May 13, 2014
To whom it may concern,
Company name:Name ofrepresentative:(TSE Code:Contact person:

Mitsubishi Chemical Holdings Corporation
Yoshimitsu Kobayashi
President & Chief Executive Officer
4188, First Section of the TSE)
Hajime Takasaka, General Manager,
Public Relations and Investor Relations Office
TEL.03-6748-7120

Company name:Name ofrepresentative:(TSE Code:Contact person:

Taiyo Nippon Sanso Corporation
Shinji Tanabe, President
4091, First Section of the TSE)
Masayuki Kuniya, General Manager,
Corporate Communications
TEL.03-5788-8015

Notice Regarding Execution of an Agreement in connection with Tender Offer by Mitsubishi
Chemical Holdings Corporation for Shares of Taiyo Nippon Sanso Corporation
Mitsubishi Chemical Holdings Corporation (“MCHC”) and Taiyo Nippon Sanso Corporation(“TNSC”, MCHC and TNSC are collectively referred to as the “Companies”) hereby announce thateach company executed a master agreement (the “Agreement”) in order to further enhance the capitaland business alliance relationship between the Companies and improve the corporate value of bothCompanies based on the resolution of their respective board of directors’ meetings held on May 13,
2014. MCHC will be taking steps to acquire a majority of voting rights of TNSC through a tender
offer (the “Tender Offer”) for common shares of TNSC (the “TNSC Shares”).
At its board of directors’ meeting, TNSC resolved to (i) issue an opinion in support of theTender Offer, and (ii) take a neutral position on whether to recommend that the shareholders of TNSC
accept the Tender Offer and defer to the decision of each shareholder as to whether to accept theTender Offer, if the Tender Offer commences.
MCHC and TNSC intend to maintain (i) the listing of the TNSC Shares and (ii) the autonomy of
the management of TNSC after the consummation of the Tender Offer, based on their judgment thatdoing so would serve the interests of both Companies.
The Tender Offer will commence after certain conditions, such as the completion of procedures
and responses required under domestic and foreign competition laws, are satisfied. Since it isanticipated that it will take about half a year to complete the procedures and responses required underdomestic and foreign competition laws, the Companies expect that the Tender Offer will commencein early November 2014. The Companies intend to conduct the Tender Offer as soon as possible, andwill announce the specific date once it is determined.
1．Background and Reason for Execution of the Agreement
MCHC has developed its business in a broad range of areas, such as performance products,
health care, and industrial materials, through Mitsubishi Chemical Corporation (“Mitsubishi
Chemical”), Mitsubishi Tanabe Pharma Corporation, Mitsubishi Plastics, Inc., and Mitsubishi Rayon
Co., Ltd. as the core operating companies.

