REG-Mitsui & Co Ltd Notice Regarding Commencement of Tender Offer for Shares of Honshu Chemical Industry Co., Ltd. (Securities Code: 4115)

Mitsui & CoAnnouncement

14/05/2021 10:35

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20210514:nBw9m49Rza&default-theme=true


Notice Regarding Commencement of Tender Offer for Shares of Honshu Chemical
Industry Co., Ltd. (Securities Code: 4115)

 

This announcement is for our U.S.$5,000,000,000 Euro Medium Term Note
Programme

 

 Translation 

 

May 14, 2021

 

To whom it may concern:

 

Company Name: Mitsui Chemicals, Inc.

Name of Representative:

Osamu Hashimoto

President & CEO

(Securities code: 4183)

Contact:

Junichi Inoue

General Manager of Corporate Communications Division

Phone: +81-3-6253-2100

Company Name: Mitsui & Co., Ltd.

Name of Representative:

Kenichi Hori

President and Chief Executive Officer

(Securities code: 8031)

Contact:

Masaya Inamuro

General Manager of Investor Relations Division

Phone: +81-3-3285-7657

Notice Regarding Commencement of Tender Offer for Shares of Honshu Chemical
Industry Co., Ltd. (Securities Code: 4115)

Mitsui Chemicals, Inc. ("Mitsui Chemicals") and Mitsui & Co., Ltd.
("Mitsui & Co.," and together with Mitsui Chemicals, the "Offerors") have
decided, as published in the "Notice Regarding Scheduled Commencement of
Tender Offer for Shares of Honshu Chemical Industry Co., Ltd. (Securities
Code: 4115)" dated November 11, 2020 (the "Offerors' November 11, 2020 Press
Release"), that they will jointly acquire shares of the common stock (the
"Target's Shares") of Honshu Chemical Industry Co., Ltd. (the "Target")
through a tender offer (meaning the tender offer pursuant to the Financial
Instruments and Exchange Act (Act No. 25 of 1948, as amended; the "Act") and
related laws and regulations; the "Tender Offer"), upon the satisfaction (or
waiver by the Offerors) of certain conditions, including the completion of the
procedures and actions required by antitrust laws of Japan, the EU, China,
Taiwan and Turkey because such procedures and actions are expected to take a
certain period of time (For details, see "(II) Joint Tender Offer Agreement"
under "(6) Matters concerning material agreements regarding the Tender Offer"
under "1. Purposes of the Purchase" below. Such preconditions are hereinafter
referred to as the "Conditions").

The Offerors, having confirmed that all of the Conditions have been satisfied,
announce that the Tender Offer will commence from May 17, 2021 as follows.

1. Purposes of the Purchase


 1. Outline of the Tender Offer

As of the date of this Press Release, each of the Offerors (Note 1) holds
3,098,000 shares (Shareholding Ratio (Note 2): 26.99%) of the Target's Shares,
which are listed on the Second Section of Tokyo Stock Exchange, Inc. (the
"TSE"), making the Target an equity method affiliate of each Offeror.

(Note 1) As of March 31, 2020, Mitsui Chemicals did not hold any shares in
Mitsui & Co., but was entitled to instruct the exercise of the voting
rights pertaining to 3,592,000 shares of the common stock of Mitsui & Co.
held in the name of Mitsui Chemicals, Inc. Retirement Benefit Trust Account
(shareholding ratio (rounded to the second decimal place) to the total number
of issued shares (excluding the treasury shares owned by Mitsui & Co.):
0.21%). As of March 31, 2020, Mitsui & Co. held 3,474,078 shares of the
common stock of Mitsui Chemicals (shareholding ratio (rounded to the second
decimal place) to the total number of issued shares (excluding the treasury
shares owned by Mitsui Chemicals): 1.82%), and was entitled to instruct the
exercise of the voting rights pertaining to 3,474,000 shares of the common
stock of Mitsui Chemicals held in the name of Mitsui & Co., Ltd.
Retirement Benefit Trust Account (shareholding ratio (rounded to the second
decimal place) to the total number of issued shares (excluding the treasury
shares owned by Mitsui Chemicals): 1.82%).

(Note 2) "Shareholding Ratio" refers to the ratio (rounded to the second
decimal place) to the number of Target's Shares (11,476,788 shares) obtained
by deducting the number of treasury shares owned by the Target as of March 31,
2021 (23,212 shares) from the total number of issued shares as of March 31,
2021 (11,500,000 shares), both as stated in the "Consolidated Financial
Results for the Fiscal Year Ended March 31, 2021 (Japanese GAAP)" published by
the Target on May 14, 2021 (the "Target's Annual Earnings Briefing").

As announced in the Offerors' November 11, 2020 Press Release, the Offerors
entered into a joint tender offer agreement (the "Joint Tender Offer
Agreement") on the same date of the press release, and each of the Offerors
resolved to jointly implement the Tender Offer for all of the Target's Shares
(excluding the Target's Shares owned by the Offerors and the treasury shares
owned by the Target; hereinafter the same) as part of the series of
transactions (the "Transaction") to make the Offerors the sole shareholders of
the Target, with Mitsui Chemicals' and Mitsui & Co.'s voting right
percentages in the Target after the privatization being 51% and 49%,
respectively, subject to the satisfaction (or waiver by the Offerors) of the
Conditions as follows:

(i) The special committee established by the Target issued a written report in
favor of the Target (x) supporting the Tender Offer and (y) recommending the
shareholders of the Target to tender in the Tender Offer and (z) implementing
the Share Consolidation (as defined in (III) Establishment of independent
special committee at the Target and procurement of written report from the
said committee" under "(3) Measures to ensure the fairness of the Tender
Offer, such as measures to ensure the fairness of the Tender Offer Price and
measures to avoid conflict of interests" below; hereinafter the same), and
this report has not been withdrawn;

(ii) The Target's board of directors, excluding directors who have or may have
interests with the Offerors, reached an unanimous resolution to support the
Tender Offer and to recommend the Target's shareholders to tender in the
Tender Offer, and this resolution was publicly announced and no resolution has
been made to withdraw this opinion or that conflicts with this opinion;

(iii) It has been confirmed that there have been no material facts concerning
the Target's business (those facts stipulated in Article 166, Paragraph 2 of
the Act) that have not been publicly disclosed (as defined in Article 166,
Paragraph 4 of the Act) by the Target;

(iv) The Offerors have agreed between themselves on the contents of the
disclosure documents to be filed or announced jointly by the Offerors by the
date of public notice concerning commencement of the Tender Offer;

(v) Necessary procedures were performed, necessary arrangements were made, and
waiting periods (if any) have lapsed (including to receive notice that no
cease and desist order will be issued) pursuant to the antitrust laws of
Japan, the EU, China, Taiwan, and Turkey with respect to the Transaction, and
it is reasonably projected that no measures or procedures will be assumed that
would prevent the implementation of the Transaction by the antitrust
authorities and other judicial or administrative agencies concerning antitrust
laws of those countries or regions;

(vi) There are no filings, litigation or procedures pending at judicial or
administrative agencies that seek to restrict or prohibit any of the
Transaction, and there is no judgment or a concrete possibility for a judgment
to be made, by any judicial or administrative agency that restricts or
prohibits any of the Transaction;

(vii) Each company in the Target Group (as defined in "(I) Background and
purposes of the Tender Offer and decision-making process leading to the
consummation of the Tender Offer" under "(2) Background and purposes of the
Tender Offer and decision-making process leading to the consummation of the
Tender Offer and management policy after the Tender Offer" below) has received
written confirmations from the counterparties to the agreements executed by
each company in the Target Group that are materially important for business
stating that those counterparties will not exercise their rights upon
execution and performance of the Joint Tender Offer Agreement, and these
confirmations have not been rescinded;

(viii) The Shareholders Agreement (as defined in "(II) Management policy after
the Tender Offer" under "(2) Background and purposes of the Tender Offer and
decision-making process leading to the consummation of the Tender Offer and
management policy after the Tender Offer" below) is executed between the
Offerors and has been effective;

(ix) The representations and warranties made by the Offerors (for the specific
details thereof, see "(II) Joint Tender Offer Agreement" under "(6) Matters
concerning material agreements regarding the Tender Offer" below) under the
Joint Tender Offer Agreement are true and accurate in all material respects;

(x) All obligations that must be performed, or complied with, by the Offerors
by 15:00 on the business day immediately preceding the date of public notice
of commencement of the Tender Offer pursuant to the Joint Tender Offer
Agreement have been performed and complied with in all material respects; and

(xi) There has been no material change in the business or property of the
Target or any of its subsidiaries, and there has been no other circumstance
that would materially impede the achievement of the purpose of the tender
offer as provided in the proviso to Article 27-11, Paragraph 1 of the Act.

On May 5, 2021 (local time), the European Commission issued a document stating
its decision to approve the acquisition of the Target's Shares through the
Tender Offer (the "Acquisition"), and the Offerors received this document on
May 5, 2021. The Offerors, having confirmed that all of the Conditions had
been satisfied by confirming that the Acquisition was approved on the same
date, decided on May 14, 2021 to commence the Tender Offer from May 17, 2021.

The Offerors have set the minimum number of tendered shares to be purchased in
the Tender Offer at 1,455,200 shares (Shareholding Ratio: 12.68%), and if the
total number of shares, etc. tendered in the Tender Offer (the "Tendered
Shares") is less than the minimum number of tendered shares to be purchased in
the Tender Offer, the Offerors will purchase none of the Tendered Shares.
Meanwhile, with the intention of privatizing the Target's Shares, the Offerors
have not set the maximum number of tendered shares to be purchased in the
Tender Offer. If the total number of the Tendered Shares is no less than the
minimum number of tendered shares to be purchased in the Tender Offer, the
Offerors will purchase all of the Tendered Shares. The minimum number of
tendered shares to be purchased in the Tender Offer (1,455,200 shares) has
been set so that the sum of the voting rights in the Target held by the
Offerors upon the successful completion of the Tender Offer should be no less
than two thirds (2/3) (fractional number, if any, shall be rounded up) of the
total number of voting rights in the Target (114,767), which is the number of
voting rights pertaining to the number of shares (11,476,788 shares) obtained
by deducting the number of treasury shares owned by the Target as of March 31,
2021 (23,212 shares) from the total number of issued shares of the Target as
of March 31, 2021 (11,500,000 shares), both as stated in the Target's Annual
Earnings Briefing).

While the purpose of the Tender Offer is for the Offerors to be the sole
shareholders of the Target, such minimum number of tendered shares to be
purchased in the Tender Offer was set so that the Offerors will hold no less
than two thirds (2/3) of the number of voting rights of all shareholders of
the Target after the Tender Offer in order to ensure the adoption of a special
resolution of the shareholders meeting of each company as provided in Article
309, Paragraph 2 of the Companies Act (Act No. 86 of 2005 as amended;
hereinafter the same), which is a requirement for the implementation of the
Share Consolidation under "(4) Policies on the organizational restructuring,
etc. after the Tender Offer (matters concerning "two-step acquisition")"
below.

