Notice: This document is a translation of the original Japanese document and is only for reference
purposes. In the event of any discrepancy between this translated document and the original
Japanese document, the latter shall prevail.

December 12, 2023
80, Oshimada-machi, Nagano-shi, 381-2287 JapanSHINKO ELECTRIC INDUSTRIES CO., LTD.
Stock exchange code: 6967, TSE Prime

Notice Concerning Expression of Opinion to Support Commencement of
Tender Offer for Company Shares by JICC-04, Ltd. and Recommendation of
Tender Thereto
The Company hereby announces that it resolved at its Board of Directors meeting held today
to express its current opinion that, if commenced, it will express an opinion to support the tender
offer (the “Tender Offer”) for the Company’s common shares (the “Company Shares”) to be
conducted by JICC-04, Ltd. (the “Tender Offeror”) and recommend that its shareholders tendertheir shares in the Tender Offer, as below.
According to the Tender Offeror, because the procedures and steps required under domestic andforeign competition laws (at present, while it is believed that procedures will be required inJapan and foreign countries including China and South Korea and that procedures may berequired in Vietnam, the decision on whether it is necessary to take procedures may change inthe future depending on further confirmation of facts concerning the Company’s business orassets and views expressed by relevant authorities; hereinafter the same) and foreign investment
control laws and regulations (at present, while it is believed that procedures may be required in
the U.S., the decision on whether it is necessary to take procedures may change in the future
depending on further confirmation of facts concerning the Company’s business or assets andviews expressed by relevant authorities; hereinafter the same) will take time to complete, theTender Offeror plans to commence the Tender Offer on the following date (the “Tender Offer
Commencement Date”): a date that is (i) within 10 business days after the aforementioned
procedures and steps are completed and other conditions precedent (Note 1) set out in the
Master Transaction Agreement (as defined in “(I) Overview of Tender Offer” in “(2) Basis andReasons for Opinion Regarding Tender Offer” in “3. Details, Basis, and Reasons for Opinion
Regarding Tender Offer” below; hereinafter the same) (those conditions precedent, the “Tender
Offer Conditions Precedent”) (excluding those to be satisfied on the commencement date of theTender Offer) are satisfied (or waived at the discretion of the Tender Offeror (Note 2)) (however,
if a Counter Proposal (as defined in “(1) Master Transaction Agreement” in “4. Matters
Concerning Material Agreements Related to Tender Offer” below; hereinafter the same) has
been made as of such date, then the earlier of (a) the date on which 20 business days haveelapsed since the date on which Fujitsu Limited(“Fujitsu”) makes a request to the Tender
Offeror for consultation regarding changing the Tender Offer Price (as defined in “2. Purchase
Price, Etc.” below) and the Repurchase Price (as defined in “(I) Overview of Tender Offer” in“(2) Basis and Reasons for Opinion Regarding Tender Offer” in “3. Details, Basis, and Reasonsfor Opinion Regarding Tender Offer” below; hereinafter the same) or (b) the date on which
1Fujitsu covenants in writing that it will not accept the Counter Proposal) and (ii) determined by
the Tender Offeror upon consultation with Fujitsu. As of today, the Tender Offeror aims, basedon discussions with local law firms concerning such procedures, to commence the Tender Offerin or around late August 2024, but since it is difficult to accurately estimate the amount of timerequired for the procedures involving foreign competition authorities and authorities having
jurisdiction over investment control laws and regulations, the detailed schedule for the Tender
Offer will be promptly announced as soon as it is decided. Any changes to the expected timingof the commencement of the Tender Offer will be also announced promptly.
Note 1:

Under the Master Transaction Agreement, the Tender Offer Conditions Precedent
are stipulated as follows: (i) the permanent Special Committee (as defined in “(III)Process of and Reasons for Decision-Making by Company to Support Tender Offer”
in “(2) Basis and Reasons for Opinion Regarding Tender Offer” in “3. Details, Basis,
and Reasons for Opinion Regarding Tender Offer” below), established by theCompany on June 17, 2022 based on the Corporate Governance Code published by
the Tokyo Stock Exchange, has reported to the board of directors of the Company
that it is appropriate for the board of directors of the Company to express its opinion
in favor of the Transactions (as defined in “(I) Overview of Tender Offer” in “(2)Basis and Reasons for Opinion Regarding Tender Offer” in “3. Details, Basis, andReasons for Opinion Regarding Tender Offer” below; hereinafter the same) and torecommend that the shareholders of the Company tender their shares in the Tender
Offer, and the report has not been changed or withdrawn; (ii) the board of directorsof the Company has adopted a resolution with the approval of all disinterested
directors to express its opinion in favor of the Tender Offer and to recommend thatthe shareholders of the Company tender their shares in the Tender Offer, and that
opinion has been publicly announced in accordance with laws and regulations andhas not been changed or withdrawn, and no resolution in contradiction therewith
has been passed; (iii) no judgment has been made or is likely to be made by any
judicial or administrative agency that restricts or prohibits the Transactions; (iv)
Fujitsu has performed and complied with, in all material respects, all of its
obligations under the Master Transaction Agreement (Note 3), and there has beenno breach of Fujitsu’s representations and warranties under the Master Transaction
Agreement (Note 4) that would have a material adverse effect (Note 5) (however,Fujitsu shall be given an opportunity to cure any nonperformance, noncompliance,or breach in advance, and if the nonperformance, noncompliance, or breach is cured
within a reasonable period of time, the foregoing conditions shall be deemedsatisfied); (v) the acquisition of Clearance (Note 6) has been completed; (vi)confirmation has been obtained in writing from the Company that, as of the business
day immediately preceding the Tender Offer Commencement Date, there is nomaterial fact regarding the business, etc. (excluding those publicly announced inaccordance with Article 166, Paragraph 4 of the Financial Instruments andExchange Act (Act No. 25 of 1948, as amended; the “Act”) of the Company asprovided for in Article 166, Paragraph 2 of the Act, except for matters relating to
the Transactions including the Tender Offer to be announced on that date by theCompany; (vii) no settlement failure event (Note 7) has occurred with regard to thefinancial institution that will become the lender in the borrowings (including
mezzanine borrowings) by the Tender Offeror or its parent company for the purposeof financing the Transactions; (viii) the “Memorandum of Understanding
Regarding Tender Offer” (the “MOU”) between the Tender Offeror and theCompany dated as of the date of execution of the Master Transaction Agreement2remains in effect, and the Company has performed and complied with, in allmaterial respects, all of its obligations under the MOU (however, the foregoingconditions shall be deemed satisfied unless a breach of such obligations has amaterial adverse effect); (ix) if the Tender Offer has commenced on or after the dateof execution of the Master Transaction Agreement, no circumstances have arisen in
the Company that would allow the withdrawal of the Tender Offer pursuant to theprovisions of the Article 27-11, Paragraph 1 of the Act (however, limited to thecircumstances set out in Article 14, Paragraph 1, Item 3 of the Order for
Enforcement of the Financial Instruments and Exchange Act (Cabinet Order No.
321 of 1965, as amended)) (the foregoing condition shall be deemed satisfied unlessthe circumstances have a material adverse effect); and (x) no proposal for a dividendof surplus to be implemented on or after the execution date of the MasterTransaction Agreement has been approved at any shareholders’ meeting of theCompany. If any Counter Proposal is made before the commencement of the Tender
Offer, the Tender Offeror shall not bear an obligation to commence the Tender Offer
unless Fujitsu covenants in writing not to accept the Counter Proposal or the Tender
Offeror changes the Tender Offer Price to an amount higher than the consideration
proposed in the Counter Proposal and changes the Repurchase Price to an amountthat, taking tax effects into account, is substantially higher than the consideration
proposed in the Counter Proposal. Further, since the Master Transaction Agreement
sets out termination events (Note 8), the Tender Offeror will not bear an obligation
to commence the Tender Offer in the event that the Master Transaction Agreement
terminates. Please refer to “(1) Master Transaction Agreement” in “4. Matters
Concerning Material Agreements Related to Tender Offer” below for details of the
Master Transaction Agreement.
Note 2:The Master Transaction Agreement stipulates that any or all of the Tender Offer
Conditions Precedent may be waived at the discretion of the Tender Offeror.

Note 3:

Please refer to “(1) Master Transaction Agreement” in “4. Matters Concerning
Material Agreements Related to Tender Offer” below for details of Fujitsu’s
obligations under the Master Transaction Agreement.

Note 4:

Please refer to “(1) Master Transaction Agreement” in “4. Matters Concerning
Material Agreements Related to Tender Offer” below for details of therepresentations and warranties of Fujitsu under the Master Transaction Agreement.

Note 5:“Material adverse effect” means any material adverse effect on the business,financial condition, assets, liabilities, operating results, or cash flow of theCompany and its subsidiaries as a whole or on the execution of the Transactions, or
any specific risk thereof.

Note 6:“Clearance” means the obtainment (including the expiration of the applicablewaiting period without objection from the relevant authorities) of permits andauthorizations, etc. (meaning a permit, authorization, license, approval, consent,
registration, notification, or any other similar act or procedure by the national
government, a local government, or any other public agency or administrative
agency as required by relevant laws and regulations; hereinafter the same) under
the competition laws and regulations of Japan, China, South Korea, and Vietnam
and notification to the Committee on Foreign Investment in the United States3

(however, after the execution of the Master Transaction Agreement, Fujitsu, theCompany, and the Tender Offeror shall consult regarding that notification, and theTender Offeror shall determine whether or not it will be included in the scope of
permits and authorizations, etc. to be obtained for Clearance). If it is found that
there are other permits and authorizations, etc. required for the execution or
performance of the Master Transaction Agreement in addition to the above, and theTender Offeror reasonably determines that such permits and authorizations, etc. arenecessary, the Tender Offeror may add such permits and authorizations, etc. to thescope of permits and authorizations, etc. to be obtained for Clearance after
discussion in good faith with Fujitsu. Any additions will be disclosed in a timely
manner.
Note 7:“Settlement failure event” means, with regard to the financial institutions that will
become the lenders in the borrowings by the Tender Offeror or its parent company
for the purpose of financing the Transactions (referring to MUFG Bank, Ltd.,
Sumitomo Mitsui Banking Corporation, The Hachijuni Bank, Ltd., and Aozora
Bank, Ltd.), (i) any natural disaster, war, or outbreak of terrorism, (ii) any
breakdown or failure of electric, communication or various clearing systems, (iii)any event where, in the Tokyo Interbank Market, a loan of yen funds cannot be
executed, and (iv) any other event that is similar to (i) through (iii) above for any
reason not attributable to the financial institutions for which the financial
institutions objectively and reasonably determine that it is objectively impossible
to conduct the settlement of the financing due to that event.

Note 8:

Please refer to “(1) Master Transaction Agreement” in “4. Matters Concerning
Material Agreements Related to Tender Offer” below for details of termination
events set out in the Master Transaction Agreement.

In light of such situation, as stated in “(V) Unanimous Approval of All Non-Interested Directorsof Company” of “(6) Measures to Ensure Fairness of Tender Offer, Such as Measures to Ensure
Fairness of Tender Offer Price and Avoid Conflicts of Interest” of “3. Details, Basis, andReasons for Opinion Regarding Tender Offer” below, the Company also resolved (i) that when
the Tender Offer is commenced, the Board of Directors will request that the Special Committee(a) consider whether there are any changes in its opinion as expressed to the Board of Directors
as of today regarding inquiring with the Special Committee about the Transactions, and (b) if
there are no changes in its opinion, make a statement to that effect, or if there are changes in its
opinion, state the changed opinion, to the Board of Directors; and (ii) that based on such opinionof the Special Committee, the Company will express its opinions on the Tender Offer again
when the Tender Offer is commenced.
For details of the composition of the Special Committee and its specific activities, please referto “(II) Procurement by Company of Written Report from Independent Special Committee” of“(6) Measures to Ensure Fairness of Tender Offer, Such as Measures to Ensure Fairness ofTender Offer Price and Avoid Conflicts of Interest” of “3. Details, Basis, and Reasons for
Opinion Regarding Tender Offer” below.
The Board of Directors resolution above was made on the assumption that the Tender Offeror
intends to acquire all Company Shares through the Tender Offer and a series of subsequent
procedures and that the Company Shares will be delisted.

4

1.

Overview of Tender Offeror

(1)
(2)

Name
Location
Title and Name ofRepresentative(3)

JICC-04, Ltd.
1-3-1, Toranomon, Minato-ku, Tokyo
Osamu Itabashi, Representative Director(i) Controlling and managing the business activities of acompany through the acquisition and holding of the sharecertificates, etc. that company(ii) Any and all business including or related to thepreceding item
100,000 yen
September 29, 2023
JIC Capital, Ltd.
100%

(4)

Business Description

(5)
(6)

CapitalDate of Establishment
Major Shareholders andShareholding Ratios
Relationships Between the Company and the Tender Offeror
N/A
Capital Relationships

(7)
(8)

Personnel Relationships

N/A

Transactional
N/A
Relationships
Conditions Applicable to N/A
Related Parties
2.

Purchase Price, Etc.
5,920 yen per common share (the “Tender Offer Price”)

3.

Details, Basis, and Reasons for Opinion Regarding Tender Offer(1)

Details of Opinion Regarding Tender Offer
The Company resolved at its Board of Directors meeting held today to express its
current opinion that, if commenced, it will express an opinion to support the Tender
Offer and to recommend that its shareholders tender their shares in the Tender Offer,based on the basis and reasons stated in “(2) Basis and Reasons for Opinion
Regarding Tender Offer” below. According to the Tender Offeror, the Tender
Offer is scheduled to commence within 10 business days from the date on which
the Tender Offer Conditions Precedent (excluding those to be satisfied on thecommencement date of the Tender Offer) are satisfied (or waived by the Tender
Offeror; however, if a Counter Proposal has been made as of such date, then theearlier of (a) the date on which 20 business days have elapsed since the date on
which Fujitsu Limited (“Fujitsu”) makes a request to the Tender Offeror for
consultation regarding changing the Tender Offer Price and the Repurchase Priceor (b) the date on which Fujitsu covenants in writing that it will not accept theCounter Proposal), and as of today, the Tender Offeror aims to commence theTender Offer in or around late August 2024, but since it is difficult to accurately
estimate the amount of time required for the procedures involving foreigncompetition authorities and authorities having jurisdiction over investment control
5

laws and regulations.
In light of such situation, as stated in “(V) Unanimous Approval of All NonInterested Directors of Company” of “(6) Measures to Ensure Fairness of Tender
Offer, Such as Measures to Ensure Fairness of Tender Offer Price and Avoid
Conflicts of Interest” below, the Company also resolved (i) that when the Tender
Offer is commenced, the Board of Directors will request that the Special Committee(x) consider whether there are any changes in its opinion as expressed to the Boardof Directors as of today, and (y) if there are no changes in its opinion, make astatement to that effect, or if there are changes in its opinion, state the changed
opinion, to the Board of Directors; and (ii) that based on such opinion of the Special
Committee, the Company will express its opinions on the Tender Offer again when
the Tender Offer is commenced.
(2)

Basis and Reasons for Opinion Regarding Tender Offer

Statements in “(2) Basis and Reasons for Opinion Regarding Tender Offer” that pertain
to the Tender Offeror are based on explanations provided by the Tender Offeror.
(I)

Overview of Tender Offer
The Tender Offeror is a stock company (kabushiki kaisha) established on September
29, 2023 and whose business primarily consists of controlling and managing thebusiness activities of the Company through the acquisition and holding of the sharecertificates, etc. of the Company after the completion of the Tender Offer. As oftoday, JIC Capital, Ltd. (“JICC”), which is a wholly-owned subsidiary of Japan
Investment Corporation (“JIC”), holds all of the issued shares of the Tender Offeror.
During the period up to the time of settlement of the Tender Offer, JICC will transfer
all of the issued shares of the Tender Offeror to JIC PEF1 Limited Partnership and
JIC PEFJ1 Limited Partnership, both managed by JICC. In addition, during theperiod from the completion of the Tender Offer to the time of settlement of theTender Offer, the Tender Offeror will commence procedures for a capital
contribution by a third-party allotment of common shares through which shares areallotted by the Tender Offeror to the JICC Funds (meaning other investment limited
partnerships or other entities in which JICC or its subsidiaries or affiliates act as
general partners, including JIC PEF1 Limited Partnership and JIC PEFJ1 Limited
Partnership; the same shall apply hereinafter; investment limited partnerships
included in the JICC Funds include those in which Hachijuni Sustainability No. 1
Fund (general partner: Hachijuni Investment Co., Ltd. (“Hachijuni Investment”))
will invest as a limited partner), Dai Nippon Printing Co., Ltd. (“DNP”), and Mitsui
Chemicals, Inc. (“Mitsui Chemicals”; the JICC Funds, DNP, and Mitsui Chemicals
are hereinafter collectively referred to as the “JICC Alliance,” and the capital
contribution, the “Contribution (Common Shares)”) and procedures for a capitalincrease by a third-party allotment of preferred shares (non-voting class shares withno conversion rights to common stock) through which shares are allotted by theTender Offeror to DNP and Mitsui Chemicals (the “Contribution (Preferred
Shares)”; together with the Contribution (Common Shares), the “Contributions”)
for the purpose of providing for the funds necessary to execute the Transactions.
JIC, the JICC Alliance, and the Tender Offeror do not hold any Company Shares asof today. After the Contributions, the JICC Funds, DNP, and Mitsui Chemicals will6

hold 80.00%, 15.00%, and 5.00% of common stock of the Tender Offeror,
respectively.
Today, the Tender Offeror entered into a master transaction agreement with Fujitsu(the “Master Transaction Agreement”; for details of the Master Transaction
Agreement, please refer to “(1) Master Transaction Agreement” in “4. Matters
Concerning Material Agreements Related to Tender Offer” below), and decided to
conduct the Tender Offer for all of the Company Shares (excluding the Company
Shares held by Fujitsu (number of shares held: 67,587,024 shares, ownership
percentage (Note 9): 50.02%; the “Fujitsu Holding Shares”) and the treasury shares
held by the Company) as part of the series of transactions aimed at making theTender Offeror the sole shareholder of the Company and taking the Company
Shares listed on the Prime Market of Tokyo Stock Exchange as of today private (the“Transactions”) on the condition that the Tender Offer Conditions Precedent aresatisfied or, at the discretion of the Tender Offeror, waived.
Note 9: “Ownership percentage” means the ratio of the shares owned (rounded totwo decimal places) to the sum (135,117,512 shares) of the total number
of issued shares of the Company as of September 30, 2023 (135,171,942
shares) as stated in the Summary of Consolidated Financial Results for the
Six Months Ended September 30, 2023 (based on Japanese GAAP)
announced by the Company on October 26, 2023 minus the treasury shares(54,430 shares) owned by the Company as of September 30, 2023. Thisapplies hereinafter in the calculation of the ownership percentage.
The Transactions consist of the following procedures through which the Tender
Offeror intends to ultimately make the Company a wholly-owned subsidiary of theTender Offeror:(A) the Tender Offer by the Tender Offeror;(B) procedures for the Share Consolidation (as defined in “(4) Policy fororganizational restructuring after the Tender Offer (matters relating to a socalled “Two-Step Acquisition”)” below; hereinafter the same) to be
conducted by the Company in order to make the Tender Offeror and Fujitsu
the only shareholders of the Company if the Tender Offeror is not able toacquire all of the Company Shares (excluding the Fujitsu Holding Shares andthe treasury shares held by the Company) through the Tender Offer (the“Squeeze-Out Procedures”);(C) (i) the provision of funds to the Company by the Tender Offeror (which is
expected to be through a capital increase by a third-party allotment throughwhich shares are allotted to the Tender Offeror or through a loan to theCompany (the “Financing”)) and (ii) a decrease in the amounts of the statedcapital, capital reserve, and retained earnings reserve of the Company inaccordance with Article 447, Paragraph 1 and Article 448, Paragraph 1 of theCompanies Act (Act No. 86 of 2005, as amended, the “Companies Act”) (the“Capital Decrease, Etc.”) (Note 10), each to be conducted by the Company
for the purpose of procuring funds and a distributable amount necessary for
conducting the Company’s acquisition of the Fujitsu Holding Shares on thecondition that the Share Consolidation becomes effective (the “Share
Repurchase”); and(D) the Share Repurchase.
7Please refer to “(4) Policy for organizational restructuring after the Tender Offer(matters relating to a so-called “Two-Step Acquisition”)” below for details of the
Share Consolidation.
Note 10: It is planned that, upon the Capital Decrease, Etc., the Company willtransfer (i) part or all of the decreased stated capital and capital reserve toother capital surplus and (ii) all of the decreased retained earnings reserve
to retained earnings carried forward.
In connection with the Tender Offer, the Tender Offeror has executed the MasterTransaction Agreement with Fujitsu as of today, pursuant to which Fujitsu has
agreed (i) not to tender any of the Fujitsu Holding Shares that it holds in the Tender
Offer, and (ii) to sell all of the Fujitsu Holding Shares that it holds in response to
the Share Repurchase. For details of the Master Transaction Agreement, please referto “(1) Master Transaction Agreement” in “4. Matters Concerning Material
Agreements Related to Tender Offer” below.
If the total number of share certificates, etc. tendered in response to the Tender Offer(the “Tendered Share Certificates, Etc.”) is less than the minimum number of shares
to be purchased (22,491,400 shares (Note 11), ownership percentage: 16.65%)(Note 12), then the Tender Offeror will not purchase any of the Tendered Share
Certificates, Etc. Since the purpose of the Transactions is to take the Company
Shares private, the minimum number has been set as the number of shares required
to carry out the Transactions given that a special resolution in the shareholders’meeting as provided for in Article 309, Paragraph 2 of the Companies Act isrequired for carrying out the procedures for the Share Consolidation as describedin “(4) Policy for organizational restructuring after the Tender Offer (mattersrelating to a so-called “Two-Step Acquisition”)” below and given that the Tender
Offeror has agreed with Fujitsu that Fujitsu will not tender the Fujitsu Holding
Shares in the Tender Offer and that the Tender Offeror and Fujitsu will vote in favorof each proposal regarding the Squeeze-Out Procedures if the Tender Offer issuccessfully completed. On the other hand, because the purpose of the Transactions
is to take the Company Shares private, the Tender Offeror has not set a limit on the
maximum number of shares to be purchased, and if the total number of Tendered
Share Certificates, Etc. is equal to or greater than the minimum number of the shares
to be purchased (22,491,400 shares), then the Tender Offeror will purchase all of
the Tendered Share Certificates, Etc.
Note 11: The minimum number of shares to be purchased (22,491,400 shares) will
be set as the number of shares calculated by (i) subtracting the treasury
shares (54,430 shares) owned by the Company as of September 30, 2023
from the total number of issued shares of the Company as of September
30, 2023 (135,171,942 shares) as stated in Summary of Consolidated
Financial Results for the Six Months Ended September 30, 2023 (Basedon Japanese GAAP), (ii) multiplying the number of voting rights(1,351,175 voting rights) represented by that number of shares(135,117,512 shares) by two thirds, (iii) deducting from that number(900,784 voting rights, rounded up to the nearest whole number) the
number of voting rights (675,870 voting rights) represented by the Fujitsu
8Holding Shares (67,587,024 shares), and then (iv) multiplying that number(224,914 voting rights) by 100.
Note 12: The minimum number of shares to be purchased is temporary and depends
on the information as of today, and the actual minimum number of shares
to be purchased in the Tender Offer may differ from the number above due
to changes in the number of treasury shares held by the Company and thenumber of Company Shares held by Fujitsu occurring hereafter. While thefinal minimum number of shares to be purchased is to be determined
before the commencement of the Tender Offer based on the latest
information available as of the commencement of the Tender Offer, nochanges are planned to the basic framework, including the method of
calculating the minimum number of shares to be purchased.
Diagrams summarizing the Transactions are provided below.

