July 23, 2024
Name of Company

Furukawa Electric Co., Ltd.

Name of Representative

Hideya Moridaira, President(Code: 5801 Prime Market of the Tokyo Stock Exchange)

Contact

Hiroko Takita,
Corporate Vice President and General Manager ofInvestor Relations Dept.

(TEL +81-3-6281-8540)
Notice concerning the conclusion of agreements related to the tender offer
for shares of a subsidiary and transfer of the subsidiary (projected)
The Company hereby announces that, in today’s resolution of the Board of Directors, theCompany has decided to approve an agreement with the fund where Advantage Partners,
Inc. (hereinafter “AP”) provides investment-related services (hereinafter “AP Fund”), andAP78 Co., Ltd. (hereinafter the “Offeror”) which is a wholly-owned subsidiary of Sustainable
Battery Holdings, Inc. (hereinafter “SBH”) all of whose voting shares are owned by TC
Investment Partners Co. Ltd. (hereinafter “TCIP”), a wholly-owned subsidiary of Tokyo
Century Corporation (hereinafter “TC”), regarding the following matters, among others(hereinafter the “Non-Application Agreement”): (i) the Company will not apply for the tender
offer by the Offeror (hereinafter the “Tender Offer”) for common shares of The Furukawa
Battery Co., Ltd. (hereinafter “Furukawa Battery”), a consolidated subsidiary of theCompany, (hereinafter “Furukawa Battery shares”); (ii) upon the successful closing of theTender Offer, a share consolidation will be carried out in a way where only the Company
and the Offeror are the shareholders of Furukawa Battery (hereinafter the “ShareConsolidation”);

and (iii) on the condition that the Share Consolidation takes effect, allshares of Furukawa Battery owned by the Company (18,781,200 shares; shareholding ratio(see Note): 57.30%; hereinafter “shares to be sold by the Company”) will be transferredthrough the share buyback by Furukawa Battery (hereinafter the “Share Buyback”)(hereinafter the “Share Transfer”). In the same Board’s resolution, the Company has alsodecided to approve an shareholders agreement with AP Fund, TC and TCIP, to stipulate theCompany’s acquisition of common shares of SBH (shareholding ratio: approx. 20％) andhow to operate SBH and Furukawa Battery thereafter, among others (hereinafter1

“Shareholders Agreement”). On the same date as above, the Non-Application Agreement
was executed. The details are as below.
As a result of a series of transactions scheduled under the Non-Application Agreement,etc. (hereinafter “the Transactions”), Furukawa Battery will no longer be the Company’s
consolidated subsidiary. For the details of the Transactions, please refer to today’s press
release by Furukawa Battery, the notice of expression of opinion in favor of thecommencement of and recommendation to tender in tender offer for company’s share by AP
78 Co., Ltd.
(Note) “Shareholding ratio” is computed and rounded up to the nearest third decimal placeas the percentage of the total number of shares (32,777,668 shares), which is calculated
by subtracting total number of the number of treasury shares held by Furukawa Battery(22,332 shares) as of March 31, 2024 as stated in the “Annual Securities Report for the89th Fiscal Year” released by Furukawa Battery on June 26, 2024 (hereinafter “Furukawa
Battery’s Annual Securities Report”) from the total number of Furukawa Battery’s
outstanding shares (32,800,000 shares) as of March 31, 2024 as stated in Furukawa
Battery’s Annual Securities Report. Hereinafter, the same shall apply to the calculation ofshareholding ratios.

1.

Purpose and Background of the Transactions
Established in 1950 by spinning off the battery division of the Company, Furukawa Battery

has been providing value to satisfy customers’ needs and contributing to the society with its“power of storage, motive and sustainability” of main products, storage batteries and power
supply systems. In its medium-term management plan released in May 2022, Furukawa
Battery has made clear its basic policy of solving social issues by addressing material issues
and worked on capturing overseas markets and creating new businesses, in addition tostrengthening existing businesses.
Meanwhile, the Company released its Medium-term Management Plan “Road to Vision
2030 -Transform and Challenge-” in May 2022. Under this Plan, the Company has beenworking on the review of its business portfolio by visualizing the positioning of the Group’sbusinesses and optimizing allocation of investments, towards achieving “Furukawa ElectricGroup’s Vision 2030.” Furthermore, the Company has held a series of discussion on listed
subsidiaries within the Group. Considering the positioning of Furukawa Battery in the courseof these initiatives, the Company judged that, even if the allocation of management resources
is concentrated in Furukawa Battery, it is not highly likely to increase corporate value of theGroup commensurate with or exceeding the allocation, and thus it would be the best to2