With respect to the method to purchase the Tendered Shares by Mitsui Chemicals
and Mitsui & Co., (i) if the total number of Tendered Shares is 2,487,859
or more shares, Mitsui Chemicals will purchase the Tendered Shares up to
2,640,394 shares, and Mitsui & Co. will purchase the remainder of the
Tendered Shares up to the total number of the Tendered Shares, and (ii) if the
total number of Tendered Shares is less than 2,487,859 shares, each of the
Offerors will purchase one half of the total number of the Tendered Shares
(fractional number, if any, shall be rounded up with respect to the shares to
be purchased by Mitsui Chemicals, and shall be rounded down with respect to
the shares to be purchased by Mitsui & Co.).

As already mentioned, the Offerors intend to eventually set Mitsui Chemicals'
and Mitsui & Co.'s respective voting right percentages in the Target at
51% and 49% through the Transaction and jointly seek to enhance the Target's
corporate value. Mitsui Chemicals is considering aggressively investing
business resources in the Target for research and development and production
technologies by making it a consolidated subsidiary of Mitsui Chemicals.
Mitsui & Co. believes that the privatization of the Target's Shares will
enable it to invest business resources in the Target more aggressively,
although the Target will remain an equity method affiliate of Mitsui & Co.

If the Offerors fail to acquire all of the Target's Shares in the Tender Offer
despite the successful completion of the Tender Offer, the Offerors will
implement the series of procedures to make themselves the sole shareholders of
the Target, as stated in "(4) Policies on the organizational restructuring,
etc. after the Tender Offer (matters concerning "two-step acquisition")"
below.

According to the "Statement of Opinion on the Tender Offer for Shares of
Honshu Chemical Industry Co., Ltd. by Mitsui Chemicals, Inc. and Mitsui &
Co., Ltd. and Recommendation for Tender" published on November 11, 2020 by the
Target (the "Target's November 11, 2020 Press Release"), the Target resolved
at its board of directors meeting held on November 11, 2020 to express its
opinion as of that date in favor of the Tender Offer, if commenced, and to
recommend that its shareholders tender their shares in the Tender Offer.

Furthermore, according to the "Notice Regarding Statement of Opinion in Favor
of the Tender Offer for the Company's Shares by Mitsui Chemicals, Inc. and
Mitsui & Co., Ltd. and Recommendation to Tender" published by the Target
on May 14, 2021 (the "Target's May 14 Press Release, and together with the
Target's November 11, 2020 Press Release, the "Target's Press Releases"), at
the Target's board of directors meeting held on May 14, 2021, all nine (9)
directors of the Target held a discussion, and in view of the Target's
business conditions and the environment surrounding the Transaction, again
carefully considered the various terms of the Tender Offer, decided that even
as of May 14, 2021 there were no factors to change its opinion concerning the
Tender Offer as of November 11, 2020, and those nine (9) directors of the
Target resolved with a unanimous vote that the Target will again express its
opinion in favor of the Tender Offer and recommend to its shareholders to
tender their shares in the Tender Offer. For details of the process of
decision-making by the board of directors of the Target at the meetings on
November 11, 2020 and May 14, 2021, see the Target's Press Releases and "(V)
Unanimous approval of all disinterested directors of the Target and the
opinion of all auditors that they have no objection" under "(3) Measures to
ensure the fairness of the Tender Offer, such as measures to ensure the
fairness of the Tender Offer Price and measures to avoid conflicts of
interest" below.

(2) Background and purposes of the Tender Offer and decision-making process
leading to the consummation of the Tender Offer and management policy after
the Tender Offer

(I) Background and purposes of the Tender Offer and decision-making process
leading to the consummation of the Tender Offer

Mitsui Chemicals is a new company established by the equal merger of Mitsui
Petrochemical Industries, Ltd. ("MPI") and Mitsui Toatsu Chemicals, Inc. as of
October 1, 1997, and it originates from the commencement of operation of the
ammonium sulfate plant located at Omuta-city, Fukuoka Prefecture in April 1933
by Toyo Koatsu Industries Inc., i.e. the predecessor company of Mitsui Toatsu
Chemicals, Inc. Mitsui Chemicals was listed on the Second Section of the TSE
and the Second Section of the Osaka Securities Exchange Co., Ltd. ("OSE") in
October 1962, and was listed on the First Section of the TSE and the First
Section of the OSE in February 1965. In December 2003, Mitsui Chemicals was
delisted from the First Section of the OSE. Mitsui Chemicals and its 127
consolidated subsidiaries and 27 equity method companies (as of March 31,
2021) ("Mitsui Chemicals Group") are mainly engaged in the: (i) "Mobility"
business mainly engaged in manufacture and sales of automobile-related
materials; (ii) "Healthcare" business engaged in manufacture and sales of
vision care materials, dental materials and nonwovens; (iii) "Food &
Packaging" business engaged in manufacture and sales of agrochemicals and
packaging materials; and (iv) "Basic Materials" business engaged in
manufacture and sales of petrochemicals and basic chemicals. The Mitsui
Chemicals Group has its ratio of overseas sales reaching approximately 54% and
the ratio of overseas employees reaching approximately 43%. The Mitsui
Chemicals Group's corporate mission is to: "Contribute broadly to society by
providing high-quality products and services to customers through innovation
and the creation of materials, while keeping in harmony with the global
environment." Its corporate target is: "Constantly pursuing innovation and
growth to become a chemical group with an undisputed global presence." On
November 16, 2016, the Mitsui Chemicals Group issued its 2025 Long-term
Business Plan that envisioned targets for 2025 ("2025 Long-term Business
Plan"). According to the 2025 Long-term Business Plan, the mission of the
Mitsui Chemicals Group is to contribute to solving social challenges in order
to realize a "cohesive society in harmony with the environment," "health and
happiness in an aging society," and "industrial platforms in harmony with
local communities." The Mitsui Chemicals Group is making efforts to create a
better future society in five (5) business categories, namely, "Mobility,"
"Healthcare," "Food & Packaging," "Basic Materials," and "Next Generation
Business," which creates new solutions and system businesses focused on energy
solutions, agri-solutions, medical solutions and IoT (Note 1) solutions. In
addition, as announced during the CEO Presentation of Business Results and
Outlook on June 2, 2020, pursuant to the strategic policy of 2020, ICT( )(Note
2) was named as the business domain to be strengthened in the next period, and
growth will be accelerated through aggressive investment.

(Note 1) "IoT" is an acronym for Internet of Things, meaning the
interconnection via the Internet of computing devices embedded in everyday
objects.

(Note 2) "ICT" is an acronym for Information and Communication Technology.

Mitsui & Co. was incorporated under the trade name of Daiichi Bussan
Kaisha, Ltd. in July 1947. In February 1959, it changed its trade name to the
current Mitsui & Co., Ltd. (Mitsui & Co. listed its shares on the TSE
in May 1949, listed its shares on the Sapporo Securities Exchange, the Nagoya
Stock Exchange, Inc. and the OSE in November 1954, and listed its shares on
the Fukuoka Stock Exchange in February 1959. Due to the integration of the
cash markets of the TSE and the OSE in July 2013, Mitsui & Co. is no
longer listed on the OSE). Utilizing the global operating locations, network
and information resources as a general trading company, Mitsui & Co. and
its 280 consolidated subsidiaries and 234 equity method affiliates (as of
March 31, 2021) ("Mitsui & Co. Group") multilaterally pursue business in
the fields of Iron & Steel Products, Mineral & Metal Resources,
Energy, Machinery & Infrastructure, Chemicals, Lifestyle, and Innovation
& Corporate Development. The Mitsui & Co. Group regards the Chemicals
segment as one of the core business domains, and this encompasses trade and
investment in a range of industries, from upstream and midstream chemicals
such as basic chemicals and fertilizer and inorganic resources, to downstream
chemicals that meet diverse market needs, including functional materials,
electronics materials, specialty chemicals (Note 3), forestry and housing
materials, fertilizers, feed additives, and flavor and fragrance chemicals.
The Chemicals segment is also pursuing new initiatives in the tank terminal
business (Note 4), carbon fiber, and human nutrition. The future basic
strategies of the Chemicals segment are to make investments for business
expansion leading to growth of existing businesses, as well as to increase
profits of existing businesses through strengthening of business management
capabilities, the establishment of next-generation revenue pillars in Energy
Solutions and Healthcare/Nutrition (Note 5), the enhancement of trading
functions given changes in market structures, and the engagement in new growth
opportunities such as activities to achieve low-carbon society as stated in
the "Medium-term Management Plan 2023" published on May 1, 2020.

(Note 3) "Specialty chemicals" mean materials for green chemicals, materials
for detergents, surface activating agents and their materials and materials
for lubricants.

(Note 4) "Tank terminal business" is a business engaged in the storage,
preservation and shipment services for petroleum products and petrochemicals,
which is a major infrastructure in the energy and chemical industries.

(Note 5) "Healthcare/Nutrition" is a business field expected to drive creation
of multifaceted value using existing businesses as a platform in order to
create multifaceted value through integration of medicine and food including
hospitals and their ancillary business, medical data business, integrated
facility management, nutrition/presymptomatic diseases measures.

According to the Target's Press Release, the Target was initially founded by
Asajiro Yura and his partners as Yuraseiko & Company in November 1914.
Asajiro Yura and his partners succeeded in industrializing the production of
aniline (Note 6) and synthetic phenol (Note 7) for the first time in Japan in
1914 in order to self-produce dye after its import from Europe was halted, and
full production commenced at Kozaika in Wakayama-city (the Target's current
Wakayama plant). However, an application of the Corporate Rehabilitation Act
for the Target was filed in 1953. Subsequently, in March 1956, the corporate
rehabilitation process of the Target was closed with the full support of one
of the predecessor companies of Mitsui & Co., Daiichi Trading Co., Ltd.
("Daiichi Trading") (and the Target changed its corporate name to the current
Honshu Chemical Industry Co., Ltd. in October 1955 before the decision to
close the corporate rehabilitation process was made). In October 1960, the
Target listed its shares on the Second Section of the OSE and in December
1961, the Target listed its shares on the Second Section of the TSE. Due to
the integration of the cash markets of the TSE and the OSE in July 2013, the
Target is no longer listed on the OSE.

(Note 6) "Aniline" is a type of aromatic compounds used as synthetic coating
material of leather products. As of 1914, it was the main material for
navy-blue Kasuri print. The first synthetic dye discovered is said to be
coal-tar dye (aniline dye) discovered by Sir Perkins of the UK in 1856, and
much research on synthetic dye was conducted in Europe thereafter.

(Note 7) "Synthetic phenol" is a type of aromatic compounds used as a material
for various chemicals such as dye, surface-active agent, bactericide,
agrichemical, medicine and other intermediates. The Target, which was also
successful in benzene distillation in addition to synthesis of aniline as of
1914, succeeded in the production of phenol from benzene using synthesis
technology.

After the change of its corporate name, the Target began domestic production
of bisphenol A (Note 8; "BPA") for the first time in Japan in 1959, and also
became the world's first company to industrialize synthesis cresol in 1967,
and thus succeeded in the production of various basic chemicals as a pioneer
in the chemicals industry. However, since these basic chemicals are
significantly affected by market changes, in 1980, the Target built a plant
that was able to switch and produce multiple products in order to stabilize
its business, and this allowed the Target to advance and enter the fine
chemicals market, which are high-performance or high value-added chemicals of
various types produced in small volumes.

(Note 8) "Bisphenol A (BPA)" is a chemical mainly used as a material for
plastic (polycarbonate resin and epoxy resin).

