of any of those shareholding associations tender its
shares in the Tender Offer, (x) obligation to make efforts to obtain support
for the Transactions from major shareholders of the Target Company andobligation to cooperate with the Offeror in obtaining that support to theextent not jeopardizing the fairness of the procedures of the Transactions,(xi) obligation to notify the Offeror if it breaches any of its representations
and warranties, breaches any of its obligations, or it finds that it might beunable to satisfy the Tender Offer Conditions Precedent, (xii) obligation
to consult and notify in advance when changing business plans or budgets,and (xiii) obligation to pay compensation if it breaches any of its
representations and warranties or breaches any of its obligations under theTender Offer Agreement.
Note 3 There are provisions in the Tender Offer Agreement that restrict the Target
Company from reaching an agreement on or making a proposal, offering,or soliciting an offer for a Competing Transaction, but under the Tender
Offer Agreement, if the Target Company receives a proposal for aCompeting Transaction from a person other than the Offeror after the
execution of the Tender Offer Agreement, it shall promptly notify theOfferor of that fact and matters objectively considered necessary for theOfferor to compare and consider the terms of that Competing Transaction
with the terms of the Transactions and inform the Offeror of the status ofits discussions and consideration of that proposal to the maximum possible
extent that is reasonably practical, after which the Target Company shallhave discussions in good faith with the Offeror on a reasonably practicalresponse to the Competing Transaction (including, but not limited, to thehandling of the obligation to maintain the Supporting Opinion and theobligations owed by the Target Company under the Tender Offer
Agreement). If the Tender Offer Agreement is terminated or cancelled inconnection with the Target Company withholding, modifying, orwithdrawing the Supporting Opinion in connection with the proposal for
the Competing Transaction or discussions described above, the Target
Company shall pay the Offeror 4 billion yen.
2.

Outline of the Tender Offer(1)

Outline of the Target Company

(i)
(ii)
(iii)

Name
Address
Name and Title ofRepresentative

JSR Corporation
1-9-2 Higashi-Shimbashi, Minato-ku, Tokyo
Eric Johnson, Representative Director, CEO andPresident
57

(iv)

(v)
(vi)
(vii)

(viii)

Director
Businesses

Digital solutions business (semiconductor materials
business (including lithography materials, CMP materials,
packaging materials, and cleaning agents), display
materials business, and edge computing related business),life sciences business (drug discovery and development
services business (including contract development andmanufacturing of biopharmaceuticals and contractdevelopment of pharmaceutical products), research &diagnostics products business, and bioprocess products
business), plastics business (including ABS resins, AES
resins, AS resins, and ASA resins), and other businesses(including acrylic emulsions, waterproofing materials, andHeartnote)
Capital23,370 million yen (as of December 31, 2023)
Date of Foundation
December 10, 1957
Major Shareholders
 The Master Trust Bank of Japan, Ltd. (Trust Account) –and Ownership
13.80%
Percentage, as of SSBTC CLIENT OMNIBUS ACCOUNT BRITISH
September 30, 2023
VIRGIN ISLANDS/U.K. (Standing proxy: The
Hongkong and Shanghai Banking Corporation Limited,Tokyo Branch, Custody Department) – 7.56%
 BNY GCM CLIENT ACCOUNT JPRD AC ISG (FEAC) (Standing proxy: MUFG Bank, Ltd.) – 4.22%
 Custody Bank of Japan, Ltd. (Trust Account) – 3.65%
 JP JPMSE LUX RE UBS AG LONDON BRANCH EQ
CO (Standing proxy: MUFG Bank, Ltd.) – 2.48%
 Aya Nomura (Standing proxy: Mita Securities Co.,
Ltd.) – 1.99%
 Nippon Life Insurance Company (Standing proxy: The
Master Trust Bank of Japan, Ltd.) – 1.79%
 JPMorgan Securities Japan Co., Ltd. – 1.66%
 Mizuho Bank, Ltd. (Standing proxy: Custody Bank ofJapan, Ltd.) – 1.60%
 Meiji Yasuda Life Insurance Company (Standing proxy:
Custody Bank of Japan, Ltd.) – 1.57%
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
Note: Statements in “(vii) Major Shareholders and Ownership Percentage, as of
September 30, 2023” are based on the information stated in the “Status of the
Major Shareholders” in the Quarterly Securities Report for the First Six
Months of the 79th Fiscal Year submitted by the Target Company on
58

November 13, 2023.
(2)

Schedule(i)

Schedule

Date of resolution by theboard of directors

March 18, 2024 (Monday)
March 19, 2024 (Tuesday)

Date of public notice ofcommencement of theTender Offer

Public notices will be made electronically via the Internet,
and a notice to that effect will be published in the Nikkei
Newspaper.
(URL of the electronic notice: https://disclosure2.edinetfsa.go.jp/)

Filing date of the tender offer
March 19, 2024 (Tuesday)
registration statement(ii)

Tender offer period at the time of filing
From March 19, 2024 (Tuesday) to April 16, 2024 (Tuesday) (20 businessdays)(iii) Possibility of extension of tender offer period upon request of the Target
Company
If the Target Company submits a Position Statement in accordance with
Article 27-10, Paragraph 3 of the Act to the effect that the Target Company
requests an extension of the Tender Offer Period, the Tender Offer Period
will be extended to May 1, 2024 (Wednesday) (30 business days).
(3)