1

TNSC has been focusing primarily on air separation plants that produce industrial gases(oxygen, nitrogen, and argon), while working to advance a variety of technologies and develop its
business as an industrial gas manufacturer, since it developed Japan’s first oxygen generator in 1934.
TNSC was formed in 2004 through the merger of Nippon Sanso Corporation and Taiyo Toyo Sanso
Co., Ltd. (“Taiyo Toyo Sanso”). At that time, Taiyo Toyo Sanso was in an alliance relationship with
Mitsubishi Chemical and engaged in the industrial gas manufacturing business through a joint ventureof Taiyo Toyo Sanso and Mitsubishi Chemical, and Mitsubishi Chemical possessed 34.85% (thepercentage of the total number of issued shares) of the Taiyo Toyo Sanso stock. As a result of theformation of TNSC, Mitsubishi Chemical became the largest shareholder of TNSC, holding 10.09% of
the TNSC Shares. Mitsubishi Chemical continued to acquire the TNSC Shares thereafter through themarket, and as a result, by the end of 2009, its shareholding percentage reached 15.12% (thepercentage of the total number of issued shares).
MCHC, Mitsubishi Chemical’s parent company, deeply understands the effectiveness of TNSC’s
business strategies, and the potential for improvement in TNSC. MCHC and TNSC therefore
believed that they would be able to further expand their business opportunities by causing TNSC toestablish a broad alliance relationship with the respective companies of the Mitsubishi Chemical
Holdings Group, including Mitsubishi Chemical. As announced in the press release, “NoticeRegarding the Capital and Business Alliance between Taiyo Nippon Sanso Corporation and Mitsubishi
Chemical Holdings Corporation” dated September 26, 2013, the Companies thus agreed to create abusiness alliance relationship and executed a capital and business alliance agreement. As announced
in TNSC’s press release, “Notice Regarding Issuance of New Shares and Disposition of Treasury
Shares by Way of Third-Party Allotment, and Change of the Principal Shareholder” dated September
26, 2013, for the purpose of making the business alliance even stronger to generate a synergistic effect,
and also meeting its financial needs concerning future business development, including capital
investment, TNSC has issued new shares and disposed of treasury shares by way of third-party
allotment (collectively, the “Capital Increase by Third-Party Allotment”) to MCHC. As a result, as oftoday MCHC holds 116,797,870 TNSC Shares (the holding ratio is 26.97%), including those held
indirectly through Mitsubishi Chemical.
Afterward, based on the execution of the capital and business alliance agreement and theimplementation of the third-party allotment, the Companies discussed and evaluated, among otherthings, as to the agreed-upon business alliance areas, the terms and conditions as well as the timing of
implementation, and as to other areas, potential business alliances or business development. These
discussions and evaluations were for the purpose of maximizing synergies between both corporategroups. In this process, MCHC and TNSC shared a common understanding that it is essential tofurther strengthen the foundation of their businesses in order to respond to changes in the global
competitive environment, and for that purpose, it is necessary to create further business synergies
through both Companies’ cooperation as members of the same corporate group based on an enhanced
capital relationship and through effective use of management resources of both Companies. In orderto achieve this goal, the Companies agreed to strengthen the capital relationship and business alliance
between both Companies through the Tender Offer. The Companies expect that TNSC’s changing
from an equity method affiliate of MCHC to a consolidated subsidiary of MCHC will create an evenfirmer alliance and a broad range of synergies through, inter alia, disclosure and supply of
management resources that will serve as the foundation of their businesses. Both Companies believethat it will become possible for both Companies to cooperate more closely with each other thanpreviously contemplated. Such cooperation will include, for instance, on-site cooperative businesssuch as mutual utilization of both Companies’ supply chains in and outside of Japan and TNSC’s gas
supply to the overseas manufacturing bases developed by MCHC, and joint research and developmentin certain advanced fields.
2．Outline and Manner of the Tender Offer(1) Purposes of the Tender Offer
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The Tender Offer is aimed at enhancing the capital and business alliance relationship between
the Companies and improving the corporate value of both Companies, through MCHC’s acquiring amajority of voting rights of TNSC, and the reorganization of TNSC as a consolidated subsidiarythrough the Tender Offer.
The Companies will work on a detailed examination of promoting the mutual use of therespective Companies’ distribution channel. To be more specific, the Companies will consider the
possibilities of cooperative business and transactions in every business segment, including the
expansion of sales in TNSC’s medical care business (medical gases and related equipment) through
MCHC’s distribution channel, and the utilization of TNSC’s distribution channels for MCHC’s
artificial spa generators and CFRP pressure vessels.
TNSC has thus far supplied gases through the piping (on-site plant) method, mainly to large
customers in Japan. From now on, TNSC intends to utilize its know-how for stably supplying gases,
which it has fostered over years for major domestic customers, for new overseas manufacturing basesthat will be planned by MCHC. By doing so, TNSC aims to further expand overseas business.
TNSC will also procure the base load that is stable in the long term, by supplying gases through thepiping method, and absorb demands for liquefied gases, cylinder gases, and gas-related equipment inneighboring markets, thereby aiming to expand its sales through the synergetic effect generated withexisting products/business.
As stated in “(4) Number of the TNSC Shares to be purchased in the Tender Offer” below, since
MCHC intends to maintain the listing of the TNSC Shares after the consummation of the Tender Offer,
MCHC has set 104,079,476 shares (together with the TNSC Shares that MCHC and Mitsubishi
Chemical hold as of today, the total holding percentage after the Tender Offer will be 51%) as the
maximum number of shares to be purchased in the Tender Offer. On the other hand, MCHC has set
99,748,549 shares as the minimum number of shares to be purchased in the Tender Offer. The
number of directors of TNSC appointed by MCHC will be raised to two (2) from one (1) after the
consummation of the Tender Offer, but TNSC will continue to be managed on respect for its
autonomy.
Moreover, as stated in “3.Outline of the Agreement, (4) Maintenance of ownership ratio after the
consummation of the Tender Offer” below, MCHC and TNSC have agreed that MCHC will maintainits percentage of shareholding in TNSC after the Tender Offer. MCHC does not plan to acquire
TNSC Shares additionally after the Tender Offer, and intends to maintain long-term ownership of all
the TNSC Shares that are currently held by the MCHC Group (including Mitsubishi Chemical), as
well as of all the TNSC Shares that may be acquired through the Tender Offer.
(2)