transfer the shares held by the Company to a partner who strongly supports Furukawa
Battery by making capital investments in its growth.
In such circumstances, the Company received a proposal from AP and TC for increasing
corporate value of Furukawa Battery (hereinafter the “Proposal”). Upon careful examinationof the Proposal, the Company concluded that it is possible to accelerate further growth ofFurukawa Battery and increase the corporate value by utilizing synergy between Energywith
Co., Ltd. affiliated with the above two companies and Furukawa Battery, TC’s track recordand expertise in finance as well as the affinity with automobility and environment energy
businesses, and AP’s networks within and outside Japan as well as know-how that facilitates
the growth of investee companies. Following Furukawa Battery’s acceptance of the proposal
from AP and TC, the Company concluded the Non-Application Agreement with the Offeror.
In addition, the Company is plan to conclude the Shareholders Agreement with AP Fund,TC and TCIP for stipulating the operations of SBH and Furukawa Battery.
The Company believes that the Transactions fit in with the strategy under the Mediumterm Management Plan, that is to concentrate the Group’s strengths and management
resources in the growth areas. In case the Transactions are completed, Furukawa Battery
will be removed from the Company’s consolidated subsidiaries, but the Company willcontinue to hold approx. 20% of Furukawa Battery’s shares indirectly through SBH. In orderto build a sustainable world and make people’s life safe, peaceful and rewarding, theCompany will cooperate with the partner for continuing to contribute to the further
development of storage battery business and to increase corporate value of the entire Group.
2.

Details of the Transactions

The overview of the Transactions is as follows:(1) The Offeror plans to commence the Tender Offer, in case preconditions set forth in theNon-Application Agreement are satisfied. The Company will not apply for the Tender
Offer with respect to the shares to be sold by the Company.
(2) If the Offeror fails to acquire all of Furukawa Battery shares (excluding treasury shares
owned by Furukawa Battery and the shares to be sold by the Company) upon thesuccessful closing of the Tender Offer, the Offeror plans to request for theimplementation of the Share Consolidation so that only the Offeror and the Companywill be the shareholders of Furukawa Battery.
(3) After the Offeror and the Company own all of Furukawa Battery shares (excluding
treasury shares owned by Furukawa Battery) as a result of the Share Consolidation, theCompany will transfer the shares to be sold by the Company through the Share Buyback
by Furukawa Battery.
3(4) After the Share Buyback, the Company will acquire common shares of SBH. After thecompletion of the Transactions, the Company will indirectly hold approx. 20％ against
Furukawa Battery’s outstanding shares, and Furukawa Battery will no longer be aconsolidated subsidiary of the Company.

3.

Overview of Furukawa Battery(1) Name

The Furukawa Battery Co., Ltd.

(2) Address

2-4-1, Hoshikawa, Hodogaya-ku, Yokohama city,
Kanagawa(3) Name and title ofOsamu Kuroda, President ＆ CEO

representative(4) Business outline

Manufacture, sales, installation and service inspectionof lead-acid storage batteries, alkaline storage batteries
and power supply systems such as rectifiers(5) Capital

1.64 billion yen（as of March 31, 2024）(6) Establishment

September 1, 1950

(7) Major shareholders andFurukawa Electric Co., Ltd.

57.30％

shareholding ratio

The Master Trust Bank of Japan, Ltd.

（as of March 31, 2024）(Account in Trust)（Note)

Furukawa

Battery

4.85％
Trading-Partner

Shareholding Association

1.69％

Custody Bank of Japan, Ltd. (Account inTrust)

1.45％

MSIP CLIENT SECURITIES

1.16％

Asahi Mutual Life Insurance Company

1.07％

UBS AG LONDON A/C IPB

0.76％

SEGREGATED CLIENT ACCOUNTBNY GCM CLIENT ACCOUNT JPRD AC(8) Relationship between theCompany and Furukawa

ISG (FE-AC)

0.61％

Kyojun Yonehara

0.60％

SBI SECURITIES Co., Ltd.