9Before the implementation of the Tender Offer (current status)
As of December 12, 2023, Fujitsu holds 67,587,024 Company Shares(ownership percentage: 50.02%) and other shareholders (excluding theCompany) hold the remaining 67,530,488 shares (ownership percentage:
49.98%).

Other shareholders

Fujitsu

50.02%

49.98%

Company

The Tender Offer by the Tender Offeror
The Tender Offeror will conduct the Tender Offer for all of the Company
Shares (excluding the Fujitsu Holding Shares and the treasury shares held by
the Company).
*Includes funds in which Hachijuni Investment invests

JICC Funds*

DNP

80.00%

15.00%

Mitsui Chemicals
5.00%

Fujitsu will not tender its shares in
the Tender Offer

FujitsuOthershareholders

50.02%

Tender Offer for a
49.98% minimum of 16.65%

Tender Offeror

After the Tender Offer, the combined
equity interest of the Tender Offeror
and Fujitsu will be two thirds or more

Company* Investment limited partnerships included in the JICC Funds include those inwhich Hachijuni Investment will invest as a limited partner. The same shall apply
hereinafter.

10

The Squeeze-Out Procedures through the Share Consolidation by the Tender
OfferorIf the Tender Offer has been successfully completed, but the Tender Offeror
is unable to acquire all of the Company Shares (excluding the Fujitsu Holding
Shares and the treasury shares held by the Company) in the Tender Offer, thenthe Tender Offeror intends to request the Company to conduct the Share
Consolidation and carry out procedures for making the Tender Offeror andFujitsu the only shareholders of the Company.
*Includes funds in which Hachijuni Investment invests

JICC Funds*

DNP

80.00%

Mitsui Chemicals

15.00%

5.00%

Implementation ofsqueeze-out transaction

Other
shareholders

Fujitsu

Tender Offeror

33.33% or less→0%Company

The Financing and the Capital Decrease, Etc. to be conducted for the purposeof procuring funds for the Share Repurchase and a distributable amount
After the Company Shares are delisted and the Share Consolidation takes
effect, the Tender Offeror will provide the Financing to the Company, and theCompany will conduct the Capital Decrease, Etc. in order to procure funds
required for the Share Repurchase and a distributable amount.
*Includes funds in which Hachijuni Investment invests

DNP

JICC Funds*
80.00%

15.00%

Fujitsu

Mitsui Chemicals
5.00%

Tender Offeror

Company
Capital Decrease, Etc.

11

FinancingThe Share Repurchase from Fujitsu by the Company
After the Capital Decrease, Etc. has been completed, the Company will use
the funds and distributable amount procured by the Funding and Capital
Decrease, Etc. to conduct the Share Repurchase to acquire all of the Fujitsu
Holding Shares.
*Includes funds in which Hachijuni Investment invests

JICC Funds*

Mitsui Chemicals

DNP

80.00%

5.00%

15.00%

Fujitsu

Tender Offeror

Company
Share Repurchase-

While there is a possibility that the Share Repurchase will be conducted after
the Share Consolidation prior to the approval of the exemption from theobligation to file an annual securities report, the Share Repurchase is intended
to be conducted after the delisting of the Company Shares. As the delisted
shares will not constitute “listed share certificates, etc.” (Article 24-6,
Paragraph 1 of the Act and Article 4-3 of the Order for Enforcement of the
Financial Instruments and Exchange Act), which would be subject to a tender
offer of treasury shares (Article 27-22-2 of the Act), a tender offer of treasury
shares is not planned to be conducted upon the execution of the Share
Repurchase.

After the Transactions
After the Transactions, the Tender Offeror will hold all of the issued shares of
the Company (excluding the treasury shares held by the Company).
*Includes funds in which Hachijuni Investment invests

JICC Funds*

DNP

80.00%

15.00%

Mitsui Chemicals
5.00%

Tender Offeror
100%Company

The Tender Offeror plans to cover the funds required for settlement of the Tender
Offer through the Contributions and borrowing from MUFG Bank, Ltd., Sumitomo
12Mitsui Banking Corporation, The Hachijuni Bank, Ltd., and Aozora Bank, Ltd. (the“Bank Loan”). The Tender Offeror intends to receive the Contributions and the
Bank Loan by the business day immediately preceding the commencement date ofsettlement of the Tender Offer subject to the successful completion of the Tender
Offer and other conditions. The details of the loan terms of the Bank Loan will be
specified in the loan agreement for the Bank Loan upon separate discussion witheach bank. The loan agreement for the Bank Loan will stipulate that all of the issued
shares of the Tender Offeror to be held by the JICC Funds and certain assets,
including the Company Shares to be acquired by the Tender Offeror through theTender Offer, will be provided as security. Of the assets to be provided as security
for the Bank Loan, the assets held by the Company and its consolidated subsidiaries
will be provided as security after the Squeeze-Out Procedures are completed.
In addition, although the Share Repurchase will be conducted within the limit ofthe distributable amount of the Company, the Tender Offeror intends to provide the
Financing after the Share Consolidation, taking into account the funds required for
the Share Repurchase, the amount of deposits held by the Company, and the levelof deposits required for business operations after the Share Consolidation.
Additionally, the Tender Offer Price and the consideration for the repurchase oftreasury shares in the Share Repurchase (per share prior to share consolidation; the“Repurchase Price”) were calculated so that (i) the amount calculated as the aftertax earnings of Fujitsu if the Share Repurchase were to be conducted at theRepurchase Price is equal to (ii) the amount of earnings that Fujitsu would receive
if it were to tender its shares in the Tender Offer at the Tender Offer Price.
Accordingly, Fujitsu will not receive greater benefits than the minority shareholdersof the Company.
(II)

Background, Purpose, and Decision-Making Process of Tender Offeror’s
Decision to Implement Tender Offer; Management Policy Thereafter(i)

Background to, and Purpose of, Tender Offeror’s Decision to Implement
Tender Offer(a)Business Environment Surrounding the Company
The Company was founded in February 1946 as Nagano Katei Denki Saiseijo with the main goal of recycling household lightbulbs, and it reorganized
and renamed itself SHINKO ELECTRIC INDUSTRIES CO., LTD. in
September of the same year to expand operations. In 1957, thanks to capitalfunding from Fujitsu, the Company newly expanded its operations into thesemiconductor field. As a leading company of semiconductor packaging in
the ever-advancing electronics industry, the Company has developed,
manufactured, and sold products based on a wide range of semiconductor
packaging technologies. Specifically, as of today, the Company group,comprising the Company and nine subsidiaries (the “Company Group”),
engages in the following main businesses with an integrated production
system (from development/design to shipment): development, manufacture,and sale of various semiconductor packages, such as flip-chip type packages(Note 13), plastic BGA substrates (Note 14), and leadframes (Note 15), eachof which has a world-leading market share; assembly and sale of ICs; and13

development, manufacture, and sale of ceramic electrostatic chucks (Note 16)
for semiconductor manufacturing equipment. Furthermore, the Company
Shares came to be listed on the Second Section of the Tokyo Stock Exchange
in December 1984, reassigned to the First Section in September 1996, andafter the reorganization of the Tokyo Stock Exchange, Inc. (the “Tokyo Stock
Exchange”) they came to be listed on the Prime Market of the Tokyo Stock
Exchange.
The Company Group aims for “Progress without Limits” in the electronics
industry, which is expected to grow in the medium to long term, by supporting
the evolution of semiconductors, working to create products that enrich thelives of people around the world based on technology that links the superb
functions of semiconductors with people’s lives, and developing,
manufacturing, and selling superb products that start with the needs ofcustomers. Furthermore, the Company Group upholds as its corporate visions“Global Outlook” and “Responsibility to Individual,” in addition to“Technology Leadership” and “Long Term Vision”; in accordance with thesevisions, the Company Group is committed to coexisting and prospering in theinternational community as a global company that engages in business withcustomers around the world and operates offices in various regions, striving
to create an environment that brings together the talents of diverse humanresources and enables each and every employee to achieve personal growth,and promoting business with a management stance that takes into
consideration “respect for the global environment and humanity,” thereby
aiming to contribute to the healthy development of society and creation of abrighter future.
Note 13: Flip-chip type packages are semiconductor packages used for highperformance semiconductors, such as CPUs for computers andservers, that meet the need for higher speed and higher density
semiconductors with fine line patterning, multilayered structures,and excellent electrical characteristics.
Note 14: Plastic BGA substrates are semiconductor packages used primarily
for semiconductor memory for smartphones and micro-control units(MCU) for automobiles that meet the need for size reduction as wellas thinner and higher density semiconductors with fine line
patterning and multilayered structures.
Note 15: Leadframes are widely used in smartphones, computers,
automobiles, and home appliances. The Company provides various
types of leadframes through stamping using precise dies and etchingprocesses.
Note 16: Ceramic electrostatic chucks are parts used for semiconductor
manufacturing equipment such as etching; they adsorb and fix
silicon wafers using static electricity, and meet the need for higher
performance in semiconductor manufacturing equipment.
Economic and societal structures are being changed by the spread of fifthgeneration mobile communications systems (5G) and the progression of
Digital transformation (DX) (Note 17) due to the increasing use of big data,
artificial intelligence (AI), the Internet of things (IoT), and other advanced
14

technologies. These technologies have the potential to create innovation on adifferent order of magnitude than ever before. It is expected that
semiconductors, as the key technology for achieving this potential, willcontinue to evolve. At the same time, the importance of semiconductors is
growing from a strategic perspective. Moreover, the markets forsemiconductors are expected to continue expanding in the future, includingin the automotive market, where technological developments, such as
autonomous driving and EVs, are accelerating, as well as in the medical field
to support people’s health. In addition, semiconductor needs are expected to
become more sophisticated and diverse as key devices that speed up thetransition to a decarbonized society and support the evolution of technologies
that is essential for realizing green transformation (GX). Meanwhile, in termsof the semiconductor manufacturing process, progress in miniaturization
during the upstream process of forming circuit patterns on wafers previously
led to improvements in semiconductor performance. In recent years, however,
the importance of the downstream packaging process has increased to meetthe need for more advanced and multifunctional semiconductors. In particular,
the Company’s main business of semiconductor packages, beginning withflip-chip type packages used in high-performance semiconductors such asCPUs for computers and servers, is increasing needs and attracting attention
in the semiconductor industry, as core products indispensable forsemiconductors with advanced functionality and speed as well as powersaving.
Note 17: “Digital transformation (DX)” refers to, in the case of businessenterprises, the response to rapid changes in the businessenvironment and reforms to a company’s products, services, andbusiness model in response to customer and social needs by utilizing
data and digital technology. At the same time, it involves theimplementation of reforms in the business operation itself, theorganization, business processes, corporate culture and climate, inorder to establish a competitive advantage.
In such industry, the Company Group is committed to developing highly
competitive products and innovating the art of manufacturing, beginning withvarious semiconductor packages that have a leading product share in theindustry based on diverse, cutting-edge semiconductor packaging
technologies that it has cultivated to date. The Company Group strives toprovide customers with high-value products and services in terms offunction/performance, cost, and quality, and to support their success. Throughthese initiatives, the Company Group pursues its own development andgrowth. In addition, the Company Group focuses on cash flow and on
building a solid management foundation able to continually generate profits,
as well as fulfilling corporate governance, while executing a management
strategy that emphasizes “focus on growth areas,” “building a robust
production system” and “promoting the Shinko Way.”As for the future business environment, in the U.S., personal consumption is
expected to remain firm due to solid employment and incomes. In Japan, agradual recovery is expected as socioeconomic activities normalize. However,15

the global and Japanese economies are expected to remain uncertain due tosoaring energy and raw material prices, as well as concerns about economic
recessions caused by the prolonged Russia-Ukraine conflict and ongoing
global inflation, monetary tightening in the U.S. and Europe, and the slowing
Chinese economy, among others.
The semiconductor industry is expected to face a severe market environment:
Negative growth is expected in the semiconductor market in 2023 due tofactors such as the decline in demand for PCs and smartphones and prolonged
inventory adjustments due to the underlying global economic slowdown andthe backlash from COVID-related special demand, as well as the impact ofsemiconductor export restrictions. On the other hand, with the spread of 5G,
the increasing use of AI and IoT, and the progression of digital transformation(DX), etc., society and the economy are becoming digitized. Consequently,
the applications for semiconductors are expected to keep growing, further
increasing the demand over the medium to long term, as well as the need foreven higher functionality and performance. Moreover, the significance ofsemiconductors as key technologies to support the promotion of green
transformation (GX), including the transition to renewable energy andadvancements in energy conservation, is growing while efforts to achieve a
decarbonized society accelerate. At the same time, global competition is
expected to intensify, requiring that development and production systems that
can adapt rapidly and flexibly to increasingly sophisticated and diverse
market needs and changing demand be set up.
In such a severe environment, the Company Group is working hard, acrossthe board, to boost productivity and cut costs. The Company Group also
developed proactive sales drives to generate consistent revenues. The
Company Group has been making continual, focused capital investments inmarkets with promising growth and has augmented its production capacity toincrease sales. The Company Group’s focus is on steadily making capital
investments in and technological developments for these growing markets,with sights set on the Company Group’s future development. For flip-chiptype packages, which meet the need for semiconductors with enhanced
functionality, speed, and power saving, the Company Group is committed toreinforcing its production system and broadening the customer base in viewof the expansion of the cutting-edge semiconductor market, especially forservers. The Company Group is focusing on the construction, which started
last year, of its Chikuma Plant (Chikuma City, Nagano Prefecture), theCompany’s sixth production plant, with operations set to begin in fiscal year
2024. Furthermore, in order to meet the needs of the high-performancecomputing (HPC) market, which is expected to experience significant growthin the medium to long term, the Company plans to make further capital
investments in the Chikuma Plant to launch next-generation flip-chip typepackages developed by the Company, beginning with i-THOP® (integrated
Thin film High density Organic Package). This plan is certified as a “plan for
ensuring supply” under the Act on the Promotion of Ensuring National
Security through Integrated Implementation of Economic Measures (the“Economic Security Promotion Act”). As the semiconductor manufacturing
equipment market continues to grow, the Company anticipates steady demand
16for ceramic electrostatic chucks as a key component. Accordingly, theCompany is trying to expand its mass production system through theconstruction of a new building and introduction of a production facility in its
Takaoka Plant (Nakano City, Nagano Prefecture). Further, at its Arai Plant(Myoko City, Niigata Prefecture), the Company has begun construction
planning for a new building to increase the production capacity of its plastic
BGA substrates to meet the demand for semiconductor memory with higher
speeds and lager capacities, aiming to further develop the market for its
products that contribute to higher performance semiconductors.
In addition, in order to further strengthen its earnings base in this severebusiness environment, the Company strives to establish a production systemthat can provide a stable supply of superb products by ensuring quality at allstages, from development and design to production, and is focusing on thedevelopment and commercialization of highly-competitive new products
based on its diverse semiconductor packaging technologies that it has
cultivated to date, while accurately identifying market trends.
In the above described business environment surrounding the Company, inorder to identify the potential for medium- to long-term market growth of its
products and technologies and aim for “Progress without Limits,” it will
become increasingly important to develop technologies that anticipate market
needs and to make flexible capital investments, and the size of funds required
for these investments is expected to increase as well. In an increasingly severe
competitive environment, the Company has been considering various
measures to achieve continued enhancement of its corporate value, including
its capital structure, such as faster decision-making, diversification offinancing methods, and expansion of human capital, which is fundamental tothe promotion of its business, while taking into consideration minority
shareholder interests.
(b)

Discussions Among Tender Offeror, Company, and Fujitsu; Decision-Making
Process of Tender Offeror
JICC aims to achieve both a financial return and the policy objectives ofpromoting business portfolio transformation to enhance the international
competitiveness of Japanese industries, creating new businesses andindustries to realize Society 5.0, establishing next-generation social
infrastructure to promote digital transformation (DX), solving social issues,and serving as a catalyst for private funds. JICC, which was established basedon this philosophy, aims to conduct the Transactions for the main purposes of(a) enhancing the Company’s corporate value by making it a private entitythat is not limited by its current capital structure and is not affected by shortterm fluctuations in business performance and (b) thereby providing an
opportunity for acquisition of private funds to strengthen the international
competitiveness of the semiconductor industry in which the Company
operates.
JICC is a wholly-owned subsidiary of JIC, which is a corporation establishedto generate a virtuous cycle of risk capital to support next-generation17

industries in Japan. To achieve this vision, JIC promotes open innovation(Note 18) as a means of supporting the growth and enhancing thecompetitiveness of businesses. JIC approaches these challenges bystimulating private sector investments through the provision of funds while
fostering the development of investment professionals. JICC aims to achieveboth a financial return and the policy objectives of promoting businessportfolio transformation to enhance the international competitiveness ofJapanese industries, creating new businesses and industries to realize Society
5.0 (Note 19), establishing next-generation social infrastructure to promote
Digital Transformation (DX), solving social issues, and serving as a catalyst
for private sector investment through the supply of large-scale, long-term,
neutral risk capital.
Note 18: “Open innovation” refers to the intentional and proactive utilizationof the flow of internal and external resources, such as technologies
and ideas, in and out of the organization to promote internalinnovation and then deploying the resulting internal innovations
outside the organization to increase market opportunities.
Note 19: “Society 5.0” was proposed in the 5th Science and Technology Basic
Plan approved by the Cabinet on January 22, 2016 as a future societythat Japan should aspire to. It refers to a human-centered society thatbalances economic advancement with the resolution of social
problems by a system that highly integrates cyberspace (virtual
space) and physical space (real space).
Since its establishment in September 2020, JICC has studied investment
opportunities as a fund responsible for buyout investments (Note 20) andlarge growth investments (Note 21) within the JIC Group (collectively
referring to JIC and its subsidiaries and affiliates). Specifically, as announcedin August 2022, JICC plans to acquire 80% of the voting stock of the new
combined company in the business combination of Toyo Aluminium K.K. and
UACJ Foil Corporation. The domestic aluminum foil industry finds itself
confronting increasingly difficult challenges due to the increase in imports ofoverseas manufactured aluminum foils, but it is believed that through thisinvestment, it will be possible to streamline the manufacturing structure in the
short term, thereby securing a stable supply capacity matching demand forfurther supply of aluminum foil (including lithium-ion battery foil), which
will in turn support all industries in Japan. Through the planning of a growthstrategy and enhancing facilities in the medium term, JICC’s aim is to realize
technical development and manufacturing capacity that will withstandinternational competition, and it will support the new combined company inestablishing its position as a globally competitive aluminum foil manufacturer
to further enhance the presence and corporate value of Japan’s aluminum foil
industry. In addition to this, JICC has completed its capital participation in
Hitachi Astemo, Ltd. in October 2023. Through JICC’s capital participation,
JICC will utilize its extensive track record of investment and support,
including in the automotive industry, as well as its knowledge and information
network based on that experience to support Hitachi Astemo, Ltd. in realizing
sustained growth by leveraging its competitive software development
technology with accelerating investment in advanced fields.
18