Schedule of the Tender Offer

MCHC plans to commence the Tender Offer targeting the TNSC Shares in early November
2014, as soon as possible after certain conditions, such as the completion of procedures and responses
required under domestic and foreign competition laws, are satisfied. The Companies will announce
the specific date once it is determined.
(1)
(2)
(3)
(4)

Date of Board of Directors’ Resolutions
Date of Entrance into the Agreement
Date of Public Notice of Tender Offer
Commencement
Date of Submission of Tender Offer Registration
Statement

3

May 13, 2014 (Today)
May 13, 2014 (Today)
early November 2014 (Schedule)
early November 2014 (Schedule)

(3)Tender Offer Price(i)

Tender Offer Price and Rationale for Determination
The Tender Offer Price (the “Tender Offer Price”) is planned to be 1,030 yen per TNSC Share.

To ensure the appropriateness of the Tender Offer Price, the Companies appointed financial
advisors independent of the Companies regarding financial analysis of the Tender Offer Price or thevalue of the TNSC shares, and MCHC hired J.P. Morgan Securities Japan Co., Ltd. (“J.P. Morgan”)
and TNSC hired Mizuho Securities Co., Ltd. (“Mizuho Securities”) as their respective financial
advisors, and requested a financial analysis of the Tender Offer Price or the value of the TNSC Shares.
The Companies referred to share valuation reports received from the respective financial advisors andthe results of due diligence on TNSC conducted by MCHC, and also took into consideration several
elements comprehensively, including the respective financial and business situations and asset
situations, the standards of premiums to market prices offered in previous similar equity tender offers
by entities other than the issuers, the likelihood of obtaining the support of the TNSC’s board of
directors’ for the Tender Offer, the market trend of the TNSC Share, the likely number of shareholders
that would accept the Tender Offer, the future perspectives, and after studious negotiations andconsultations between the Companies, the Companies reached an agreement that the Tender Offer
Price would be 1,030 yen per share, and based on the board of directors’ resolutions at the board of
directors’ meeting held today, the Companies concluded the Agreement. J.P. Morgan, the financial
advisor of MCHC, and Mizuho Securities, that of TNSC, are not related parties of the Companies, andhave no material interests that need to be stated regarding the Tender Offer.
The Tender Offer Price of 1,030 yen per share includes (a) a premium of 28.43% on 802 yen,which is the closing price of the TNSC Shares quoted on the Tokyo Stock Exchange on May 12, 2014,
which is the business day immediately preceding the execution of the Agreement, (b) a premium of
26.38% on 815 yen, which is the simple average closing price of the TNSC Shares quoted for the pastone (1) month period to May 12, 2014, (c) a premium of 31.04% on 786 yen, which is the simple
average closing price of the TNSC Shares quoted for the last three (3) month period to May 12, 2014,
and (d) a premium of 38.44% on 744 yen, which is the simple average closing price of the TNSC
Shares quoted for the last six (6) month period to May 12, 2014.
(ii)

Obtaining share valuation reports from independent financial advisors

As stated above, in determining the Tender Offer Price, MCHC requested that J.P. Morgan, an
independent third-party appraiser having no material interests in the Companies, calculate the value of
the TNSC Shares. J.P. Morgan valued the TNSC Shares using the average market price method, thecomparable company method, and the discounted cash flow (the “DCF”) method of analysis based on
its assessment of valuation methods in relation to the value of the TNSC Shares, and submitted theShare Valuation Report Regarding the TNSC Shares (the “JPM Valuation Report”) to MCHC on May
13, 2014. Moreover, MCHC has received a fairness opinion from J.P. Morgan regarding the Tender
Offer Price, which states that, subject to certain conditions, the Tender Offer Price is fair to MCHC
from a financial perspective (the “JPM Fairness Opinion”).
J.P. Morgan, when preparing the JPM Valuation Report, performed a financial analysis including
the average market price method, the comparable company method, and the DCF method of analysis
regarding the TNSC Shares. The JPM Valuation Report was prepared only for the purpose ofproviding information and support when the MCHC’s board of directors considered the Tender Offer.
J.P. Morgan did not recommend a specific tender offer price to MCHC or its board of directors, nor did
it recommend any price as the only adequate tender offer price.
According to the JPM Valuation Report, the valuation methods used, and the valuation ranges
derived from these methods, expressed as the price per TNSC Share, are as follows:4a)Average Market Price Method: between 744 yen and 815 yen