Furthermore, the Target transferred its business related to the previous major
product BPA to MPI in 1988, and accelerated the change of its focus from basic
chemicals to unique products for niche markets, and also drastically changed
its course to become a fine chemical specialist engaged in R&D. As a
result, the Target is now equipped with a system to seamlessly conduct
small-volume test production to large-scale production in accordance with the
demands of customers by using plants operating switchable production of
multiple products, and has achieved stable business management. In addition,
for the purpose of strengthening the production of specialty bisphenol (Note
9), the Target established a joint venture company called Hi-Bis GmbH
(consolidated subsidiary of the Target; "Hi-Bis") together with the Mitsui
& Co. Group and other investors in 2001. In order to respond to further
increase in demands, the second plant has been operating in Hi-Bis since 2014.

(Note 9) "Specialty bisphenol" is a chemical used as a material for specialty
polycarbonate resin (for use in automobile components, optical and electronic
components) and specialty epoxy resin (for use in semiconductor sealant,
laminated plates), in order to enforce heat resistant features and optical
properties.

The Mitsui Chemicals Group and the Target have built a relationship through
capital relationships and business transactions through the present. Their
relationship began in 1959 when the Target commenced to supply phenol to MPI,
the predecessor company of Mitsui Chemicals. Thereafter, the Target continued
to supply aniline, BPA and a number of other products to the Mitsui Chemicals
Group. In December 1968, MPI acquired 700,000 shares of the Target's Shares
(shareholding ratio based on the total number of issued shares at the time:
7.78%) from Toyo Rayon Co., Ltd. for the purpose of building an alliance on
phenol, etc. For the purpose of reinforcing the relationship, MPI became an
underwriter of a third party allotment by the Target in 1977. Subsequently, in
1980, MPI acquired the Target's Shares from minority shareholders of the
Target. In 1987, MPI acquired 817,000 shares of the Target's Shares from
Mitsui & Co. and as a result owned a total of 3,098,000 shares of the
Target's Shares (shareholding ratio based on the total number of issued shares
at the time: 30.98%). In 1988, MPI accepted the transfer of the Target's BPA
business and also transferred production technologies, etc. of MPI's fine
chemical products to the Target. After the capital increase of the Target in
March 1997, the total number of issued shares of the Target increased to
11,500,000 shares and led to a decrease in the investment ratio of MPI in the
Target. MPI, currently known as Mitsui Chemicals, continues to own 3,098,000
shares of the Target's Shares and its Shareholding Ratio is 26.99% (the
history of investment is provided herein based on internal records). The
Target is the main purchaser of phenol and meta-, para-cresol for the Mitsui
Chemicals Group, while the Mitsui Chemicals Group is the main supplier of
major materials, i.e. phenol and meta-, para-cresol, for the Target. Thus,
these two parties have built both capital and transactional relationships.

The Mitsui & Co. Group and the Target have also built a relationship
through capital relationships and business transactions through the present.
As a general trading company handling chemicals, the Mitsui & Co. Group
has, since its days as one of its predecessor companies, Daiichi-Trading,
conducted transactions to supply raw materials to the Target and to sell the
Target products both in and outside Japan. In addition, when an application of
the Corporate Reorganization Act was made for the Target in 1953, Daiichi
Trading acquired a stake in the Target in order to support the rebuilding of
the Target (number of acquired shares: 80,940 shares; shareholding ratio based
on the total number of issued shares at the time: 20.91%). Then, it became an
underwriter of multiple third party allotments by the Target and also
repeatedly became a transferee and transferor of the Target's Shares. In 1987,
after the transfer of 817,000 shares of the Target's Shares to Mitsui
Chemicals, Mitsui & Co. owned 3,098,000 shares of the Target's Shares
(shareholding ratio based on the total number of issued shares at the time:
30.98%). After the capital increase of the Target in March 1997, the total
number of issued shares of the Target increased to 11,500,000 shares and led
to a decrease in the investment ratio of Mitsui & Co. in the Target.
Currently, Mitsui & Co. continues to own 3,098,000 shares of the Target's
Shares and its Shareholding Ratio is 26.99% (the history of investment is
provided herein based on internal records). Based on this capital
relationship, the Mitsui & Co. Group supports new business developments of
the Target in addition to acting as supplier of materials and seller of
products, and is also committed to the stabilization of business base and the
development and implementation of growth strategies of the Target. The Mitsui
& Co. Group has also been a co-investor of Hi-Bis, the Target's
subsidiary, since its incorporation. Accordingly, the Mitsui & Co. Group
deems that the Mitsui & Co. Group, the Target and Hi-Bis are mutually
important business partners. As of the date of this Press Release, the Target
group consists of the Target and 2 subsidiaries (together with the Target, the
"Target Group"), and has four (4) core businesses (i.e. Cresol Derivatives,
Biphenol, Electronic Chemicals and Specialty Bisphenols).

The Target Group's management policy is to "act as Global Fine Chemical
Specialist for developing and utilizing its original technologies thus
creating valuable products, and thereby realizing sustainable growth in
collaboration with our clients. It is also our goal to make ourselves a
genuinely reliable company and to gain respect from our clients, employees,
shareholders and the regional society." Currently, under this policy, the
Target has four (4) core businesses; namely, (i) Cresol Derivatives (Note 10);
(ii) Biphenol (Note 11); (iii) Electronic Chemicals (Note 12); and (iv)
Specialty Bisphenols. Based on these products, the Target is actively
operating in Japan and overseas mainly in niche markets within IT, automobile
and medical industries.

(Note 10) "Cresol Derivatives" are chemicals used as materials for vitamin E
(additive for animal feeds), electronic chemicals and antioxidants.

(Note 11) "Biphenol" is a chemical used as a material for liquid crystal
polymers (LCP) used in components of electronic devices such as personal
computers, smartphones and digital home electronic appliances, and for
polyphenyl sulfone (PPSU) used in medical areas and aircrafts.

(Note 12) "Electronic Chemicals" produced by the Target Group are used in the
production processes for semiconductors and flat panel displays (LC displays
and organic EL displays).

In addition, in order to become a Global Fine Chemical Specialist and build a
competitive, profitable and strong business base, the Target Group has set up
a long-term vision for 2030 called "HCI 500." Moreover, the Target Group has
developed a 4-year medium-term management plan commencing from 2020 called
"Medium-term Management Plan 20" (devised in January 2020) to link the results
of the 4-year medium-term management plan commencing from 2016 called
"Medium-term Management Plan 16" (devised in February 2016) and to seek
further growth. The Target Group aims to achieve 30 billion yen of sales and
4.2 billion yen of operating income in 2023 by development and sales of
IT-related goods during the active development of materials related to 5G
(Note 13), a next-generation technology standard for broadband cellular
network. Also, the Target Group will newly adopt EBITDA (income calculated by
adding income before taxes and interest expense and depreciation costs) as its
business target, and aims to increase EBITDA from 4.5 billion yen in 2019 to
6.8 billion yen through aggressive investments, and also plans to increase the
ratio of sales of new products from 10% to 15% (since the relevant Medium-term
Management Plan 20 was prepared before effects of the COVID-19 pandemic became
evident, future business plans and expected results are subject to change).
The specific measures to be taken to enhance corporate value are: (i) to
acquire production abilities, to develop new products and to strategically
invest in new business domains; (ii) to be committed to IT-related goods
market, including 5G, in addition to existing business domains and development
topics; (iii) to promote more efficient research and accelerated development
through utilization of materials informatics (Note 14) and establishment of
new bench facilities (Note 15); and (iv) to be fully committed in efforts
regarding ESG (Note 16) and sustainability (Note 17).

(Note 13) "5G" is a 5(th) generation technology standard for broadband
cellular network after 4G.

(Note 14) "Materials informatics" is a method of informatics using statistical
analysis in order to discover new materials from mass data.

(Note 15) "Bench facilities" refer to small-scale facilities that conduct
prior test production or necessary measurement of design data upon full
production.

(Note 16) "ESG" stands for Environment, Social and Governance.

(Note 17) "Sustainability" refers to a concept to maintain a long-term good
natural environment and human society without depleting or damaging any
functions and systems based on three (3) perspectives, i.e. environmental,
social and economic aspects.

While customer needs and market needs for materials are expected to diversify
and intensify given the full commencement of 5G services in the near future,
the penetration of CASE (Note 18), further advancement of digital
transformation (Note 20) via AI (Note 19) and IoT, the Offerors believe that,
through their past capital and transactional relationships with the Target,
the Target has a high potential for growth with its various high-technologies
in domains of high-performance monomer (Note 21) related to ICT, Mobility and
Healthcare. However, and concurrently, in order to draw out the potential of
the Target and achieve sustainable growth even in the midst of dramatic
changes in the external environment, such as the progress of CASE and 5G,
increased competition with competitors in China, South Korea and Taiwan, or
the build-up of business alliances among competitors, the Offerors are aware
that any challenges that the Target is facing or will face in each business
domain must be addressed with sufficient and prompt countermeasures.
Specifically, the major challenges are: (i) regarding the Target's major
businesses of Cresol Derivatives, Biphenol, Electronic Chemicals and Specialty
Bisphenols, while demand therefor is expected to increase on a stable basis,
the capital expenditures to increase timely and competitive production power
in accordance with market growth, and the acquisition of additional personnel
and know-how for such purpose; (ii) regarding the mobility specialty
bisphenols business of Hi-Bis, the implementation of countermeasures against
lower demand and slowdown in growth as a result of a weaker global automobile
markets; and (iii) regarding the whole Target Group, the acceleration of
strengthening of product development abilities and production technologies and
the build-up of new profit platforms in order to win over competitors.

(Note 18) "CASE" stands for Connected, Autonomous/Automated, Shared &
Service, and Electric.

(Note 19) "AI" is an acronym for Artificial Intelligence, a technology that
"aims to make a high level of inference accurately for a large amount of
knowledge data (Prospectus of The Japanese Society for Artificial
Intelligence)."

(Note 20) "Digital transformation" means any transformation of products,
services and business models by companies based on customer needs and social
needs in order to respond to rapid changes in business environment and by
using data and digital technology, and any transformation of business,
organization, process, corporate culture and features in order to gain
competitive advantages over other competitors.

(Note 21) "Monomer" means a small molecule comprising polymers (e.g.
ethylene).

The Offerors have been seeking to build alliances regarding individual
businesses and products with the Target. However, there are certain
restrictions in efficient and aggressive investments of business resources in
the Target, and mutual use of business resources and personnel exchange among
the Offerors and the Target pursuant to the limited capital relationship in
which the Target remains as an equity method affiliate of each Offeror. In
addition, even if any support from the Offerors for the challenges stated in
(i), (ii) and (iii) above is beneficial for the Target, the Offerors are
forced to be cautious when considering whether such support should be provided
if the question of whether such support is beneficial for the Offerors
themselves remains unclear. Also, if there are any conflicts of interest
between the Offerors and the Target's minority shareholders, it is difficult
for the Target to completely match the interests of the Offerors and those of
the Target's minority shareholders. Therefore, the Offerors must carefully
consider, on a case-by-case basis, measures to avoid conflicts of interest
whenever any measures to deal with the challenges listed in (i), (ii) or (iii)
are implemented or any transactions between the Target and the Offerors are
conducted. As a result, prompt decision-making and implementation of measures
are difficult.