Price of tender offer(i)

Common stock: 4,350 yen per share of common stock(ii)

Stock acquisition rights(a)Stock acquisition rights issued pursuant to the resolution at the ordinary
general meeting of shareholders held on June 17, 2005 and the resolution at
the board of directors meeting held on June 17, 2005 (the “First Stock
Acquisition Rights”) (the exercise period is from June 18, 2005 to June 17,2025): 434,900 yen per stock acquisition right(b)

Stock acquisition rights issued pursuant to the resolution at the ordinary
general meeting of shareholders held on June 16, 2006 and the resolution at
the board of directors meeting held on July 10, 2006 (the “Stock Acquisition
Rights for 2006 (for Directors)”) (the exercise period is from August 2, 2006
to June 16, 2026): 434,900 yen per stock acquisition right(c)

Stock acquisition rights issued pursuant to the resolution at the ordinary59

general meeting of shareholders held on June 16, 2006 and the resolution at
the board of directors meeting held on July 10, 2006 (the “Stock Acquisition
Rights for 2006 (for Officers)”) (the exercise period is from August 2, 2006
to June 16, 2026): 434,900 yen per stock acquisition right(d)

Stock acquisition rights issued pursuant to the resolution at the board of
directors meeting held on June 15, 2007 and the resolution at the board of
directors meeting held on July 9, 2007 (the “Stock Acquisition Rights for2007”) (the exercise period is from July 11, 2007 to July 10, 2027): 434,900
yen per stock acquisition right(e)

Stock acquisition rights issued pursuant to the resolution at the board of
directors meeting held on June 13, 2008 and the resolution at the board of
directors meeting held on July 14, 2008 (the “Stock Acquisition Rights for2008”) (the exercise period is from July 16, 2008 to July 15, 2028): 434,900
yen per stock acquisition right(f)

Stock acquisition rights issued pursuant to the resolution at the board of
directors meeting held on June 16, 2009 and the resolution at the board of
directors meeting held on July 13, 2009 (the “Stock Acquisition Rights for2009”) (the exercise period is from July 15, 2009 to July 14, 2029): 434,900
yen per stock acquisition right(g)

Stock acquisition rights issued pursuant to the resolution at the board of
directors meeting held on June 18, 2010 and the resolution at the board of
directors meeting held on July 12, 2010 (the “Stock Acquisition Rights for2010”) (the exercise period is from July 14, 2010 to July 13, 2030): 434,900
yen per stock acquisition right(h)

Stock acquisition rights issued pursuant to the resolution at the board of
directors meeting held on June 17, 2011 and the resolution at the board of
directors meeting held on July 11, 2011 (the “Stock Acquisition Rights for2011”) (the exercise period is from July 13, 2011 to July 12, 2031): 434,900
yen per stock acquisition right(i)

Stock acquisition rights issued pursuant to the resolution at the board of
directors meeting held on June 15, 2012 and the resolution at the board of
directors meeting held on July 9, 2012 (the “Stock Acquisition Rights for2012”) (the exercise period is from July 11, 2012 to July 10, 2032): 434,900
yen per stock acquisition right(j)

Stock acquisition rights issued pursuant to the resolution at the board of
directors meeting held on June 21, 2013, the resolution at the board of
directors meeting held on June 27, 2013, and the resolution at the board of
directors meeting held on July 8, 2013 (the “Stock Acquisition Rights for2013”) (the exercise period is from July 17, 2013 to July 16, 2033): 434,900
yen per stock acquisition right(k)

Stock acquisition rights issued pursuant to the resolution at the board of
directors meeting held on July 14, 2014 and the resolution at the board of60

directors meeting held on July 28, 2014 (the “Stock Acquisition Rights for2014”) (the exercise period is from July 31, 2014 to July 30, 2034): 434,900
yen per stock acquisition right(The First Stock Acquisition Rights, the Stock Acquisition Rights for 2006
(for Directors), the Stock Acquisition Rights for 2006 (for Officers), the Stock
Acquisition Rights for 2007, the Stock Acquisition Rights for 2008, the Stock
Acquisition Rights for 2009, the Stock Acquisition Rights for 2010, the Stock
Acquisition Rights for 2011, the Stock Acquisition Rights for 2012, the Stock
Acquisition Rights for 2013, and the Stock Acquisition Rights for 2014 arehereinafter collectively referred to as the “Stock Acquisition Rights.”)(iii) Depositary receipts for share certificates, etc.
The Target Company Shares pertaining to the American Depositary Shares(“ADSs”) deposited with Citibank, N.A., The Bank of New York Mellon,
Convergex Depositary, Inc., and JPMorgan Chase Bank, N.A. (collectively,
the “Depositary Banks”) represented by the American Depositary Receipts(“ADRs”) for the Target Company Shares issued in the U.S. by the Depositary
Banks: 4,350 yen per share
Note: According to the registration statements for ADRs (Form F-6EF) filed
by Citibank, N.A., The Bank of New York Mellon, Convergex
Depositary, Inc., and JPMorgan Chase Bank, N.A. with the U.S.
Securities and Exchange Commission on November 4, 2008,
September 17, 2010, October 15, 2014, and August 26, 2022,
respectively (collectively, the “ADR Registration Statements”), ADRs
have been issued for the Target Company Shares, and according to theTarget Company, the Target Company was not involved in the issuanceof the ADRs. Since the Offeror aims to acquire all of the Target
Company Shares through the Tender Offer, the Offeror is required tosolicit offers to sell all share certificates, etc. issued by the Target
Company pursuant to the provisions of Article 27-2, Paragraph 5 of the
Act and Article 8, Paragraph 5, Item (iii) of the Order for Enforcementof the Financial Instruments and Exchange Act (Cabinet Order No. 321
of 1965, as amended, the “Cabinet Order”), and so the ADRs have been
included in the class of share certificates, etc. to be purchased. However,as the ADRs are securities issued in the U.S., the Offeror has found it
difficult in practice for the Offeror, which resides in Japan, to acquire
the ADRs through the Tender Offer, which will be conducted outside
the U.S., because there is no financial instruments business operator,etc. that is capable of handling the ADRs as a tender offer agent.
Therefore, in the Tender Offer, the Offeror accepts only tenders of theTarget Company Shares and the Stock Acquisition Rights and does not
accept any tender of the ADRs, but the Offeror will accept tenders of
the Target Company Shares for the ADSs represented by the ADRs.
Thus, holders of ADRs who wish to tender their ADRs in the Tender
Offer are requested to deliver them to the Depositary Banks, withdraw
the Target Company Shares pertaining to the ADSs represented by the
ADRs in advance, and tender those Target Company Shares.
61