With the average market price method based on public information, J.P. Morgan used May 12,
2014, as the base date, and the valuation was based on 802 yen, which is the closing share price on thebase date, 815 yen, which is the simple average closing price for the past one (1) month, 786 yen,which is the simple average closing price for the last three (3) months, and 744 yen, which is thesimple average closing price for the last six (6) months.
b)Comparable Company Method: between 775 yen and 1,126 yenWith the comparable company method, J.P. Morgan used May 12, 2014, as the base date, andvalued the TNSC Shares by selecting listed companies that, while not totally comparable to TNSC, areengaged in businesses that for purposes of analysis may be considered similar to TNSC, based on thecomparison of financial indicators such as market share price, growth rate, and profitabilityc)

DCF Method: between 895 yen and 1,192 yenWith the DCF method, J.P. Morgan’s analysis was based on relevant factors such as TNSC’s
business plans and financial forecasts, approved for J.P. Morgan’s use by MCHC, profit andinvestment projects in TNSC’s business plans, the results of interviews and due diligence on TNSC,
and other publicly available information. J.P. Morgan evaluated the share value by discounting thefree cash flows that TNSC is expected to generate in the future by a range of discount rates to arrive ata range of present values. In addition, no significant increases or decreases in profit are anticipatedin TNSC’s business plans and financial forecasts, on which the DCF analysis was based.
(Note) The following is supplemental explanation of the assumptions, matters considered, and the limitations on thereview undertaken by J.P. Morgan in connection with the JPM Fairness Opinion and the financial analyses of TNSC’s equity,which were the basis for the opinion.
In providing the opinion contained in the JPM Fairness Opinion and conducting the financial analyses of TNSC’s
equity, which were the basis for the opinion, J.P. Morgan has relied upon and assumed the accuracy and completeness of all
information that was publicly available or was furnished to or discussed with J.P. Morgan by MCHC and TNSC or otherwise
reviewed by or for J.P. Morgan, and J.P. Morgan has not independently verified (nor has J.P. Morgan assumed responsibility
or liability for independently verifying) any such information or its accuracy or completeness. J.P. Morgan has notconducted or been provided with any valuation or appraisal of any assets or liabilities of MCHC or TNSC, nor has J.P.
Morgan evaluated the solvency of MCHC or TNSC under any laws relating to bankruptcy, insolvency or similar matters. In
relying on financial analyses and forecasts provided to J.P. Morgan or derived therefrom, J.P. Morgan has assumed that they
have been reasonably prepared based on assumptions reflecting the best currently available estimates and judgments bymanagement of MCHC and TNSC as to the expected future results of operations and financial condition of MCHC andTNSC to which such analyses or forecasts relate. J.P. Morgan expresses no view as to such analyses or forecasts or theassumptions on which they were based. J.P. Morgan has also assumed that the Tender Offer and the other transactions
contemplated by the Agreement will have all of the consequences described in discussions with, and materials furnished to
J.P. Morgan by, representatives of MCHC, and will be consummated as described in the Agreement and that the definitive
version of the Agreement will not differ in any material respects from the draft thereof furnished to J.P. Morgan. J.P. Morgan
has also assumed that the representations and warranties made by MCHC and TNSC in the Agreement are and will be trueand correct in all respects material to J.P. Morgan’s analysis, and that MCHC will have no exposure under any
indemnification obligations contained within the Agreement in any amount material to J.P. Morgan’s analysis. J.P. Morgan
is not a legal, regulatory, tax or accounting expert and has relied on the assessments made by advisors to MCHC with respect
to such issues. J.P. Morgan has further assumed that all material governmental, regulatory or other consents and approvals
necessary for the consummation of the Tender Offer will be obtained without any adverse effect on MCHC or TNSC or on
the contemplated benefits of the Tender Offer.
The JPM Fairness Opinion and J.P. Morgan’s financial analyses of TNSC’s equity, which were the basis for theopinion, are necessarily based on economic, market and other conditions as in effect on, and the information made available
to J.P. Morgan as of the date of the JPM Fairness Opinion. It should be understood that subsequent developments may
affect such opinion and that J.P. Morgan does not have any obligation to update, revise, or reaffirm this opinion. The JPM
Fairness Opinion is limited to the fairness to MCHC, from a financial point of view, of the Consideration to be paid by
MCHC in the proposed Tender Offer and J.P. Morgan express no opinion as to the underlying decision by MCHC to engage
in the Tender Offer. Furthermore, neither the JPM Fairness Opinion nor the financial analyses of TNSC’s equity, which are
the basis for the opinion, intend to suggest any specific tender offer price to MCHC or its board of directors or that any
specific tender offer price constituted the only appropriate tender offer price for the Tender Offer.

