October 26, 2007
To whom it may concern,
Company name

Mitsubishi Materials
CorporationAkihiko Ide, President

Representative’s
name(Securities Code No.: 5711 1st Section of Tokyo Stock
Exchange and Osaka Securities Exchange)
Toru Suzuki,
Deputy General Manager,
Contact
Corporate Communications andIR Department(TEL: +81-3-5252-5206)
Company name
Mitsubishi Shindoh Co., Ltd.
Representative’s
Masahiro Nishida, President
name(Securities Code No.: 5771 1st Section of Tokyo Stock
Exchange)
Masahiko Iinuma,
Contact
General Manager,
Administration Department(TEL: +81-3-3264-1230)
Regarding Making Mitsubishi Shindoh a Wholly Owned Subsidiary of Mitsubishi Materials
Mitsubishi Materials Corporation (hereinafter “Mitsubishi Materials”) and Mitsubishi
Shindoh Co., Ltd. (hereinafter “Mitsubishi Shindoh”) announced today that Mitsubishi Materials and
Mitsubishi Shindoh have signed a share exchange agreement to make Mitsubishi Shindoh a wholly
owned subsidiary of Mitsubishi Materials, with each company having resolved such at meetings oftheir respective boards of directors held today.
The effective date of the share exchange agreement will be February 1, 2008, subject toapproval by Mitsubishi Shindoh’s shareholders at an extraordinary general meeting of shareholders
to be held on December 21, 2007. Mitsubishi Materials will use a simplified share exchange
procedure that does not require the approval of a general meeting of its shareholders pursuant toArticle 796, Paragraph 3, of the Corporation Law. Mitsubishi Shindoh’s stock will be delisted as ofJanuary 28, 2008, prior to February 1, 2008, the effective date of the share exchange agreement.
Additionally, Mitsubishi Materials signed a similar share exchange agreement to make Sambo
Copper Alloy Co., Ltd. (¥2.5 billion in capital; Takao Hashida, President; hereinafter “SamboCopper Alloy”) a wholly owned subsidiary. (For details of that share exchange agreement, refer tothe news release issued today by Mitsubishi Materials.) Mitsubishi Shindoh is scheduled to merge
with Sambo Copper Alloy by April 1, 2008, after the share exchange procedure with Mitsubishi

1Materials is completed. (The merger will be officially determined and publicly announced inFebruary 2008 or later.)
1. Purpose of Making Mitsubishi Shindoh a Wholly Owned Subsidiary via a Share Exchange
The copper business of the Mitsubishi Materials Group has established an integrated
operating structure from mining to making fabricated copper products and recycling. In particular,
Mitsubishi Shindoh and Sambo Copper Alloy produce high-value-added products in collaboration
with Mitsubishi Materials from the development stage of copper alloy materials. Mitsubishi
Shindoh’s wide range of precision terminal/connector materials and lead frame materials bound forthe automobile and information and electronics markets are of first-tier quality and performance.
Furthermore, Eco Brass∗, which Sambo Copper Alloy manufactures and sells, is highly regarded inJapan and overseas as an eco-friendly new material. Meanwhile, customer needs are increasinglydiversified, sophisticated and complex, thereby requiring the unique, demanding characteristics ofthinner and lighter materials operable under the harsh operating environments of the automobile andelectronics industries. Moreover, a more stable and swifter global supply system has become anessential requirement of customers along with the expansion of emerging markets, such as China.
Given this environment, Mitsubishi Materials, Mitsubishi Shindoh and Sambo Copper Alloyagreed to a study regarding a business alliance for the copper alloy business on July 28, 2006 for thepurpose of enhancing the strength of product development, cost competitiveness and marketing
capabilities in the pursuit of joint development and/or effective utilization of production facilities. As
a result, the three parties agreed on a shared recognition that synergies could be maximized if
Mitsubishi Shindoh and Sambo Copper Alloy became wholly owned subsidiaries of their parentcompany, Mitsubishi Materials, and subsequently merged. Accordingly, Mitsubishi Materials andMitsubishi Shindoh today have agreed to the aforementioned share exchange.
By becoming wholly owned subsidiaries of Mitsubishi Materials and through the intended
subsequent merger, the new corporation to be derived from Mitsubishi Shindoh and Sambo Copper
Alloy will be the leading player in the domestic copper alloy industry with synergies as outlined
below:
1) Making unified and swift management decisions, as well as strengthening the verticalintra-group value chain;2) Increasing earnings with efficient capital investments in local production plants in eastern
and western Japan, and by establishing a more flexible, strategic and risk-responsive
production system;∗Eco Brass is a new lead-free copper alloy that ensures excellent cutting performance. It excels inmachining performance, such as cutting and forging with high strength, and has resolved issues such as
stress corrosion cracking and dezincification corrosion.