Under such circumstances, since both the Mitsui Chemicals Group that deems ICT
as a domain of growth in terms of business strategy and the Mitsui & Co.
Group that seeks to increase the profitability of the high-performance monomer
business as part of existing business growth based on the basic strategy of
the Chemicals segment regard the Target as a strategic investment target given
its deemed high potential for growth in the ICT business domain and the
high-performance monomer business, the Offerors have intermittently engaged in
discussions with the Target since late August 2019 in order to resolve the
abovementioned challenge of the inability of the Offerors and the Target to
build sufficient alliances. Because the requirements of fairness and
transparency in the corporate governance of listed subsidiaries are becoming
more stringent based on the "Group Governance System Guidelines" that were
issued by the Ministry of Economy, Trade and Industry on June 28, 2019, the
management supervision of the Offerors and the Target having a relationship
similar to a parent and subsidiary of listed companies is also expected to be
more demanding. This means that upon the decision-making of the Target,
certain procedures to resolve any structural conflicts of interest between the
Offerors and the Target's minority shareholders will be more time-consuming
than ever, and thus, may hinder the progress of further alliance with the
Target. Accordingly, each of the Offerors was aware that the review and
revision of the capital relationships between the Offerors and the Target was
one of the challenges. As such, Mitsui & Co. repeatedly discussed the
Target in its efforts to maximize the corporate value of associated companies
within the Mitsui & Co. Group, and the Offerors jointly commenced to
specifically consider privatizing the Target when the Mitsui & Co. Group
proposed privatizing the Target to Mitsui Chemicals, which had continued to
keep the same investment ratio in the Target since 1987 in early October 2019.
Mitsui & Co. is a general trading company and has limited capacity to
solely offer support relating to the strengthening of research and development
and production technology that are required for further growth of the Target.
Therefore, Mitsui & Co. does not intend to act alone to privatize the
Target. In addition, Mitsui Chemicals believes that distribution networks in
and outside Japan held by Mitsui & Co. as a general trading company are
essential for the operation of the Target. Therefore, Mitsui Chemicals does
not intend to act alone to privatize the Target. After such consideration, in
late January 2020, the Offerors decided that in order to facilitate prompt
decision-making of the Target and to attain more efficient and aggressive
investment and mutual utilization of business resources, the conflicts of
interest with the Target's minority shareholders must be resolved. In
addition, if the Offerors become the sole shareholders of the Target through
the Transaction, and the trinity management system is adopted through
strengthened capital relationships: (i) the Offerors will be able to maximize
the use of the Mitsui Chemicals Group's organic synthesis technology and
development skills of polymer materials, as well as the Mitsui & Co.
Group's integrated capabilities and networks in and outside Japan with global
customers and partners, and will be able to support the Target more
aggressively by the improvement of technical skills through personnel and
information exchanges, joint research and development, joint procurement of
raw materials and materials, optimization of logistics, and reinforcement of
sales and marketing; and (ii) the Target will be able to resolve its lack of
personnel, technical skills and functions through the abovementioned support
from the Offerors, and will also be able to actively conduct various measures,
including capital expenditures and M&As, that had been difficult for the
Target itself to conduct given the short-term low performance risk due to
deteriorating financial conditions and temporary cost increase, the stock
price fluctuation risk as a result thereof, and any possible conflicts of
interest with the Target's minority shareholders. Therefore, the Offerors
decided that in the end, the abovementioned challenge of the inability of the
Offerors and the Target to build sufficient alliances will be resolved and the
corporate value of the Target as well as the corporate value of the Mitsui
Chemicals Group and the Mitsui & Co. Group will also increase. After
subsequent discussions, in early April 2020, the Offerors decided to make the
Target a consolidated subsidiary of Mitsui Chemicals with Mitsui Chemicals
investing 51% in the Target and Mitsui & Co. investing 49% in the Target
and privatize the Target, in order to enable Mitsui Chemicals to aggressively
invest the business resources of research and development and production
technologies to the Target. Specifically, the Offerors believe that planning
and implementing medium and long-term measures including those stated in (i)
through (iii) below will further enhance the corporate value of the Target.
Although implementation of these measures are crucial in terms of medium and
long-term growth of the Target, it is likely that there would be a need to
readily conduct any prior investments that do not directly or necessarily
maximize the Target's short-term profits or any efforts that accrue temporary
cost increases, and there is also a risk of a decrease in the stock price due
to a temporary drop in revenue. Therefore, the Offerors believe that providing
a reasonable opportunity to sell shares without imposing the risk on the
Target's minority shareholders meets the interests of all minority
shareholders of the Target.

(i) Strengthening of existing businesses and products

Existing businesses and products will be strengthened from various angles.
This includes the use of customer networks, supply chains and technical bases
of the Offerors to increase distributors of the existing products and to
execute long-term contracts with customers, the reinforcement of production
capacity for biphenol and optical specialty bisphenol, and the development of
purposes of use for specialty bisphenols business of Hi-Bis. In addition,
although the ICT-related businesses developed by the Target and the Mitsui
Chemicals Group respectively were similar in nature, specific alliances have
hardly been formed between the two parties although the possibilities were
considered because there was an issue with conflicts of interest with the
minority shareholders and there were certain restrictions in efficient and
aggressive investments and mutual utilization of business resources under the
limited capital relationship of an equity method affiliate. When the Target
becomes a consolidated subsidiary of Mitsui Chemicals through the Transaction,
this will enable aggressive and mutual utilization of business resources, and
offerings to customers will be expanded by intensified material designs and
combination of materials. Accordingly, the Offerors believe that this will
enable the group as a whole to make higher value-added offerings to customers.

(ii) Creation of new businesses and products

Based on the unique technical capabilities of the Target to promptly and
stably produce high-quality new products in the high-performance monomer
business domain related to ICT, Mobility and Healthcare that have been
cultivated since its foundation, and by making the Offerors as the sole
shareholders of the Target through the Transaction, more efficient and
aggressive investment and mutual utilization of business resources, which were
difficult considering the issue of possible conflicts of interest with
minority shareholders under the current limited capital relationships, are
possible. The investment and mutual utilization specifically refer to the
aggressive utilization of a wide range of research and development and
production technology base such as polymers and catalytic technologies built
by the Mitsui Chemicals Group as a general chemical manufacturer, as well as
the consolidation of marketing and solution proposal capacities using the
global network of the Mitsui & Co. Group as a general trading company. The
Offerors also believe that expansion of product lineups and entry into new
business domains are possible. Furthermore, advanced technologies including AI
and materials informatics that are being adopted by the Offerors will also be
introduced. Specifically, the Offerors are contemplating development of new
monomers for which demand is increasing in ICT-related markets, joint
development using organic synthesis, polymers, simulation and materials
informatics technologies and research and development supports.

(iii) Personnel development and development of basis for sustainable
development

Personnel development will be conducted to win global competition through
joint use of personnel development platforms and programs held by the Offerors
and exchange of personnel and technology, and also to respond to social
requirements on ESG and to seek to strengthen the sustainable business base by
the alliance of three (3) parties.

Pursuant to such recognition, the Offerors began to specifically consider the
Transactions from early October 2019 as mentioned above. In early March 2020,
Mitsui Chemicals appointed Mori Hamada & Matsumoto as its legal advisor,
and in early April 2020, appointed SMBC Nikko Securities Inc. ("SMBC Nikko
Securities") as its financial advisor and third-party valuator independent
from the Offerors and the Target. In early March 2020, Mitsui & Co.
appointed Anderson Mori & Tomotsune as its legal advisor, and in early
April 2020 (In January 2021, Anderson Mori & Tomotsune changed its firm
name in Japanese, but its English firm name remains the same.), appointed
Nomura Securities Co., Ltd. ("Nomura Securities") as its financial advisor and
third-party valuator independent from the Offerors and the Target. In late May
2020, the Offerors jointly submitted an initial proposal regarding the
Transaction to the Target. Subsequently, the Offerors conducted due diligence
on the Target during the period from mid-July 2020 to mid-September 2020. From
early July 2020 onwards, the Offerors repeatedly and fully discussed and
negotiated with the Target regarding the management system and business policy
after the Transaction, the terms and conditions of the Transaction and other
related matters. Specifically, Mitsui Chemicals and the Target discussed the
synergies on July 28, 2020, and the Offerors and the Target again discussed
the synergies on August 24, 2020. On September 4, 2020, the Offerors received
a request for the Transaction from the Target that included matters related to
the governance system and business operation system after the Transaction
("Request Dated September 4, 2020"). Subsequently, the Offerors and the Target
discussed the synergies on September 16 and September 18, 2020, and on
September 23, 2020, the Offerors and the Target discussed the Request Dated
September 4, 2020 received from the Target. On September 30, 2020, the
Offerors submitted their answer to the Request Dated September 4, 2020 to the
Target. Also on that date, Mitsui & Co. submitted an answer regarding the
synergies to the Target, and Mitsui Chemicals submitted an answer regarding
the synergies to the Target on October 6, 2020. In response to an additional
request from the Target as of October 9, 2020 ("Request Dated October 9,
2020"), the Offerors submitted an answer thereto on October 12, 2020. In
response to a further request from the Target as of October 16, 2020 ("Request
Dated October 16, 2020"), the Offerors submitted an answer thereto to the
Target on October 26, 2020. With regards to the price of tender offer in the
Tender Offer (the "Tender Offer Price"), the Offerors proposed the Tender
Offer Price as 1,550 yen per share to the Target on October 9, 2020. After a
request was made by the Target to reconsider the Tender Offer Price because it
failed to satisfy the level sought by the Target on October 12, 2020, the
Offerors and the Target discussed and negotiated the terms and conditions of
the Transaction and on October 19, 2020, the Tender Offer Price was
re-proposed as 1,760 yen per share. After the Target requested that the
Offerors reconsider the Tender Offer Price on October 23, 2020 because the
proposed Tender Offer Price did not fully reflect the corporate value of the
Target, the Offerors proposed the Tender Offer Price as 1,800 yen per share on
October 26, 2020. On the same date, the Target again requested reconsideration
of the Tender Offer Price due to the same reason. In response, the Offerors
proposed the Tender Offer Price as 1,830 yen per share on November 5, 2020,
and the Offerors and the Target have continued to discuss and negotiate the
Tender Offer Price thereafter.

As a result of these discussions and negotiations, the Offerors and the Target
agreed in early November 2020 that in order to adapt to the recent severe
business environment as a result of diversification and intensification of
customer needs, and for the Target to attain growth strategies with a sense of
speed ahead of other competitors, the best ways to enhance the corporate value
of the Target was to implement each of the abovementioned measures after
privatizing the Target and making the Offerors become the Target's sole
shareholders, through which the Offerors may jointly and more flexibly invest
various business resources, and to transfer to a system where medium and
long-term strategies/policies decisions and flexible management decisions are
made. On November 6, 2020, the Target informed the Offerors that the Tender
Offer Price of 1,830 yen per share was acceptable. Accordingly, it was decided
that the Offerors would enter into the Joint Tender Offer Agreement as of
November 11, 2020, and, because the procedures and actions required by
antitrust laws in Japan, the EU, China, Taiwan and Turkey are expected to take
a certain period of time, that if the Conditions, including completion of
those procedures, are satisfied (or waived by the Offerors), the Offerors
would jointly implement the Tender Offer for all the Target's Shares as part
of the Transaction.