5J.P. Morgan has acted as financial advisor to MCHC with respect to the proposed Tender Offer and will receive a
fee from MCHC for J.P. Morgan’s services, a substantial portion of which will become payable only if the proposed Tender
Offer is consummated. In addition, MCHC has agreed to indemnify J.P. Morgan for certain liabilities arising out of J.P.
Morgan’s engagement. During the two years preceding the date of the JPM Fairness Opinion, J.P. Morgan and its affiliates
have had commercial or investment banking relationships with MCHC and TNSC for which J.P. Morgan and such affiliates
have received customary compensation. Such services during such period have included acting in a financial advisory roleto MCHC regarding capital and business alliance with TNSC in October 2013 and the acquisition of new shares of TNSC via
third party allotment in connection therewith, in addition to providing financial advisory services to MCHC in connection
with the Tender Offer. In the ordinary course of J.P. Morgan’s businesses, J.P. Morgan and its affiliates may actively trade thedebt and equity securities of MCHC or TNSC for J.P. Morgan’s own account or for the accounts of customers and,accordingly, J.P. Morgan and its affiliates may at any time hold long or short positions in such securities.

Moreover, as stated above, as one of the measures to ensure fairness in the decision-making
process regarding the Tender Offer Price, TNSC requested that Mizuho Securities, an independent
third-party appraiser having no material interest in the Companies and an unrelated party of theCompanies, calculate the value of the TNSC Shares, and TNSC received a share valuation report from
Mizuho Securities on May 13, 2014. In addition, based on actual practices in similar cases, TNSC
has not requested that Mizuho Securities issue any opinion stating that the Tender Offer Price is fairfrom a financial perspective (fairness opinion) because TNSC plans to take a neutral position onwhether to recommend that the shareholders of TNSC accept the Tender Offer and defer to thedecision of each shareholder as to whether to accept the Tender Offer.
Mizuho Securities analyzed the value of the TNSC Shares, upon certain conditions, based on thefinancial information and the financial forecasts, which TNSC had provided. Mizuho Securities
calculated the value of the TNSC Shares using (i) the average market price method, since the TNSC
Shares are listed on the Tokyo Stock Exchange and the market price of those shares is available there;(ii) the comparable company method, since there are multiple listed companies engaged in businesses
relatively similar to the business of TNSC and accordingly it is possible to estimate the value of the
TNSC Shares by comparing TNSC with those similar companies; and (iii) the DCF method, in orderto reflect the performance of TNSC’s future business activities on the valuation.
The valuation ranges per TNSC Share calculated by using the above methods are as follows,
respectively:
Average Market Price Method: between 744 yen and 815 yen.
Comparable Company Method: between 777 yen and 1,064 yen.
DCF Method:
between 779 yen and 1,169 yen.
With the average market price method, Mizuho Securities used May 12, 2014, as the basedate, and the valuation was based on 802 yen, which is the closing share price on the base date, 815
yen, which is the simple average closing price for the past one (1) month, 786 yen, which is the simple
average closing price for the last three (3) months, and 744 yen, which is the simple average closing
price for the last six (6) months.
With the comparable company method, Mizuho Securities valued the TNSC Shares throughcomparison with market share prices and financial metrics (indicating elements such as profitability)of listed companies engaged in businesses relatively similar to the business of TNSC.
With the DCF method, Mizuho Securities calculated the value of the TNSC Shares by
discounting the free cash flows that TNSC is expected to generate in the future to present value using
certain discount rates. It was based on assumptions derived from multiple sources, including profit
and investment projects in TNSC’s business plans, and publicly available information.
In addition, no significant increases or decreases in profit are anticipated in TNSC’s businessplans, on which the DCF analysis was based.

6

(4)

Number of the TNSC Shares to be purchased in the Tender Offer

The TNSC Shares are listed on the Tokyo Stock Exchange First Section, and MCHC has apolicy to strengthen the capital relationship, maintaining the TNSC Shares listing and the autonomy of
TNSC regarding its management, continuously after the consummation of the Tender Offer.
Therefore, MCHC has set a maximum number of shares (104,079,476) to be purchased in the Tender
Offer (together with the TNSC Shares that MCHC and Mitsubishi Chemical hold as of today, the total
holding percentage after the Tender Offer will be 51%), and if the total number of tendered shares
exceeds the maximum number, MCHC will refrain from purchasing some or all of the excess tenderedshares. In such an event, the transfer of shares and other settlements of the sale and purchase of thetendered shares will be conducted using the method of proportional distribution prescribed in Article
27-13, Paragraph 5, of the Financial Instruments and Exchange Act. On the other hand, MCHC has
set a minimum number of shares (99,748,549) to be purchased in the Tender Offer, which would resultin a voting rights ownership ratio for TNSC equivalent to a majority, by adding it to the number ofshares that MCHC and Mitsubishi Chemical hold as of today, and if the total number of tenderedshares is less than the minimum number, MCHC will not purchase any of the tendered shares in theTender Offer.
(5)

Other Conditions and Methods of Purchase
The method of settlement, the date of public notice of the Tender Offer commencement,
the Tender Offer agent, and any other conditions and methods of purchase will be announced
as soon as they are determined.