Note 20: “Buyout investment” refers to an investment strategy aimed atreforming industrial structures and strengthening international
competitiveness through reorganization and integration of domestic
and foreign companies.
Note 21: “Large growth investment” refers to an investment strategy aimed atstrengthening the international competitiveness of a company byinvesting in domestic and foreign high-growth companies.
Additionally, in the semiconductor materials field, JICC announced on June
26, 2023 that it intends to take JSR Corporation (“JSR”) private through atender offer. Through the privatization of JSR, JICC, as a partner of JSR, will
support the smooth restructuring and integration of the semiconductormaterials industry in Japan by taking advantage of its neutral position as agovernment-affiliated fund and will also support JSR in achieving increased
corporate value by promoting structural reforms without being affected byshort-term fluctuations in business performance.
Furthermore, several members have joined JICC with investment experienceat Innovative Network Corporation Japan (“INCJ”), in which JIC holds all
shares and which has a similar mission to that of JICC. In addition to a wide
network of corporations and industries in Japan and overseas across private
and public sectors, JICC has accumulated knowledge through investments inadjacent fields, domestic industry reorganization projects and large-scale andcomplex projects, as mentioned above.
As an example of investment in the semiconductor field, in 2012, INCJ
invested in Renesas Electronics Corporation (“Renesas”), formerly thesemiconductor businesses of Mitsubishi Electric Corporation, Hitachi, Ltd.
and NEC Corporation. This investment was intended to support Renesas with
its world-leading technology in promoting reforms and growth investments
to build a solid earnings structure to thrive in the extremely volatile
semiconductor industry, thus aiming to restore and strengthen theinternational competitiveness of Japan’s semiconductor industry. Since INCJ
made that investment, Renesas has established governance under a newshareholder structure while executing comprehensive structural reforms
encompassing production, operation, and talent management, enabling thecompany to transform into a profit making entity. Furthermore, since 2017,
Renesas has acquired semiconductor companies, including Intersil
Corporation, Integrated Device Technology, Inc., and Dialog Semiconductor
Plc, and has succeeded in accelerating its growth as a global semiconductor
manufacturer by expanding its product lineup and customer base.
While the Company was deliberating various management strategies toenhance its corporate value in the business environment stated in “(a)Business Environment Surrounding Company” above, in response to
Fujitsu’s plan to sell all or part of the Fujitsu Holding Shares, Fujitsu
announced in September 2021, in January 2021, the Company began to havediscussions with Fujitsu concerning the specific method of selling the Fujitsu
Holding Shares. Subsequently, Fujitsu held meetings with multiple potential
19

buyer candidates and deliberated on various options, such as means of carveout from the Fujitsu Group and a capital and business alliance with potential
buyer candidates. During this time, although there were intermittent
discussions, there was no progress in the discussions as there were no specificnegotiations between Fujitsu and the Company. However, as the Company
subsequently received a specific proposal from Fujitsu in June 2022, in July
2022, the Company appointed Mitsubishi UFJ Morgan Stanley Securities Co.,
Ltd. (“MUMSS”) as its financial advisor and third-party valuation
organization, SMBC Nikko Securities Inc. (“SMBC Nikko”) as its financial
advisor, and Nishimura & Asahi (currently Nishimura & Asahi (Gaikokuho
Kyodo Jigyo); “N&A”) as its legal advisor.
The Company then carefully deliberated the various options, including
maintaining its listed status in order to both maximize the interests of its
minority shareholders in addition to those of the Fujitsu group and further
enhance the Company Group’s corporate value in light of the discussions it
engaged in with Fujitsu from July 2022 to March 2023. As a result, theCompany reached the decision that it would be desirable for the Company
and its shareholders to implement a bidding procedure in relation to theCompany’s capital policy by selling all Fujitsu Holding Shares to multiple
candidates who are expected to show a strong interest in the Company’sbusiness (the “Bidding Process”). Based on this decision, since late March
2023, the Company and Fujitsu have been making initial approaches topotential buyers, including a business company and investment funds with asufficient investment track record in the Japanese market, which wereassumed to be interested in collaborating with the Company in light ofbusiness synergies, and commenced the primary bidding process for one
business company and eight investment funds (including JICC) who showed
an interest in participating in the Bidding Process.
JICC had been continually exchanging opinions regarding various investment
opportunities, including investment in the Company, through meetings with
Fujitsu, and as part of the primary bidding process, JICC was approached by
Nomura Securities Co., Ltd. (“Nomura Securities”), Fujitsu’s financial
advisor, regarding participation in that bidding process and decided toparticipate.
In response to being approached, JICC conducted initial studies based on
information on the outlook of the Company’s business, management policies,
and other similar matters provided by the Company, and on May 12, 2023,
JICC submitted a non-legally binding letter of intent proposing to take theCompany Shares private through a tender offer for the Company Shares andsqueeze-out procedures in order to increase the Company’s corporate value
from a medium-to-long-term perspective (the “Initial Letter of Intent”).
Because multiple candidates, including the Tender Offeror, submitted lettersof intent premised on a transaction method involving the acquisition of
Fujitsu shares from Fujitsu in late May of the same year, after carefully
deliberating their content, the Company and Fujitsu selected four investment

20

funds, including JICC, to whom they would make initial approaches
concerning their participation in the secondary bidding process.
After that, the Company and Fujitsu started the secondary bidding process inlate June of the same year, and after due diligence on the Company by thecandidates, the Company and Fujitsu received a written non-legally binding
proposal from JICC in September of the same year, a written non-legallybinding final proposal from another candidate in October of the same year,
and a written legally binding final proposal from JICC in November of thesame year. Since no legally binding final proposal was submitted by the othercandidates, the Company and Fujitsu comprehensively reviewed the
proposals of each candidate, and as a result, later in the same month, theCompany and Fujitsu decided to select JICC as the final candidate fromamong JICC and the other candidates, with the transaction price, transaction
certainty, and transaction speed as the main decision-making criteria, andbegan discussions and deliberations toward implementing the Transactions,
including the Share Repurchase, with JICC.
After submitting the Initial Letter of Intent, in late June 2023, JICC received
notification from Nomura Securities, the financial advisor of Fujitsu, and
MUMSS, the financial advisor of the Company, that it had successfully
cleared the primary bidding process and was asked to confirm whether it
intended to participate in the secondary bidding process. Additionally, JICC
had been exchanging information with DNP and separately with Mitsui
Chemicals since before the commencement of the Bidding Process in orderto jointly examine new investment opportunities, including investments incorporations other than the Company. As part of that information exchange,
they also identified the Company as a potential investment opportunity andexchanged information in regard thereto, and when doing so, taking into
account the publication of a speculative article by Bloomberg regarding thesale of Fujitsu’s subsidiaries on June 1, 2023, they began specific discussions
in regard to cooperating to conduct the Transactions. Subsequently, when
considering the Transactions in the secondary bidding process, in late June
2023, JICC requested the Company and Fujitsu to allow cooperation between
JICC, DNP, and Mitsui Chemicals and received notification approving thatrequest. Taking these facts into account, in order to further increase thelikelihood of procuring funds for the Transactions, maximize the corporate
value of the Company by leveraging the knowledge of DNP and Mitsui
Chemicals, and obtain further understanding from stakeholders, JICC beganconsidering participating in the secondary bidding process in cooperation
with DNP and Mitsui Chemicals. JICC conducted due diligence on the
Company from late July to mid-September 2023 in cooperation with DNP
and Mitsui Chemicals to develop a deeper understanding of the Company’sbusinesses, management environment, growth strategies, and management
issues, as well as to confirm accounting, tax, legal, and environmental matters
involving the Company. While conducting due diligence, JICC, DNP, andMitsui Chemicals confirmed their understanding that the Transactions arevaluable opportunities to work with the Company in maintaining theCompany’s position as a world-leading entity and came to strongly believethat the Tender Offeror, a consortium composed of JICC, DNP, and Mitsui21Chemicals, was the best partner for the Company. Specifically, the JICC, DNP,
and Mitsui Chemicals believe that by JICC, which is a government-affiliatedfund that is able to provide large-scale, long-term, neutral risk capital, playing
the lead role in taking the Company private, the Tender Offeror would
promote initiatives that contribute to the enhancement of corporate value froma medium-to-long-term perspective without being affected by short-term
fluctuations in business performance even in the midst of an uncertain
economic environment. In the business environment surrounding theCompany, JICC expects that it will become increasingly important to develop
technologies that anticipate market needs and to promptly make capital
investments and that the funds required to do so will grow larger in scale aswell, and therefore, JICC believes that it is particularly important to expedite
initiatives and decision-making from a medium-to-long-term perspective
without being affected by short-term fluctuations in business performance bytaking the Company private. Additionally, JICC, DNP, and Mitsui Chemicals
believe that DNP would contribute to the next-generation semiconductorbusiness that the Company aims to achieve by combining DNP’s
micromachining technology, fine coating technology, and material
development technology developed over many years with the Company’s
semiconductor packaging technology, and that Mitsui Chemicals would aim
to strengthen and maintain the Company’s market competitiveness in the fieldof next-generation semiconductor packages substrates and strengthen its
ability to provide solutions to customers by integrating the semiconductor
packaging substrate technology of the Company and the materials technologyof Mitsui Chemicals. Accordingly, JICC, DNP, and Mitsui Chemicals believethat it will be able to greatly contribute to improving the corporate value of
the Company over the medium to long term that they work together on thematters stated above.
JICC believes that there are no particular significant demerits to taking theCompany private. Specifically, although the possible effects of the Company
leaving the Fujitsu group include a loss of the creditworthiness that theCompany possesses as a member of the Fujitsu group and a loss of operational
support from Fujitsu, JICC believes that it will be possible to supplement thecreditworthiness of the Company even after taking it private through JICC, afund affiliated with the government of Japan, and DNP and Mitsui Chemicals,
major corporations in Japan, becoming shareholders of the Company, and that
operational support from Fujitsu can be replaced through outsourcing andother such means even after taking the Company private. Therefore, JICC
believes that there are no significant demerits to the Company leaving the
Fujitsu group.
Additionally, in late August 2023, JICC received communication from The
Hachijuni Bank, Ltd., with which JICC was engaged in discussions as a
candidate to provide funding for the Tender Offer, to the effect that it wished
to also cooperate in the Transactions through Hachijuni Investment, its groupcompany, in order to provide more multi-faceted support for the increase of
the corporate value of the Company over the medium to long term. In early
September 2023, JICC received notification from the Company and Fujitsu
that they would allow Hachijuni Investment to cooperate in the Transactions,22and in late September 2023, Hachijuni Investment conducted due diligenceon the Company, as a result of which Hachijuni Investment decided to invest
in the JICC Funds as a limited partner through Hachijuni Sustainability No. 1
Fund.
Through achieving the privatization of the Company, which is considered to
be one of the companies that fulfills a central role in the development ofadvanced semiconductors in Japan, JICC desires to create a way to contributeto the further development of industry in Japan by fully drawing out the latent
growth potential of each business of the Company, thereby maintaining andevolving its globally top-level technologies. Specifically, JICC believes that
the Company holds an important position as a components and materials
company that will support technological innovation in the future from theperspective of strengthening the foundations of semiconductor manufacturing
as envisioned by the Ministry of Economy, Trade and Industry.
With the spread of 5G, the increasing use of AI and IoT, and the progressionof digital transformation (DX), etc., society and the economy are becoming
digitized, and consequently, the applications for semiconductors are expected
to keep growing, further increasing the demand over the medium to long term,
as well as the need for even higher functionality and performance. On theother hand, global competition is expected to intensify, such as requiring thatdevelopment and production systems that can adapt rapidly and flexibly tosuch needs be set up.
Against this background, in order to enable the Company to promote
initiatives that contribute to the enhancement of corporate value from a
medium-to-long-term perspective without being affected by short-termbusiness performance, JICC believes that through the Tender Offer and theprivatization of the Company, together with DNP, Mitsui Chemicals, andHachijuni Investment, it would strongly support the commercialization of the
field of advanced semiconductor packaging, such as chiplet technology andphotonic-electronic integration technology, based on the diverse
semiconductor packaging technologies that the Company has cultivated to
date.
JICC believes that by doing so, the businesses and technologies of theCompany will be able to greatly contribute to technological development inadvanced fields centered around fine-lining competition and threedimensional packaging for semiconductor processes and to achieving
practical implementation of next-generation semiconductor technologies
such as photonic-electronic integration ahead of other countries.
In this way, the JICC Alliance consisting of JICC, DNP, and Mitsui Chemicals
believes that by means such as providing knowledge based on its richinvestment experience in related industries, offering referrals to portfolio
companies, and engaging in technical cooperation, it is possible to maximize
the interests of the Company as well as its shareholders, management, andother stakeholders.

23Based on the examinations above, JICC made a non-legally binding proposal
in writing to Fujitsu and the Company on September 15, 2023 to set theTender Offer Price per Company Share at 6,000 yen and the Repurchase Price
per Company Share at 4,320 yen. (The proposal of the Tender Offer Price perCompany Share at 6,000 yen represents (i) a discount of 0.25% (rounded totwo decimal places; the same applies in the calculations of premium anddiscount rates below) on 6,015 yen, the closing price of the Company Shareson the Prime Market of the Tokyo Stock Exchange as of September 14, 2023,
which is the business day immediately preceding the date on which theproposal was made (September 15, 2023), (ii) a premium of 1.57% on 5,907
yen, the simple average closing price for the preceding one-month period
ending on that date (rounded to the nearest whole yen; the same applies in thecalculations of simple average closing prices below), (iii) a premium of
3.13% on 5,818 yen, the simple average closing price for the preceding threemonth period ending on that date, and (iv) a premium of 17.49% on 5,107
yen, the simple average closing price for the preceding six-month period
ending on that date.)
Following that, in response to receiving a request from Fujitsu to consider
raising the Tender Offer Price and the Repurchase Price on September 21,
2023, JICC made a non-legally binding proposal in writing to Fujitsu and theCompany on September 26, 2023 to raise the Tender Offer Price per Company
Share at 6,100 yen and the Repurchase Price per Company Share at 4,391 yen.
(The proposal of the Tender Offer Price per Company Share at 6,100 yen
represents (i) a premium of 3.48% on 5,895 yen, the closing price of theCompany Shares on the Prime Market of the Tokyo Stock Exchange as of
September 25, 2023 (which is the business day immediately preceding thedate on which the proposal was made (September 26, 2023)), (ii) a premiumof 2.99% on 5,923 yen, the simple average closing price for the preceding
one-month period ending on that date, (iii) a premium of 4.40% on 5,843 yen,
the simple average closing price for the preceding three-month period endingon that date, and (iv) a premium of 17.02% on 5,213 yen, the simple averageclosing price for the preceding six-month period ending on that date.) At thattime, among the methods of procuring the funds necessary for theTransactions, the Tender Offeror had not obtained commitment letters frominvestors for contributions through common stock and contributions throughnon-voting class preferred shares and had not obtained commitment lettersfrom financial institutions for senior loans.
Subsequently, on October 18, 2023, JICC received an explanation from theCompany regarding the latest outlook on its business performance for thethird quarter of the fiscal year ending March 2024 and thereafter (the“October 18, 2023 Business Performance Explanation”). In the October 18,
2023 Business Performance Explanation, the Company explained that basedon the latest market conditions, the recovery in the Company’s businessperformance would be delayed beyond the initial outlook, and that therefore
the outlook of sales for the fiscal year ending March 2024 had been revised
downwards. Taking the content of that explanation into consideration, JICC
repeatedly engaged in continual discussions and negotiations with Fujitsu
regarding the contents of the proposal, the Tender Offer Price, and the24Repurchase Price, as a result of which JICC determined that the cash flowsthat could be created by the Company had decreased, particularly in the shortterm, and that as a result, the capability of the Company to make additional
investments in future upsides had declined. Therefore, on November 7, 2023,
ahead of the submission of a final proposal, JICC made a proposal to Fujitsu
to lower the Tender Offer Price to 5,700 yen per Company Share. (Theproposal of the Tender Offer Price per Company Share at 5,700 yen represents(i) a premium of 6.64% on 5,345 yen, the closing price of the Company Shareson the Prime Market of the Tokyo Stock Exchange as of November 6, 2023,
which is the business day immediately preceding the date on which theproposal was made (November 7, 2023), (ii) a premium of 4.86% on 5,436
yen, the simple average closing price for the preceding one-month period
ending on that date, (iii) a discount of 0.26% on 5,715 yen, the simple averageclosing price for the preceding three-month period ending on that date, and(iv) a premium of 2.61% on 5,555 yen, the simple average closing price forthe preceding six-month period ending on that date.) Following that, on
November 7, 2023, JICC received a request from Fujitsu to consider raising
the Tender Offer Price, and on November 7, 2023, JICC made a proposal to
Fujitsu to raise the Tender Offer Price to 5,900 yen per Company Share as a
price that is within the range considered appropriate by JICC. (The proposalof the Tender Offer Price per Company Share at 5,900 yen represents (i) apremium of 10.38% on 5,345 yen, the closing price of the Company Shareson the Prime Market of the Tokyo Stock Exchange as of November 6, 2023,
which is the business day immediately preceding the date on which theproposal was made (November 7, 2023), (ii) a premium of 8.54% on 5,436
yen, the simple average closing price for the preceding one-month period
ending on that date, (iii) a premium of 3.24% on 5,715 yen, the simple averageclosing price for the preceding three-month period ending on that date, and(iv) a premium of 6.21% on 5,555 yen, the simple average closing price forthe preceding six-month period ending on that date.) Additionally, Fujitsu
subsequently made a request to JICC on November 8, 2023 to again consider
raising the Tender Offer Price, and in response, on November 8, 2023, JICC
made a proposal to Fujitsu to raise the Tender Offer Price to 5,910 yen per
Company Share as a price that is within the range considered appropriate by
JICC. (The proposal of the Tender Offer Price per Company Share at 5,910
yen represents (i) a premium of 16.87% on 5,057 yen, the closing price of theCompany Shares on the Prime Market of the Tokyo Stock Exchange as ofNovember 7, 2023, which is the business day immediately preceding the dateon which the proposal was made (November 8, 2023), (ii) a premium of
9.10% on 5,417 yen, the simple average closing price for the preceding onemonth period ending on that date, (iii) a premium of 3.68% on 5,700 yen, thesimple average closing price for the preceding three-month period ending onthat date, and (iv) a premium of 6.45% on 5,552 yen, the simple averageclosing price for the preceding six-month period ending on that date.)
Following that, on November 11, 2023, JICC made a non-legally binding
proposal in writing to Fujitsu and the Company to set the Tender Offer Price
at 5,910 yen per Company Share and the Repurchase Price at 4,211 yen per
Company Share. (The proposal of the Tender Offer Price per Company Shareat 5,910 yen represents (i) a premium of 10.94% on 5,327 yen, the closing
25

price of the Company Shares on the Prime Market of the Tokyo Stock
Exchange as of November 10, 2023, which is the business day immediately
preceding the date on which the proposal was made (November 11, 2023), (ii)a premium of 9.81% on 5,382 yen, the simple average closing price for thepreceding one-month period ending on that date, (iii) a premium of 4.18% on
5,673 yen, the simple average closing price for the preceding three-month
period ending on that date, and (iv) a premium of 5.91% on 5,580 yen, thesimple average closing price for the preceding six-month period ending onthat date.) Based on the opinion of the Special Committee after it considered
the content of that proposal, on November 16, 2023, the Company requested
JICC to raise the Tender Offer Price on the grounds that it could not be
concluded to be at a sufficient level to ensure the interests of the minority
shareholders of the Company, but on November 20, 2023, JICC made alegally binding final proposal (the “Final Proposal”) in writing to Fujitsu andthe Company to set the Tender Offer Price at 5,910 yen per Company Shareand the Repurchase Price at 4,211.1 yen per Company Share. (The proposalof the Tender Offer Price per Company Share at 5,910 yen represents (i) apremium of 8.14% on 5,465 yen, the closing price of the Company Shares on
the Prime Market of the Tokyo Stock Exchange as of November 17, 2023
(which is the business day immediately preceding the date on which theproposal was made (November 20, 2023)), (ii) a premium of 11.22% on 5,314
yen, the simple average closing price for the preceding one-month period
ending on that date, (iii) a premium of 4.69% on 5,645 yen, the simple averageclosing price for the preceding three-month period ending on that date, and(iv) a premium of 5.10% on 5,623 yen, the simple average closing price forthe preceding six-month period ending on that date.) When submitting the
Final Proposal, among the methods of procuring the funds necessary for theTransactions, JICC had finished obtaining commitment letters from investors(namely, JICC, DNP, Mitsui Chemicals, and Hachijuni Investment) for
contributions through common stock and contributions through non-votingclass preferred shares and had finished obtaining commitment letters fromfinancial institutions (namely, MUFG Bank, Ltd., Sumitomo Mitsui Banking
Corporation, The Hachijuni Bank, Ltd., and Aozora Bank, Ltd.) for seniorloans. Based on the opinion of the Special Committee after it considered thecontent of the Final Proposal, on November 21, 2023, the Company again
requested JICC to raise the Tender Offer Price on the grounds that a decreasein the price was undesirable given that the medium-to-long-term outlook of
the Company’s business had not changed and that the price could not be
concluded to be at a sufficient level to ensure the interests of the minority
shareholders of the Company, but JICC determined that it was not necessary
to revise the Tender Offer Price based on a comprehensive judgment in lightof factors such as the latest semiconductor market conditions.
Subsequently, following the submission of the Final Proposal, as JICC,
Fujitsu, and the Company repeatedly engaged in continual discussions andnegotiations regarding the content of the Final Proposal, the Tender Offer
Price, and the Repurchase Price, on November 27, 2023, JICC received awritten inquiry from the Special Committee regarding the views and reasonson which the Tender Offeror based its proposed Tender Offer Price of 5,910
yen per Company Share and regarding the reasons for the Tender Offer Price26