23) Reinforcing development capabilities by gathering development resources and enhancing
marketing functions; and4) Accelerating an overseas presence by gathering group wide management resources.
To carry out these measures, a scale-up expansion and a further increase in the competitiveedge of the group’s copper processing business, one of the three mainstays together with mines andsmelting/refining, are highly expected in the metals sector. Thus, the three existing corporations
would like to meet the expectations of the current shareholders of Mitsubishi Shindoh and Sambo
Copper Alloy, who will become shareholders of Mitsubishi Materials as a result of the exchange,
thereby also meeting the expectations of Mitsubishi Materials’ current shareholders.
To ensure the fairness and appropriateness of the share exchange ratio, Mitsubishi Materialsand Mitsubishi Shindoh each (a) conducted due-diligence using outside experts and (b) received andreviewed a calculation of the share exchange ratio by their respective third-party advisors. Following
the results, Mitsubishi Materials and Mitsubishi Shindoh carefully considered the share exchange
figures with reference to the calculation results on the share exchange ratio, and both parties
approved the final share exchange ratio as reasonable and acceptable for their respective
shareholders at meetings of their respective boards of directors held today and signed the shareexchange agreement today as well.
In order to avoid any conflict of interests with minority shareholders, at the Mitsubishi
Shindoh’s board of directors meeting, Mitsubishi Materials’ director and councillor whoconcurrently serve as a director of Mitsubishi Shindoh was not present at the deliberations orresolution of the share exchange agreement. Additionally, at the Mitsubishi Shindoh board ofdirectors meeting, Mitsubishi Materials’ senior executive officer who concurrently serves as
Mitsubishi Shindoh’s auditor was not present at the deliberations of the share exchange agreement.
Pursuant to the share exchange agreement, Mitsubishi Shindoh’s stock will be delisted as ofJanuary 28, 2008, prior to February 1, 2008, the effective date of the share exchange agreement.

3

Figure: Vertical value chain of the Mitsubishi Materials’ metals business
CopperBusinessCurrent Copper Business Structureof the Group
Copper Alloy Business after the Merger

Overseas copper mines
Mines

Copper ore

Copper ore

Naoshima Smelter& Refining

Smelting
Refining

Copperprocessing

Electrolytic

Japan's leading company in the domestic
copper alloy industry

Onahama
Smelting &Refining Co.,Ltd.

Production system with plants in East Japan and West Japan(Aizu-Wakamatsu and Sakai)ElectrolyticEfficient production increase of high-performance copper strips

Recycling

Sakai Plant

Onahama
Smelting &Refining Co.,Ltd.

Copper ingots

Copper ingots↓Becoming
wholly owned
subsidiaries⇒ Merger

More flexible, strategic and risk-responsive production system

Development of high copper alloys for strips and Excellent
rolling technologies (Mitsubishi Shindoh)+
Development of brass alloys for bars, plates, and strips, andGrain refining technology (Sambo Copper Alloy)+
Makingcopperalloys

Sambo CopperAlloy

Mitsubishi
ShindohCopper alloy
products

Copper alloy
products

Development of forming, melting and casting technologies(Mitsubishi Materials Corporation)↓
Further enhancement of the world's top-rated alloy
development capability

Copper alloy
products

UsersUsers

2. Outline of the Share Exchange(1)

Schedule for the share exchange
1) October 26, 2007

Resolution of the board of directors regarding theshare exchange agreement (Mitsubishi Materialsand Mitsubishi Shindoh)2) October 26, 2007

Signing of the share exchange agreement

3) November 12, 2007 (tentative)

Reference date for an extraordinary general
meeting of shareholders (Mitsubishi Shindoh)4) December 21, 2007 (tentative)