(6)

Plans for Support of the Tender Offer by TNSCAs announced in the “Notice regarding the Capital and Business Alliance between Taiyo
Nippon Sanso Corporation and Mitsubishi Chemical Holdings Corporation” dated September
26, 2013, the Companies have agreed to create a business alliance relationship, and haveexecuted a capital and business alliance agreement.
Afterward, based on the execution of the capital and business alliance agreement andthe implementation of the third-party allotment, the Companies discussed and evaluated,among other things, as to the agreed-upon business alliance areas, the terms and conditions aswell as the timing of implementation, and as to other areas, potential business alliances orbusiness development. These discussions and evaluations were for the purpose of
maximizing synergies between both corporate groups. In this process, MCHC and TNSC
shared a common understanding that it is necessary to further strengthen the foundation of
their businesses in order to respond to changes in the global competitive environment, and forthat purpose, it is necessary to create further business synergies through both Companies’
cooperation as members of the same corporate group based on an enhanced capital
relationship and through effective use of management resources of both Companies. In orderto achieve this goal, the Companies began consultations and negotiations regarding the Tender
Offer Price and other conditions at the beginning of January 2014.
TNSC has appointed Mizuho Securities as its financial advisor and as a third-party
appraiser, and Nishimura & Asahi as its legal advisor, and has held multiple consultations andnegotiations with MCHC regarding the significance and purposes of the Tender Offer, thepost-Tender Offer management policies, and the various conditions of the Tender Offer.
Regarding the Tender Offer Price, after receiving a proposal regarding the Tender Offer Pricefrom MCHC, TNSC obtained a share valuation report from Mizuho Securities as referencematerial for assessing the fairness of the proposed Tender Offer Price, as stated in “2.(3) (ii)
Obtaining share valuation reports from independent financial advisors”, above.

7

Based on the contents of the share valuation report obtained from Mizuho Securities andon legal advice from Nishimura & Asahi, TNSC held a board of directors’ meeting on May 13,
2014, and seriously considered the various conditions of the Tender Offer.
As a result, the board of directors of TNSC has resolved that if the Tender Offer
commences, the board will: (i) issue an opinion in support of the Tender Offer, since TNSC
has reached the conclusion that building an even firmer alliance with MCHC based on thestabilized capital relationship, which is subject to the consummation of the Tender Offer, willcontribute to the enhancement of TNSC’s corporate value, and eventually, its shareholder
value, and (ii) take a neutral position on whether to recommend that the shareholders of TNSC
accept the Tender Offer and defer to the decision of each shareholder as to whether to accept
the Tender Offer, since the maximum number of shares to be purchased has been set in theTender Offer and accordingly, the listing of the TNSC Shares is expected to be maintained
continuously after the Tender Offer.
Meanwhile, TNSC considers that the Tender Offer Price is appropriate, in light of theshare valuation report obtained from Mizuho Securities.
TNSC updated the “Measures against Large Volume Purchases of the Company Stock(Defensive Measures for Mergers)” in the seventh ordinary meeting of shareholders held on
June 29, 2011, which had been introduced in the fourth ordinary meeting of shareholders heldon June 27, 2008. Whereas TNSC intends to update the Defensive Measures for Mergers
again at its 10th ordinary meeting of shareholders scheduled to be held in late June 2014,
TNSC resolved at its board of directors’ meeting held today to support the Tender Offer,admitting that the acquisition of the TNSC Shares by MCHC under the Tender Offer does not
fall within the scope of the large volume purchases prescribed in the Defensive Measures for
Mergers.
All of the above resolutions of TNSC’s board of directors’ meeting were adopted by aunanimous vote of all directors present, whereas Mr. Shotaro Yoshimura, who is an external
director of TNSC, did not participate in the discussion and resolution of the board of directors’
meeting stated above to enhance the fairness, the transparency and the objectivity in theprocess of decision-making regarding the Tender Offer and to avoid a conflict of interest,
because he concurrently works as a director of MCHC. Further, all four corporate auditors of
TNSC attended the above board of directors’ meeting, and stated that they had no objections to
the resolutions.
3.