and the Repurchase Price in the Final Proposal being lower than those set out
in the proposal dated September 26, 2023. In response, on November 30, 2023,
JICC replied in writing to the Special Committee stating (i) that based on
factors such as financial information and other materials disclosed by theCompany and the results of the due diligence conducted by JICC regarding
the Company from late July to mid-September 2023, JICC conducted amultifaceted and comprehensive analysis of the Company’s business andfinancial status, prepared a financial model reflecting that analysis, andcalculated a tender offer price that secures a return on investment as required
by JICC and (ii) that JICC lowered the Tender Offer Price and the Repurchase
Price due to a comprehensive judgment based not only on the October 18,
2023 Business Performance Explanation and the second quarter financial
results announced on October 26, 2023 but also on uncertainties in the macro
environment, such as the latest semiconductor market conditions and interest
rate trends.
Additionally, on November 28, 2023, JICC received from Fujitsu a written
request to raise the Tender Offer Price. Moreover, on December 4, 2023, JICC
received a document from the Company stating the views of the Company
and the Special Committee and requesting that the Tender Offer Price beraised. Taking into consideration the opinion of the Special Committee after
it considered JICC’s response regarding the views and reasons on which theTender Offer Price was based and the reasons for lowering the price, that
document requested that the Tender Offer Price be raised on grounds such as(i) that there had been no change in the medium-to-long-term businessoutlook of the Company, which is the basis of the Company’s intrinsic value
on which the Company and the Special Committee place emphasis when
making decisions, (ii) that although the Company revised its businessperformance forecast for the fiscal year ending March 2024 due to an
expected delay in the recovery of the semiconductor market, that delay would
not have any substantial impact on the intrinsic value of the Company, and(iii) that although the Company and the Special Committee believed that asignificant amount of consideration must be given to the premiums based on
the share price of the business day preceding the announcement of the Tender
Offer, at the level of premiums based on the current Tender Offer Price of
5,910 yen, there were concerns regarding the likelihood of the Tender Offer
being successfully completed.
Subsequently, on December 5, 2023, JICC received a further written inquiry
from the Special Committee regarding matters such as the reasons forlowering the Tender Offer Price despite there being no change in the mediumto-long-term business outlook of the Company and whether there had been achange in JICC’s evaluation of the macro environment, such as
semiconductor market conditions and interest trends, in the short period from
September 26 to November 20, 2023, the day on which the Final Proposal
was submitted.
In response, on December 6, 2023, JICC replied to the Company in writingthat it would maintain the Tender Offer Price at 5,910 yen. In that reply, JICC
stated that lowering the price was appropriate due to factors such as (i) the27

Company’s financial results for the second quarter, the revision to theperformance forecast for the entire year, and the risk that growth investment
would be delayed due to that downward revision, (ii) macro environment
considerations such as delayed recovery and volatility in the semiconductor
market, unpredictable interest rate trends, and potential geopolitical risks due
to an unstable global situation, and (iii) the views regarding premiums in pasttransactions in regard to which speculative media reports had been made, andthat therefore, JICC would maintain the Tender Offer Price at 5,910 yen.
Additionally, on December 7, 2023, JICC responded to the inquiry from theSpecial Committee to the effect that lowering the price was appropriate basedon the macro environment considerations stated above.
Following that, on December 8, 2023, JICC received a document from theCompany stating the views of the Company and the Special Committee andrequesting that the Tender Offer Price be raised. On the same day, taking into
consideration the opinion of the Special Committee after it considered thecontent of JICC’s response, that document requested that the Tender Offer
Price be raised on grounds such as (i) that the short-term changes in macro
economic conditions asserted by JICC would not have any substantial impact
on the intrinsic value of the Company and (ii) that at the level of premiums
based on the current Tender Offer Price of 5,910 yen, there were concerns
regarding the likelihood of the Tender Offer being successfully completed.
In response, on December 10, 2023, JICC sent a reply in writing to theCompany stating that it would maintain the Tender Offer Price at 5,910 yen
due to a comprehensive judgment based not only on the medium-to-long-termbusiness outlook but also the impact on future upsides caused by the worsened
short-term business outlook, macro factors such as the semiconductor market
outlook and macro economic conditions, and other such factors.
Subsequently, on December 12, 2023, taking into consideration the opinionof the Special Committee after it considered the content of JICC’s response,
JICC received an oral explanation from the Company and Fujitsu regarding
the views of the Company, the Special Committee, and Fujitsu and requestingthat the Tender Offer Price be raised on grounds such as that although theprevious responses from JICC could be found to be reasonable to a certain
extent, it remained difficult to conclude that the interests of the minority
shareholders of the Company had been sufficiently ensured.
In response to these requests from the Company, the Special Committee, andFujitsu, on December 12, 2023, JICC made a proposal in writing to theCompany and Fujitsu to set the Tender Offer Price at 5,920 yen per Company
Share and the Repurchase Price at 4,218.1 yen per Company Share in order
to increase the likelihood of the Tender Offer being successfully completed
while setting a price within the evaluated range of the Company’s intrinsic
value on the grounds that JICC had received repeated requests from theSpecial Committee, the Company, and Fujitsu. Following that, on December
12, 2023, JICC received a response in writing from the Company and Fujitsu
agreeing to JICC’s proposal.
28

The Tender Offer Price of 5,920 yen represents (i) a premium of 12.98%(rounded to two decimal places; the same applies for calculations of premium
rates hereinafter) on 5,240 yen, the closing price of the Company Shares on
the Prime Market of the Tokyo Stock Exchange as of December 11, 2023
(which was the business day immediately preceding the submission date of
the proposal (December 12, 2023)), (ii) a premium of 10.10% on 5,377 yen(rounded to the nearest whole yen; the same applies for calculations of simple
average closing prices hereinafter), the simple average closing price for thepreceding one-month period ending on that date, (iii) a premium of 7.60% on
5,502 yen, the simple average closing price for the preceding three-month
period ending on that date, and (iv) a premium of 4.63% on 5,658 yen, thesimple average closing price for the preceding six-month period ending onthat date. Additionally, the Tender Offer Price represents (i) a premium of
18.88% on 4,980 yen, the closing price of the Company Shares as of thebusiness day immediately preceding the publication of a speculative article
by Bloomberg regarding the sale of Fujitsu’s subsidiaries on June 1, 2023 thattriggered changes in the share price of the Company due to expectations that
the Fujitsu group would undergo a reorganization, (ii) a premium of 31.00%
on 4,519 yen, the simple average closing price for the preceding one-month
period ending on that date, (iii) a premium of 44.60% on 4,094 yen, the simple
average closing price for the preceding three-month period ending on thatdate, and (iv) a premium of 51.87% on 3,898 yen, the simple average closing
price for the preceding six-month period ending on that date.
That proposal set out the scheme for the Transactions after setting the Tender
Offer Price and the Repurchase Price based on the belief that it is possible toboth maximize the Tender Offer Price and ensure fairness among shareholders
by increasing the amounts distributed to the minority shareholders of theCompany, taking into consideration that it is expected that the provisions of
the Corporation Tax Act on excluding deemed dividends from gross profits
will be applied in regard to Fujitsu. Additionally, the Tender Offer Price andthe Repurchase Price were calculated so that (i) the amount calculated as theafter-tax earnings of Fujitsu if the Share Repurchase were to be conducted at
the Repurchase Price is equivalent to (ii) the amount of earnings that Fujitsu
would receive if it were to tender its shares in the Tender Offer at the Tender
Offer Price. Accordingly, Fujitsu will not receive greater benefits than theminority shareholders of the Company.
(ii)

Management policy after the Tender Offer
As stated in “(I) Overview of Tender Offer” in “(2) Basis and Reasons for
Opinion Regarding Tender Offer” above, if the Tender Offer is successfullycompleted, the Tender Offeror intends to make Fujitsu and the Tender Offeror
the only shareholders of the Company through the Squeeze-Out Procedures.
Following that, after the completion of the Squeeze-Out Procedures, throughthe Company conducting the Share Repurchase for all of the Company Shares
owned by Fujitsu at that time, the Tender Offeror will come to own 100% of
the Company Shares (excluding treasury shares).

29

After the Transactions are completed, JICC desires to create a way tocontribute to the further development of industry in Japan by fully drawing
out the latent growth potential of each business of the Company, thereby
maintaining and evolving its globally top-level technologies. Specifically,
JICC believes that the Company holds an important position as a components
and materials company that supports technological innovation from theperspective of strengthening the foundations of semiconductor manufacturing,and that its businesses and technologies can greatly contribute to (i)technological development in advanced fields centered around threedimensional packaging for semiconductor processes and (ii) the practicalimplementation of next-generation semiconductor technologies such as
photonic-electronic integration. Additionally, JICC, together with the officers
and employees of the Company, will aim to further grow the Company’sbusiness and enhance its corporate value by utilizing the solid businessfoundation that the Company has built thus far and, given that several
members have joined JICC with investment experience at INCJ, which has asimilar mission to that of JICC, by utilizing the knowledge and networks
gained through INCJ’s extensive investment experience in the semiconductor
and electrical component industry. JICC’s basic policy is to re-list theCompany Shares after business growth and enhancement of corporate value
are realized for the Company through the Transactions.
Additionally, according to JICC, the Company conducts its business based on
its corporate vision regarding technology leadership, the art of manufacturing,
long-term vision, global outlook, and responsibility to individuals as well as
its founder’s philosophy of economizing and achieving innovation throughthe manufacturing site. After the Transactions are completed, JICC will aim
to achieve a leap in the growth of the Company that enables it to further
contribute to international society and regional communities by supporting
the business operation of the Company while giving priority to respecting thecorporate vision and philosophy and also taking into consideration DNP’sgroup vision, “The DNP Group connects individuals and society and provides
new value,” and Mitsui Chemicals’ management vision, “Contributing tosociety by providing high-quality products and services to customers throughinnovation and the creation of materials while remaining in harmony with theglobal environment.” The Tender Offeror intends to promote a partnershipthat can provide new value to society by combining the strengths possessedby the Company, JICC, DNP, and Mitsui Chemicals.
After the Transactions are completed, in order to increase management
efficiency, the Tender Offeror plans to transition the Company from acompany with an audit and supervisory committee to a company withcorporate auditors and to appoint persons nominated by JICC as directors andcorporate auditors of the Company, but the specific number and candidates
for the directors and corporate auditors have not yet been decided and will bedecided upon consultation with the Company moving forward. Additionally,
after the Transactions are completed, the Tender Offeror plans to appoint one
person nominated by DNP as a director of the Company, but as the specificcandidate and other such details have not yet been decided, they will also be
decided upon consultation with the Company moving forward.
30

For the time being after the completion of the Transactions, the Tender
Offeror plans to make efforts to continue the employment of the employees
who are employed by the Company as of the completion of the Transactions
and to maintain their working conditions. The Tender Offeror also plans to
introduce an incentive plan, such as stock options, for the officers andemployees of the Company and to establish a system that has the Tender
Offeror and the officers and employees of the Company aim to improve thelong-term corporate value of the Company together. Additionally, after theTransactions, the Tender Offeror will continue to respect the business
relationships between the Company and its material clients and business
partners.
(III) Process of and Reasons for Decision-Making by Company to Support TenderOffer
As stated in “(II) Background, Purpose, and Decision-Making Process ofTender Offeror’s Decision to Implement Tender Offer; Management Policy
Thereafter” above, while the Company was deliberating various management
strategies to enhance its corporate value in the business environment, as
described in “(a) Business Environment Surrounding Company” above, in
response to Fujitsu’s plan to sell all or part of the Company Shares, as
announced in September 2021, in January 2022, the Company began to havediscussions with Fujitsu concerning the specific method of sale of the Fujitsu
Holding Shares. Subsequently, Fujitsu held meetings with multiple potential
buyer candidates and deliberated on various options, such as means of carveout from the Fujitsu Group, and a capital and business alliance with potential
buyer candidates. During this time, although there were intermittent
discussions, there was no progress in the discussions as there were no specificnegotiations between Fujitsu and the Company. However, as the Company
subsequently received a specific proposal from Fujitsu in June 2022, in July
2022, the Company appointed MUMSS as its financial advisor and thirdparty valuation organization, SMBC Nikko as its financial advisor, and N&A
as its legal advisor. Then, in light of the discussions the Company engaged inwith Fujitsu from July 2022 to March 2023, the Company carefully
deliberated the various options in relation to its capital policy in order to bothmaximize the interests of its minority shareholders in addition to those of the
Fujitsu group and further enhance the Company’s corporate value, andreached the decision that it would be desirable for the Company and its
shareholders to implement the Bidding Process, and commenced the same.
To be specific, since late March 2023, the Company and Fujitsu havecommenced a Bidding Process comprised of the primary and secondary
bidding processes and conducted the bidding processes, including due
diligence covering multiple candidates and discussions with each candidate.
Subsequently, the Company and Fujitsu received a written non-legallybinding proposal from JICC in September of the same year, a written nonlegally binding final proposal from another candidate in October of the same
year and a written legally binding final proposal from JICC in November ofthe same year. However, as no legally binding final proposal was submitted
by the other candidates, as a result of a comprehensive review of the proposals
31

of each candidate, JICC was selected as the final purchase candidate fromamong JICC and the other candidates later in the same month, with thetransaction price, transaction certainty and transaction speed as the main
decision-making criteria, the Company and JICC commenced discussions anddeliberations on the implementation of the Transactions, including the Share
Repurchase.
To be specific, JICC made a non-legally binding proposal in writing to Fujitsu
and the Company on September 26, 2023 to raise the Tender Offer Price perCompany Share at 6,100 yen and the Repurchase Price per Company Shareat 4,391 yen.
Subsequently, on October 18, 2023, the Company provided the October 18,
2023 Business Performance Explanation to JICC. In the October 18, 2023
Business Performance Explanation, the Company explained that based on thelatest market conditions, the recovery in the Company’s business performance
would be delayed beyond the initial outlook, and that therefore the outlook ofsales for the fiscal year ending March 2024 had been revised downwards.
Following that, on November 11, 2023, JICC made a non-legally binding
proposal in writing to Fujitsu and the Company to set the Tender Offer Price
at 5,910 yen per Company Share and the Repurchase Price at 4,211 yen per
Company Share. Based on the opinion of the Special Committee after it
considered the content of that proposal, on November 16, 2023, the Company
requested JICC to raise the Tender Offer Price on the grounds that it could not
be concluded to be at a sufficient level to ensure the interests of the minority
shareholders of the Company, but on November 20, 2023, JICC made alegally binding final proposal in writing to Fujitsu and the Company to set theTender Offer Price at 5,910 yen per Company Share and the Repurchase Price
at 4,211.1 yen per Company Share.
Following the submission of the Final Proposal, as JICC, Fujitsu, and theCompany repeatedly engaged in continual discussions and negotiations
regarding the content of the legally binding Final Proposal, based on theopinion of the Special Committee after it considered the content of the Final
Proposal, on November 21, 2023, the Company again requested JICC to raise
the Tender Offer Price on the grounds that a decrease in the price wasundesirable given that the medium-to-long-term outlook of the Company’sbusiness had not changed and that the price could not be concluded to be at a
sufficient level to ensure the interests of the minority shareholders of theCompany, but JICC had determined that it was not necessary to revise theTender Offer Price.
Subsequently, on November 27, 2023, JICC received a written inquiry
regarding the underlying idea and rationale for the Tender Offer Price and thereasons for the price reduction from the Special Committee , and sent answers
in writing to the Special Committee on November 30, 2023. On November
28, 2023, JICC received from Fujitsu a written request to raise the Tender
Offer Price. Moreover, on December 4, 2023, JICC received a document fromthe Company stating the views of the Company and the Special Committee
32and requesting that the Tender Offer Price be raised. Taking into consideration
the opinion of the Special Committee after it considered JICC’s response
regarding the views and reasons on which the Tender Offer Price was based
and the reasons for lowering the price, that document requested that theTender Offer Price be raised on grounds such as that there had been no change
in the medium-to-long-term business outlook of the Company, which is thebasis of the Company’s intrinsic value on which the Company and the Special
Committee place emphasis when making decisions, at the level of premiums
based on the current Tender Offer Price of 5,910 yen, there were concerns
regarding the likelihood of the Tender Offer being successfully completed.
Subsequently, on December 5, 2023, JICC received a further written inquiry
from the Special Committee regarding matters such as the reasons forlowering the Tender Offer Price despite there being no change in the mediumto-long-term business outlook of the Company and whether there had been achange in JICC’s evaluation of the macro environment, such as
semiconductor market conditions and interest trends, in the short period from
September 26 to November 20, 2023, the day on which the Final Proposal
was submitted. In response, on December 6, 2023, JICC sent a reply in writing
to the Company that it would maintain the Tender Offer Price at 5,910 yen.
In that reply, JICC stated that lowering the price was appropriate due tofactors such as (i) the Company’s financial results for the second quarter, therevision to the performance forecast for the entire year, (ii) macro
environment considerations such as delayed recovery and volatility in thesemiconductor market, unpredictable interest rate trends, and potential
geopolitical risks due to an unstable global situation, and (iii) the views
regarding premiums in past transactions in regard to which speculative media
reports had been made, and that therefore, JICC would maintain the Tender
Offer Price at 5,910 yen. Additionally, on December 7, 2023, in response to
its second inquiry, JICC sent a reply to the Special Committee to the effectthat lowering the price was appropriate based on the macro environment
considerations stated above.
Following that, on December 8, 2023, the Company again sent JICC adocument stating the views of the Company and the Special Committee andrequesting that the Tender Offer Price be raised. Taking into consideration theopinion of the Special Committee after it considered the content of JICC’s
response, that document requested that the Tender Offer Price be raised on
grounds such as (i) that the short-term changes in macro economic conditions
asserted by JICC would not have any substantial impact on the intrinsic valueof the Company and (ii) that at the level of premiums based on the current
Tender Offer Price of 5,910 yen, there were concerns regarding the likelihoodof the Tender Offer being successfully completed. In response to this, on
December 10, 2023, JICC sent a reply in writing to the Company statingthat it would maintain the Tender Offer Price at 5,910 yen due to acomprehensive judgment based not only on the medium-to-long-termbusiness outlook but also the impact on future upsides caused by the worsened
short-term business outlook, macro factors such as the semiconductor market
outlook and macro economic conditions, and other such factors.