(4)

Basis for the calculation of the Tender Offer Price(i)

Basis of calculation(a)Common stock
In determining the Tender Offer Price, JICC conducted a multifacetedand comprehensive analysis of the Target Company’s business andfinancial status based on the Target Company’s disclosed financial
information and other similar materials and the results of due diligence
conducted with respect to the Target Company from mid-March 2023
to early May 2023 and then prepared a financial model reflecting thatanalysis. As a result, a tender offer price that secures a return on
investment as required by JICC has been calculated. In light of the factthat the Target Company Shares are traded on a financial instruments
exchange, JICC also referred to (i) the closing price (3,234 yen) of theTarget Company Shares on the Prime Market of the Tokyo Stock
Exchange as of June 23, 2023, which was the business day immediately
preceding the announcement date of the planned commencement of theTender Offer (June 26, 2023), and (ii) the simple average closing pricesof the Target Company Shares over the preceding one-month period(from May 24, 2023 to June 23, 2023), three-month period (from March24, 2023 to June 23, 2023), and six-month period (from December 26,
2022 to June 23, 2023) (3,334 yen, 3,183 yen, and 3,076 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.
The Tender Offer Price per Target Company Share (4,350 yen) also
represents (i) a premium of 34.51% on 3,234 yen, the closing price of
the Target Company Shares on the Prime Market of the Tokyo Stock
Exchange as of June 23, 2023, which was the business day immediately
preceding the announcement date of the planned commencement of theTender Offer (June 26, 2023), (ii) a premium of 30.47% on 3,334 yen,
the simple average closing price for the preceding one-month period
ending on that date, (iii) a premium of 36.66% on 3,183 yen, the simple
average closing price for the preceding three-month period ending onthat date, and (iv) a premium of 41.42% on 3,076 yen, the simple
average closing price for the preceding six-month period ending on thatdate.
The Tender Offer Price per Target Company Share of 4,350 yen also
represents a premium of 0.81% on 4,315 yen, the closing price of theTarget Company Shares on the Prime Market of the Tokyo Stock
Exchange as of March 15, 2024, which is the business day immediately
preceding the announcement date of the commencement of the Tender
Offer.
62

(b)Stock Acquisition Rights
As of today, each exercise price per share of the Target Company in the
Stock Acquisition Rights is less than the Tender Offer Price. Therefore,
JICC decided that the Stock Acquisition Rights Tender Offer Price is tobe an amount obtained by multiplying the difference between theTender Offer Price of 4,350 yen and the exercise price per share of theTarget Company of the Stock Acquisition Rights by 100, which is thenumber of common shares to be issued for each of those Stock
Acquisition Rights. Specifically, the Target Company has determinedthat (i) the Stock Acquisition Rights Tender Offer Price for the First
Stock Acquisition Rights is to be 434,900 yen, which is obtained bymultiplying 4,349 yen as the difference of the Tender Offer Price andthe exercise price per share of the Target Company with respect to theFirst Stock Acquisition Rights (1 yen) by 100, (ii) the Stock Acquisition
Rights Tender Offer Price for the Stock Acquisition Rights for 2006
(for Directors) is to be 434,900 yen, which is obtained by multiplying
4,349 yen as the difference of the Tender Offer Price and the exercise
price per share of the Target Company with respect to the Stock
Acquisition Rights for 2006 (for Directors) (1 yen) by 100, (iii) the
Stock Acquisition Rights Tender Offer Price for the Stock Acquisition
Rights for 2006 (for Officers) is to be 434,900 yen, which is obtainedby multiplying 4,349 yen as the difference of the Tender Offer Priceand the exercise price per share of the Target Company with respect to
the Stock Acquisition Rights for 2006 (for Officers) (1 yen) by 100, (iv)the Stock Acquisition Rights Tender Offer Price for the Stock
Acquisition Rights for 2007 is to be 434,900 yen, which is obtained bymultiplying 4,349 yen as the difference of the Tender Offer Price andthe exercise price per share of the Target Company with respect to the
Stock Acquisition Rights for 2007 (1 yen) by 100, (v) the Stock
Acquisition Rights Tender Offer Price for the Stock Acquisition Rights
for 2008 is to be 434,900 yen, which is obtained by multiplying 4,349
yen as the difference of the Tender Offer Price and the exercise priceper share of the Target Company with respect to the Stock Acquisition
Rights for 2008 (1 yen) by 100, (vi) the Stock Acquisition Rights
Tender Offer Price for the Stock Acquisition Rights for 2009 is to be434,900 yen, which is obtained by multiplying 4,349 yen as thedifference of the Tender Offer Price and the exercise price per share of
the Target Company with respect to the Stock Acquisition Rights for2009 (1 yen) by 100, (vii) the Stock Acquisition Rights Tender Offer
Price for the Stock Acquisition Rights for 2010 is to be 434,900 yen,which is obtained by multiplying 4,349 yen as the difference of theTender Offer Price and the exercise price per share of the Target
Company with respect to the Stock Acquisition Rights for 2010 (1 yen)by 100, (viii) the Stock Acquisition Rights Tender Offer Price for the
Stock Acquisition Rights for 2011 is to be 434,900 yen, which is
obtained by multiplying 4,349 yen as the difference of the Tender Offer
Price and the exercise price per share of the Target Company withrespect to the Stock Acquisition Rights for 2011 (1 yen) by 100, (ix) the63

