January 31, 2006

News Release

Taiyo Nippon Sanso Corporation
Representative: Hiroshi Taguchi, President
Address:

3-26, Koyama 1-chome,Shinagawa-ku, Tokyo

Hitachi, Ltd.
Representative: Etsuhiko Shoyama, President & CEO
Address:

6-6, Marunouchi 1-chome,Chiyoda-ku, TokyoTNSC to acquire Hitachi Oxygen
The managements of Taiyo Nippon Sanso Corporation (TNSC) andHitachi, Ltd. recently reached a preliminary agreement on theacquisition by TNSC of Hitachi Oxygen Co., Ltd., a wholly-owned
industrial gas manufacturing and sales subsidiary of Hitachi,Ltd., through a lump-sum transfer of shares in the subsidiary.
The companies are expected to sign a share transfer
agreement in March, following the completion of the due
diligence process by TNSC. On March 31, 2006 the company willcommence operation as a wholly-owned subsidiary of TNSC.
Hitachi Oxygen, whose customer base is in Ibaraki
Prefecture (north-east of Tokyo), supplies industrial gases
such as oxygen, nitrogen and argon mainly to large users in theHitachi Group engaging in the fields of energy & infrastructure,electronics, automobiles, construction, and electric wiring.
Through the development of a supply and distribution network,
Hitachi Oxygen enjoys long-term contractual relationships with
its customers in Ibaraki. The company possesses superior
technology for gas-related applications such as an in-housedeveloped automated bulk-gas supply system for servicing remoteareas. In cooperation with other members of the Hitachi Group,
Hitachi Oxygen is also actively cultivating gas technologies
in cutting-edge fields such as atomic energy, electronics andmedical services.
As Japan’s largest manufacturer of industrial gases, TNSC
is working to further strengthen its nationwide supply network(in Hokkaido and Shikoku area), by adding the local industrial
gas producers, as our subsidiaries. By leveraging Hitachi
Oxygen’s strong base in Ibaraki, the TSNC Group will be able
to strengthen its production and distribution system, currently
covering Tochigi and Fukushima Prefectures, by extending it toIbaraki Prefecture. TNSC also aims to make use of Hitachi
Oxygen’s proprietary technologies regarding gas supply and gas
application.
Hitachi Ltd., meanwhile, is considering various measures
for strengthening its group-wide operations and enhancing its
competitiveness worldwide under its medium-term management
plan, “i.e.Hitachi Plan II,” which emphasizes further

development of its core competence. Hitachi deemed it to be more
beneficial to its long-term business development to allow its
industrial gas subsidiary to become a subsidiary of TNSC rather
than to maintain the company as its own subsidiary.

Agreement Details and Anticipated Synergistic Benefits
1. Share Transfer Agreementz

Method of transfer: TNSC is to acquire Hitachi’soutstanding shares of Hitachi Oxygen common stockz

Amount to be paid: To be determined following thecompletion of the due diligence process by TNSCz

Transfer agreement date: Within March 2006z

Transfer date: March 31, 2006 (subject to change)

2. Corporate Name Change
The name will be changed to a trade name that reflects
the company’s status as an important member of the TNSCGroup.
3. Synergies to be realized through this acquisitionz

TNSC will gain access to Hitachi Oxygen’s supply network,
based mainly in Ibaraki Prefecture. Benefits relating togas production and distribution will be available toTNSC’s production bases in nearby areas: specifically,TM Air Co., Ltd. (Kashima City, Ibaraki Prefecture), theOyama Facility (Oyama City, Tochigi Prefecture), and theIwaki Sanso Center Co., Ltd. (Iwaki City, FukushimaPrefecture), among others. In this way, TNSC will be able
to bolster its supply network to local customers servedby these facilities.
zThe TNSC Group, as an industrial gas specialist, will makefull use of Hitachi Oxygen’s considerable know-how
pertaining to gas supply and gas application technologies,
cultivated through its supply of industrial gases toother members of the Hitachi Group, and looks forward tothe future expansion of Hitachi Oxygen’s business
operations.

4. Outline of Hitachi Oxygen
Name: Hitachi Oxygen Co., Ltd.
Established: October 1, 1956
Representative: Shigekazu Nagashima, President
Head office: 1-17, Kokubucho 3-chome, Hitachi, Ibaraki
Annual sales: ¥5.6 billion (term ended March 2005, on a
non-consolidated basis)
Employees: 80 (parent company only)
Scope of business: Production and sale of gases formanufacturing, food processing and medical applications;Design and production of a wide range of gas equipment,
as well as provision of engineering services

5. Share Acquisition SchedulezWithin March 2006: Conclusion of share transfer agreementz

March 31, 2006: Share transfer date (subject to change)z

Trade name change: To be announced