Extroardinary general meeting of shareholders forthe approval of the share exchange agreement(Mitsubishi Shindoh)5) January 28, 2008 (tentative)

Delisting date (Mitsubishi Shindoh)6) February 1, 2008 (tentative)

Due date for the proposed share exchange(effective date)

7) March 2008 (tentative)

Issue date of Mitsubishi Materials’ share4

certificates
Notes:
1. Mitsubishi Shindoh is scheduled to merge with Sambo Copper Alloy by April 1, 2008,
after becoming a wholly owned subsidiary of Mitsubishi Materials through the shareexchange.
2. Mitsubishi Materials will use a simplified share exchange procedure that does not
require the approval of a general meeting of its shareholders according to Article 796,Paragraph 3, of the Corporation Law.
3. The “due date” for the share exchange above is subject to change by the mutual
agreement of Mitsubishi Materials and Mitsubishi Shindoh.
(2)

Share exchange ratio

Company

Mitsubishi Materials(wholly owning parent)

Mitsubishi Shindoh(wholly owned subsidiary)

Share exchange
ratio

10.56

Notes:
1. Allotment ratio of shares
Mitsubishi Materials will issue 0.56 shares for each share of Mitsubishi Shindohcommon stock. However, Mitsubishi Materials will not issue any shares for the31,977,199 shares of Mitsubishi Shindoh’s common stock that Mitsubishi Materials
currently holds.
2. Number of new shares to be issued by the share exchange
Shares of common stock: 17,204,582 shares (rouding off a decimal point)(3)

Basis of calculation for the share exchange ratio1) Basis and details of the computation
To ensure the fairness and appropriateness of the share exchange ratio to be calculated in theshare exchange, Mitsubishi Materials designated Mitsubishi UFJ Securities, Co., Ltd. (hereinafter“Mitsubishi UFJ Securities”) and Mitsubishi Shindoh designated GCA Corporation. (hereinafter“GCA”) as their respective third-party advisors to perform the calculation of the share exchange
ratio.
To calculate the value of the stock of the respective companies, Mitsubishi UFJ Securities
adopted the market value average method for Mitsubishi Materials, and the market value averagemethod, the multiple method (a method which applies multiples to the comparable company’s
financial metrics) and the discounted cash flow (DCF) method for Mitsubishi Shindoh.

5Based on each evaluation method, Mitsubishi UFJ Securities calculated that the number of
Mitsubishi Materials shares to be allotted in exchange for each share of Mitsubishi Shindoh is asshown in the table below:

Evaluation method

Range ofshare exchange ratio

Market value
average method0.41 〜 0.52

Multiple method

0.38 〜 0.56

DCF method0.42 〜 0.64

In applying the market value average method, Mitsubishi UFJ Securities adopted theaverage closing price per share on all trading days during the six-month, three-month and one-month
periods ending on October 19, 2007, the reference date for evaluation for both Mitsubishi Materials
and Mitsubishi Shindoh.
In calculating the share exchange ratio, Mitsubishi UFJ Securities basically assumed andrelied on the accuracy and completeness of information supplied by both companies and publicly
disclosed information made available to it and did not verify such information independently. It wasassumed that there was no fact undisclosed to Mitsubishi UFJ Securities that might have asignificant effect on its calculation of the share exchange ratio. Moreover, Mitsubishi UFJ Securities
has not undertaken an independent evaluation, appraisal or assessment of any assets or liabilities(including contingent liabilities) of Mitsubishi Materials or Mitsubishi Shindoh (or their respectiveaffiliates) and has not requested any such evaluation or appraisal from any other third-party. With
respect to the financial forecast information of both companies, Mitsubishi UFJ Securities assumed
that it has been reasonably prepared with the best currently available estimates and judgment of themanagement teams of Mitsubishi Materials and Mitsubishi Shindoh.
To calculate the value of the stock of the respective companies, GCA adopted the market
value average method for Mitsubishi Materials, and the market value average method, the multiple
method (a method which applies multiples to the comparable company’s financial metrics) and thediscounted cash flow (DCF) method for Mitsubishi Shindoh.
As for the financial projections being the basis of the DCF analysis, a considerable increaseor decrease in earnings is not expected.
Based on each evaluation method, GCA calculated that the number of Mitsubishi Materials
shares to be allotted in exchange for each share of Mitsubishi Shindoh is as shown in the tablebelow.