33

Subsequently, on December 12, 2023, taking into consideration the opinionof the Special Committee after it considered the content of JICC’s response,
JICC received an oral explanation from the Company and Fujitsu regarding
the views of the Company, the Special Committee and Fujitsu requesting that
the Tender Offer Price be raised on grounds such as that although the previous
responses from JICC could be found to be reasonable to a certain extent, itremained difficult to conclude that the interests of the minority shareholdersof the Company had been sufficiently ensured.
Subsequently, on December 12, 2023, JICC sent a proposal in writing to theCompany and Fujitsu to set the Tender Offer Price at 5,920 yen per Company
Share and the Repurchase Price at 4,218.1 yen per Company Share in order
to increase the likelihood of the Tender Offer being successfully completed
while setting a price within the evaluated range of the Company’s intrinsic
value on the grounds that JICC had received repeated requests from theSpecial Committee, the Company, and Fujitsu. Subsequently, on December
12, 2023, JICC received a response in writing from the Company and Fujitsu
agreeing to JICC’s proposal.
In light of the possibility that the interests of Fujitsu and those of theCompany’s minority shareholders do not necessarily align, as stated in “(6)Measures to Ensure Fairness of Tender Offer, Such as Measures to Ensure
Fairness of Tender Offer Price and Avoid Conflicts of Interest” below, theCompany consulted with the permanent special committee established onJune 17, 2022 in accordance with the Corporate Governance Code establishedby the Tokyo Stock Exchange (the “Special Committee”) on April 14, 2023,
immediately after commencing the primary bidding process, regarding
matters such as fairness and appropriateness of the procedures concerning theTransactions in order to eliminate any arbitrariness in the Company’s
decision-making in relation to the Transactions and the candidate selection
process during the Bidding Process, and enhance its corporate value andensure the interests of its minority shareholders, as well as to deliberate andmake decisions as to the justification and reasonableness of the purpose of theTransactions, fairness of the procedures concerning the Transactions, andfairness of the terms of the Transactions (for details of the composition of theSpecial Committee and the specific matters of inquiry, please refer to “(II)Procurement by Company of Written Report from Independent Special
Committee” in “(6) Measures to Ensure Fairness of Tender Offer, Such as
Measures to Ensure Fairness of Tender Offer Price and Avoid Conflicts ofInterest” below). Additionally, the Company took the measures stated in “(6)Measures to Ensure Fairness of Tender Offer, Such as Measures to Ensure
Fairness of Tender Offer Price and Avoid Conflicts of Interest” below, in lightof the content of the share valuation report obtained from MUMSS, theCompany’s financial advisor and third-party valuation organization, as wellas the legal advice from N&A, the Company’s legal advisor, the Company
carefully discussed and deliberated matters such as whether it is appropriate
for the board of directors to express an opinion to support the Tender Offerand recommend that the Company’s shareholders tender in the Tender Offer,
and whether implementing the Transactions is disadvantageous to theCompany’s minority shareholders, giving the utmost respect to the written34

report submitted by the Special Committee on December 12, 2023 (the“Written Report”).
Specifically, the Company conducted the Bidding Process andcomprehensively deliberated on the proposal by the candidates who
participated in the secondary bidding process, taking into consideration theperspectives such as: the assessed value of the share value, the Tender Offer
price, the transactional structure, the ability to raise funds/conditions forraising funds, and the management strategy after implementation of theTransactions and the structure to support the same, including the measures toenhance corporate value; management policy and other terms and conditions
such as employee compensation and governance structure, the certainty ofprocedures such as obtaining clearances under competition laws and otherapplicable laws and regulations; and the perspective of maximizing theinterests of minority shareholders. As a result, in light of the fact that only the
final proposal presented by JICC on December 12, 2023 was a legally-binding
proposal and the presented assessed value of the share value and the Tender
Offer Price being 5,920 yen, the Tender Offeror would be the best partner for
the Company to aim for “Progress without Limits” in light of the measures toenhance corporate value, the management strategy after implementation of
the Transactions and the structure to support the same, including valueincreasing measures; and that it is important to have an accurate
understanding of the potential for medium- to long-term market expansion for
the Company’s products and technologies, and to make flexible and agile
management decisions in the semiconductor industry, where market
conditions change rapidly, the Company came to conclude that by promoting
measures such as the expansion of human capital, which is fundamental tothe promotion of our business, will contribute to increasing our corporate
value in the future. By conducting the Transactions with a tender offeror thatis focused on JICC as a government-affiliated fund, which basically supports
the Company’s business policy of focusing on capital investment andtechnological development in growth markets, the Company will be able topromote initiatives that contribute to enhancing corporate value from a
medium- to long-term perspective, without being swayed by short-term
fluctuations in business performance, as its partner, and since the Company isplanning to execute the Transactions with JICC as a partner, the Company
will be able to make decisions more quickly than before, and promotemeasures such as the expansion of human capital, which is fundamental tothe promotion of the Company’s business, which will contribute to futureenhancement of corporate value. The Company also believes that the superb,
unique technologies of DNP and Mitsui Chemicals, combined with theCompany’s semiconductor packaging technologies, will contribute topromotion of the next-generation semiconductor business the Company aims
to pursue, and reinforce the Company’s market competitiveness in nextgeneration products, thereby contributing to the enhancement of theCompany’s medium- to long-term corporate value.
In light of the above, the Company determined that the Transactions would
contribute to the enhancement of the Company’s corporate value.

35

Furthermore, the Company determined that the Tender Offer provides theCompany’s shareholders with a reasonable opportunity to sell shares, in lightof the following factors relating to the Tender Offer Price (5,920 yen):(a)
As stated above, the assessed value of the share value and the Tender
Offer Price presented by JICC was the only proposal presented as alegally binding proposal and the Tender Offer Price was 5,920 yen.
(b)
Among the results of the Company Shares calculated by MUMSS,
as stated in “(I) Procurement by Company of Share Valuation Reportfrom Independent Financial Adviser and Third-Party Valuation
Organization” of “(3) Matters Regarding Calculation” the Tender
Offer Price is above the upper end of the range of calculation results
using market share price analysis and the mid-point of the range
calculated by the comparable companies analysis, and close to themedian of the range of the results of the calculation based on the
Discounted Cash Flow analysis (“DCF analysis”).
(c)
The Tender Offer Price includes: a premium of 18.88% on 4,980 yen,
the closing price of the Company Shares as of May 31, 2023, whichis the business day immediately preceding June 1, 2023, the date on
which the leaked report on the Transactions that triggered afluctuation in the Company Shares was published; a premium of
31.00% on 4,519 yen, the simple average closing price for the past
one month (from May 1 to 31, 2023); a premium of 44.60% on 4,094
yen, the simple average closing price for the past three months (fromMarch 1 to May 31, 2023); and a premium of 51.87% on 3,898 yen,
the simple average closing price for the past six months (fromDecember 1, 2022 to May 31, 2023), respectively. Furthermore, theTender Offer Price includes: a premium of 12.98% on 5,240 yen, theclosing price of the Company Shares on the Tokyo Stock Exchange
as of December 11, 2023, which is the business day immediately
preceding the day implementation of the Tender Offer wasannounced; a premium of 10.10% on 5377 yen, the simple averageclosing price for the past one month; a premium of 7.60% on
5,502yen, the simple average closing price for the past three months;
and a premium of 4.63% on 5,658 yen, the simple average closing
price for the past six months, respectively. Under the circumstanceswhere it is not unreasonable to assume that the share price before thepublication of the leaked media report and the subsequent multiple
speculative reports had a considerable impact on the expected valueof the Transaction, etc., if the share price is used as the basis for the
price before the publication of the leaked media report, it is notunreasonable to assume that the premium is sufficiently reasonable
in comparison with the level of premiums in 185 cases of othertakeover bids for listed companies aiming to go private since thepublication of the “Guidelines on Fair M&A -Towards enhancing
corporate value and securing shareholder interests-” by the Ministryof Economy, Trade and Industry, is sufficiently reasonable incomparison with the level of premiums in 185 cases of other tender
offers for the purpose of taking listed companies private after 28 June
2019, the date of the publication of the said article (Note 22). The
premium level for the closing price on the reference date and the
36

(d)

simple average closing price for the last one month on the referencedate, which are sensitive to the share price fluctuations in theimmediate past, is relatively low, while the premium level for thesimple average closing price for the last three months on thereference date and the last six months on the reference date, whichreflect more medium- to long-term share price trends, is relatively
high. The share price of the Company increased by 25.60% from
December 1, 2022, which is six months prior to May 31, 2023 (the“Reference Date”), the business day immediately preceding the
publication of the leaked media report. However, since 95.10% of
this 25.60% increase is accounted for by the 24.34% increase from
April 3, 2023 (which is two months prior to the Reference Date) to
the Reference Date, it can be confirmed that the increase within twomonths prior to the Reference Date was particularly significant.
While such a rapid increase is considered difficult to explain
rationally, even in light of the information disclosed by the Company,
it is appropriate to consider the level of the premium on the market
share price by considering the average value over a longer period oftime, rather than judging it in light of the simple average closing
price on the current reference date and over the most recent one
month. It is not unreasonable to consider that it is appropriate toconsider the premium level of the Tender Offer Price in light of thesimple average of the closing prices for the three months preceding
the current reference date or the six months preceding the current
reference date, and that the premium level of the Tender Offer Priceis sufficiently reasonable.
The measures to ensure fairness of Tender Offer stated in “(6)Measures to Ensure Fairness of Tender Offer, Such as Measures to
Ensure Fairness of Tender Offer Price and Avoid Conflicts of Interest”
below have been taken, and therefore the interests of generalshareholders have been taken into consideration.

Note22: The average premium is 41.46% of the closing price on the same day,
44.89% of the simple average closing price over the past month up
to the same day, 47.05% of the simple average closing price over the
past three months up to the same day and 47.57% of the simple
average closing price over the past six months up to the same day,using the business day before the day of publication as the reference
date. The median premium was 38.74% over the closing price on thesame day, 40.46% over the simple average closing price over the pastmonth up to the same day, 41.05% over the simple average closing
price over the past three months up to the same day and 44.59% overthe simple average closing price over the past six months up to thesame day.
For the reasons above, the Company resolved at its board of directors meeting
held today that it will express its current opinion that, if commenced, it will
express an opinion to support the Tender Offer and to recommend that its
shareholders tender their shares in the Tender Offer.

37

As stated above, the Tender Offeror plans to commence the Tender Offer ona date that is (i) within 10 business days after the Tender Offer Conditions
Precedent (excluding those to be satisfied on the commencement date of theTender Offer) are satisfied (or waived at the discretion of the Tender Offeror)(however, if a Counter Proposal has been made as of such date, then the earlierof (a) the date on which 20 business days have elapsed since the date on which
Fujitsu makes a request to the Tender Offeror for consultation regarding
changing the Tender Offer Price and the Repurchase Price or (b) the date on
which Fujitsu covenants in writing that it will not accept the Counter
Proposal) and (ii) separately notified to the Company in advance by theTender Offeror. As of today, the Tender Offeror aims to commence the Tender
Offer in or around late August 2024, based on discussions with local law firms
about the procedures required under domestic and foreign competition laws
and foreign investment control laws and regulations, but it is difficult toaccurately estimate the amount of time required for the procedures involving
foreign competition authorities and authorities having jurisdiction overinvestment control laws and regulations (please refer to the recitals of thisdocument for details).
In light of the above circumstances, at the above board of directors meeting,
the Company also resolved (i) that when the Tender Offer is commenced, theboard of directors will request that the Special Committee (x) consider
whether there are any changes in its opinion as expressed to the board of
directors as of today, and (y) if there are no changes, make a statement to that
effect, or if there are changes, state the changed opinion, to the board of
directors; and (ii) that based on such opinion of the Special Committee, theCompany will express its opinions on the Tender Offer again when the Tender
Offer is commenced.
For details of the resolution at the board of directors meeting of the Company
above, please refer to “(V) Unanimous Approval of All Non-Interested
Directors of the Company” in “(6) Measures to Ensure Fairness of Tender
Offer, Such as Measures to Ensure Fairness of Tender Offer Price and Avoid
Conflicts of Interest” below.
(3)

Matters Regarding Calculation(I)

Procurement by Company of Share Valuation Report from Independent
Financial Adviser and Third-Party Valuation Organization(i)Name of Third-Party Valuation Organization and its Relationship with
Company and Tender Offeror
In determining its opinion on the Tender Offer and to ensure fairness, theCompany appointed MUMSS as its financial advisor and third-party
valuation organization independent from the Tender Offeror, Fujitsu, and theCompany and received advice from a financial viewpoint. The Company
requested a calculation of the value of the Company’s shares acquired a sharevaluation report (the “Share Valuation Report”) dated December 12, 2023
from MUMSS, subject to the conditions precedent set forth in (ii) below and38certain other conditions.
In addition, same as MUFG Bank, Ltd. (“MUFG Bank”), MUMSS is amember of the Mitsubishi UFJ Financial Group companies and MUFG Bank
conducts financing transactions for the Company as part of a series ofordinary banking transactions, and plans to provide the Tender Offeror withfunds for settlement of the Tender Offer. According to MUMSS, incompliance with the applicable provisions of Article 36, Paragraph 2 of the
Act and Article 70-4 of the Cabinet Office Order on Financial Instruments
Business (Cabinet Office Order No. 52 of 2007; as amended), MUMSS, theCompany’s financial advisor, and MUFG Bank have, between them andwithin each company, established and implemented a means to prevent
adverse effects, including an appropriate management structure for conflictsof interest, such as an information barrier to strictly manage information
regarding the Company. Therefore, MUMSS has performed its duties as afinancial advisor without being affected by MUFG Bank’s decisions and has
calculated the Company’s share value in a position that is independent fromMUFG Bank’s position as a lender. Based on the fact that a strict
information management structure has been established for information
management between MUMSS and MUFG Bank and within each of them, as
well as the fact that MUMSS was formerly a third-party valuation
organization for a similar transaction, the Company has appointed MUMSS
as its financial advisor and third-party valuation organization independent
from the Tender Offeror and the Company.
Furthermore, the compensation payable to MUMSS in connection with theTransactions includes contingent compensation payable subject to publicannouncement of the Transactions, including the Tender Offer, andcompletion of the Squeeze-Out Procedures. By taking into consideration
general customary practices in similar types of transactions, as well as the
propriety of a compensation system that imposes a reasonable monetaryburden on the Company when the Transactions are not completed, theCompany has decided that MUMSS’s independence is not ruled out by the
inclusion of contingent compensation payable subject to publicannouncement of the Transactions, including the Tender Offer, andcompletion of the Squeeze-Out Procedures.
In addition, in consideration of the interests of minority shareholders, theCompany has implemented various measures as stated in “(6) Measures to
Ensure Fairness of Tender Offer, Such as Measures to Ensure Fairness ofTender Offer Price and Avoid Conflicts of Interest” below, in the Tender
Offeror and the Company, to ensure fairness of the Tender Offer. Therefore,
the Company has not obtained from MUMSS an opinion on fairness of theTender Offer Price (fairness opinion).
(ii)

Outline of Calculation
As a result of considering the valuation method for the Tender Offer, MUMSS
calculated the value of the Company Shares using each of (i) the market shareprice analysis because the Company Shares are listed on the Prime Market of39

the Tokyo Stock Exchange and a market share price exists, (ii) the comparable
companies analysis because there are multiple listed companies similar andcomparable to the Company and it is possible to infer by analogy the sharevalue of the Company by comparing the Company with such similar listedcompanies, and (iii) the DCF analysis so as to reflect the Company’s intrinsic
value based on the status of future business activities, from the perspectivethat it would be appropriate to assess the share value of the Company Sharesin multiple ways.
The ranges of the per-share value of the Company Shares calculated using
such methods are as follows:
Market share price analysis:
Comparable companies analysis:
DCF analysis:

5,240 yen to 5,658 yen
5,238 yen to 6,220 yen
5,077 yen to 6,780 yen

Under the market share price analysis, where December 11, 2023 was thereference date, the per-share value of the Company Shares was calculated as
ranging from 5,240 yen to 5,658 yen, based on the following prices of theCompany Shares on the Prime Market of the Tokyo Stock Exchange: theclosing price as of the reference date (5,240 yen); the simple average of theclosing price for the one month immediately preceding the reference date
(5,377 yen); the simple average of the closing price for the three months
immediately preceding the reference date (5,502 yen); and the simple averageof the closing price for the six months immediately preceding the reference
date (5,658 yen).
Under the comparable companies analysis, the per-share value of theCompany Shares was calculated as ranging from 5,238 yen to 6,220 yen,through comparison with market share prices and financial indices indicating
profitability, etc. of similar listed companies engaged in business that is
relatively similar to that of the Company.
Under the DCF analysis, the Company’s corporate value and share value were
calculated by making certain financial adjustments, such as adding the valuesof the Company’s cash equivalents, etc. (including excess cash and deposits
held by the Company) to the business values calculated by rebating the free
cash flow that is expected to be generated by the Company in the future at a
certain discount rate to the present value, in light of the Company’s future
projections in and after the fiscal year ending in March 2024, which takes into
account various factors, such as the Company’s business plan for fiscal years
from the fiscal year ending in March 2024 through the fiscal year ending inMarch 2028, recent business result trends, and publicly available information.
Using this methodology, the per-share value of the Company Shares wascalculated as ranging from 5,077 yen to 6,780 yen.
MUMSS has used the information provided by the Company and publicly
available information in calculating the Company’s share value, has assumed
that that information is all accurate and complete, and has not independently
verified the accuracy or completeness thereof. In addition, information40

regarding the Company’s financial projections is assumed to have beenreasonably prepared based on the Company’s best projections and judgments
currently available. With regard to the financial projections, questions havebeen asked to and answers have been received from the Special Committee,
and the reasonability of the contents and conditions precedent, etc. thereof
has been confirmed. Furthermore, MUMSS has not independently evaluatedor appraised the assets and liabilities of the Company (including off-balance
sheet assets and off-balance sheet liabilities, and other contingent liabilities)
and has not requested any appraisals or evaluations from third-party
organizations. The calculation by MUMSS reflects the above information asof December 11, 2023.
Moreover, the Company’s business plan, which MUMSS used as the basis forthe DCF analysis calculation, includes a fiscal year in which significant
increases or decreases in profits are expected in comparison with the previous
year. Specifically, the semiconductor industry is expected to face a severemarket environment; negative growth is expected in 2023.
The Company has been making continual, focused capital investments inmarkets with promising growth, and is committed to reinforcing its
production system and broadening the customer base in view of the growing
markets by: establishing the Chikuma Plant (Chikuma City, Nagano
Prefecture) as a new production plant for flip-chip type packages used in highperformance semiconductors; expanding its mass production system throughthe construction of a new building completed in 2023 at its Takaoka Plant(Nakano City, Nagano Prefecture) for ceramic electrostatic chucks forsemiconductor manufacturing equipment; and beginning construction
planning for a new building at its Arai Plant (Myoko City, Niigata Prefecture)for producing plastic BGA substrates for cutting-edge memories. In thebusiness plan prepared by the Company, although the consolidated operating
profit of approximately 35 billion yen for the fiscal year ending March 31,
2024 is expected to decrease significantly by approximately 50% year-onyear due to the sluggish semiconductor market, the Company anticipatescontinuous growth with steady year-on-year increase by approximately 50%
in the consolidated operating profit, which will reach 52 billion yen in thefiscal year ending March 31, 2025, due to the above initiatives as well as
further productivity improvement and cost reduction throughout theCompany. In addition, consolidated operating profit of approximately 87
billion yen for the year ending March 31, 2027 is expected to increasesignificantly by approximately 40% compared to the previous year. The
consolidated free cash flow used in the DCF analysis is expected to increaseor decrease significantly in each financial year due to the above increase anddecrease in profits and the impact of the Company’s capital expenditure.
Specifically, the significant increase and decrease in consolidated free cash
flow due to the above-mentioned increase/decrease in profits and theCompany’s capital expenditure is expected to be approximately -36 billion
yen in the year ending March 31, 2024, a decrease of approximately 88 billion
yen compared to the previous year; approximately -4 billion yen in the year
ending 31 March 2025, an increase of approximately 32 billion yen comparedto the previous year; approximately 38 billion yen in the year ending March41

31, 2026, an increase of approximately 42 billion yen compared to theprevious year; 68 billion yen in the year ending March 31, 2027, a decreaseof approximately 30 billion yen compared to the previous year; and 42 billion
yen in the year ending March 31, 2028, a decrease of approximately 26 billion
yen compared to the previous year. Further, since it is difficult to make aspecific estimation of synergies that are expected to be realized by executing
the Transactions at present, such synergies were not taken into account in thebusiness plan.
(II)

Method of Calculation by Tender Offeror
In determining the Tender Offer Price, JICC conducted a multifaceted andcomprehensive analysis of the Company’s business and financial status basedon the Company’s disclosed financial information and other similar materials
and the results of due diligence conducted with respect to the Company fromlate July 2023 to mid-September 2023 and then prepared a financial model
reflecting that analysis. As a result, a tender offer price that secures a returnon investment as required by JICC has been calculated. In light of the factthat the Company Shares are traded on a financial instruments exchange, inorder to ascertain the valuation of the Company’s corporate value by theequity market, JICC also referred to (i) the closing price (5,240 yen) of theCompany Shares on the Prime Market of the Tokyo Stock Exchange as ofDecember 11, 2023, which was the business day immediately preceding theannouncement date of the planned commencement of the Tender Offer(December 12, 2023), and (ii) the simple average closing prices of theCompany Shares over the preceding one-month period (from November 13,
2023 to December 11, 2023), three-month period (from September 12, 2023
to December 11, 2023), and six-month period (from June 12, 2022 to
December 11, 2023) (5,377 yen, 5,502 yen, and 5,658 yen, respectively).
Similarly, JICC referred to (i) the closing price (4,980 yen) of the Company
Shares on the Prime Market of the Tokyo Stock Exchange as of May 31, 2023,
which was the business day immediately preceding the date of the speculative
article published by Bloomberg (June 1, 2023) that triggered changes in theshare price of the Company due to expectations that the Fujitsu group would
undergo a reorganization, and (ii) the simple average closing prices of theCompany Shares over the preceding one-month period (from May 1, 2023 to
May 31, 2023), three-month period (from March 1, 2023 to May 31, 2023),
and six-month period (from December 1, 2022 to May 31, 2023) (4,519 yen,
4,094 yen, and 3,898 yen, respectively).
As JICC has determined the price by comprehensively taking into
consideration the factors described above, JICC has not obtained a sharevaluation report from any third-party appraiser.
The Tender Offer Price per Company Share (5,920 yen) also represents (i) apremium of 12.98% on 5,240 yen, the closing price of the Company Shareson the Prime Market of the Tokyo Stock Exchange as of the business day
immediately preceding the announcement date of the plannedcommencement of the Tender Offer (December 11, 2023), (ii) a premium of
10.10% on 5,377 yen, the simple average closing price for the preceding one42

month period ending on that date, (iii) a premium of 7.60% on 5,502 yen, thesimple average closing price for the preceding three-month period ending onthat date, and (iv) a premium of 4.63% on 5,658 yen, the simple averageclosing price for the preceding six-month period ending on that date.
In addition, the Tender Offer Price per Company Share (5,920 yen) also
represents (i) a premium of 18.88% on 4,980 yen, the closing price of theCompany Shares on the Prime Market of the Tokyo Stock Exchange as of
May 31, 2023, which was the business day immediately preceding the date of
the speculative article published by Bloomberg regarding the sale of Fujitsu’s
subsidiaries (June 1, 2023), (ii) a premium of 31.00% on 4,519 yen, the simple
average closing price for the preceding one-month period ending on that date,(iii) a premium of 44.60% on 4,094 yen, the simple average closing price forthe preceding three-month period ending on that date, and (iv) a premium of
51.87% on 3,898 yen, the simple average closing price for the preceding sixmonth period ending on that date.
Also, in the process of calculation above, on December 12, 2023, JICC
decided on the Tender Offer Price per Company Share of 5,920 yen based on
the discussions and negotiations with the Company while comprehensively
taking into account the matters stated above as well as whether or not theCompany supports the Tender Offer and the prospect of the successful
completion of the Tender Offer. Since JICC decided on the Tender Offer Priceupon discussions and negotiations with the Company while taking into
consideration the factors described above, and JICC believes that sufficientconsideration has been given to the interests of the minority shareholders of
the Company since JICC and the Company have taken measures to ensure thefairness of the Tender Offer Price and measures to avoid conflicts of interest(specifically, the measures stated in “(6) Measures to Ensure Fairness ofTender Offer, Such as Measures to Ensure Fairness of Tender Offer Price andAvoid Conflicts of Interest” below), JICC did not obtain a share valuation
report or fairness opinion from a third-party appraiser.
(4)