On May 5, 2021 (local time), the European Commission issued a document stating
its decision to approve the Acquisition, and the Offerors received this
document on May 5, 2021. The Offerors, having confirmed that all of the
Conditions had been satisfied by confirming that the Acquisition was approved
on the same date, decided on May 14, 2021 to commence the Tender Offer from
May 17, 2021.

(II) Management policy after the Tender Offer

As of the date of this Press Release, the board of directors of the Target
consists of nine (9) members, and its board of auditors consists of four (4)
members. The Offerors plan to newly nominate an individual to be appointed as
director(s) of the Target for the purpose of building a better business
structure for efficient implementation of each measure stated in "(I)
Background and purposes of the Tender Offer and decision-making process
leading to the consummation of the Tender Offer" above. Specifically, the
Offerors agreed pursuant to the shareholders agreement (the "Shareholders
Agreement") entered into as of November 11, 2020, that after the completion of
the Transaction: (i) the number of directors of the Target will be no more
than seven (7), the Offerors are entitled to appoint three (3) directors each
and one director from the Target may be appointed by respecting the opinion of
the representative directors of the Target; and (ii) the number of
representative directors of the Target will be two (2) and Mitsui Chemicals is
entitled to appoint the President and Representative Director and Mitsui &
Co. is entitled to appoint the Vice President and Representative Director.
Each Offeror intends to consider and nominate the personnel who is most
capable at the time to maximize the corporate value regardless of his/her
department or position as the representative director of the Target. Moreover,
the Offerors agreed under the Shareholders Agreement that after the completion
of the Transaction: (iii) the Target's Audit & Supervisory Board shall be
abolished and shall have three (3) auditors, the Target is entitled to appoint
one (1) full-time auditor and the Offerors are entitled to appoint one (1)
part-time auditor each; and (iv) the Offerors shall establish a shareholder
steering committee for the operation of the Target, and its members will be
the responsible persons of the Offerors and the persons appointed by the
Offerors.

For an overview of the Shareholders Agreement, see "(I) Shareholders
Agreement" under "(6) Matters concerning material agreements regarding the
Tender Offer" below.

Furthermore, as announced by the Target in its "Notice Concerning Change of
Officers" dated May 14, 2021, Mr. Yoshinori Ashida, Target's auditor, is
scheduled to resign from office at the closing of the 92nd annual general
meeting of shareholders to be held on June 24, 2021 as his term of office
matured.

In addition, the Offerors responded regarding the management policy of the
Target after the Transaction during discussions with the Target concerning the
Request Dated September 4, 2020 and the Request Dated October 9, 2020.
Specifically, the Offerors responded to the Target that the main management
policies after the Transaction are: (i) consideration of the adoption of a new
executive officer system and transfer of business execution powers to
executive officers in order to establish a framework to enable officers and
employees of the Target to be independently involved in the business execution
even after the Transaction (the transitional period will be subsequently
discussed and determined by the Offerors and the Target); (ii) no adverse
change to employee benefits directly resulting from the Transaction is
expected to be made, and the Offerors believe that the Target's employees may
work with pride and loyalty even after the Transaction; (iii) Mitsui Chemicals
and the Target will assume roles in research and development in accordance
with their specialty, Mitsui Chemicals will offer necessary support to any
research and development that is independently promoted by the Target, and a
cooperative structure will be built in areas mutually deemed to be required;
and (iv) the Offerors will actively promote company-wide efforts to enhance
the Target's corporate value in order to maximize the corporate value of the
Target

The Offerors intend to implement and promote in good faith the matters
provided in response to the Target concerning the relevant Requests.

(III) Decision-making process leading to and grounds for the opinion in favor
of the Tender Offer by the Target

According to the Target's Press Release, as stated in "(I) Background and
purposes of the Tender Offer and decision-making process leading to the
consummation of the Tender Offer" above, the Target received an initial
proposal for the Transaction from the Offerors in late May 2020.

After receiving the proposal, as stated in "(3) Measures to ensure the
fairness of the Tender Offer, such as measures to ensure the fairness of the
Tender Offer Price and measures to avoid conflicts of interest" below, because
(i) the Offerors respectively own 3,098,000 shares of the Target's Shares
(Shareholding Ratio: 26.99%) as of the date of this Press Release and this
Transaction constitutes the acquisition of an equity method affiliate by other
associated companies of the Target that are the Target's major shareholders
and top shareholders, (ii) the Offerors own a total of 6,196,000 shares
(Shareholding Ratio: 53.99%) of the Target's Shares, and therefore are
controlling shareholders of the Target, which could give rise to an issue of
structural conflicts of interest and information asymmetry with general
shareholders in the process of consideration of the Transaction by the Target,
and because (iii) of the total of nine (9) directors of the Target, six (6)
(Messrs. Yuji Fukuyama, Yoshiji Ohori, Hidebumi Kasuga, Katsuya Okano,
Nobuyoshi Ikeda and Takuya Inagaki) were former employees of the Offerors
within the most recent ten (10) years (calculated from the time of receipt of
the proposal), and of the total of four (4) auditors of the Target, one (1)
(Mr. Yoshinori Ashida) was a former employee of Mitsui Chemicals within the
most recent ten (10) years and one (1) (Mr. Masafumi Takenaka) currently is
also an employee of Mitsui Chemicals, the Target established the following
structures for discussions and negotiations for the Transaction to ensure
fairness of the whole process for considerations and decisions made regarding
the necessity of the Transaction and the appropriateness of its terms and
conditions.

On May 31, 2020, the Target appointed Nagashima Ohno & Tsunematsu as its
legal advisor independent from the Offerors and the Target.

While receiving advice from Nagashima Ohno & Tsunematsu, the Target
resolved at its board of directors' meeting on June 2, 2020 to establish a
special committee solely comprised of outside officers of the Target who are
independent from the Offerors and the Target (the "Special Committee") to
exclude arbitrariness of the Target's decision-making concerning the
Transaction, including the Tender Offer, to ensure fairness, transparency and
objectiveness in the decision-making process and to avoid the uncertainty of
conflicts of interest. For details on the composition and the activities of
the Special Committee, see "(III) Establishment of independent special
committee at the Target and procurement of written report from the said
committee" under "(3) Measures to ensure the fairness of the Tender Offer,
such as measures to ensure the fairness of the Tender Offer Price and measures
to avoid conflict of interests" below. One of the four (4) auditors of the
Target, Mr. Masafumi Takenaka, concurrently holds an executive position at
Mitsui Chemicals. In order to exclude any effects arising from the issue of
structural conflicts of interests in the Transaction as much as possible, Mr.
Takenaka did not participate in the discussions of the Target's meeting of the
board of directors regarding the Transaction, including the above Target's
meeting of the board of directors on June 2, 2020, and he also did not
participate in any considerations of the Transaction in a position as the
Target, or any discussions and negotiations with the Offerors concerning the
Transaction.

Furthermore, on June 9, 2020, the Target appointed Deloitte Tohmatsu Financial
Advisory LLC ("Deloitte Tohmatsu Financial Advisory") as its financial advisor
and third-party valuator independent from the Offerors and the Target, and
requested that Deloitte Tohmatsu Financial Advisory evaluate the Target's
Shares as the third-party valuator.

Subsequently, the Target considered the appropriateness of the Transaction
through numerous discussions and considerations with the Offerors based on the
outline of the Tender Offer including the purpose of the Transaction, the
effects on the Target resulting from the Transaction, the details of the
management policy after the Transaction and the current stock price trend, and
also while receiving advice from Nagashima Ohno & Tsunematsu and Deloitte
Tohmatsu Financial Advisory. During the following process of discussions and
considerations, the Target reported to the Special Committee from time to time
and has been handling, pursuant to the handling policies confirmed in advance
by the Special Committee and opinions, instructions and requests given by the
Special Committee upon important negotiation phases.

First, regarding the initial proposal from the Offerors received in late May
2020, while receiving advice from Nagashima Ohno & Tsunematsu and Deloitte
Tohmatsu Financial Advisory, the Target and the Offerors discussed on June 18,
2020 in order to confirm and analyze further details of the proposal.
Thereafter, the Target submitted a questionnaire to the Offerors on June 26,
2020. Based on the answers from the Offerors thereto, since the grounds for
the enhancement of the Target's corporate value were confirmed to a certain
extent, the Target accepted due diligence by the Offerors from July 10, 2020
and continued further discussions and negotiations.

Next, regarding the rationality of the purpose of the Transaction, the Target
repeatedly discussed with the Offerors in order to specifically confirm and
analyze the synergies in the Transaction. The Target and Mitsui Chemicals
discussed the synergies on July 28, 2020, and the Target and the Offerors
again discussed the synergies on August 24, 2020. Subsequently, the Offerors
and the Target discussed the synergies on September 16 and September 18, 2020,
and on September 23, 2020, the Offerors and the Target discussed a request for
the Transaction submitted by the Target on September 4, 2020 ("Request Dated
September 4, 2020"). In the end, the Target received an answer dated September
30, 2020 regarding the synergies from Mitsui & Co., and an answer dated
October 6, 2020 regarding the synergies from Mitsui Chemicals.

The Target also came to acknowledge that it is crucial to ensure the
independence of the management by the Target after the Transaction for the
enhancement of the corporate value of the Target because having a pioneering
spirit has always been the Target's basic policy while it engaged in the
creation of a number of products (first in Japan) using unique technology
since its foundation in 1914. Accordingly, the Target decided that there is a
need to re-confirm and analyze whether independent management by the Target
can be ensured even after the Transaction. During the 5th meeting of the
Special Committee on August 27, 2020, the Offerors explained the rationality
of the purpose of the Transaction, and the Target confirmed and discussed with
the Offerors regarding the issue as to whether the independence of the
management by the Target can be ensured after the Transaction in parallel with
the confirmation and consideration of the synergies mentioned above.
Specifically, the Target and the Offerors discussed and re-confirmed the
management policy, etc. after the Transaction as envisioned by the Offerors on
September 3, 2020. On September 4, 2020, the Target submitted the Request
Dated September 4, 2020 to the Offerors, which included matters related to the
governance system and business operation system after the Transaction.

Subsequently, on October 9, 2020, the Target submitted to the Offerors the
Request Dated October 9, 2020 concerning the answer dated September 30, 2020
received from the Offerors in response to the Request Dated September 4, 2020.
Afterwards, the Target received an answer dated October 12, 2020 from the
Offerors in response to the Request Dated October 9, 2020. On October 16,
2020, the Target submitted the Request Dated October 16, 2020 to the Offerors,
and on October 26, 2020, the Target received an answer thereto from the
Offerors.

Based on the abovementioned discussions with the Offerors and the details of
the abovementioned answers received from the Offerors, the Target decided that
the synergies explained below can be expected and that the independent
management by the Target can be ensured even after the Transaction as stated
in "(II) Management policy after the Tender Offer" above. Consequently, the
Target was able to confirm the rationality of the purpose of the Transaction,
and commenced specific discussions and considerations on the terms and
conditions of the Transaction, including the Tender Offer Price.

The Offerors and the Target commenced to discuss and consider the specific
terms and conditions of the Transaction including the Tender Offer Price, from
early October 2020, and conducted ongoing discussions and negotiations.