Outline of the Agreement
The following matters were substantially agreed under the Agreement, in addition to thematters described in “2. Outline and Manner of the Tender Offer”, above:(1)

Purpose and outline of the Agreement
By aiming to further enhance the capital and business alliance relationship between the
Companies and improve the corporate value of both Companies, in order to survive the global
competition, which is predicted to become fiercer in the future, the Companies agreed to
conduct the Tender Offer to achieve the said purposes.

(2)

Launch of the Tender Offer by MCHCMCHC will launch the Tender Offer subject to the satisfaction, as of the business day
immediately preceding the commencement date of the Tender Offer, of the following
conditions precedent: (a) TNSC’s board of directors has resolved to express the Supporting
Opinion as defined in (3) below and has announced the Supporting Opinion; (b) TNSC has not8violated any of its obligations under the Agreement to be performed by the time ofcommencement of the Tender Offer in any material respect; (c) TNSC’s representations andwarranties are true and correct in all material respects; (d) necessary licenses, approvals, andso on have been obtained or the relevant waiting period has expired without any objection
being withheld, in relation to the procedures and responses required under domestic andforeign competition laws; (e) there is no judgment, decision, order, or similar obligation froma court or administrative agency that prohibits commencement of the Tender Offer or places
restrictions on the Tender Offer; (f) no material adverse effect has occurred with respect to
TNSC’s business, assets, liabilities, financial conditions, operating results, cash flow status, or
future earnings plan; and (g) there is no material fact or a Fact Concerning Tender Offer, etc.
(as defined in Article 167(3) of the Financial Instruments and Exchange Act) that has not yet
been announced regarding TNSC. If an event falling under (f) above has occurred by thetime of commencement of the Tender Offer, the Companies will faithfully consult with eachother regarding the responses to be taken regarding the Tender Offer, including revision of itsconditions.
(3)

Support and revocation of support of the Tender Offer by TNSCTNSC shall express and announce its opinion approving the Tender Offer (the“Supporting Opinion”) and shall maintain the Supporting Opinion until the expiration of theTender Offer period. However, TNSC’s expression of the Supporting Opinion shall be
subject to the satisfaction, as of the business day immediately preceding the commencement
date of the Tender Offer, of the following conditions precedent: (a) MCHC has not violated
any of its obligations under the Agreement to be performed by the time of commencement of
the Tender Offer in any material respect; (b) MCHC’s representations and warranties are trueand correct in all material respects; (c) no event has occurred that will materially affect thecorporate value of TNSC and that will thus cause it to be reasonably decided to beinappropriate for TNSC to support the Tender Offer; and (d) there is no proposal for a tender
offer of the TNSC Shares or any other large purchasing transaction, etc. of the TNSC Shares,
etc. by a third party other than MCHC that proposes conditions that are superior to those of theTender Offer (collectively, a “Competing Transaction”) and that, due to expressing the
Supporting Opinion despite the existence of such a Competing Transaction may, in reasonable
judgment, cause TNSC’s directors to be in violation of their duty to exercise the due care of aprudent manager.

(4)

Maintenance of ownership ratio after the consummation of the Tender Offer(i)
MCHC shall maintain MCHC and its subsidiaries’ (collectively, the “MCHCGroup”) collective ownership ratio in TNSC after the consummation of the Tender
Offer.
(ii)
After the Tender Offer, if TNSC intends to conduct any act that will result in
the MCHC Group’s ownership ratio of the TNSC Shares becoming less than the
majority of the total number of issued TNSC Shares, then TNSC shall, upon
consultation with MCHC, provide MCHC with a reasonably acceptable opportunity tomaintain its ownership ratio of the TNSC Shares.

(5)

Operation and maintenance of the listing of TNSC after the consummation of the Tender Offer(i)
TNSC shall manage its business pursuant to MCHC’s “Internal Rules on theGroup Management.” Under the Group Management Rules, MCHC shall respect theautonomy of TNSC’s management, and shall support and cooperate with TNSC in fullforce.

9(ii)MCHC shall maintain the listing of the TNSC Shares, and shall not conduct
any act intended to abolish their listing.
(iii)
MCHC may nominate in principle two persons as candidates for TNSC’s
directors, out of whom MCHC may nominate a candidate for TNSC’s representative
director and chairman. TNSC may nominate a candidate for TNSC’s representative
director and president.
(iv)
TNSC shall in principle maintain its corporate name and the location of its
head office.
4.