Possibility of Delisting and Reasons Therefor
The Company Shares are currently listed on the Prime Market of the Tokyo Stock
Exchange as of today. However, since the Tender Offeror has not set a limit on the
maximum number of share certificates to be purchased in the Tender Offer, theCompany Shares may be delisted through prescribed procedures in accordance withthe stock delisting criteria of the Tokyo Stock Exchange, depending on the result of
the Tender Offer.
Also, even in the event that the delisting standards are not met upon completion of
the Tender Offer, if the Squeeze-Out Procedures are carried out as stated in “(4)Policy for organizational restructuring after the Tender Offer (matters relating to aso-called “Two-Step Acquisition”)” above after the successful completion of theTender Offer, then the Company Shares will be delisted through the prescribed
procedures in accordance with the stock delisting criteria of the Tokyo Stock
Exchange. After delisting, the Company Shares will no longer be traded on thePrime Market of the Tokyo Stock Exchange.
43For the reasons for aiming for delisting, the effects on minority shareholders, andideas relating thereto, please see “(II) Background, Purpose, and Decision-Making
Process of Tender Offeror’s Decision to Implement Tender Offer; Management
Policy Thereafter” of “(2) Basis and Reasons for Opinion Regarding Tender Offer”
above and “(5) Policy for Organizational Restructuring, Etc. After Tender Offer(Matters Relating to So-Called “Two-Step Acquisition”)” below.
(5)

Policy for Organizational Restructuring, Etc. After Tender Offer (Matters Relating to
So-Called “Two-Step Acquisition”)
As stated in “(2) Basis and Reasons for Opinion Regarding Tender Offer” above, if
the Tender Offeror fails to acquire all of the Company Shares (excluding Fujitsu
Holding Shares and the treasury shares owned by the Company) in the Tender offer,
the Tender Offeror will request the Company, after the completion of the settlementof the Tender Offer, to hold an extraordinary shareholders’ meeting at which thefollowing proposals will be submitted (the “Extraordinary Shareholders’Meeting”): (i) to conduct a consolidation of the Company Shares (the “Share
Consolidation”) under Article 180 of the Companies Act and (ii) to make a partial
amendment to the Company’s Articles of Incorporation to abolish the share unit
number provisions on the condition that the Share Consolidation becomes effective.
The Tender Offeror and Fujitsu intend to approve each of those proposals at theExtraordinary Shareholders’ Meeting. If the proposal for the Share Consolidation isapproved at the Extraordinary Shareholders’ Meeting, the shareholders of theCompany will come to own the number of Company Shares proportionate to theratio of the Share Consolidation that is approved at the Extraordinary Shareholders’Meeting as of the effective date of the Share Consolidation. In such case, if, due tothe Share Consolidation, the number Is a fraction less than one, each shareholder of
the Company who holds such fractional shares will receive an amount of cash
obtained by selling the Company Shares equivalent to the total number of sharesless than one unit (with such aggregate sum rounded down to the nearest whole
number; the same applies hereinafter) to the Company or the Tender Offeror as per
the procedures specified in Article 235 of the Companies Act and other relevantlaws and regulations. The purchase price for the aggregate sum of the Company
Shares that are less than one unit will be valued so that the amount of cash received
by each shareholder who did not tender its shares in the Tender Offer as a result of
the sale will be equal to the price obtained by multiplying the Tender Offer Price by
the number of Company Shares owned by each such shareholder. The Tender
Offeror will request the Company to file a petition to the court for permission topurchase such Company Shares on this basis. Although the ratio of the Share
Consolidation of the Company Shares has not been determined as of today, it isintended that the shares of shareholders who did not tender their shares in the Tender
Offer (excluding the Tender Offeror, Fujitsu, and the Company) will be classified
as shares less than one unit in order for the Tender Offeror and Fujitsu to become
the sole owners of all of the Company Shares.
According to the provisions of the Companies Act that aim to protect the rights ofminority shareholders in relation to the Share Consolidation, the Companies Act
provides that if the Share Consolidation occurs and there are shares less than one
unit as a result thereof, each shareholder of the Company may request that the44

Company purchase all such shares less than one unit at a fair price, and suchshareholders may file a petition to the court to determine the price of the Company
Shares in accordance with the provisions of Articles 182-4 and 182-5 of theCompanies Act and other relevant laws and regulations. The purchase price pershare by this method will be finally determined by the court.
The Tender Offer is not intended to solicit the shareholders of the Company toapprove the proposal at the Extraordinary Shareholders’ Meeting.
With regard to the procedures described above, it is possible that, depending on
circumstances such as the interpretation of the relevant laws and regulations byauthorities, more time may be required or alternative methods may be utilized to
implement the procedures. However, even in such a case, the Tender Offeror intends
to make the Company a wholly-owned subsidiary of the Tender Offeror by a method
whereby the shareholders of the Company who do not tender their shares in theTender Offer (excluding the Tender Offeror, Fujitsu, and the Company) will
ultimately receive cash consideration equal to the number of Company Shares heldby such shareholders multiplied by the Tender Offer Price.
The specific procedures, timing of implementation, and other such matters in thecase set out above will be announced promptly by the Company once it has decided
them after consultation with the Tender Offeror. Shareholders of the Company arerequested to confirm with tax experts regarding tax treatment relating to tenderingin the Tender Offer and the procedures set out above at their own responsibility.

(6)

Measures to Ensure Fairness of Tender Offer, Such as Measures to Ensure Fairness ofTender Offer Price and Avoid Conflicts of Interest
As of today, the Company is not a subsidiary of the Tender Offeror, and the Tender
Offer does not fall under a tender offer by a controlling shareholder. Furthermore,
the Tender Offer is not a tender offer for which the Tender Offeror is an officer of
the Company or a person who is conducting the Tender Offer at the request of an
officer of the Company and who has a common interest with the Company’s officers.
The Transactions, including the Tender Offer, also do not fall under a so-called
management buy-out (MBO) transaction.
However, since the Transactions are transactions proposed by Fujitsu, as thecontrolling shareholder (parent company) of the Company, and in light of thepossibility that the interests of Fujitsu and those of the Company’s minority
shareholders do not necessarily align, the Tender Offeror and the Company
implemented the following measures to ensure fairness of the Tender Offer Priceand to avoid conflicts of interest.
Since Fujitsu, the parent company of the Company, holds 67,587,024 Company
Shares (ownership percentage: 50.02%) as stated in “(I) Overview of Tender
Offer” in “(2) Basis and Reasons for Opinion Regarding Tender Offer” above, andgiven that setting a so-called “majority of minority” minimum number of shares tobe purchased may make the completion of the Tender Offer uncertain because theminimum number of shares to be purchased in the Tender Offer would be high, and45

doing so may cause the Tender Offer not to contribute to the interests of minority
shareholders wishing to tender their shares therein, the Tender Offeror has not set a“majority of minority” minimum number of shares to be purchased in the Tender
Offer. The Tender Offeror believes that the interests of the Company’s minority
shareholders are sufficiently taken into consideration because the Tender Offeror
and the Company have carried out the measures described below.
Also, of the measures described below, descriptions regarding those implemented
by the Tender Offeror are based on the Company’s Press Release and explanations
received from the Tender Offeror.
(I)

Implementation of bidding procedure
As stated in “(II) Background, Purpose, and Decision-Making Process ofTender Offeror’s Decision to Implement Tender Offer; Management Policy
Thereafter Tender Offeror” in “(2) Basis and Reasons for Opinion Regarding
Tender Offer” above, the Company and Fujitsu implemented the Bidding
Process, which targeted multiple candidates, including a business company
and investment funds with a sufficient investment track record in the Japanesemarket, which were assumed to be interested in collaborating with theCompany in light of business synergies, starting from late March 2023, andcommenced the first bidding process for one business company and eight
investment funds that were interested in participating in this bidding process.
In late May, 2023 of the same year, several candidates, including the Tender
Offeror, submitted letters of intent premised on a transaction method
involving the acquisition of Fujitsu shares from Fujitsu, and after carefulconsideration of the contents, four investment funds, including the Tender
Offeror, were selected to participate in the second bidding process.
Subsequently, after due diligence from late June to mid-September, 2023, theCompany and Fujitsu received non-legally binding proposal from JICC in
September of the same year, a written non-legally binding proposal fromanother candidate in October of the same year and a written legally binding
final proposal from JICC in November of the same year. However, as nolegally binding final proposal was submitted by the other candidates, as aresult of a comprehensive review of the proposals of each candidate, JICC
was selected as the final purchase candidate from among JICC and the othercandidates later in the same month, with the transaction price, transaction
certainty and transaction speed as the main decision-making criteria, JICC
and the Tender Offeror commenced discussions and deliberations on theimplementation of the Transaction, including the Share Repurchase
Subsequently, JICC, Fujitsu and the Company held ongoing discussions andnegotiations, the Tender Offer Price, and the Repurchase Price, and as a result,in light of the fact that only the final proposal presented by JICC on December
12, 2023 was a legally-binding proposal and the presented assessed value ofthe share value and the Tender Offer Price being 5,920 yen, the Company
decided that, the Tender Offeror is the best partner for the Company to aim
for “Progress without Limits” in terms of the proposed management strategy
and support system after implementation of the Transaction, including
measures to enhance corporate value, and the Tender Offeror is also the best
partner for the Company in the semiconductor industry where the market
46

environment is changing rapidly and the Company’s products andtechnologies have the potential to expand the market in the medium to longterm. Based on the recognition that it is important to accurately grasp the
potential for medium- and long-term market expansion for the Company’s
products and technologies and to make flexible and agile management
decisions, the Tender Offeror basically supports the Company’s business
policy of focusing on capital investment and technology development for
growth markets and, as a government-affiliated fund, will not be swayed byshort-term fluctuations in business performance and will promote initiatives
that contribute to the enhancement of corporate value from a medium- andlong-term perspective. The Company reached the conclusion that executing
the Transactions with the Tender Offeror as a partner, which consists mainlyof JICC, which is capable of promoting initiatives that contribute to theenhancement of corporate value from a medium- to long-term perspective
without being swayed by short-term performance fluctuations as a sovereign
wealth fund, and promoting measures such as the expansion of human capital,
which is fundamental to the promotion of our business, to accelerate decisionmaking even further, will contribute to enhancing our corporate value in the
future. The decision was reached to accelerate the decision-making processeven more than before. In addition, by combining the excellent proprietary
technologies of DNP and Mitsui Chemicals with the semiconductor
packaging-related technologies of the Company, the Company believes that
it will be possible to make a significant contribution to the medium- to longterm corporate value of the Company by promoting the next-generation
semiconductor business and strengthening the market competitiveness ofnext-generation products, which are the goals of the Company.
In light of the above, the Company determined that the Transactions would
contribute to the enhancement of the Company’s corporate value, and no
candidate existed that offered more favorable terms to the Company’s
shareholders compared to the proposal made by JICC.
(II)

Procurement by Company of Written Report from Independent Special
Committee
In light of the fact that the Tender Offer is part of the Transactions for the
purpose of delisting the Company Shares, on April 14, 2023, immediately
after commencement of the primary bidding process, the board of directorsof the Company consulted with the Company’s permanent Special Committee,
established based on the Corporate Governance Code published by the Tokyo
Stock Exchange and composed of three members—Mr. Jun Niimi (Outside
Director of the Company), Ms. Namiko Araki (Outside Director and Audit
and Supervisory Committee Member of the Company), and Mr. Kunikazu
Kobayashi (Outside Director and Audit and Supervisory Committee Memberof the Company)—independent of the Tender Offeror, the Company, andcompletion of the Transactions, as to the following matters, in order to secure
fairness of the Tender Offer Price, eliminate arbitrariness in the Company’s
decision making regarding the Transactions, ensure fairness, transparency,
and objectivity of the Company’s decision-making process, and avoid
conflicts of interest: (i) justification and reasonableness of the purpose of the47

Transactions (including whether the Transactions contribute to enhancementof the Company’s corporate value), (ii) fairness of the procedures concerning
the Transactions, (iii) fairness and appropriateness of the terms of theTransactions, (iv) whether it is appropriate for the board of directors of theCompany to express an opinion to support the Tender Offer and recommendthat the Company’s shareholders tender in the Tender Offer, and (v) whether
implementing the Transactions (including the board of directors expressing
an opinion to support the Tender Offer and recommending that the Company’s
shareholders tender in the Tender Offer) is disadvantageous to the Company’s
minority shareholders (collectively referred to as the “Matters of Inquiry”).
Also, the board of directors of the Company entrusted the Special Committeewith submitting to the Company a written report regarding the Matters ofInquiry. The Special Committee was established on June 17, 2022 as apermanent special committee, based on the Corporate Governance Code(Supplementary Principle 4.8.3) published by the Tokyo Stock Exchange,
without taking the Transactions as an opportunity, for the purpose ofdeliberating on material transactions and actions that may give rise toconflicts of interest between the controlling shareholder and minority
shareholders and reporting to the board of directors. The members of theSpecial Committee have not changed since the establishment thereof.
Furthermore, regardless of the particulars of the report, a fixed amount of
remuneration will be paid to each member as consideration for their duties.
In addition, the Company has also resolved that the board of directors of theCompany will make decisions concerning the Transactions while respecting
the opinions of the Special Committee to the utmost extent and that it will
oppose the Transactions (and the Tender Offer) if the Special Committee
decides that the transaction terms of the Transactions are not appropriate.
Moreover, the board of directors of the Company resolved to grant to theSpecial Committee (i) the authority to independently appoint an attorney-atlaw, third-party valuation organization, certified public accountant, and otheradvisors and (ii) the authority to get substantially involved in the process ofnegotiating the transaction terms by confirming in advance the policy fornegotiating the transaction terms of the Transactions, receiving reports on thestatus of the negotiations in a timely manner, and stating opinions and making
instructions or requests on material aspects. However, the Special Committee
has not exercised its authority to independently appoint advisors, because
each of MUMSS (the Company’s financial advisor and third-party valuation
organization), SMBC Nikko (financial advisor), and N&A (legal advisor)
have no issues regarding independence or expertise.
The Special Committee held meetings during the period from April 14, 2023
to December 12, 2023, 13 times in total. In addition, the Special Committee
carefully considered the Matters of Inquiry by collecting information anddeliberating as necessary.
Specifically, the Special Committee approved the appointment of MUMSS(the Company’s financial advisor and third-party valuation organization),
SMBC Nikko (financial advisor), and N&A (legal advisor) after confirmingthat there were no issues regarding their independence or expertise.
48

As stated in “(I) Procurement by Company of Share Valuation Report fromIndependent Financial Adviser and Third-Party Valuation Organization” in“(3) Matters Regarding Calculation” above, MUMSS is not a related party of
the Tender Offeror, Fujitsu, or the Company and does not have any materialinterest in the Transactions, including the Tender Offer, that is required to bedisclosed. In addition, as stated in “(I) Procurement by Company of Share
Valuation Report from Independent Financial Adviser and Third-Party
Valuation Organization” in “(3) Matters Regarding Calculation” above, sameas MUFG Bank, MUMSS is a member of the Mitsubishi UFJ Financial Group
companies and MUFG Bank conducts financing transactions for theCompany as part of a series of ordinary banking transactions, and plans toprovide the Tender Offeror with funds for settlement of the Tender Offer.
According to MUMSS, in compliance with the applicable provisions ofArticle 36, Paragraph 2 of the Act and Article 70-4 of the Cabinet Office
Order on Financial Instruments Business (Cabinet Office Order No. 52 of
2007; as amended), MUMSS, the Company’s financial advisor, and MUFG
Bank have, between them and within each company, established andimplemented a means to prevent adverse effects, including an appropriate
management structure for conflicts of interest, such as an information barrier
to strictly manage information regarding the Company. Therefore, MUMSS
has performed its duties as a financial advisor without being affected by
MUFG Bank’s decisions and has calculated the Company’s share value in aposition that is independent from MUFG Bank’s position as a lender.
As stated in “(I) Procurement by Company of Share Valuation Report fromIndependent Financial Adviser and Third-Party Valuation Organization” in“(3) Matters Regarding Calculation” above, based on the fact that a strict
information management structure has been established for information
management between MUMSS and MUFG Bank and within each of them, as
well as the fact that MUMSS was formerly a third-party valuation
organization for a similar transaction, the Company has appointed MUMSS
as its financial advisor and third-party valuation organization independent
from the Tender Offeror and the Company.
Furthermore, SMBC Nikko is not a related party of the Tender Offeror, theCompany, or Fujitsu, and does not have any material interest in theTransactions, including the Tender Offer. Like Sumitomo Mitsui Banking
Corporation, SMBC Nikko is a member of the group companies of Sumitomo
Mitsui Financial Group, Inc. The Company appointed SMBC Nikko as afinancial advisor in accordance with SMBC Nikko’s actual performance as afinancial advisor, and based on the fact that (a) as a measure to prevent
adverse effects, the required information barrier has been implemented
between the department providing financial advisory services and the otherdepartments at SMBC Nikko, and Sumitomo Mitsui Banking Corporation,(b) SMBC Nikko’s independence as a financial advisor is secured because thetransaction has been conducted between the Company and SMBC Nikko ontransaction terms similar to those of general clients, and (c) SMBC Nikko is
not a related party of the Tender Offeror, the Company, or Fujitsu. The
compensation payable to SMBC Nikko in connection with the Transactions
49

includes contingent compensation payable subject to completion of theTransactions, including the Tender Offer, and other conditions; however, by
taking into consideration general customary practices in similar types oftransactions, the Company has appointed SMBC Nikko as the Company’s
financial advisor with the compensation structure described above.
Based on the background stated above, as a result of carefully deliberating
and considering the Matters of Inquiry, taking into consideration each of the
explanations above, advice from each advisor, and other explanatory
materials for consideration, the Special Committee submitted to the board of
directors of the Company the Written Report mainly to the following effect,
as of December 12, 2023, with the unanimous consent of its members.
(i)

Justification and reasonableness of the purpose of the Transactions(including whether it contribute to the enhancement of the Company’s
corporate value)