Regarding the Tender Offer Price, the Target received an initial proposal from
the Offerors of 1,550 yen per share as the Tender Offer Price on October 9,
2020. Based on the report on tentative share valuation results of the Target's
Shares from Deloitte Tohmatsu Financial Advisory and the opinion of the
Special Committee, and also while receiving advice from Deloitte Tohmatsu
Financial Advisory, the Target requested that the Offerors reconsider the
Tender Offer Price because the Tender Offer Price failed to meet the level
sought by the Target on October 12, 2020. The Target discussed and negotiated
with the Offerors a number of times regarding the terms and conditions of the
Transaction, and the Offerors re-proposed the Tender Offer Price as 1,760 yen
per share on October 19, 2020. After the Target requested that the Offerors
reconsider the Tender Offer Price on October 23, 2020 because the proposed
Tender Offer Price did not fully reflect the corporate value of the Target,
the Offerors re-proposed the Tender Offer Price as 1,800 yen per share on
October 26, 2020. On the same date, the Target again requested reconsideration
of the Tender Offer Price due to the same reason. As a result, the Offerors
proposed the Tender Offer Price as 1,830 yen per share on November 5, 2020.
After receiving the proposal, the Target confirmed its validity with the
Special Committee, and also requested further opinion from Deloitte Tohmatsu
Financial Advisory. The Target carefully considered by also taking into
account the share valuation report procured from Deloitte Tohmatsu Financial
Advisory as of November 10, 2020 ("Share Valuation Report"). As a result, the
Target decided that the relevant proposed Tender Offer Price was appropriate
because a suitable premium was added to the market price, and was reasonable
because it exceeded the median of the price range of the results based on the
discounted cash flow method ("DCF Method") by Deloitte Tohmatsu Financial
Advisory as stated below. As stated herein, the Target has continuously
negotiated with the Offerors regarding the Tender Offer Price.

Furthermore, the Target received necessary legal advice from Nagashima Ohno
& Tsunematsu concerning the method and process of decision-making of the
Target's meeting of the board of directors and other concerns, including
procedures for the Transaction, and received a written report from the Special
Committee as of November 10, 2020 ("November 10, 2020 Written Report") (for
details of the outline of the November 10, 2020 Written Report and the
specific activities of the Special Committee, see "(III) Establishment of
independent special committee at the Target and procurement of written report
from the said committee " under "(3) Measures to ensure the fairness of the
Tender Offer, such as measures to ensure the fairness of the Tender Offer
Price and measures to avoid conflicts of interest"). Based on the legal advice
from Nagashima Ohno & Tsunematsu and the Share Valuation Report procured
from Deloitte Tohmatsu Financial Advisory, and also giving full respect to the
details of the November 10, 2020 Written Report submitted by the Special
Committee, the Target carefully discussed and considered in view of whether
the corporate value of the Target will increase through the Transaction and
whether the interests to be enjoyed by minority shareholders can be ensured by
implementing the Transaction using fair procedures.

The Target Group has built various cooperative relationships on sales to
customers and research and development not only limited to its major
shareholders, the Mitsui Chemicals Group and the Mitsui & Co. Group, and
has gained trust from customers through its continuous efforts in research and
development, production and sales/marketing in order to satisfy customer's
demands based on its customer-first policy and its prompt attainment of goals.
However, the business environment of the Target Group is significantly
affected not only by trends of the fine chemical industry to which the Target
Group belongs, but also by trends of periphery markets. In the automobile
market, medium and long-term trends involve EV and automated driving, and
there is a slowdown in growth due to the current decrease in travel as a
result of the COVID-19 pandemic. In addition, in the IT-related goods market,
competitions to establish de facto standards (Note 1) for various materials
for 5G and ICT high-performance device are gaining speed at an unprecedented
level, and customer needs and market needs of materials are diversifying and
intensifying. As stated above, while the changes in the market environment of
the Target Group are accelerating, and customer needs are diversifying and
intensifying, the Target believes that in order to attain growth strategies
with a sense of speed ahead of other competitors and gain profit therefrom,
the Target must urgently build new products and new business domains and
expand the production system. In order to deal with these matters, the Target
is aggressively engaged in employment of professionals, utilization of
external institutions and increase of open innovation, but there is a limit in
investing significant resources given its current size of business.

(Note 1)"Competitions to establish de facto standards" mean that since
existing standard materials are unable to meet the demand functions in
high-speed and large-capacity cellular market mainly related to 5G where
demands are rapidly increasing, related companies are making efforts to allow
their own standards to be adopted as the new standard materials in order to
ensure their competitive superiority in the relevant market.

Under such circumstances, the Target figured that pursuant to the
customer-first policy, in order to place various cooperative relationships
regarding sales to customers and research and development as a top-priority as
before without impairing such trust, and to satisfy customers' needs with more
speed, it is important to obtain the following business resources through the
Transaction. The Target wishes to attain the Target's sustainable growth for
years to come by gaining more trust from the customers. The Target believes
that the synergies listed in (i) through (iii) below as stated in "(I)
Background and purposes of the Tender Offer and decision-making process
leading to the consummation of the Tender Offer" above are expected as a
result of the Transaction.

(i) Strengthening of existing businesses and products

Existing businesses and products of the Target may be strengthened from
various angles. This includes more possibilities of the use of customer
network, supply chains and technical base of the Offerors to increase
distributors of the existing products and to execute long-term contracts with
customers, the reinforcement of production capacity for biphenol and optical
specialty bisphenol, and the development of purposes of use for specialty
bisphenols business of Hi-Bis.

(ii) Creation of new businesses and products

Based on the unique technical capabilities of the Target to promptly and
stably produce high-quality new products in the high-performance monomer
business domain related to ICT, Mobility and Healthcare that it has been
cultivating since its foundation, the Target believes it can expand and
accelerate the development of new products including existing businesses and
the development of new monomers for which demand is increasing in ICT-related
markets through the aggressive utilization of a wide range of research and
development and production technology base such as polymers and catalytic
technologies built by the Mitsui Chemicals Group as a general chemical
manufacturer, the consolidation of marketing and solution proposal capacities
using the global network of the Mitsui & Co. Group as a general trading
company, as well as the introduction of advanced technologies, including AI
and materials informatics, which are being adopted by the Offerors.

(iii) Personnel development and development of basis for sustainable
development

Personnel development will become possible to be conducted by the Target to
win global competition through joint use of personnel development platforms
and programs held by the Offerors and exchange of personnel and technology,
and also the Target believes it can seek to strengthen a sustainable business
base that responds to social requirements on ESG by the alliance of three (3)
parties.

In addition, the utilization of abundant business resources of the Offerors is
expected to expand the Target's business scale through an increase in the
Target's production volume, expansion of business, expansion or increase of
production sites based on business continuous plan, and prompt and definite
securement of necessary business resources. The Target also believes that
flexible and prompt resolution of challenges that were difficult to be handled
by the Target alone will be possible, and that offering of solutions and new
values to various customers as before will further increase the feasibility of
the Target's long-term vision "HCI 500."

In accordance with the above reasons, the Target concluded in early November
2020 that further alliance with the Offerors through the Transaction including
the Tender Offer is the best option for the enhancement of the corporate value
of the Target.

The Target's board of directors determined that the Transaction, including the
Tender Offer, is expected to enhance the Target's corporate value, the Tender
Offer Price and other terms and conditions of the Tender Offer are appropriate
for all shareholders of the Target, and that the Tender Offer offers
reasonable opportunities to all shareholders of the Target to sell the shares
based on the following facts relating to the Tender Offer Price (1,830 yen):
(i) regarding the share valuation results of the Target's Shares calculated by
Deloitte Tohmatsu Financial Advisory as stated in "(II) Procurement of Share
Valuation Report by the Target from an independent third-party valuator" under
"(3) Measures to ensure the fairness of the Tender Offer, such as measures to
ensure the fairness of the Tender Offer Price and measures to avoid conflicts
of interest," the Tender Offer Price exceeds the maximum of the price range
based on the average market price method, is within the price range based on
the comparable company analysis method and exceeds the median of the price
range based on the DCF Method; (ii) the price accounts for a 41.86% premium
(rounded to the second decimal place; hereinafter the same in calculation of
the premiums (%) over the stock prices) over the closing price (1,290 yen) of
the Target's Shares on the Second Section of the TSE as of November, 10, 2020,
i.e. the business day immediately prior to the date of publication of the
Offerors' November 11, 2020 Press Release, a 43.64% premium over the simple
average closing price (1,274 yen) for the month ending November 10, 2020, a
42.86% premium over the simple average closing price (1,281 yen) for the three
(3) months ending November 10, 2020, a 50.87% premium over the simple average
closing price (1,213 yen) for the six (6) months ending November 10, 2020, and
such premiums stand comparison with premiums adopted in recent transactions
similar to the Transaction; (iii) measures to resolve conflicts of interest
stated in "(3) Measures to ensure the fairness of the Tender Offer, such as
measures to ensure the fairness of the Tender Offer Price and measures to
avoid conflicts of interest" below are adopted and minority shareholders'
interests are taken into consideration; (iv) the Tender Offer Price was
determined after measures to resolve the abovementioned conflicts of interest
were taken and the Target and the Offerors repeatedly discussed and negotiated
(i.e. after good-faith and continuous discussions and negotiations based on
the share valuation results of the Target's Shares prepared by Deloitte
Tohmatsu Financial Advisory, the discussions with the Special Committee and
the legal advice from Nagashima Ohno & Tsunematsu); and (v) effective
increase of the proposed price for the Tender Offer took place at the request
of the Special Committee.

Thus, the Target resolved at its board of directors' meeting held on November
11, 2020, through discussion by all of its nine (9) directors and with
unanimous approval of all of those nine (9) directors that, as the opinion of
the Target as of the same date, the Target will express its opinion to support
the Tender Offer if the Tender Offer is commenced, and recommend that its
shareholders tender their shares in the Tender Offer. Three (3) auditors of
the Target (excluding Mr. Masafumi Takenaka) participated in the above board
of directors' meeting and all participating auditors have given their opinion
that they do not object to the above resolution.

The Target also resolved at the abovementioned meeting of the board of
directors that: (i) upon the commencement of the Tender Offer, the Special
Committee established by the Target shall consider whether changes should be
made to the November 10, 2020 Written Report and shall inform the Target's
board of directors that, if there is no change in its previous opinion, the
fact thereof, or if there is a change in its opinion, the details of such
change; and (ii) the Target shall express its opinion again regarding the
Tender Offer upon the commencement of the Tender Offer based on the opinion of
the Special Committee.

In early March 2021, the Target received contact from the Offerors that if the
procedures and actions required by the antitrust laws of Japan, the EU, China,
Taiwan and Turkey were completed by early May 2021, the Offerors would
commence the Tender Offer on May 17, 2021, and the Target commenced
preparations to again review the various terms of the Tender Offer.
Thereafter, on May 10, 2021, the Target received contact from the Offerors
that they were scheduled to commence the Tender Offer from May 17, 2021 upon
the satisfaction of the Conditions, because the procedures and actions
required by the antitrust laws of Japan, the EU, China, Taiwan and Turkey had
been completed. Having received this contact, on May 11, 2021, the Target
requested that the Special Committee established by the Target review whether
there were any changes to be made on the contents of the November 10, 2020
Written Report, and either (i) advise the Target accordingly if there is no
need to make any such changes thereto; or, (ii) if any changes were necessary,
state an opinion as to why it made those changes. The Special Committee
confirmed with the Target the facts regarding whether there had been any
material change to the circumstances that could affect the Transaction since
November 11, 2020, and conducted review on the above mentioned matters for
which the review was requested, confirmed that there are no reasons for which
the contents of the November 10, 2020 Written Report should be changed even
after taking into account the situation from November 11, 2020 until May 13,
2021, and on May 13, 2021, with a unanimous resolution of the committee
members, submitted to the Target's board of directors the written report dated
May 13, 2021 (the "May 13, 2021 Written Report") stating that the committee
had no changes to its above opinion.