Outline of the Companies(As of March 31, 2014, unless specifically indicated)
Corporate Name
Location
Title and Name of
the Representative
Details of BusinessStated Capital
Date of Incorporation
Number of Issued
SharesDate of Settlementof the AccountNumber of
Employees
Major Customers

Major Transacting
Banks

Major Shareholders
and Shareholding
Percentages

Mitsubishi Chemical Holdings Corporation
1-1-1, Marunouchi, Chiyoda-ku, Tokyo
Yoshimitsu Kobayashi
President & Chief Executive Officer
Management and control of groupcompanies (establishing strategies,
distributing resources, and other matters foror in relation to the entire group)
50,000 million yen
October 3, 2005

Taiyo Nippon Sanso Corporation
1-3-26, Koyama, Shinagawa-ku, Tokyo

1,506,288,107 shares

433,092,837 shares

March 31

March 3156,031 (consolidated);
104 (non-consolidated)
Mitsubishi Chemical Corporation
Mitsubishi Tanabe Pharma Corporation
Mitsubishi Plastics, Inc.
Mitsubishi Rayon Co., Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust and Banking
Corporation
Mizuho Bank, Ltd.
The Norinchukin Bank
The Master Trust Bank of
4.73%
Japan, Ltd. (Trust Account)
Meiji Yasuda Life Insurance
Company (Standing Proxy),
4.27%
Trust & Custody Services Bank,
Ltd.
Japan Trustee Services Bank,
4.18%
Ltd. (Trust Account)

12,955 (consolidated);
1,366 (non-consolidated)

Nippon Life Insurance
Company
The Bank of Tokyo-Mitsubishi
UFJ, Ltd.
Takeda Pharmaceutical
Company Limited
Tokio Marine & Nichido Fire
Insurance Co., Ltd.
TAIYO LIFE INSURANCECOMPANY

10

Shinji Tanabe, President
Production and sale of industrial gases andrelated equipment/devices
37,344 million yen
July 19, 1918

Manufacturers inside and outside Japan

Mizuho Bank, Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
The Norinchukin Bank
Mitsubishi Chemical
Corporation

14.07 %

Mitsubishi Chemical Holdings
Corporation

12.90 %JFE Steel Corporation

5.83 %

3.05%

Taiyo Nippon Sanso
Corporation’s shareholding
association

4.82 %

2.72%

Mizuho Bank, Ltd.

3.78 %

2.54%
1.98%
1.64%

Meiji Yasuda Life Insurance
Company
Master Trust Bank of Japan ,Ltd. (Trust Account)
The Norinchukin Bank

3.70 %
2.45 %
2.31 %

Japan Trustee Services Bank,
Ltd. (Trust Account 4)

1.54%

Mizuho Bank, Ltd.

1.17%

Japan Trustee Services Bank,
Ltd. (Trust Account)
National Mutual Insurance
Federation of Agricultural
Cooperatives

2.15 %
2.00 %

Relationship between the Parties
CapitalMCHC holds 116,797,870 shares (including those held indirectly) of the stock of TNSC.
Relationship
TNSC holds 10,118,148 shares (including those held indirectly) of the stock of MCHC.
Personnel
One (1) officer of MCHC concurrently serves as the external-director of TNSC.
Relationship
There are no material transactional relationships to be specifically noted, between people orTransactional
companies affiliated with TNSC, and those affiliated with MCHC. There are no material
Relationshiptransactional relationships between TNSC and MCHC to be noted.
Application
TNSC is an equity method affiliate of MCHC, and falls under the category of a related
as a Related Party party.
Operational Results and Financial Conditions for the Last 3 Fiscal Years
Accounting Period

March 2012

March 2013

March 2014

March 2012

March 2013

March 2014

Net assets(consolidated)

1,144,954

1,203,316

1,314,870

219,611224,253

298,475

Total assets(consolidated)

3,173,970

3,307,758

3,479,359

607,024

615,820731,677522.77553.54611.95506.02525.38633.693,208,168

3,088,577

3,498,834

477,451

468,387

522,746

Operating income(consolidated)

130,579

90,241

110,460

31,067

24,884

31,489Ordinary income(consolidated)

133,61487,054

103,092

29,73023,06030,54635,486

18,59632,24821,200△2,071

20,194

24.06

12.61

21.89

53.33

△5.25

49.42

10.0

12.0

12.0

12.0

12.0

12.0

Net assets per share(consolidated;in yen)Sales(consolidated)

Net income
for the year
(consolidated)
Net income pershare for the year
(consolidated;in yen)Dividends per share(yen)(in millions of yen, unless specifically indicated)

5.

Future Prospects

The specific effect of the execution of the Agreement on the business results of each of theCompanies is currently unknown. If any matters that should be disclosed arise, the Companies willpromptly disclose the details thereof, as soon as they become aware of them. Please note that theCompanies have agreed to maintain the listing of the TNSC Shares continuously after the
consummation of Tender Offer, and have included provisions to that effect in the Agreement.
END

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