Given the business environment surrounding the Company, the Company
believes that in order to identify the potential for medium- to long-term
market growth of its products and technologies and to aim for “Progress
without Limits,” it will become increasingly important to develop
technologies that anticipate market needs and to make flexible capital
investments, and the size of funds required for these investments is expected
to increase as well. In this increasingly severe competitive environment, theCompany came to the conclusion that it could enhance its corporate value
through faster decision-making and expansion of human capital, which isfundamental to the promotion of its business, and that with JICC as agovernment-affiliated fund, which basically supports the Company’s business
policy of focusing on capital investments and technological developments ingrowth markets, the Company will be able to promote initiatives that
contribute to enhancing corporate value from a medium- to long-term
perspective, without being swayed by short-term fluctuations in businessperformance, and that since the Company is planning to execute theTransactions with the Tender Offeror, consisting mainly of JICC as a partner,
the Company will be able to make decisions more quickly than before, andpromote measures such as expansion of human capital, which is fundamental
to the promotion of the Company’s business, which will contribute to future
corporate value enhancement. The Company also believes that the superb,
unique technologies of DNP and Mitsui Chemicals, combined with theCompany’s semiconductor packaging technologies, will contribute topromotion of the next-generation semiconductor business the Company aims
to pursue, and reinforce the Company’s market competitiveness in nextgeneration products, thereby contributing to enhancement of the Company’s
medium- to long-term corporate value. Fujitsu and the Company’s
management team, are not deemed to be using their positions to benefit
themselves or third parties at the expense of general shareholders (the term
“general shareholder” is synonymous with “minority shareholder” in Rule441-2 of the Securities Listing Regulations of the Tokyo Stock Exchange; thesame applies hereinafter), and the Transactions are considered reasonablebecause they will lead to the sustainable development of the Company Group,50

improve its earnings, and enhance the corporate value of the Company’sgroup.
Furthermore, the growth strategy and corporate value enhancement plan
expected by JICC do not contain any unreasonable points that raise suspicion
concerning the possibility of realizing them and are considered to bereasonable because it is assumed that they will to contribute to faster decisionmaking and further expansion of human capital than before. There are noother points in the management policy explained by JICC that might beunreasonable.
Based on the foregoing, the Transactions are believed to contribute toenhancement of the Company’s corporate value.
On the other hand, the following are believed to be matters with regard towhich the Transactions may have an adverse effect on enhancement of theCompany’s corporate value: (i) the effects of dissolution of the capital
relationship with Fujitsu, (ii) the effects of going private, (iii) the effects of
the Company’s liabilities, etc., and (iv) the effects on existing customers andbusiness partners of the JICC Affiliate becoming a shareholder of theCompany. However, since appropriate measures for handling and resolving
all of these matters can be taken, it is considered that they will not have amaterial adverse effect on the Company’s corporate value.
As referenced above, the Transactions have the possibility of contributing toenhancement of the Company’s corporate value, and the purpose of theTransactions is considered to be justifiable and reasonable.
(ii)

Fairness of the procedures concerning the Transactions

Based on facts like the various following measures being taken to secure thefairness of the Transactions, the procedures relating to the Transactions are
deemed to be fair.
The procedures relating to the Transactions are believed to be fair, in light of
the following aspects of the Transactions: (a) the independent Special
Committee has been involved in the Transactions since the candidate’s initialpresentation of transaction terms in the primary bidding process and has been
granted the authority to appoint/approve advisors, and other relevant matters,
as well as to get substantially involved in the process of negotiating thetransaction terms and other aspects of the Transactions. Given that, aresolution was passed at the meeting of the board of directors of the Company
requiring that the Company make decisions concerning the Transactions
while respecting the particulars of the report of the Special Committee to theutmost extent. By exercising its authority, the Special Committee was foundto have been substantially involved in the process of negotiating thetransaction terms of the Transactions between the candidate and Fujitsu as
relevant to the overall process, including the method by which to conduct the
Bidding Process. Moreover, no particular problems were found with theestablishment of the Special Committee and the timing of consultations,members of the Special Committee, the process for establishment,51

consultation, and appointment of members of the Special Committee,
appointment of advisors, etc., information acquisition, compensation, and theCompany’s internal consideration structure, etc.; (b) the Company selected
N&A as its legal advisor independent of the Company, Fujitsu, the JICC
Affiliate, the Tender Offeror, and the candidate, and has received various legal
advice from N&A; (c) the Company requested that MUMSS, the Company’s
financial advisor and a third-party valuation organization independent fromthe Company, Fujitsu, the JICC Affiliate, the Tender Offeror, and thecandidate, calculate the Company’s share value, and has acquired the Share
Valuation Report dated December 12, 2023; (d) the Bidding Process was
carried out by Fujitsu and the Company with the substantial involvement of
the Special Committee, and it can be determined that the market check for the
Bidding Process was performed with proper consideration; (e) while theTender Offer period for the Tender Offer is set at 20 business days, inconsideration of the fact that the Tender Offer is a tender offer with advancenotice, and a relatively long period was secured after the announcement of
the series of transaction terms and before commencement of the Tender Offer,
it can be determined that an appropriate opportunity for the Company’s
shareholders to decide whether to tender in the Tender Offer, as well as anopportunity for persons other than the Tender Offeror to make competing
tender offers for the Company Shares, was secured; (f) the MOU contains an
obligation to maintain the Opinion (defined in “(2) Memorandum ofUnderstanding Regarding Tender Offer” in “4. Matters Concerning Material
Agreements Related to Tender Offer” below) and an obligation not to enter
into agreements with third parties, offer to enter into agreements, invite offers,
or accept, discuss, negotiate, solicit, or provide information, etc. concerningcompeting transactions. If a serious acquisition proposal is made, dependingon the concreteness of the competing acquisition proposal and theappropriateness and realizability of its purpose, then the board of directors’
avoidance of serious consideration will be objectively and reasonably deemed
to constitute a breach of the duty of care of a prudent manager by Directors,
and the Company may either revoke or amend the Opinion, or pass a
resolution or carry out a conflicting transaction that contradicts the Opinion,
based on the following under the MOU: (i) if the Company reasonably
determines that Directors’ (a) maintaining the Opinion without making any
changes or (b) avoiding passing a resolution or carrying out a conflicting
transaction (in certain cases, including consulting or providing information
regarding suggestions concerning the conflicting transaction) contradictory to
the Opinion will constitute a breach by the Directors of their duty of care of
a prudent manager, then the Company should explain the details and reasons
therefor to the Tender Offeror in advance and engage in good faithconsultations with the Tender Offeror to determine the handling thereof, and(ii) if, even after good-faith consultations with the Tender Offeror, theCompany’s (a) maintaining the Opinion without making any changes or (b)avoiding passing a resolution or carrying out a conflicting transaction
contradictory to the Opinion is still deemed to constitute a breach of the dutyof care of a prudent manager by Directors, then the Company may revoke oramend the Opinion, or pass a resolution or carry out a conflicting transaction
contradictory to the Opinion. Also, the provisions above will contribute, to acertain extent, to enhancement of the stability of the Transactions, based on52the fact that the Company, Fujitsu, and the JICC Affiliate have conducted theBidding Process at a considerable amount of time and cost. Therefore, theprovisions are believed not to immediately and inappropriately restrict
competing acquisition proposals; and (g) attention has been paid to notcoercing general shareholders.
A “majority of minority” is not set for the Transactions. However, inconsideration of the fact that (a) Fujitsu, the Company’s parent company,
holds 67,587,024 Company Shares (ownership ratio: 50.02%), and if a“majority of minority” is set, then the lower limit of the number of shares
planned to be purchased in the Tender Offer will become high and successful
completion of the Tender Offer would become uncertain, resulting in thepossibility of non-contribution to the interests of general shareholders whowish to tender their shares in the Tender Offer; (b) measures to secure fairness
have been adopted, as stated above; and (c) the transaction terms of theTransactions are considered to be fair and appropriate, as stated in (iii) below,
the Company believes that the fairness of the Transactions will not bedamaged by not establishing a “majority of minority.”(iii) Fairness and appropriateness of the terms of the Transactions
The transaction terms of the Transactions were agreed to as a result of the
Bidding Process conducted by the Company and Fujitsu, during which,pursuant to the Special Committee’s request, the Company, Fujitsu, and JICC
agreed on the Tender Offer Price after negotiating it multiple times even after
JICC submitted the legally-binding final proposal. Accordingly, the processof consultations and negotiations for the transaction terms of the Transactions
is determined to be on fair terms negotiated between independent parties, andcircumstances were secured under which reasonable efforts were made toensure that the Transactions were conducted on terms as favorable as possible
to general shareholders while enhancing corporate value. Furthermore,according to the Share Valuation Report, the range of the calculated sharevalue per Company Share is 5,240 yen to 5,658 yen using market share priceanalysis, 5,238 yen to 6,220 yen using comparable companies analysis, and
5,077 yen to 6,780 yen using DCF analysis. The Tender Offer Price of 5,920
yen exceeds the upper end of the range of calculation results using market
share price analysis and exceeds the midpoint of the range of calculation
results using the comparable companies analysis and is close to the medianof the range of calculation results using DCF analysis.
The premium on the Company’s market share price based on the business day
immediately preceding the preparation date of the Written Report is notnecessarily high compared to premiums in past similar cases as described in“(III) Process of and Reasons for Decision-Making by Company to Support
Tender Offer” in “(2) Basis and Reasons for Opinion Regarding Tender
Offer” above. However, considering that there were speculative media reports
containing observations concerning the sale of a Fujitsu subsidiary thatcaused a fluctuation in the market price of the Company Shares, it is not
irrational to consider that the share price during the period pertaining to theabove calculation of the premium was considerably impacted by expectations
53

about the sale of Fujitsu Holding Shares due to those speculative media
reports and multiple speculative media reports that followed. Furthermore,compared to premiums in past similar cases as described in “(III) Process ofand Reasons for Decision-Making by Company to Support Tender Offer” in“(2) Basis and Reasons for Opinion Regarding Tender Offer” above,
considering a fluctuation in the market price of the Company Shares, it is notunreasonable to conclude that it is appropriate to consider the average priceover a longer time period than in light of the simple average closing price on
the record date of May 31, 2023, which is the business day preceding the
speculative media report date, and the simple average closing price over themost recent one month, and the premium of the Tender Offer Price issufficiently reasonable in light of the simple average of the closing prices forthe three months immediately preceding the relevant reference date or the six
months immediately preceding the relevant reference date..
Moreover, the Transactions include the Share Consolidation, which is to takeplace after the Tender Offer. Sufficient consideration is found to have been
given to the interests of general shareholders after the Share Consolidationsuch that they will not be placed in a situation where they could expect to betreated unfavorably if they did not tender in the Tender Offer. Furthermore,
the Transactions include the Share Repurchase after the Share Consolidation,with the Repurchase Price of 4,218.1 yen. Adopting a scheme that involves a
combination of the Tender Offer and the Share Repurchase enables the priceof the Tender Offer in which general shareholders tender their shares to be set
higher compared to Fujitsu selling the Company Shares via the Tender Offer.
It can also be evaluated as a fair distribution of the tax benefits enjoyed by
Fujitsu to general shareholders and thus would not be disadvantageous tothem. Accordingly, the transaction terms with a scheme involving the Share
Repurchase are not unfair or inappropriate. Additionally, the Tender Offeror’s
financing would not have a material adverse impact on the Company’s
financial status.
Consequently, the Company’s corporate value has been appropriately
assessed, and the transaction terms of the Transactions, including the Tender
Offer Price, and the compensation to be paid upon the Share Consolidation to
the Company’s shareholders who did not tender their shares in the Tender
Offer, are assessed to have been set appropriately. Therefore, the terms of theTransactions are fair and appropriate.
(iv) Whether it is appropriate for the board of directors of the Company toexpress an opinion to support the Tender Offer and recommend that theCompany’s shareholders tender in the Tender Offer
As stated in (i) through (iii) above, because the Transactions contribute toenhancement of the Company’s corporate value, and the purpose of theTransactions is justified and reasonable, it is appropriate for the board of
directors to express an opinion to support the Tender Offer.
Furthermore, as appropriateness of the procedures for the Transactions has
been ensured, and thus the transaction terms of the Transactions are found to54

be fair and appropriate, recommending that the Company’s shareholders
tender their shares in the Tender Offer is considered to be appropriate.
However, it is expected to take a considerable amount of time fromannouncement of the Tender Offer to its commencement. As such, otherconsiderations may become necessary if, for example, during the period
before commencement of the Tender Offer, there are fluctuations in the
Company’s market price causing it to exceed the Tender Offer Price.
Accordingly, the response to (iv) of the Special Committee’s Matters ofInquiry is premised on the situation as of the date of the Written Report(December 12, 2023).
(v)

Whether implementing the Transactions (including the board of
directors of the Company expressing an opinion to support the Tender
Offer and recommending that the Company’s shareholders tender in theTender Offer) is disadvantageous to the Company’s minority
shareholders

As stated in (i) through (iv) above, the Company came to the conclusion thatproviding the Company’s general shareholders with an opportunity to sell
their common shares of the Company at an appropriate price through theTender Offer would be the best option that takes shareholder interests into
consideration. Accordingly, the Transactions are justifiable and reasonable,
the appropriateness of procedures for the Transactions is ensured, and thetransaction terms of the Transactions are fair and appropriate. Therefore,
conducting the Transactions (including the board of directors passing a
resolution to express an opinion to support the Tender Offer and recommendthat the Company’s shareholders tender in the Tender Offer) is not considered
to be disadvantageous to the Company’s general shareholders.
(III)

Procurement of Advice to Company from Independent Legal Advisor
In order to ensure fairness, transparency, and objectivity of the Company’s
decision-making concerning the Transactions, including the Tender Offer, as
stated in “(b) Discussions Among Tender Offeror, Company, and Fujitsu;
Decision-Making Process of Tender Offeror” in “(II) Background, Purpose,and Decision-Making Process of Tender Offeror’s Decision to Implement
Tender Offer; Management Policy Thereafter” in “(2) Basis and Reasons for
Opinion Regarding Tender Offer” above, the Company selected N&A as its
legal advisor independent of the Tender Offeror, Fujitsu, and the Company,and has received necessary legal advice from the same in relation to decisionmaking methods and processes for the Transactions, as well as other points tonote in decision-making concerning the Transactions. Furthermore, N&A is
not a related party of the Tender Offeror, Fujitsu, or the Company, and has nomaterial interest in the Transactions, including the Tender Offer. Fees to N&A
only consist of fees based on hourly rates to be paid irrespective of whether
or not the Transactions are consummated, and does not include any
conditional fees contingent upon consummation of the Transactions.

(IV) Procurement by Company of Share Valuation Report from Independent55

Financial Advisor and Third-Party Valuation Organization
In determining its opinion on the Tender Offer and as a measure to ensure
fairness, as stated in “(b)Discussions Among Tender Offeror, Company,
and Fujitsu; Decision-Making Process of Tender Offeror” in “(II)Background, Purpose, and Decision-Making Process of Tender Offeror’s
Decision to Implement Tender Offer; Management Policy Thereafter” in “(2)Basis and Reasons for Opinion Regarding Tender Offer” above, the Company
appointed MUMSS as its financial advisor and third-party valuation
organization independent from the Tender Offeror, Fujitsu, and the Company
and received advice from a financial viewpoint. The Company acquired Share
Valuation Report dated December 12, 2023 from MUMSS, subject to theconditions precedent set forth in (ii) below and certain other conditions.
For an overview of the Share Valuation Report, please refer to “(I)Procurement by Company of Share Valuation Report from Independent
Financial Advisor and Third-Party Valuation Organization” of “(3) Matters
Regarding Calculation” above. Furthermore, MUMSS is not a related partyof the Tender Offeror, Fujitsu, or the Company, and has no material interestin the Transactions, including the Tender Offer.
(V) Unanimous Approval of All Non-Interested Directors of the Company
As stated in “(III)Process of and Reasons for Decision-Making by Company
to Support Tender Offer” in “(2) Basis and Reasons for Opinion Regarding
Tender Offer” above, the board of directors of the Company carefully
discussed and considered whether the Transactions, including the Tender
Offer, would contribute to improvement of the Company’s corporate value
and whether the transaction terms related to the Transactions, including theTender Offer Price, were appropriate, taking into consideration the legal
advice received from N&A, the advice from a financial perspective received
from MUMSS, and the content of the Share Valuation Report, while giving
the utmost respect to the Special Committee’s decision as shown in the
Written Report.
As a result, the Company determined that the transaction terms related to theTransactions, including the Tender Offer Price, were appropriate as they
ensured the benefits that should be enjoyed by minority shareholders of theCompany and that the Tender Offer would provide minority shareholders of
the Company with a reasonable opportunity to sell the Company Shares, andconsequently adopted a resolution at the board of directors meeting held today
to express an opinion in support of the Tender Offer and to recommend thatshareholders of the Company tender their shares in the Tender Offer via aunanimous decision of all seven of the eight directors of the Company
participating in the deliberations and resolutions, excluding Mr. Yasuhisa
Makino as explained below. Furthermore, as stated in “(III) Process of andReasons for Decision-Making by Company to Support Tender Offer” of “(2)Basis and Reasons for Opinion Regarding Tender Offer” above, the Tender
Offer is planned to be commenced promptly on a date that is (i) within 10
business days from the date on which the Tender Offer Conditions Precedent56

(excluding those to be satisfied on the commencement date of the Tender
Offer) are satisfied (or waived by the Tender Offeror) (however, if a Counter
Proposal has been made as of such date, then the earlier of (a) the date on
which 20 business days have elapsed since the date on which Fujitsu makesa request to the Tender Offeror for consultation regarding changing the Tender
Offer Price and the Repurchase Price or (b) the date on which Fujitsu
covenants in writing that it will not accept the Counter Proposal) and (ii)separately notified to the Company in advance by the Tender Offeror, and asof today, the Tender Offeror aims to commence the Tender Offer around lateAugust 2024 based on the discussions with local law firms regarding
necessary procedures and measures under domestic and foreign competition
laws and foreign investment control laws and regulations, etc.; however, it
seems difficult to accurately estimate the period required for, among others,
procedures involving foreign competition authorities and authorities
supervising inward direct investments. Therefore, at the board of directors
meeting mentioned above, the Company also resolved (i) that when theTender Offer is commenced, the board of directors will request that theSpecial Committee (x) consider whether there are any changes in its opinion
as expressed to the board of directors of the Company as of today, and (y) if
there are no changes in its opinion, make a statement to that effect, or if there
are changes in its opinion, state the changed opinion, to the board of directorsof the Company; and (ii) that based on such opinion of the Special Committee,
the Company will express its opinion on the Tender Offer again when theTender Offer is commenced.
Furthermore, in light of the fact that among the Company’s directors, Mr.
Yasuhisa Makino is originally from Fujitsu, and only two years have passed
since his employment at Fujitsu, he did not participate in any deliberations or
resolutions relating to the Transactions at board of directors meetings,
including the deliberations and resolutions at the board of directors meeting
mentioned above, nor did he, in the capacity as a representative of theCompany, participate in any discussions or negotiations with the Tender
Offeror, in order to avoid suspicions of conflicts of interest and to ensure
fairness of the Transactions. Moreover, Mr. Masami Fujita is originally from
Fujitsu and has acted as the Corporate Senior Executive Vice President andRepresentative Director of Fujitsu, and as the President and Representative
Director of Fujitsu Marketing Limited (currently Fujitsu Japan Limited)(“Fujitsu Marketing”), a wholly-owned Fujitsu subsidiary, as well as the
Executive Advisor of Fujitsu (until the end of March 2018) and the
Executive Advisor of Fujitsu Marketing (until the end of March 2019);
however, he has participated in deliberations and resolutions relating to theTransactions at board of directors meetings, including the deliberations andresolutions at the board of directors meeting mentioned above, and, in thecapacity as a representative of the Company, participated in discussions andnegotiations with the Tender Offeror, in light of facts such as five or more
years having passed since his employment at Fujitsu, and four or more years
having passed since he left Fujitsu Marketing, which therefore obviously
makes it impossible for him to be involved in Fujitsu’s decision-making, andsubsequently there has been no relationship between him and Fujitsu or
Fujitsu Marketing that could give rise to a conflict of interests with the57Company and therefore his relationship with Fujitsu seemingly being poor. In
addition, Mr. Takashi Ozawa is originally from Fujitsu, but he has participatedin deliberations and resolutions relating to the Transactions at board of
directors meetings, including the deliberations and resolutions at the board of
directors meeting mentioned above, and, in the capacity as a representative of
the Company, participated in discussions and negotiations with the Tender
Offeror, in light of the fact that 20 or more years have passed since his
employment at Fujitsu, which therefore obviously makes it impossible forhim to be involved in Fujitsu’s decision-making, and subsequently there has
been no relationship between him and Fujitsu that could give rise to a conflictof interests with the Company and therefore his relationship with Fujitsu
seemingly being poor.
(VI) Measures to Ensure Opportunities for Purchase for Parties Other Than Tender
OfferorAccording to the Tender Offeror, although the offer period of the Tender Offer
has been set at 20 business days, which is the minimum period stipulated bylaw, the Tender Offer is a so-called prior disclosure-type tender offer, where
the transaction terms including the Tender Offer Price are disclosed inadvance. As a result, a relatively long period is ensured from theannouncement of the transaction terms until the commencement of the Tender
Offer. Further, the Tender Offeror has not reached an agreement with theCompany that would excessively restrict the Company from contacting
competing offerors. The Tender Offeror therefore believes that it has ensured
that the Company’s shareholders have an opportunity to properly determine
whether to tender their shares, etc. in the Tender Offer and that it has provided
an opportunity for competing offerors to make offers.
4.