Stock Acquisition Rights Tender Offer Price for the Stock Acquisition
Rights for 2012 is to be 434,900 yen, which is obtained by multiplying
4,349 yen as the difference of the Tender Offer Price and the exercise
price per share of the Target Company with respect to the Stock
Acquisition Rights for 2012 (1 yen) by 100, (x) the Stock Acquisition
Rights Tender Offer Price for the Stock Acquisition Rights for 2013 is
to be 434,900 yen, which is obtained by multiplying 4,349 yen as thedifference of the Tender Offer Price and the exercise price per share of
the Target Company with respect to the Stock Acquisition Rights for2013 (1 yen) by 100, and (xi) and the Stock Acquisition Rights Tender
Offer Price for the Stock Acquisition Rights for 2014 is to be 434,900
yen, which is obtained by multiplying 4,349 yen as the difference of theTender Offer Price and the exercise price per share of the Target
Company with respect to the Stock Acquisition Rights for 2014 (1 yen)by 100.
Since JICC has determined the Stock Acquisition Rights Tender Offer
Price as stated above, it has not obtained a valuation report from any
third-party appraiser.
(c)

ADRs
In light of the fact that ADRs represent ADSs deposited with the
Depositary Banks and given that one ADS corresponds to one Target
Company Share, the purchase price for one share of ADS represented
by an ADR has been set at 4,350 yen, which is the same amount as theTender Offer Price per share of the Target Company Shares.

(ii)

Process of calculation
In determining the Tender Offer Price, JICC conducted a multifaceted andcomprehensive analysis of the Target Company’s business and financial
status based on the Target Company’s disclosed financial information andother similar materials and the results of due diligence conducted with respect
to the Target Company from mid-March to early May 2023. In light of thefact that the Target Company Shares are traded on a financial instruments
exchange, JICC also referred to (i) the closing price (3,234 yen) of the Target
Company Shares on the Prime Market of the Tokyo Stock Exchange as ofJune 23, 2023, which was the business day immediately preceding theannouncement date of the planned commencement of the Tender Offer (June26, 2023), and (ii) the simple average closing prices of the Target Company
Shares over the most recent one-month period, three-month period, and sixmonth period (3,334 yen, 3,183 yen, and 3,076 yen, respectively). In addition,by comprehensively taking into consideration the prospects for support of theTender Offer by the Target Company and the likelihood of successfullycompleting the Tender Offer, and in light of discussions and negotiations with
the Target Company, JICC decided to set the Tender Offer Price per Target
Company Share at 4,350 yen, the Stock Acquisition Rights Tender Offer Priceat 434,900 yen, and the Tender Offer Price per share of the ADRs represented
by the ADRs at 4,350 yen on June 19, 2023. JICC has not obtained a share64valuation report or a fairness opinion from a third-party appraiser given that(i) JICC has decided on the Tender Offer Price upon discussions andnegotiations with the Target Company while taking into consideration thefactors described above and (ii) JICC believes that sufficient consideration
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 ofinterest (specifically, the measures set forth in “(i) Establishment of an
Independent Special Committee at the Target Company and receipt of the SC
Report from the Special Committee” through “(v) Setting minimum numberof shares to be purchased satisfying majority of minority condition” 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”
under “1. Purpose of the Tender Offer” above).
Having confirmed that all of the Tender Offer Conditions Precedent havebeen satisfied or are certain to be satisfied by March 19, 2024, the Offeror
decided to commence the Tender Offer from March 19, 2024. There is nochange to the Tender Offer Price per Target Company Share of 4,350 yen.
(iii) 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 is
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 numberof shares to bepurchased

Common stock

207,760,664 (shares)

138,507,100 (shares)- (shares)

Total

207,760,664 (shares)

138,507,100 (shares)- (shares)

Note 1:

If the total number of Tendered Share Certificates, Etc. is less than theminimum number of shares to be purchased (138,507,100 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 (138,507,100
shares), the Offeror will purchase all the Tendered Shares Certificates,
Etc.