6Evaluation method

Range ofshare exchange ratio

Market value
average method0.41 〜 0.52

Multiple method0.51 〜 0.78

DCF method

0.48 〜 0.75

In applying the market value average method, GCA adopted the average closing price pershare on all trading days during the six-month, three-month and one-month periods ending on
October 19, 2007, the reference date for evaluation for both Mitsubishi Materials and Mitsubishi
Shindoh.
In calculating the share exchange ratio, GCA basically assumed and relied on the accuracy
and completeness of information supplied by both companies and publicly disclosed information
made available to it and did not verify such information independently. It was assumed that there
was no fact undisclosed to GCA that might have significant effect on its calculation of the shareexchange ratio. Moreover, GCA has not undertaken an independent evaluation, appraisal orassessment of any assets or liabilities (including contingent liabilities) of Mitsubishi Materials or
Mitsubishi Shindoh (or their respective affiliates) and has not requested any such evaluation orappraisal from any other third-party. With respect to the financial forecast information of bothcompanies, GCA assumed that it has been reasonably prepared with the best currently available
estimates and judgment of the management teams of Mitsubishi Materials and Mitsubishi Shindoh.
Mitsubishi Materials and Mitsubishi Shindoh carefully considered the share exchange
figures with reference to the calculation results on the share exchange ratio, which were submittedby the respective aforementioned third-party advisors and, as a result of subsequent negotiations anddiscussions, both parties approved the final share exchange ratio as reasonable and acceptable for
their respective shareholders at meetings of their respective boards of directors held on October 26,
2007 and signed the share exchange agreement today as well.
The share exchange ratio is subject to change by the mutual agreement of both companies inthe event of a substantial change to any conditions on which the calculation is based.
2) Relations with third-party advisors
Mitsubishi UFJ Securities is not a related party of Mitsubishi Materials or MitsubishiShindoh. Likewise, GCA is not a related party of Mitsubishi Materials or Mitsubishi Shindoh.
(4)

Treatment of stock acquisition rights and bonds with stock acquisition rights ofMitsubishi Shindoh
Mitsubishi Shindoh has not issued any stock acquisition rights or bonds with stock7

acquisition rights.
3. Overview of Mitsubishi Materials and Mitsubishi Shindoh (as of June 30, 2007)

(1)

(2)

(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)

(12)

(13)

(14)

Company name

Mitsubishi Materials(wholly owning parent company)

Mitsubishi Shindoh(wholly owned subsidiary)Line of business

Manufacture and sales of cement
and secondary cement products;
smelting/refining, processing andsales of copper, gold, silver andother metals; manufacture andsales of cemented carbide
products for metal fabrication,
diamond-cutting tools, powder
metallurgy products andhigh-performance alloy products;
and manufacture and sales ofelectronic materials andcomponents and polycrystalline
silicon

Manufacture and sales of copperand copper alloy products,
fabricated products, and thin-film
products

April 1, 1950

May 20, 1925

Date ofestablishment
Location of head
officeRepresentative
CapitalShares issued
Net assets
Total assets
Fiscal term-end
Number ofemployees

Major customers

Principal
shareholders andshareholding
ratiosMajor
correspondentbanks

1-5-1, Otemachi, Chiyoda-ku,
Tokyo
Akihiko Ide, President¥119,457 million
1,252,092,486¥493,127 million¥1,852,598 million
March 31
19,631 (consolidated)(as of March 31, 2007)
Users in Japan and overseas ofcement, copper, processed metal
products, aluminum, electronicparts, electronic materials, energy
systems and other products
Japan Trustee Services
Bank, Ltd.: 8.2%
The Master Trust
Bank of Japan, Ltd.: 6.3%
The Bank of TokyoMitsubishi UFJ, Ltd.:

2.9%(as of March 31, 2007)
The Bank of Tokyo-Mitsubishi
UFJ, Ltd., andMitsubishi UFJ Trust and BankingCorporation