Matters Concerning Material Agreements Related to Tender Offer(1)

Master Transaction Agreement
As stated in “(I) Overview of Tender Offer” in “(2) Basis and Reasons for
Opinion Regarding Tender Offer” in “3. Details, Basis, and Reasons for
Opinion Regarding Tender Offer” above, the Tender Offeror has, inconnection with the Tender Offer, executed the Master Transaction
Agreement with Fujitsu regarding the Transactions on December 12, 2023. In
the Master Transaction Agreement, Fujitsu has agreed (i) that it will not tender
the Fujitsu Holding Shares in the Tender Offer and that it will not conduct any
transaction that competes, contradicts, or conflicts with the Tender Offer or
impedes or is likely to impede the implementation of the Tender Offer (a“Competing Transaction”), (ii) that it will not reach an agreement regarding
a Competing Transaction with a third party, make any application for suchagreement, or make any invitation for, approve, discuss, negotiate about,make any solicitation for, or exchange information about a Competing
Transaction, and (iii) that if it is engaged in any consultation or negotiation
regarding any Competing Transaction at the time of execution of the MasterTransaction Agreement, it will promptly suspend such consultation or
negotiation. However, in the case where Fujitsu receives a proposal on a58

Competing Transaction from a third party other than the Tender Offeror
without any breach of such agreement, if, by the last day of the Tender Offer
Period (the period during which the Tender Offeror intends to make the Offer.
According to the Tender Offeror, it is planned to be 20 business days;
hereinafter the same) and Fujitsu reasonably determines that the proposal issincere and reasonably expected to lead to a tender offer to acquire all of theshares of common stock of the Company with no limit on the maximum
number of shares to be purchased through a transaction in which theconsideration is equivalent to an amount that exceeds the Tender Offer Priceby a certain percentage or more (a “Counter Proposal”), Fujitsu may consult
with or provide information to the third party with respect to the proposal tothe minimum extent necessary. If Fujitsu or the Company receives a written
proposal regarding a Competing Transaction during the period from theexecution date of the Master Transaction Agreement until the last day of theTender Offer Period, Fujitsu shall immediately notify the Tender Offeror tothat effect and of the details of the proposal and, at the request of the Tender
Offeror, consult with the Tender Offeror to a reasonable extent regarding the
progress of the consultations and negotiations regarding the Competing
Transaction.
If a Counter Proposal is commenced by a third party set out above whom
Fujitsu may consult with or provide information to by the last day of theTender Offer Period, Fujitsu may request the Tender Offeror to consult
regarding changing the Tender Offer Price and the Repurchase Price, and,even taking into account such consultation, if the Tender Offeror does not, by
the earlier of the date on which 20 business days have elapsed since the dateof the request or the last day of the Tender Offer Period, change the Tender
Offer Price to an amount higher than the consideration proposed in theCounter Proposal and change the Repurchase Price to an amount that, taking
tax effects into account, is in substance higher than the consideration
proposed in the Counter Proposal, Fujitsu may accept the Counter Proposal
in regard to all of the Fujitsu Holding Shares, unless Fujitsu is in violation of
its obligations set out in the Master Transaction Agreement. If any Counter
Proposal is made before the commencement of the Tender Offer, the Tender
Offeror shall not bear an obligation to commence the Tender Offer unless
Fujitsu covenants in writing not to accept the Counter Proposal or the Tender
Offeror conducts the acts set out above.
Additionally, the Master Transaction Agreement sets out the conditions
precedent for the commencement of the Tender Offer (the “Tender Offer
Conditions Precedent” set out in the preamble), the representations andwarranties of the Tender Offeror and Fujitsu (Note 1), obligations of Fujitsu(Note 2), obligations of the Tender Offeror (Note 3), and termination events(Note 4).
Note 1: In the Master Transaction Agreement, the Tender Offeror represents
and warrants (i) its incorporation, existence, and the existence of thepower necessary for the execution and performance of the MasterTransaction Agreement, (ii) the validity and enforceability of the
Master Transaction Agreement, (iii) the obtainment or59

implementation of permits and authorizations, etc. necessary for the
execution and performance of the Master Transaction Agreement,
except for the acquisition of Clearance, and the implementation of
the procedures necessary for the execution and performance of the
Master Transaction Agreement, (iv) the absence of any conflict withlaws and regulations regarding the execution and performance of the
Master Transaction Agreement, (v) the absence of any bankruptcy
procedures, (vi) that it is not an antisocial force and has no
relationship with any antisocial forces, and (vii) the sufficiency offunds necessary for the settlement of the Tender Offer and theexistence of reasonable prospects for securing such funds. In
addition, in the Master Transaction Agreement, Fujitsu represents
and warrants (i) its incorporation, existence, and the existence of thepower necessary for the execution and performance of the MasterTransaction Agreement, (ii) the validity and enforceability of the
Master Transaction Agreement, (iii) the obtainment or
implementation of permits and authorizations, etc. necessary for the
execution and performance of the Master Transaction Agreement
and the implementation of the procedures necessary for the
execution and performance of the Master Transaction Agreement,(iv) the absence of any conflict with laws and regulations regarding
the execution and performance of the Master Transaction Agreement,(v) the absence of any bankruptcy procedures, (vi) that it does not
fall under an antisocial force and has no relationship with any
antisocial forces, (vii) matters relating to the legal and valid holding,etc. of the Fujitsu Holding Shares, (viii) matters relating to theCompany’s shares, (ix) the accuracy of securities reports of theCompany filed after April 1, 2021, and (x) the accuracy of theinformation disclosed in due diligence.
Note 2: The following is a summary of the obligations owed by Fujitsu in
the Master Transaction Agreement: (i) obligation not to tender in theTender Offer or transfer or otherwise dispose of the Fujitsu Holding
Shares, (ii) obligation regarding the implementation of the SqueezeOut Procedures, (iii) obligation to cause the Company to conduct the
Financing and the Capital Decrease, Etc., (iv) obligation regarding
the conduct of the Share Repurchase, (v) obligation to cooperate andmake efforts for the satisfaction of the Tender Offer Conditions
Precedent, (vi) obligation to notify the Tender Offeror if it breaches
any of its representations and warranties, breaches any of its
obligations, or finds that it might be unable to satisfy the Tender
Offer Conditions Precedent, (vii) obligation to cooperate and makeefforts for the prompt execution of the Transactions, (viii) obligation
to consult in good faith in regard to continuing the services provided
by Fujitsu and its subsidiaries to the Company Group for the period
necessary to support transition procedures, (ix) obligation regarding
certain patents that the Company Group holds and uses, (x)obligation to take certain measures in relation to the Company’s
health insurance system and retirement pension system, (xi) noncompetition obligations for a certain period after the date of the60

Share Repurchase, (xii) obligation not to solicit the officers andemployees of the Company Group for a certain period after the
execution date of the Master Transaction Agreement, (xiii)
obligation to cooperate with the Tender Offeror in financing, (xiv)obligation to cooperate in the acquisition of Clearance, (xv)
obligation to pay compensation if it breaches any of its
representations and warranties or breaches any of its obligations,(xvi) confidentiality obligations, (xvii) obligation to bear taxes andpublic charges and expenses it incurs, and (xviii) obligation not toassign any of its contractual rights and obligations.
Note 3: The following is a summary of the obligations owed by the Tender
Offeror in the Master Transaction Agreement: (i) obligation tocommence the Tender Offer on or after the date on which theConditions Precedent are satisfied, (ii) obligation to make efforts to
conduct all acts necessary under laws and regulations for theacquisition of Clearance and efforts to complete the acquisition ofClearance, (iii) obligation regarding the implementation of the
Squeeze-Out Procedures, (iv) obligation to cause the Company toconduct the Financing and the Capital Decrease, Etc., (v) obligation
regarding the conduct of the Share Repurchase, (vi) obligation tocooperate and make efforts for the satisfaction of the Tender Offer
Conditions Precedent, (vii) obligation not to amend the MOU
without the prior written consent of Fujitsu, (viii) obligation not tomake any communication with any judicial or administrative agency
in relation to Fujitsu’s burdens arising out of or in connection with
the Transactions without the prior written consent of Fujitsu, (ix)obligation to notify Fujitsu if it breaches any of its representations
and warranties, breaches any of its obligations, or finds that it might
be unable to satisfy the Tender Offer Conditions Precedent, (x)obligation to cooperate and make efforts for the prompt execution of
the Transactions, (xi) obligation to take certain measures in relation
to the Company’s health insurance system and retirement pension
system, (xii) obligation not to solicit the officers and employees of
the Company Group for a certain period after the execution date of
the Master Transaction Agreement, (xiii) obligation to pay
compensation if it breaches any of its representations and warranties
or breaches any of its obligations, (xiv) confidentiality obligations,(xv) obligation to bear taxes and public charges and expenses it
incurs, (xvi) obligation not to assign any of its contractual rights andobligations, and (xvii) obligation to make efforts in relation to theextension of the effective terms of commitment letters or the
execution of new commitment letters (see Note 4).
Note 4: Under the Master Transaction Agreement, the Tender Offeror andFujitsu may terminate the Master Transaction Agreement by
notifying the other party in writing by the end of the Tender Offer
Period if (i) there is a breach of any of the other party’s
representations and warranties that may have a material adverse
effect on the implementation of the Transactions, (ii) the other party
fails to perform or comply with any of its obligations under the
Master Transaction Agreement in any material respect and, despite61

being requested in writing to remedy such nonperformance or
noncompliance, fails to remedy such nonperformance or
noncompliance within a reasonable period of time, (iii) a petition is
filed against the other party for commencement of bankruptcy
proceedings, (iv) the Tender Offer is not commenced by September
30, 2024 (however, if the effective term of a commitment letter
regarding the borrowings by the Tender Offeror from a financial
institution necessary for the implementation of the Transactions is
extended to a date after the same date, or if a substitute newcommitment letter is executed with a financial institution, then the
expiration date of the extended commitment letter or the expiration
date of the new commitment letter) due to any event not attributable
to itself (the Tender Offeror shall use its reasonable best efforts toextend the effective term of such commitment letter or to execute a
new commitment letter; if the Tender Offeror commences
consultation with a financial institution regarding the extension of
the effective term of such commitment letter or the execution of a
new commitment letter, the Tender Offeror shall provide Fujitsu
with information regarding the status of consultation with thefinancial institution; if the Tender Offeror becomes aware of a
specific risk that would make it difficult to extend the effective termof the commitment letter or execute a new commitment letter, theTender Offeror shall promptly notify Fujitsu of such risk, as well as
the details of relevant matters considered by the Tender Offeror andthe status of negotiations with the financial institution, and shallconsult with Fujitsu in good faith regarding the response to thesituation before the Tender Offeror exercises its termination right;
JICC has submitted to Fujitsu today a document to the effect that
JICC covenants these matters as summarized above), (v) the Tender
Offer is not commenced by June 30, 2025 due to any reason not
attributable to itself, or (vi) there is any change in a person who
directly or indirectly controls the Tender Offeror through theexercise of voting rights or the exercise of contractual rights or any
other change of control in relation to the Tender Offeror. The MasterTransaction Agreement provides that the Master Transaction
Agreement will automatically terminate if any of the following
events occurs: (i) the Tender Offeror lawfully withdraws the Tender
Offer in accordance with the Act and other applicable laws andregulations, (ii) a tender offer under a Counter Proposal iscommenced, Fujitsu becomes able to accept the Counter Proposal,
and Fujitsu announces that it will accept the Counter Proposal, or(iii) the total number of share certificates, etc. tendered in responseto the Tender Offer is less than the minimum number of shares to bepurchased.
(2)

Memorandum of Understanding Regarding Tender Offer
Upon the Tender Offer, the Tender Offeror and the Company have enteredinto the MOU regarding the Transactions on December 12, 2023. The MOU
sets out the obligations of the Company (Note 5), the obligations of the62Tender Offeror (Note 6), and termination events (Note 8).
Note 5: The following is a summary of the obligations owed by the Company
in the MOU: (i) obligation to adopt a resolution to express its opinion
in support of the Tender Offer and recommending that theCompany’s shareholders tender their shares in the Tender Offer (the“Opinion”) and maintain such resolution, and obligation not to
conduct any Competing Transaction (Note 7), (ii) obligation to
implement and cooperate in procedures necessary for the
implementation of the Transactions, (iii) obligation to cooperate in
the acquisition of Clearance, (iv) obligation to conduct its businesswithin the ordinary course thereof, (v) obligation to make efforts sothat the balance of its deposit account as of the end of the last day of
the Tender Offer Period is no less than a certain amount, (vi)obligation of the Company Group to maintain permits andauthorizations, etc. and comply with laws and regulations, (vii)
obligation to grant the Tender Offeror access to information on the
Company Group and its officers and employees, (viii) obligation tocooperate with the Tender Offeror in financing, (ix) obligation not
to be involved with anti-social forces or conduct any anti-social act,(x) obligation to make efforts to obtain consent from certain business
partners in relation to the Transactions, (xi) obligation to notify
certain business partners of the Transactions, (xii) obligation toprovide explanations, etc. regarding the Transactions to the Shinko
Electric Workers Union, (xiii) obligation to cooperate in thetendering of shares in the Tender Offer by a directors and officers
shareholding association or employees shareholding association of
the Company or a member thereof, (xiv) obligation to makeindemnity if it breaches any of its obligations, (xv) confidentiality
obligations, (xvi) obligation to bear taxes and public charges andother expenses it incurs, and (xvii) obligation not to assign any of its
contractual rights and obligations.
Note 6: In the MOU, the Tender Offeror owes the obligations (i) to makeefforts to, in principle, continue the employment and maintain theworking conditions of the Company Group’s employees for the
meantime after the completion of the Transactions, (ii) not topropose an amendment of the articles of incorporation to change in
the Company’s trade name for the time being after the completion of
the Transactions, (iii) to respect business relationships between the
Company and its material clients and business partners, (iv) torespect the Company Founder’s Philosophy and Corporate Vision,etc., (v) to make efforts to complete the acquisition of Clearance, (vi)
not to be involved with anti-social forces or conduct any anti-social
act, (vii) to make indemnity if it breaches any of its obligations, (viii)
to maintain confidentiality, (ix) to bear taxes and public charges andother expenses it incurs, and (x) not to transfer any of its contractual
rights and obligations.
Note 7: The MOU sets out provisions regarding the maintenance of theOpinion and provisions that restrict the Company from reaching anagreement regarding a Competing Transaction with a third party,
63

making any application for such agreement, or making any invitation
for, approving, discussing, negotiating about, making any
solicitation for, or exchanging information about a Competing
Transaction. However, under the MOU, it is provided that if theCompany reasonably determines that it would violate the fiduciary
duty of its directors to maintain the Opinion without change, not tomake a resolution that conflicts with the Opinion, or not to conduct
a Competing Transaction (including consultation or informationexchange regarding a proposal in relation to a Competing
Transaction in certain cases), the Company shall provide the Tender
Offeror with prior explanation of the details and reasons therefor anddiscuss in good faith with the Tender Offeror regarding the responseto that situation. It is also provided that if, even after discussion ingood faith with the Tender Offeror, it is objectively and reasonably
considered that it would violate the fiduciary duty of the Company’s
directors to maintain the Opinion without change, not to make aresolution that conflicts with the Opinion, or not to conduct a
Competing Transaction, the Company may withdraw or change theOpinion, make a resolution that conflicts with the Opinion, or
conduct a Competing Transaction.
Note 8: The MOU provides that the MOU will automatically terminate in theevent that the Master Transaction Agreement terminates.
(3)

Shareholders’ agreement
Upon the Tender Offer, JICC, DNP, and Mitsui Chemicals plan to enter intoa shareholders’ agreement (the “Shareholders’ Agreement”) before thecommencement date of the Tender Offer and agree on matters regarding themanagement of the Tender Offeror and the Company, the handling of shares,
and the like. Specifically, as matters relating to the Company, JICC, DNP,
and Mitsui Chemicals plan to agree on matters regarding the governance, etc.
of the Company (Note 9), matters regarding the business operation of theCompany (Note 10), and matters regarding the disposal, etc. of the Company
Shares (Note 11). Matters regarding the Company in the Shareholders’
Agreement shall be applicable from the time of completion of the Share
Repurchase, except for certain provisions such as prohibition of assignmentof the Company Shares.
Note 9: The number of directors of the Company to be nominated after thecompletion of the Share Repurchase, matters requiring the priorconsent of DNP and Mitsui Chemicals (the “Joint Investors”) withrespect to the Company’s decision making, and other such matters
are planned to be set out in the Shareholders’ Agreement.
Note 10: The following matters are planned to be set out in the Shareholders’
Agreement: (i) JICC, DNP, and Mitsui Chemicals will not bear any
obligation to make additional contributions or warranties, etc. to theTender Offeror or the Company, (ii) JICC, DNP, and Mitsui
Chemicals will use their best efforts for the successful business
operation of the Company Group, and (iii) JICC, DNP, and Mitsui
Chemicals will consult regarding business collaboration between
64each of the Joint Investors and the Company Group (including abusiness alliance between each of the Joint Investors and theCompany leveraging each other’s strengths, including thedevelopment and expansion of next-generation technologies in thesemiconductor business) and cooperate toward the execution of anagreement regarding such alliance, and other such matters.
Note 11: The following matters are planned to be set out in the Shareholders’
Agreement: (i) if the Company conducts an issuance, etc. of shares,
JICC, DNP, and Mitsui Chemicals will have preemptive rights inaccordance with their voting rights ratio, and (ii) the assignment, etc.
of the Company Shares will be prohibited for a certain period.
5.

Details of Profit Sharing by Tender Offeror or Its Special Related Parties
N/A

6.

Policies for Responses in Relation to Basic Policies Regarding Control of Company
N/A

7.

Questions to Tender Offeror
N/A

8.

Requests to Extend Tender Offer Period
N/A

9.

Future Outlook
N/A

10.

Matters Regarding Transactions, Etc. with Controlling Shareholder(1)

Applicability to Transactions, etc. with Controlling Shareholder; Status of Compatibility
with Policies Regarding Measures for Protecting Minority Shareholders
The Tender Offeror has executed Master Transaction Agreement with Fujitsu, theCompany’s controlling shareholder (parent company), and as part of the Transactions,
the Tender Offeror is scheduled to conduct the Tender Offer with a plan to acquire
Fujitsu Holding Shares through the Share Repurchase, after the Tender Offer andcompletion of the share consolidation. Therefore, the Company has determined thatthe opinions expressed at the Board of Directors meeting regarding the Tender Offer
conform with the transactions, etc. with a controlling shareholder.
The “Policy Regarding Measures for Protection of Minority Shareholders inTransactions, etc. with Controlling Shareholder,” indicated in the Corporate Governance
Report disclosed by the Company on July 14, 2023, states that “similar to other generaltransactions, the transaction with the Fujitsu group has been determined by taking into
account matters such as the transaction terms and market rate, and has been approved
based on the Company’s decision-making standards. Furthermore, the Company has
65established a Special Committee, composed of independent persons, including
Independent Outside Directors. The Company is careful not to damage minority
shareholder interests, by regularly reporting to and discussing the status of transactions
with the Fujitsu group at Board of Directors meetings, and in addition, deliberating
material transactions or actions that conflict with the interests of the controllingshareholder and minority shareholders at the Special Committee. The basic principleof business operations is independence/self-sustainability and a large portion of the total
sales volume is from sales to companies other than the Fujitsu group.” As also statedin “(6) Measures to Ensure Fairness of Tender Offer, Such as Measures to Ensure
Fairness of Tender Offer Price and Avoid Conflicts of Interest” of “3. Details, Basis, andReasons for Opinion Regarding Tender Offer” above, the Company has made an effort
to protect minority shareholders, by reasonable decision-making accounting for theCompany’s independence/self-sustainability, conducted by ensuring fairness of theTender Offer and without any conflicts of interest, such as by receiving the Written
Report from the Special Committee, which states that the Transactions are notdisadvantageous to the Company’s minority shareholders, acquiring the Share Valuation
Report from MUMSS, an independent third-party valuation organization, and acquiring
legal advice from N&A. Therefore, the Company assumes that there is conformity
with the “Policy Regarding Measures for Protection of Minority Shareholders inTransactions, etc. with Controlling Shareholder.”(2)Matters Regarding Measures to Ensure Fairness and Avoid Conflicts of Interest
Please see “(6) Measures to Ensure Fairness of Tender Offer, Such as Measures to
Ensure Fairness of Tender Offer Price and Avoid Conflicts of Interest” of “3. Details,
Basis, and Reasons for Opinion Regarding Tender Offer” above.

(3)

Outline of Opinion Obtained From Persons Who Have No Interest in Controlling
Shareholder That Implementation of Transactions is Not Disadvantageous to Minority
Shareholders
As of today, the Company has obtained from the Special Committee, composed of
persons who do not have any interest in the controlling shareholder, a written reportstating that the Company’s carrying out Transactions is not disadvantageous to theCompany’s minority shareholders. For details, please see “(II) Procurement by
Company of Written Report from Independent Special Committee” of “(6) Measures to
Ensure Fairness of Tender Offer, Such as Measures to Ensure Fairness of Tender Offer
Price and Avoid Conflicts of Interest” of “3. Details, Basis, and Reasons for Opinion
Regarding Tender Offer” above.

11.

OthersThe Company passed a resolution at its Board of Directors meeting held today to amend theyear-end dividend forecast for fiscal year ending in March 2024 and not to make any year-end
dividends for the fiscal year ending in March 2024, as well as to abolish the shareholder special
benefit program , with the final shareholder special benefit being the one granted in June 2023
to shareholders covered by the program as of March 31, 2023. For details, please see the“Notice Concerning Amendment of Year-End Dividend Forecast for Fiscal Year Ending inMarch 2024 (No Dividends) and Abolition of Shareholder Special Benefit Program” theCompany announced separately today.
66

End of document67