Accordingly, the Target, having again carefully considered various terms
concerning the Tender Offer by taking into account the Target's business
conditions (including the contents of the Target's "Notice Concerning Revision
of Earnings Forecast" published on February 9, 2021 (the "Target's Earnings
Forecast Revision Press Release")) and the environment surrounding the
Transaction while giving maximum respect to the contents of the May 13, 2021
Written Report submitted by the Special Committee, decided that, even as of
May 14, 2021, there were no reasons to change its opinion concerning the
Tender Offer as of November 11, 2020.

Further, at the Target's board of directors meeting held on May 14, 2021, all
of its nine (9) directors held a discussion and all of those nine (9)
directors unanimously resolved to again state the board’s opinion in favor
of the Tender Offer and to recommend that the Target's shareholders tender
their shares in the Tender Offer. Three (3) auditors of the Target (excluding
Mr. Masafumi Takenaka) participated in the above board of directors meeting
and stated their opinion that they had no objection to the above resolution.

For details of the resolution of each of the Target's meeting of the board of
directors held on November 11, 2020 and May 14, 2021, see "(V) Unanimous
approval of all disinterested directors of the Target and the opinion of all
auditors that they have no objection" under "(3) Measures to ensure the
fairness of the Tender Offer, such as measures to ensure the fairness of the
Tender Offer Price and measures to avoid conflicts of interest."

(3) Measures to ensure the fairness of the Tender Offer, such as measures to
ensure the fairness of the Tender Offer Price and measures to avoid conflict
of interests

As of the date of this Press Release, the Target is not a consolidated
subsidiary of the Offerors, and the Tender Offer does not constitute a tender
offer by the controlling shareholder. However, because: (i) the Offerors
respectively own 3,098,000 shares of the Target's Shares (Shareholding Ratio:
26.99%) as of the date of this Press Release, and this Transaction constitutes
the acquisition of an equity method affiliate by other associated companies of
the Target that are the Target's major shareholders and top shareholders; (ii)
the Offerors own a total of 6,196,000 shares (Shareholding Ratio: 53.99%) of
the Target's Shares, and therefore are equivalent to controlling shareholders
of the Target, which could give rise to an issue of structural conflicts of
interest and information asymmetry with general shareholders in the process of
consideration of the Transaction by the Target; and (iii) of the total of nine
(9) directors of the Target, six (6) (Messrs. Yuji Fukuyama, Yoshiji Ohori,
Hidebumi Kasuga, Katsuya Okano, Nobuyoshi Ikeda, and Takuya Inagaki) were
former employees of the Offerors within the most recent ten (10) years, and of
the total of four (4) auditors of the Target, one (1) (Mr. Yoshinori Ashida)
was a former employee of Mitsui Chemicals within the most recent ten (10)
years and one (1) (Mr. Masafumi Takenaka) currently is also an employee of
Mitsui Chemicals, the Offerors and the Target implemented measures below in
(I) to (VI) to ensure fairness of the Tender Offer from the stage of the
Tender Offer, eliminate arbitrariness in decision-making concerning this
Transaction, and to ensure fairness, transparency, and objectiveness in the
decision-making process, and to avoid doubts of conflicts of interest. Among
the descriptions below, the descriptions of the measures implemented by the
Target are based on explanation received from the Target.

Furthermore, as of the date of this Press Release, the Offerors decided that
because the Offerors own a total of 6,196,000 shares (Shareholding Ratio:
53.99%) of the Target's Shares, that if the minimum of the so-called "Majority
of Minority" is set, the establishment of the Tender Offer would be rather
destabilized, which in turn might not serve the interests of minority
shareholders who wish to tender in the Tender Offer, and, therefore, no
minimum of the so-called "Majority of Minority" was set in this Tender Offer.
However, because the Offerors and the Target assumed the measures below in (I)
through (VI), the Offerors and the Target believe that due consideration was
given to the interests of the Target's minority shareholders.

(I) Procurement of a Share Valuation Report from an independent third-party
valuator retained by the Offerors

In order to ensure fairness of the Tender Offer Price, Mitsui Chemicals
retained SMBC Nikko Securities, Mitsui Chemicals' financial advisor, to serve
as a third- party valuator independent from the Offerors and the Target to
calculate the share value of the Target's Shares in order to determine the
Tender Offer Price. For details on the share valuation report concerning the
share value of the Target's Shares (the "Share Valuation Report (SMBC Nikko
Securities)") procured by Mitsui Chemicals from SMBC Nikko Securities, see
"(I) Basis of calculation" under "(4) Basis of calculation of the price of
tender offer" under "2. Summary of tender offer" below.

In order to ensure fairness of the Tender Offer Price, Mitsui & Co.
retained Nomura Securities, Mitsui & Co.'s financial advisor, to serve as
a third-party valuator independent from the Offerors and the Target to
calculate the share value of the Target's Shares in order to determine the
Tender Offer Price. For details on the share valuation report concerning the
share value of the Target's Shares (the "Share Valuation Report (Nomura
Securities)") procured by Mitsui & Co. from Nomura Securities, see "(I)
Basis of calculation" under "(4) Basis of calculation of the price of tender
offer" under "2. Summary of tender offer" below.

(II) Procurement of Share Valuation Report by the Target from an independent
third-party valuator

The Target, in expressing its opinion concerning the Tender Offer, retained
Deloitte Tohmatsu Financial Advisory as its third-party valuator independent
from the Target and the Offerors to calculate the share value of the Target's
Shares, and procured the Share Valuation Report on November 10, 2020. Deloitte
Tohmatsu Financial Advisory is not a related party of the Target and the
Offerors and has no material interests in the Tender Offer. Deloitte Tohmatsu
Financial Advisory will be paid a fixed fee regardless of whether the
Transaction is completed and also a performance fee payable on condition that
the Transaction is completed. The Target appointed Deloitte Tohmatsu Financial
Advisory as its financial advisor and third-party valuator based on the above
fee arrangement by also taking into account general practices in the same kind
of transactions. The Target has not obtained from Deloitte Tohmatsu Financial
Advisory an opinion concerning fairness of the Tender Offer Price (fairness
opinion).

Deloitte Tohmatsu Financial Advisory considered multiple calculation methods
to apply in calculating the share value of the Target's Shares. On the
assumption that the Target is a going concern, and that multifaceted valuation
of the Target's Shares is appropriate, Deloitte Tohmatsu Financial Advisory
decided to apply: (i) the average market price method given that the Target's
Shares are listed on the Second Section of the TSE and thus the market price
thereof is available; (ii) the comparable company analysis method given that
there are multiple listed companies that are engaged in business relatively
similar to the Target's business, and the availability of an analogy of the
share value thereof by comparison with companies that are determined to be
engaged in business similar to the business of the Target; and (iii) the DCF
Method to reflect the future business activities of the Target in valuation,
in calculating the per share value of the Target's Shares. The share price
range per share of the Target's Shares as calculated by each of the above
methods is as follows.
 Average market price method:         From 1,213 yen to 1,290 yen  
 Comparable company analysis method:  From 1,713 yen to 2,322 yen  
 DCF Method:                          From 1,654 yen to 2,043 yen  


Pursuant to the average market price method, as of the reference date of
calculation on November 10, 2020, the share value range per share of the
Target's Shares was calculated to be 1,213 yen to 1,290 yen, based on the
closing price of 1,290 yen of the Target's Shares on the Second Section of the
TSE, the simple average closing price of 1,274 yen for the recent one month,
the simple average closing price of 1,281 yen for the most recent three (3)
months, and the simple average closing price of 1,213 yen for the most recent
six (6) months.

Pursuant to the comparable company analysis method, the listed companies that
are judged to be engaged in business similar to the business of the Target and
therefore comparable with the Target were chosen for comparison, and the share
value of the Target's Shares was calculated by using the EBITDA ratio against
the enterprise value. For this purpose, ADEKA Corporation, Sumitomo Bakelite
Company Limited, Osaka Organic Chemical Industry Ltd., Taoka Chemical Company,
Limited, Hokko Chemical Industry Co., Ltd., and Koei Chemical Company, Limited
were chosen as the listed companies that were judged to be engaged in business
similar to the business of the Target. As a result, the share value range per
share of the Target's Shares was calculated to be 1,713 yen to 2,322 yen.

Pursuant to the DCF Method, the Target's enterprise value and share value were
calculated by using various elements such as the business plan from its Fiscal
Year ending March 2021 to its Fiscal Year ending March 2024 prepared by the
Target and information disclosed by it to the public, and by discounting by a
certain rate to the present value the free cash flow projected to be generated
by the Target on and after the third quarter of its Fiscal Year ending in
March 2021. At this time, the discount rate of 9.20% to 10.20% was applied. In
calculating the going-concern value, perpetual growth rate method was used and
the perpetual growth rate of 0.70% to 1.70% was applied. As a result, the
share value range per share of the Target's Shares was calculated to be 1,654
yen to 2,043 yen.

The concrete figures for the Target's financial forecast that Deloitte
Tohmatsu Financial Advisory used as the basis for the calculation pursuant to
the DCF Method are as follows. Deloitte Tohmatsu Financial Advisory does not
project significant increase or decrease in profits in comparison with the
previous years. Also, because the synergistic effects that could be expected
by executing the Transaction, including the Tender Offer, were difficult to
estimate as of the time of making the calculation, Deloitte Tohmatsu Financial
Advisory did not take these into account in its financial forecasts. The
Offerors were informed that these financial forecasts were analyzed and
reviewed through several sessions of questions and answers conducted by
Deloitte Tohmatsu Financial Advisory with the Target.

(Unit: million yen)
                   March 2021   March 2022  March 2023  March 2024  
                   
                                                
                   (6 months)                                       
 Net sales         10,673       24,227      27,691      29,557      
 Operating income  730          3,088       3,468       4,274       
 EBITDA            1,477        4,896       5,839       6,927       
 Free cash flow    (757)        (1,802)     (1,562)     3,998       


(Note 1) EBITDA is calculated by adding depreciation to operating income, and
free cash flow is calculated based on the EBITDA.

(Note 2) Deloitte Tohmatsu Financial Advisory, in principle, straightforwardly
used information received from the Target and information publicly disclosed
by it, etc. in calculating the share value of the Target's Shares and did not
independently verify their accuracy and completeness, on the basis that all
such materials and information are accurate and complete and that there are no
facts that were not disclosed to Deloitte Tohmatsu Financial Advisory that may
materially affect the calculation of the share value of the Target's Shares.
In addition, as for the information concerning the Target's financial
forecast, it was assumed that such information was reasonably prepared based
on the best estimate and judgment that could be made by the Target's
management as of the time of making the calculation. Furthermore, Deloitte
Tohmatsu Financial Advisory did not independently evaluate and assess, or
retain a third party firm to appraise or assess, the Target and its
affiliates' assets and liabilities (including financial derivative products,
off-book assets and liabilities, and other contingent liabilities). The
calculation of Deloitte Tohmatsu Financial Advisory is said to reflect the
above information through November 10, 2020. Furthermore, the calculation of
Deloitte Tohmatsu Financial Advisory is solely for the purpose of reference
for the Target's board of directors in reviewing the share value of the
Target's Shares.