0.50％

CapitalThe Company owns 57.30% (see Note)

relationshipof total number of Furukawa Battery’s

Battery

outstanding shares (excluding treasury
4

shares owned by Furukawa Battery).
Personnel

3 persons from the Company assume therelationshipposition of Director of Furukawa Battery,and one of them concurrently serves as
the Company’s employee.

BusinessThe Company supply some of the raw

relationshipmaterialsandpurchasesomeofFurukawa Battery's products. In addition,
the Company lease real estate andequipment.
Status ofFurukawa Battery is the Company’s

relatedconsolidated subsidiary, and falls underparty

the category of related party.

Operating performance and financial condition in the last three fiscal years（Millions of yen）
Fiscal year

Fiscal year

Fiscal year

Fiscal year

ended March

ended March

ended March

31, 2022

31, 2023

31, 2024

Net assets

33,82634,94737,906

Total assets

60,681

63,27865,461

Net assets per share (Yen)992.95

1,028.38

1,118.64

Net sales

62,78569,53875,455Operating income

3,212

1,900

3,233

Ordinary income

3,394

2,193

3,417

Net income

3,837

797

2,574

Net income per share (Yen)

117.07

24.34

78.56

Dividend per share (Yen)

22.00

19.00

21.00

(Note) Cited from “Major Shareholders” stated in Furukawa Battery’s Annual Securities
Report.
4.

Overview of Offeror(1) Name

AP78 Co., Ltd.

(2) Address

17F Toranomon Towers Office 4-1-28 Toranomon, Minatoku, Tokyo5

(3) Name and Title ofToru Indo, Representative Director

Representative(4) Business Outline

Managementconsulting;acquisition,

holdings,management, operation, and trading of securities; and all
incidental or related businesses(5) Capital

250 thousand yen(6) Establishment

February 2, 2024

(7) Major Shareholders andSBH 100％Shareholding ratio(8) Relationship between

Capital relationship

N/A

the Company andPersonne relationship

N/A

OfferorBusiness relationship

N/A

Status of related party

N/A

5.

Overview of SBH(1) Name

Sustainable Battery Holdings, Inc.

(2) Address

17F Toranomon Towers Office 4-1-28 Toranomon, Minatoku, Tokyo(3) Name and title ofToru Indo, Representative Director

representative(4) Business outline

Management

consulting;acquisition,holdings,management, operation, and trading of securities; and all
incidental or related businesses(5) Capital

56.5 million yen(6) Establishment

June 22, 2021

(7) Major shareholders andAdvantage Partners VI, ILP

shareholding ratio

TCIP

30.7%

(voting rights basis)

CJIP (AP) VI Co-1, L.P.

14.9％

APCP VI Co-1, L.P.

14.8％
14.7％

(8) Relationship between

Capital relationship

the Company and SBH

The Company holds SBH’sclass shares.

Personnel relationship

N/A

Business relationship

N/A

Status of related partyN/A(Note) After the end of the Tender Offer period, SBH will receive capital contribution from
6TCIP and AP Fund prior to the commencement of payments associated with the Tender
Offer, as well as the Company at the same time of the Share Buyback. Consequently, SBH’s
capital amount will increase.
6.

Number of shares to be transferred and transfer price under the Share Transfer, and thenumber of shares held before and after the Transactions

Number of shares held before

18,781,200 shares

the Transactions(Number of voting rights: 187,812 units)(Percentage of voting rights held: 57.32％)(Note 1)

Number of the Shares to be

Number of shares to be sold by the Company:

transferred through this Share

18,781,200 shares (Note 2)

Transfer(Number of voting rights: 187,812 units)(Percentage of voting rights held: 57.32％)

Transfer price (projected)

18,669 million yen (Note 3)(994 yen per share)(Note 4)