Note 2:

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 required65

by laws and regulations.

(6)

Note 3:The Offeror does not intend to acquire the treasury shares held by theTarget Company through the Tender Offer.

Note 4: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 (207,760,664 shares). Thismaximum number is equal to the sum (208,552,300 shares) of the total
number of issued shares of the Target Company as of December 31,
2023 (208,400,000 shares) as stated in the Target Company’s Quarterly
Securities Report for the First Nine Months and (i) the Target Company
Shares (3,700 shares) underlying the First Stock Acquisition Rights (37stock acquisition rights), (ii) the Target Company Shares (2,300 shares)
underlying the Stock Acquisition Rights for 2006 (for Directors) (23stock acquisition rights), (iii) the Target Company Shares (800 shares)
underlying the Stock Acquisition Rights for 2006 (for Officers) (8 stockacquisition rights), (iv) the Target Company Shares (4,600 shares)
underlying the Stock Acquisition Rights for 2007 (46 stock acquisitionrights), (v) the Target Company Shares (9,600 shares) underlying the
Stock Acquisition Rights for 2008 (96 stock acquisition rights), (vi) the
Target Company Shares (18,400 shares) underlying the Stock
Acquisition Rights for 2009 (184 stock acquisition rights), (vii) the
Target Company Shares (22,900 shares) underlying the Stock
Acquisition Rights for 2010 (229 stock acquisition rights), (viii) the
Target Company Shares (32,200 shares) underlying the Stock
Acquisition Rights for 2011 (322 stock acquisition rights), (ix) the
Target Company Shares (38,200 shares) underlying the Stock
Acquisition Rights for 2012 (382 stock acquisition rights), (x) the
Target Company Shares (9,000 shares) underlying the Stock
Acquisition Rights for 2013 (90 stock acquisition rights), and (xi) the
Target Company Shares (10,600 shares) underlying the Stock
Acquisition Rights for 2014 (106 stock acquisition rights), in each caseremaining as of February 29, 2024 and as reported by the Target
Company, less the treasury shares (791,636 shares) owned by the Target
Company as of December 31, 2023 as set out in the Target Company’s
Financial Results for the First Nine Months.

Note 5:The Stock Acquisition Rights may be exercised up to the last day of theTender Offer Period, but any Target Company Shares issued ortransferred through that exercise are also subject to the Tender Offer.

Changes to share ownership percentages due to the tender offer

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 by- Ownership percentage of sharecertificates, etc. prior to the tender
offer: -%- Ownership percentage of sharecertificates, etc. prior to the tender66

special 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 the tender
offer
Total number of voting rights of allshareholders of the Target Company(7)

offer: -%2,077,606 Ownership percentage of sharecertificates, etc. after the tender
offer: 100%0 Ownership percentage of sharecertificates, etc. after the tender
offer: 0.00%
2,074,783

Note 1:The “Number of voting rights represented by share certificates, etc. heldby special related parties prior to the tender offer” is the total numberof voting rights represented by share certificates, etc. held by eachspecial related party.

Note 2: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 (207,760,664
shares) in the Tender Offer stated in “(5) Number of share certificates,etc. to be purchased” above.

Note 3:The “Total number of voting rights of all shareholders of the Target
Company” is the number of voting rights of all shareholders as of
September 30, 2023 as stated in the Target Company’s Quarterly
Securities Report for the First Nine Months submitted on February 13,2024 (based on the number of shares per unit being 100 shares).
However, since shares less than one unit and Target Company Sharesthat might be issued as a result of the exercise of Stock Acquisition
Rights 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,” 2,077,606 voting rights represented by the Total Numberof Shares After Considering Potential Shares is used as a denominator.

Note 4: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 price903,758,888,400 yen
Note: The purchase price is the amount obtained by multiplying the number ofshares to be purchased in the Tender Offer (207,760,664 shares) by the Tender
Offer Price per share of the Target Company Shares (4,350 yen).

(8)

Method of settlement(i)Name and address of head office of financial instruments dealers/bank etc. in67charge of settlement of tender offer
Nomura Securities Co., Ltd. 13-1, Nihombashi 1-chome, Chuo-ku, Tokyo
Note 1: The Offeror is required to solicit offers to sell all share certificates,etc. issued by the Target Company pursuant to the provisions of Article 27-2,
Paragraph 5 of the Act and Article 8, Paragraph 5, Item (iii) of the Cabinet
Order, and so the ADRs have been included in the class of share certificates,etc. to be purchased. However, as the ADRs are securities issued in the U.S.,
the Offeror has found it difficult in practice for the Offeror, which resides inJapan, to acquire the ADRs through the Tender Offer, which will be conducted
outside the U.S., because there is no financial instruments business operator,etc. that is capable of handling the ADRs as a tender offer agent. Therefore,
in the Tender Offer, the Offeror accepts only tenders of the Target Company
Shares and does not accept any tender of the ADRs themselves, but theOfferor will accept tenders of the Target Company Shares related to the ADRs.
Thus, holders of ADRs who wish to tender their ADRs in the Tender Offer
are requested to deliver them to the Depositary Banks, withdraw the Target
Company Shares related to the ADRs in advance, and tender those Target
Company Shares. It is possible to receive the Target Company Shares bysubmitting the ADRs to the corporate trust office of the Depositary Banks andpaying the fees and taxes, etc. designated by the Depositary Banks.
(ii)

Commencement date of settlement
April 23, 2024 (Tuesday)
Note: If the Target Company submits a Position Statement in accordance with
Article 27-10, Paragraph 3 of the Act to the effect that the Target Company
requests an extension of the Tender Offer Period, the commencement date ofsettlement will be May 10, 2024 (Friday).