83, Niban-cho, Chiyoda-ku, Tokyo
Masahiro Nishida, President¥8,713 million
62,699,667¥18,804 million¥52,560 million
March 31
1,390 (consolidated)(as of March 31, 2007)
Users in Japan and overseas of theautomobile, semiconductor andother industries
Mitsubishi Materials Corporation:
51.0%
The Master Trust Bank of Japan,Ltd.:
2.6%
Japan Trustee Services Bank, Ltd.:
1.3%(as of March 31, 2007)
The Bank of Tokyo-Mitsubishi
UFJ, Ltd., andMitsubishi UFJ Trust and BankingCorporation(15)Relationships
between thecompanies
concerned

Capitalrelations

Mitsubishi Materials holds 51.0% of Mitsubishi
Shindoh’s issued and outstanding shares. Mitsubishi
Shindoh holds no Mitsubishi Materials’ shares.

Human
relations

A director and a councillor of Mitsubishi Materials
currently assume the positions of directors ofMitsubishi Shindoh. In addition, a senior executive
officer of Mitsubishi Materials currently assumes theposition of auditor of Mitsubishi Shindoh.

Businessrelations

Mitsubishi Materials sells electrolytic copper, ingot
copper and other products to Mitsubishi Shindoh.

Relevance torelated party

Mitsubishi Shindoh is a consolidated subsidiary of
Mitsubishi Materials.

(16)

Financial results for the most recent three fiscal years
Mitsubishi Materials(wholly owning parent company)(consolidated)
YearYearYear
Fiscal term
ended
ended
ended
Mar 2005 Mar 2006 Mar 2007

Mitsubishi Shindoh(wholly owned subsidiary)(consolidated)
YearYearYear
ended
ended
ended
Mar 2005 Mar 2006 Mar 2007Net sales

984,776 1,143,699 1,452,108

39,874

46,69569,513Operating profit

54,084

68,98178,758

2,591

3,285

3,781

Ordinary income

50,50580,759107,188

2,119

2,899

3,330

Net income

16,37458,802

71,382

598

1,623

1,937

Net income per share (yen)

14.44

51.73

60.33

10.51

27.24

30.91

Dividend per share (yen)

3.0

4.0

6.0

5.0

7.0

6.0

Net assets per share (yen)174.18265.15329.35224.42276.75298.64(Millions of yen)

9

4.

Parent Company Information after the Share Exchange(1)Company name

Mitsubishi Materials Corporation
Manufacture and sales of cement and secondary cement products;
smelting/refining, processing and sales of copper, gold, silver and othermetals; manufacture and sales of cemented carbide products for metal
fabrication, diamond-cutting tools, powder metallurgy products andhigh-performance alloy products; and manufacture and sales ofelectronic materials and components and polycrystalline silicon
1-5-1, Otemachi, Chiyoda-ku, Tokyo
Akihiko Ide, President¥119,457 million
Not determined at present
Not determined at present
March 31(2)Line of business

(3)
(4)
(5)
(6)
(7)
(8)

Location of head office
Representative
Capital
Total assets
Net assets
Fiscal term-end(9)

Outline of accounting treatment

As a category under the transactions commonly controlled by both parties, the shareexchange is expected to fall under a transaction with minority shareholders. The value of goodwillthat will be generated in connection with the share exchange has not been determined at present.
(10)

Impact of the share exchange on financial results

As Mitsubishi Shindoh is a consolidated subsidiary of Mitsubishi Materials, the effects ofthe share exchange on financial results are considered to be insignificant either on a consolidated or
nonconsolidated basis.

Mitsubishi Materials and Mitsubishi Shindoh are Japanese companies.

Information

distributed in connection with the proposed share exchange transaction is subject to Japanese
disclosure requirements that are different from those of the United States.

Financial statements

included herein have been prepared in accordance with Japanese accounting standards that may not
be comparable to the financial statements of United States companies.
It may be difficult for you to enforce your rights and any claim you may have arising underthe U.S. federal securities laws, since the companies are located in Japan, and some or all of theirofficers or directors are residents of Japan.

You may not be able to sue the companies or theirofficers or directors in a Japanese court for violations of the U.S. securities laws. Finally, it may bedifficult to compel the companies and their affiliates to subject themselves to a U.S. court’s
judgment.
You should be aware that the companies may purchase shares of Mitsubishi Shindohotherwise than under the share exchange, such as in open market or privately negotiated purchases.

10