Number of shares held after theNone

Transactions(Number of voting rights: None)(Percentage of voting rights held: None)(Note１) Percentage of voting rights held is based on the total number of voting rights of allshareholders (327,639 units) as of March 31, 2024 as stated in Furukawa Battery’s
Annual Securities Report.
(Note 2) Actual number of shares transferred is calculated by excluding fractional shares tobe purchased by Furukawa Battery at the Share Consolidation from the shares tobe sold by the Company.
(Note 3) The total transfer price is expected to be the amount obtained by multiplying thetransfer price per share by the number of the shares to be sold by the Company lessthe number of fractional shares to be purchased by Furukawa Battery at the Share
Consolidation. Please note that the amount stated above is a reference value
calculated by multiplying the transfer price per share by the number of shares to be
sold by the Company.
(Note 4) With respect to the transfer price per share for the Share Buyback, considering thefact that the provisions of the Corporation Tax Act (Act No. 34 of 1965, including
revisions thereafter) regarding the exclusion of deemed dividends from gross profits
with respect to the Share Transfer, in order to maximize the Tender Offer price andalso ensure the fairness among shareholders, the transfer price is planned to set at994 yen, which is equal to the amount the Company would receive after tax if the7Company applied for the Tender Offer.
7.

Schedule

Since the Tender Offer requires a certain period of time for necessary procedures andhandling based on competition laws, investment control laws and regulations in Japan andabroad (i.e. Japan and Thailand), it is informed that the Offeror will commence the Tender
Offer promptly after certain preconditions, including the completion of such procedures andhandling, are satisfied (or abandoned by the Offeror). According to the Offeror, as of today, itaims at commencing the Tender Offer in March, 2025. However, since it is difficult toaccurately forecast the period of time necessary for the procedures with competition
authorities and authorities with jurisdiction over investment control laws and regulations inJapan and abroad, the Offeror will notify of the schedule of the Tender Offer promptly after it
is fixed.
8.

Future outlook

After the Tender Offer, the Transactions are expected to be implemented after April 2025,
and in case the Transactions are successfully implemented, in the non-consolidated financial
results for the year ending March 31, 2026, the Company will record gain on sales of sharesof subsidiaries and associates of approx. 10 billion yen as extraordinary income.
The impact on the consolidated financial results for the year ending March 31, 2026 is underreview, but the book value of Furukawa Battery shares in the consolidated financial results,
which is the basis for the recording of extraordinary income and losses, differs from those in
the non-consolidated financial results, and therefore is assumed to be more limited. If there
arises any matter which requires disclosure, including the timing of the Transactions, theCompany will promptly disclose the matter.
END8

【APPENDIX】【Current status】
57.30% of Furukawa Battery shares isheld by the Company and the remaining
42.70% is held by general shareholders.

【Tender Offer by the Offeror】
In case preconditions set forth in theNon-Application

Agreementaresatisfied, the Offeror will commence theTender Offer for all Furukawa Battery
shares, excluding Furukawa Battery
shares owned by the Company andtreasury shares owned by Furukawa
Battery. The Company will not apply for
the Tender Offer.
If the Offeror fails to acquire all ofFurukawa Battery shares (excluding
treasury shares owned by Furukawa
Battery and the shares held by theCompany) upon the successful closingof the Tender Offer, the Offeror and theCompany will request Furukawa Battery
to convene a general shareholders
meeting with the agenda regarding
necessary matters for carrying out theShare Consolidation, and exercise thevoting right in favor.
After the Share Consolidation, theOfferor and the Company will own all ofFurukawa Battery shares (excluding
treasury shares owned by Furukawa
Battery).
9

【Share Buyback by Furukawa Battery】
After the Offeror and the Company own
allofFurukawa

Batteryshares(excluding treasury shares owned by
Furukawa Battery) as a result of theShare Consolidation, the Company willtransfer the shares to be sold by theCompany through the Share Buyback by
Furukawa Battery.
【After the Transactions】
After the Share Buyback, the Company
will acquire common shares of SBH.
After the Transactions, the Company will
indirectly hold approx. 20 ％againstFurukawa Battery’s outstanding shares,
and Furukawa Battery will no longer be aconsolidated subsidiary of the Company.
In addition, after the Transactions, SBH
shareholding ratio will be: AP Fundapprox. 60%, TCIP approx. 20%, and theCompany approx. 20%.

10