(iii) Method of settlement
A notice regarding the purchase under the Tender Offer will be mailed to theaddress of persons who accept the offer for the purchase of share certificates,etc. in the Tender Offer or offer the sale of share certificates, etc. in the Tender
Offer (“Tendering Shareholders”) (or the Standing Proxy in the case ofshareholders, etc. residing in foreign countries who do not have accounts withthe tender offer agent that are available for trading (including corporateshareholders, etc.) without delay after the expiration of the Tender Offer
period.
The purchase will be settled in cash. The Tendering Shareholders may receive
the sales proceeds from the tender offer in the manner they specify, including
by way of remittance, without delay after the commencement date of thesettlement (a remittance fee may be charged).
(iv) Method of return of share certificates, etc.
68

In the event that all of the Tendered Share Certificates, Etc. will not bepurchased under the terms set forth in “(1) Conditions set forth in each itemof Article 27-13, Paragraph 4 of the Act and the details thereof” and “(ii)Conditions of withdrawal, etc. of the tender offer, details thereof and methodof disclosure of withdrawal, etc.” in “(9) Other conditions and methods ofpurchase” below, the share certificates, etc. that are to be returned will be
returned promptly after the business day that is two days after the last day of
the Tender Offer Period (or the business day following the day of withdrawal,
etc. if the Offeror withdraws the Tender Offer). With respect to the shares, theshares that are to be returned will be returned to the accounts held by theTendering Shareholders with the tender offer agent by restoring the record to
the status immediately preceding the tendering of those shares (if theTendering Shareholders, Etc. wish their share certificates, etc. to betransferred to an account opened at other financial instruments business
operators, please confirm with the head office or any domestic branch officeof the tender offer agent that accepted the tender). With respect to stockacquisition rights, the documents submitted at the time of tendering of stockacquisition rights are to be delivered to the Tendering Shareholders or mailed
to the address of the Tendering Shareholders in accordance with the
instructions given by each Tendering Shareholder.
(9)

Other conditions and methods of purchase(i)

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 (138,507,100 shares), the Offeror
will not purchase any of the Tendered Share Certificates, Etc. If the total
number of Tendered Share Certificates, Etc. is equal to or exceeds theminimum number of shares to be purchased (138,507,100 shares), the Offeror
will purchase all the Tendered Share Certificates, Etc.

(ii)

Conditions of withdrawal, etc. of the tender offer, details thereof and methodof disclosure of withdrawal, etc.
If any event listed in Article 14, Paragraph 1, Items (i)(a) through (j) and (m)through (t), Items (iii)(a) through (h) and (j), as well as Article 14, Paragraph2, Items (iii) through (vi) of the Enforcement Order occurs, the Offeror may
withdraw the Tender Offer. If the corporate body determining businessexecution of the Target Company determines to (a) make a distribution of
surplus by setting a date before the commencement date of the settlement of
the Tender Offer as the record date (excluding distribution for which theamount of money and other assets to be delivered to shareholders are expected
to be less than the amounts equivalent to 10% of the book value of net assets(27,835 million yen (Note)), as stated in the non-consolidated balance sheet
at the end of the most recent fiscal year of the Target Company) (including
the case where it determines to make a distribution of surplus by setting a date
before the commencement date of the settlement of the Tender Offer as therecord date, without indicating the specific amount of the distribution of69

surplus) or (b) submit a proposal to a shareholders’ meeting to make a
distribution as described above, the Tender Offer may withdraw the Tender
Offer, considering it the case falling under “facts equivalent to those set forthin (a) through (s)” set forth in Article 14, Paragraph 1, Item (i)(t) of the
Enforcement Order. Further, “facts equivalent to those set forth in (a) through(i)” set out in Article 14, Paragraph (1), Item (iii)(j) of the Enforcement Ordermeans cases where (i) it is found that a statutory disclosure document
submitted by the Target Company in the past contains a false statement on amaterial matter or omits a material matter that should be stated, and (ii) a fact
listed in (a) through (g) of that item has occurred in an material subsidiary of
the Target Company.
If the Offeror is requested by the State Administration for Market Supervision
to postpone the Share Acquisition on or before the day before the expiration
date of the Tender Offer Period (including the extended Tender Offer Period),
the Offeror may withdraw the Tender Offer as if an event listed in Article 14,
Paragraph (1), Item (iv) of the Enforcement Order.
If the Offeror intends to withdraw the Tender Offer, the Offeror will give anelectronic public notice and publish a notice to that effect in the Nikkei
Newspaper. However, if it is deemed difficult to give the public notice by thelast day of the Tender Offer Period, the Offeror will make a publicannouncement by the method set out in Article 20 of the Cabinet Office Orderon Disclosure Required for Tender Offer for Share Certificates by Persons
Other Than Issuers (Ministry of Finance Order No. 38 of 1990, as amended,
the “Cabinet Office Order”) and give a public notice immediately after theannouncement.
Note:

If there is no change in the total number of issued shares and thenumber of treasury shares, the amount distributed per share will beequivalent to 135 yen. Specifically, this amount is the quotient(rounded up to the nearest whole yen) of 27,835 million yen, whichis equivalent to 10% (rounded down to the nearest million yen) of
the net assets stated in the non-consolidated balance sheet of theTarget Company as of March 31, 2023, which is included in theannual securities report for the 78th Fiscal Year filed by the Target
Company on June 19, 2023 (278,352 million yen), divided by
207,608,364 shares, which is the difference of the total number ofissued shares of the Target Company as of December 31, 2023 asstated in the Target Company’s Financial Results for the First Nine
Months (208,400,000 shares) less the number of treasury shares heldby the Target Company as of December 31, 2023 as stated in theTarget Company’s Financial Results for the First Nine Months(791,636 shares).

(iii) Conditions to reduce purchase price, details thereof and method of disclosureof reduction
Under Article 27-6, Paragraph 1, Item (i) of the Act, if the Target Company
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conducts any act set out in Article 13, Paragraph 1 of the Enforcement Order
during the Tender Offer Period, the Offeror may reduce the purchase price inaccordance with the standards set out in Article 19, Paragraph 1 of the Cabinet
Office Order. If the Offeror intends to reduce the purchase price, the Offeror
will give electronic public notice and publish a notice to that effect in the
Nikkei Newspaper. However, if it is deemed difficult to give the public noticeby the last day of the Tender Offer Period, the Offeror will make a publicannouncement by the method set out in Article 20 of the Cabinet Office Orderand give a public notice immediately after the announcement. If the purchaseprice is reduced, the Offeror will also purchase the Tendered Share
Certificates, Etc. on or before the date of the public notice at the reduced
purchase price.
(iv) Matters concerning Tendering Shareholders’ right to cancel tender
Tendering Shareholders may, at any time during the Tender Offer Period,
cancel their agreement under the Tender Offer. If a Tendering Shareholder
intends to terminate the agreement, he/she will be requested to deliver or maila document stating the intention to terminate the agreement for the Tender
Offer (a “Termination Notice”) to the head office or a domestic branch officeof the person designated below that accepted the tendering of sharecertificates, etc. by 3:30 p.m. on the last day of the Tender Offer Period.
However, if a Termination Notice is sent by mail, it will become effective on
the condition that it arrives by 3:30 p.m. on the last day of the Tender Offer
Period.
Please request the termination of the agreement for share certificates, etc.
tendered through the online service through the online service at
https://hometrade.nomura.co.jp/ or by delivering or mailing a Termination
Notice. If terminating through the online service, please follow the methods
described on the web page and complete the termination procedures by 3:30
p.m. on the last day of the Tender Offer Period. Any agreement for the sharecertificates, etc. tendered at the handling branch cannot be terminated by thetermination procedures through the online service. If terminating by
delivering or mailing a Termination Notice, please request the handlingbranch to send a Termination Notice in advance and deliver or mail the
Termination Notice to the handling branch by 3:30 p.m. of the last day of theTender Offer Period. However, if a Termination Notice is sent by mail, it will
become effective on the condition that it arrives by 3:30 p.m. on the last dayof the Tender Offer Period.
The Offeror will not make any claim for damages or penalty payment upon a
Tendering Shareholder’s cancellation of an agreement. Further, the cost of
returning Tendered Share Certificates, Etc. to the Tendering Shareholders will
be borne by the Offeror. If a request for cancellation is made, the Tendered
Share Certificates, Etc. will be returned promptly after the completion of theprocedures for such request for cancellation in the manner described in “(iv)
Method of return of share certificates, etc.” in “(8) Method of settlement.”(v)

