NEWS RELEASE(TRANSLATION FOR REFERENCE ONLY)

Dec. 1, 2023
FDK CORPORATION
President: Ryo Nagano(Code: 6955 Standard, TOKYO)
Contact: Koichi Yanagida
General ManagerCorporate Business Planning Office(Tel: +81-3-5715-7400)

Announcement of Acquisition of Equity Interests (Conversion to Subsidiary) and Extraordinary Income
FDK CORPORATION (“FDK”) hereby announces that its Board of Directors has resolved at a meeting held today to acquire
all of Santoku’s equity interest in Baotou Santoku Battery Materials Co., Ltd. (“BSBM”), a subsidiary of Santoku Corporation(“Santoku”), as described below.
1. Reason for acquisition of equity interests
Under the FDK Group Strategy Framework 10 years’ scheme, FDK has formulated a Mid Term Business Plan “R2 (FY20232025)” and has positioned the nickel-metal hydride battery business as one of its three major existing businesses. In order tostrengthen the foundation of this business, it is essential to stably secure hydrogen absorbing alloys, its main raw material.
With the acquisition of BSBM’s equity interest, FDK intends to further differentiate ourselves from our competitors and further
solidify No.1 global market share (*1) by combining BSBM’s technology in the production and development of hydrogenabsorbing alloys with FDK’s development capabilities and sales network for nickel-metal hydride batteries. In addition, FDK
will respond to the hydrogen society of the future and grow into a world-class group in the field of hydrogen storage.
2. Overview of subsidiary to be transferred (BSBM)(1) Company NameBaotou Santoku Battery Materials Co., Ltd.
(2)

Location

No.21, Rare-earth Street, Rare-earth Hi-tech Industrial Development Zone Baotou
City, Inner Mongolia 014030, China(3)

Title and name of representative

Yukio Taira, President(4)

Business description

Production and sales of battery materials and rare earth alloys.
Trade in battery materials, rare earth alloys and their raw materials.
Trade in tungsten, molybdenum products, corundum products, alumina raw
materials and sub-materials for graphite products.

(5)

Capital

RMB 56 million (JPY 1,154 million)(6)

Date of establishment

February 15, 2001

(7)

Equity ratio

Santoku: 94.4%
Inner Mongolia High-tech Holding Co., Ltd.: 5.6%

(8)

Relationship with FDK

Capital relationship

Not applicable

Personal relationship

Not applicable

Business relationship

FDK purchases BSBM products through Santoku.

(9)

Net Assets

RMB 87 million (JPY 1,801 million) (December 31, 2022)(10)

Total Assets

RMB 139 million (JPY 2,875 million) (December 31, 2022)(11) Net Sales
RMB 166 million (JPY 3,427 million) (December 31, 2022)* Reference values converted at RMB 1 = 20.61 yen (rate at the end of November 2023)
3. Overview the counterparty of the equity acquisition(1) Company Name
Santoku Corporation(2)

Location

4-14-34 Fukaekitamachi, Higashinada-ku, Kobe, Hyogo 658-0013, Japan(3)

Title and name of representative

Tatsuhiko Kakuda, CEONEWS RELEASE(TRANSLATION FOR REFERENCE ONLY)(4)Business description

Manufacturing and sales of rare earth compounds, rare earth metals, magnet
materials and battery materials.

(5)

CapitalJPY 1,500 million(6)

Date of establishment

1949

(7)

Equity ratio

Proterial, Ltd. 100%(8)

Relationship with FDK

4. Status of acquisition of equity interest(1) Equity ratio before acquisition

Capital relationship

Not applicable

Personal relationship

Not applicableBusiness relationship

FDK purchases Santoku products.

Applicable item to related party

Not applicable0%(2)

Acquisition equity

94.4% (Whole equity of Santoku)(3)

Acquisition price

Yen equivalent to RMB 52,866,500 (JPY 1,089 million)(4) Equity ratio after acquisition
94.4%* Reference values converted at RMB 1 = 20.61 yen (rate at the end of November 2023)
5. Schedule(1) Date of resolution in board ofdirectors meeting

December 1, 2023

(2)

Date of agreement

December 1, 2023

(3)

Effective date of transfer of equity
Late February, 2024 (scheduled)interest

6. Future Prospect
In the financial results for the year ending March 31, 2024, a gain on bargain purchase of approximately JPY 500 million as an
extraordinary income will be recorded due to this acquisition of equity interest, but the amount of the accounting are still under
scrutiny. FDK will promptly announce the details of the impact amount to the consolidated business result as soon as they arefinalized.
*1: Nickel-metal hydride batteries (small size) market in 2020. Source: FUJI KEIZAI CO., LTD. “2022 Comprehensive Surveyof Battery-Related Market, Volume 1: Battery Cell Market”