September 29, 2020
To All Concerned Parties
Company name
Representative

Contact for inquiries

Mitsubishi Materials Corporation
Naoki Ono, Chief Executive Officer(Securities code: 5711, First Section, Tokyo
Stock Exchange)
Yuji Omura, General Manager, Corporate
Communications Dept.
(Tel: +81-3-5252-5206)

Regarding Signing of Memorandum of Understanding
Concerning Transfer of Shares of Diamet Corporation, and Recording of Extraordinary Losses
Mitsubishi Materials Corporation (hereinafter referred to as the “Company”) hereby announces that the Company,at the meeting of its Board of Directors held today, adopted a resolution to commence detailed consultations andstudies to transfer (hereinafter referred to as the “Transfer”) the shares of Diamet Corporation (hereinafter referredto as “Diamet”), a consolidated subsidiary of the Company, to Endeavour Ⅱ United Investment Business LimitedPartnership (hereinafter referred to as "EUF-2"), a fund under management of Endeavour United Co., Ltd.
(hereinafter referred to as “Endeavour”) which is an unlimited liability partner of EUF-2 in around December 2020
and that the Company signed a Memorandum of Understanding with Endeavour today. The Company also announcesthat the Company is expected to record extraordinary losses as a provision for loss on business restructuring for thesecond quarter of the fiscal year ending March 31, 2021.
The Company plans to proceed with detailed consultations and studies with Endeavour and finalize a definitive
agreement on the Transfer in around November 2020. If the Company determines any new matters to be disclosed
in the future, it will announce separately.

1. Background and rationale
Due to deteriorating earnings from the sintered parts business (hereinafter referred to as the “Sintered partsbusiness”) of the Group in which Diamet and its subsidiaries and affiliated companies have engaged, the Company
has provided financial support to Diamet, which leads the Sintered parts business, including the underwriting ofcapital increase and direct loans. However, as it has revealed that such support alone is unlikely to be sufficient toimprove revenue of the Sintered parts business, the Company has been discussing the treatment of the Sinteredparts business, including transferring to third parties. From these rationales, the Company has reached anagreement with Endeavour to transfer the business to Endeavour aiming at restructuring it under the Endeavour’sleadership. And they decided to commence the detailed consultations and studies. Endeavour is a Japanese
investment fund which has extensive experience in business revitalization. The Company believes that a businessrestructuring led by Endeavour is the best way to revitalize and stabilize the Sintered parts business.
2. Scope of the Transfer
The entire shares of Diamet held by the Company will be transferred. Accordingly, PM Techno Corporation,
Diamet Klang (Malaysia) Sdn., Bhd. and Guangdong Diamet Powder Metallurgy Co., Ltd., which are thesubsidiaries of Diamet and also the consolidated subsidiaries of the Company, will be out of the scope ofconsolidation.

Outline of Diamet(1)

NameDiamet Corporation(2)

Location

3-1-1 Koganecho, Higashi-ku, Niigata City, Niigata(3)

Name and title of representative

Fumio Tsurumaki, President Director(4)

Business Overview(5)Stated capital

4.75 billion Japanese yen(6)Date of establishment

December 1, 2005

(7)

Major shareholder and its shareholding
ratio

Mitsubishi Materials Corporation: 100%

Production, R&D and Sales for sintered mechanical parts, Oilless
Beariings, Other powder metallurgy parts

3.Outline of the transferee(1)

Name(2)

Location(3)Ground for establishment and others

Limited liability partnership incorporated under the Limited Partnership
Act for Investment(4)

Date of establishment

September 13, 2018(5)

Total investments

35.1 billion Japanese yen (total amount of investment commitments madeby partners)(6)

Outline of unlimited liability partner

Endeavour Ⅱ United Investment Business Limited Partnership
6F, Marunouchi 2-chome Building, 2-5-1 Marunouchi, Chiyoda-ku,
TokyoCompany name

Endeavour United Co., Ltd.

Location

6F, Marunouchi 2-chome Building,Marunouchi, Chiyoda-ku, Tokyo

Name and title ofrepresentative

Tomohiko Mimura, CEOBusiness Overview

Private equity fund management

Stated capital

80 million Japanese yen

2-5-1* The transferee and the Company have no capital, personal or transactional relationships and the transferee or the Company do
not constitute a related party of each other.
4. Schedule of the Transfer
September 29, 2020 (date of this announcement) : Signing of the Memorandum of Understanding
November 2020 (expected) : Finalizing of the definitive agreement
December 2020 (expected) : Closing
5. Impact on the Company’s financial results
Regarding the Transfer, the Company is expected to record an extraordinary loss of approximately 21 billion Japanese yen as aprovision for loss on business restructuring for the second quarter of the fiscal year ending March 31, 2021. The impact of theTransfer on the Company’s financial results has been factored in the forecast of annual consolidated earnings in the “Notice ofRevisions to Earnings Forecasts” announced today.

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