Method of disclosure if the conditions of the Tender Offer are changed
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The Offeror may change the conditions, etc. of the Tender Offer during theTender Offer Period unless such change is prohibited under Article 27-6,
Paragraph 1 of the Act or Article 13, Paragraph 2 of the Enforcement Order.
If the Offeror intends to change any conditions, etc. of the Tender Offer, theOfferor will give an electronic public notice and publish a notice to that effectin the Nikkei Newspaper. However, if it is deemed difficult to give the public
notice by the last day of the Tender Offer Period, the Offeror will make apublic announcement by the method set out in Article 20 of the Cabinet Office
Order and give a public notice immediately after the announcement. If theconditions, etc. of the Tender Offer are changed, the Offeror will alsopurchase the Tendered Share Certificates, Etc. on or before the date of the
public notice in accordance with the changed conditions, etc. of the Tender
Offer.
(vi) Method of disclosure if amendment statement is filed
If the Offeror submits an amendment statement to the Director-General of the
Kanto Local Finance Bureau (excluding the cases provided for in the proviso
in Article 27-8, Paragraph 11 of the Act), the Offeror will immediately makea public announcement of the content of such amendment statement that isrelevant to the content of the public notice of the commencement of theTender Offer in the manner set out in Article 20 of the Cabinet Office Order.
The Offeror will also immediately amend the explanatory statement of theTender Offer and deliver the amended explanatory statement to the Tendering
Shareholders who have already received the previous explanatory statement.
However, if the amendments are limited in scope, the Offeror may instead
prepare and deliver to Tendering Shareholders a document stating the reason
for the amendments, the matters amended, and the details thereof.
(vii) Method of disclosure of results of the Tender Offer
The results of the Tender Offer will be made public on the day following thelast day of the Tender Offer Period in the manner set out in Article 9-4 of the
Enforcement Order and Article 30-2 of the Cabinet Office Order.
(viii) 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 or
Stock Acquisition Right Holders wish to make an offer to sell their shares in
the Tender Offer, they should first read the Tender Offer Explanation
Statement for the Tender Offer and offer their shares or stock options for saleat their own discretion. This press release neither constitutes, nor constitutes
a part of, an offer to sell or purchase, or a solicitation of an offer to sell orpurchase, any securities; neither this press release (or a part thereof) nor its
distribution may be interpreted to be the basis of any agreement in relation to
the Tender Offer; and this press release may not be relied on at the time ofentering into any such agreement.
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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 United States. In particular, Section
13(e) and Section 14(d) of the U.S. Securities Exchange Act of 1934 (asamended; hereinafter the same) and the rules prescribed thereunder do not
apply to the Tender Offer, and the Tender Offer does not conform to those
procedures and standards. Financial information contained in this press
release has been prepared in accordance with international accounting
standards, which may be materially different from the generally accepted
accounting standards in the United States or other countries. In addition, as
the Offeror is a legal entity established outside the United States and all orsome 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 United States and its officers in a nonU.S. court for violations of U.S. securities laws. Furthermore, U.S. courts may
not necessarily have jurisdiction over legal entities and their respective
subsidiaries and affiliates outside the United States.
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, the Target Company, and their affiliates do notguarantee the events portrayed in such implicit and explicit forward-looking
statements will materialize. The “forward-looking statements” in this press
release were prepared based on the information obtained by the Offeror or theTarget Company as of the date hereof, and unless required by law, the Offeror,
and Target Company, and their affiliates are not obligated to amend or revise
such forward-looking statements to reflect future matters and situation.
The financial advisors to the Offeror and the Target Company, and the tender
offer agent (including their respective affiliates) may, within their ordinary
course of business, engage during the Tender Offer Period in the purchase of,or an arrangement to purchase, Target Company Shares for their own accountor for their customers’ 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 and other applicable laws andregulations. Such purchases, etc. may be made at the market price through73

market transactions or at a price determined by negotiation outside of themarket. In the event that information regarding such purchases, etc. isdisclosed in Japan, such information will also be disclosed in a similar mannerin the United States.
If a right to request a 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.
(10) Date of public notice of commencement of the Tender Offer
March 19, 2024 (Tuesday)(11) Tender offer agent
Nomura Securities Co., Ltd. 13-1, Nihonbashi 1-chome, Chuo-ku, Tokyo
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(i)Expressions of Support for the Tender Offer
According to the Target Company’s Press Release of June 26, 2023, at theboard of directors meeting of the Target Company held on June 26, 2023, a
resolution was adopted that if the Tender Offer commences, the position of
the Target Company as of June 26, 2023 is that it will express an opinion in
support of the Tender Offer and that it will recommend that the Target
Company’s shareholders and Stock Acquisition Right Holders tender theirshares and stock acquisition rights, respectively, in the Tender Offer, and thatthe holders of ADRs tender their shares in the Tender Offer upon delivering
their ADRs to the Depositary Banks and withdrawing the Target Company
Shares pertaining to the ADSs represented by those ADRs if the Tender Offeris commenced.
At the board of directors meeting of the Target Company held on March 18,
2024, a resolution was again adopted to the effect that the board of directors
will express an opinion in support of the Tender Offer and that it will
recommend that the Target Company’s shareholders and the Stock
Acquisition Right Holders tender their shares and stock acquisition rights,
respectively, in the Tender Offer, and that the holders of ADRs tender their74

shares in the Tender Offer upon delivering their ADRs to the Depositary
Banks and withdrawing the Target Company Shares represented by ADSs
that are represented by those ADRs.
For details of the decision-making process of each meeting of the Target
Company’s board of directors mentioned above, please refer to “(iv)Approval of all directors who have no interest in the Target Company and no
objection from all corporate auditors” in “(3) Measures to ensure the fairnessof the Tender Offer Price and avoid conflicts of interest, and other measures
to ensure the fairness of the Tender Offer” under “1. Purpose of the Tender
Offer” above.
(ii)

The Tender Offer Agreement
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(i)

Release of “Notice Regarding Revisions to Dividend for the Fiscal Year
Ended March 2024 (No Dividend)”
According to the “Notice Regarding Revisions to Dividend for the Fiscal Year
Ended March 2024 (No Dividend)” released by the Target Company on June
26, 2023, at the board of directors meeting of the Target Company held on
June 26, 2023, it was resolved that the Target Company will not pay out any
dividend of surplus with a record date of September 30, 2023 (the end of thesecond quarter) and March 31, 2024 (the end of the fiscal year). For details,
please refer to the said release.
JICC’s financial advisors are JPMorgan Securities Japan Co., Ltd. andNomura Securities Co., Ltd and JICC’s legal advisors are Mori Hamada &Matsumoto and Davis Polk & Wardwell LLP.

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