The Target's board of directors believes that there were no significant
changes to the facts that are the preconditions for the Share Valuation
Report, that would affect this report, even if taking into account the
Target's circumstances from the time of its board of directors meeting held on
November 11, 2020 until May 14, 2021 (including the contents of the Target's
Earnings Forecast Revision Press Release) and it believes that this report is
still effective as advised by Deloitte Tohmatsu Financial Advisory and
Nagashima Ohno & Tsunematsu.

(III) Establishment of independent special committee at the Target and
procurement of written report from the said committee

As indicated above in "(III) Decision-making process leading to and grounds
for the opinion in favor of the Tender Offer by the Target" under "(2)
Background and purposes of the Tender Offer and decision-making process
leading to the consummation of the Tender Offer and management policy after
the Tender Offer," the Target established the Special Committee by resolution
of its board of directors at the meeting of the board of directors held on
June 2, 2020. Before establishment of the Special Committee, the Target, in
late May 2020, directly after receiving an initial proposal for the
Transaction from the Offerors, for the purpose of establishing a system to
review, negotiate, and make a judgment concerning the Transaction from the
perspective of enhancing the Target's enterprise value and protecting the
interests of general shareholders of the Target from an independent standpoint
from the Offerors, explained to Ms. Akiko Kurokochi, Outside Director and
Independent Director of the Target who has extensive experience and knowledge
as a lawyer, that the Target received an initial proposal for the Transaction
from the Offerors, and that it is necessary to establish the above system
because the Transaction may give rise to issues of structural conflicts of
interest and information asymmetry with general shareholders. The Target, with
guidance from Ms. Akiko Kurokochi, explained to Mr. Masayoshi Mochizuki, the
Target's former Outside Director and Independent Director, and Mr. Norihisa
Nakano, the Target's Outside Auditor and Independent Officer, that the Target
received an initial proposal for the Transaction from the Offerors, and that a
system to review, negotiate, and make a judgment concerning the Transaction
must be established from the perspective of enhancing the Target's enterprise
value and protecting the interests of general shareholders of the Target from
an independent standpoint from the Offerors. The Target then held discussions
with all three (3) independent officers of the Target on how to proceed with
the Transaction such as establishing the Special Committee, and with the
advice from Nagashima Ohno & Tsunematsu, nominated three persons, Ms.
Akiko Kurokochi (Outside Director and Independent Director of the Target,
Representative of Kashiwagi Sogo Law Offices), Mr. Masayoshi Mochizuki
(Target's former Outside Director and Independent Director, Representative of
Certified Public Accountant and Tax Accountant Masayoshi Mochizuki Offices)
and Mr. Norihisa Nakano (Target's Outside Auditor and Independent Officer,
Representative of Nakano Certified Public Accountant and Tax Accountant
Offices), as candidate members of the Special Committee.

Accordingly, the Target's board of directors established the Special Committee
on June 2, 2020 comprised of Ms. Akiko Kurokochi (Outside Director and
Independent Director of the Target, Representative of Kashiwagi Sogo Law
Offices), Mr. Masayoshi Mochizuki (Target's former Outside Director and
Independent Director, Representative of Certified Public Accountant and Tax
Accountant Masayoshi Mochizuki Offices) and Mr. Norihisa Nakano (Target's
Outside Auditor and Independent Officer, Representative of Nakano Certified
Public Accountant and Tax Accountant Offices) as the committee members for the
purpose of eliminating arbitrariness in the Target's decision-making
concerning the Transaction (including the Target's board of directors to make
a decision to support the Tender Offer and recommend the Target's shareholders
to tender in the Tender Offer, and to consolidate the Target's Shares after
the Tender Offer is completed (the "Share Consolidation")), ensuring fairness,
transparency, and objectiveness in the decision-making process, and avoiding
doubts relating to conflicts of interests, and requested that the Special
Committee provide advice on the below matters ("Items for Advice") and submit
a written report on the Items for Advice.


 1. whether the purpose of the Transaction is reasonable (including whether the
Transaction will contribute to the enhancement of enterprise value);

 2. whether the terms of the Transaction (including the Tender Offer Price) are
appropriate from the point of view of protecting the interests of the Target's
minority shareholders;

 3. whether due consideration was given to protecting the interests of the
Target's minority shareholders through fair procedures of the Transactions;

 4. whether the Target's board of directors should support or object to the Tender
Offer that is the subject of the Transaction under the final terms, and
whether it should recommend that the Target's shareholders tender in the
Tender Offer; and

 5. whether the Transaction (including the Target's opinion concerning the Tender
Offer) is disadvantageous to the Target's minority shareholders.

The Target, at its board of directors meeting described above, made a
resolution with respect to the decision concerning the Tender Offer by the
Target's board of directors, that it would fully respect the judgment of the
Special Committee, including the Special Committee's views on its support or
objection to the Tender Offer and recommendation to tender in the Tender
Offer, and in particular, that if the Special Committee determines that the
purpose of the Transaction or the terms and conditions of the Transaction are
inappropriate, the Target will not support the Tender Offer and will not
recommend to tender in the Tender Offer. It was also resolved to grant to the
Special Committee the (a) authority to negotiate the terms and conditions of
the Transaction, (b) authority to approve the advisors chosen by the Target
(financial advisor and legal advisor), (c) authority to appoint, if necessary
and at the Target's expense, an advisor (financial advisor, legal advisor, and
other advisor) to solely advise the Special Committee, and authority to seek
professional advice from the Target's advisors (financial advisor and legal
adviser), and (d) authority to acquire information (authority to request the
Target's officers and employees and the Offerors to provide necessary
information).

It was also resolved at the Target's board of directors meeting held on June
24, 2020 with respect to the members of the Special Committee that due to the
resignation of Mr. Masayoshi Mochizuki from the office of the Target's outside
director due to expiration of term as of the closing of the 91st annual
general meeting of shareholders held on June 24, 2020, he should also resign
as a member of the Special Committee on the same day, and Mr. Keiji Kabeya who
was newly appointed as the Target's Outside Director (Outside Director and
Independent Director, Representative of Kabeya Keiji Certified Public
Accountant Offices) at the same general meeting of shareholders would assume
office as member of the Special Committee.

At the Special Committee, Ms. Akiko Kurokochi was elected as the chairman of
the Special Committee through mutual election. Each member of the Special
Committee will be paid consideration for serving on the committee separately
from remuneration as Outside Director and Outside Auditor, in an amount
obtained by multiplying a certain hourly rate by the number of hours spent on
the committee work. Such remuneration as a member of the Special Committee
does not include a performance fee conditional on announcement or completion
of the Transaction.

The Special Committee held a total of 18 meetings from June 9, 2020 until
November 10, 2020, and it also held discussions and conducted reviews as
necessary inside the committee on the Items for Advice.

Specifically, at the first meeting of the Special Committee, the members
confirmed that the legal advisor retained by the Target, Nagashima Ohno &
Tsunematsu, and the financial advisor retained by the Target, Deloitte
Tohmatsu Financial Advisory, were both professionally qualified and
independent, and both would be approved as the Target's legal advisor and
financial advisor, respectively, and the Special Committee had no objections
to receiving professional advice from these two firms, and if the Special
Committee determined it to be necessary, the Special Committee would, at the
expense of the Target, retain other lawyers, certified public accountants and
other advisors as necessary and seek advice therefrom. The Special Committee
also confirmed that as its policy for involvement in negotiations with the
Offerors, it would conduct direct negotiations through the Target and the
Target's financial advisor, Deloitte Tohmatsu Financial Advisory, as the
liaison, and proposals and other opinions from the Special Committee should be
conveyed to the Offerors in principle through the Target or the Target's
financial advisor, Deloitte Tohmatsu Financial Advisory, and if the Special
Committee requested, the Special Committee shall be authorized to directly
question and discuss with the Offerors, the Special Committee should receive
timely reports from the Target or the Target's financial advisor, Deloitte
Tohmatsu Financial Advisory, on the status of discussions with the Offerors,
the Special Committee would determine the policy for negotiating the terms if
necessary, and may state and opinion thereto, and the Special Committee could
become substantially involved in the process of negotiation concerning the
terms for the Transaction through the above arrangements.

Accordingly, the Special Committee, from and after its second meeting, based
on the materials received from the Target, received explanation from the
Target concerning the contents of the proposal from the Offerors, the purpose
and reason for conducting the Transaction, the effect of the Transaction to
the Target's enterprise value, the Target's requests to the Offerors upon
executing the Transaction, the Target's business plan (including the rationale
and process of formulating the plan), the terms of the Transaction and how
these terms were decided, and held a question and answer session on the
foregoing. The Special Committee received an explanation from Deloitte
Tohmatsu Financial Advisory concerning the calculation of the Target's share
value and held a question and answer session on this issue, and received legal
advice from Nagashima Ohno & Tsunematsu concerning the contents of
measures to ensure fairness of the Transaction and measures to avoid conflicts
of interests and other matters overall related to the Transaction and held a
question and answer session concerning the foregoing. Furthermore, the Special
Committee received an explanation from the Offerors concerning the purpose and
reasons for conducting the Transaction, the Target's management policies after
execution of the Transaction, and views towards various terms of the
Transaction, including the Tender Offer Price, and held a question and answer
session concerning the foregoing. The Special Committee is also receiving
reports from time to time from the Target and Deloitte Tohmatsu Financial
Advisory concerning the system, circumstances, and contents of discussions and
negotiation on the Transaction between the Offerors and the Target and are
discussing on those contents.

The Special Committee determined with respect to the fact that the Offerors
expect a so-called indirect market check (Note 1) that, while the purchase
period for the Tender Offer (the "Tender Offer Period") is set to twenty (20)
business days, which is the statutory minimum period, there is a long period
of time from the date of publication of the Offerors' November 11, 2020 Press
Release to the actual commencement of the Tender Offer, and it could therefore
be said that a relatively long period of time is ensured after the
announcement, and that no agreement will be executed that restricts
competitive potential purchasers from contacting the Target, such as an
agreement, etc. that contains a provision to protect the transaction by
prohibiting the Target from contacting competitive potential purchasers, an
indirect market check is properly functioning and fairness of the Transaction
is not undermined.

(Note 1) An “indirect market check” is a term used in the “Fair M&A
Guidelines: Enhancing Corporate Value and Securing Shareholders’
Interests” dated June 28, 2019 by the Ministry of Economy, Trade and
Industry meaning an arrangement to conduct M&A by announcing the M&A
and creating an environment to allow other potential purchasers to make
competitive proposals after the announcement.

Furthermore, after the Target received a proposal from the Offerors on October
9, 2020 that the Tender Offer Price would be set at 1,550 yen per share, the
Special Committee received a report from time to time on the circumstances and
contents of discussion and negotiation for the Transaction between the Target
and the Offerors, and discussed how to proceed. On October 19, 2020, the
Offerors proposed a Tender Offer Price of 1,760 yen per share, and on October
26, 2020, the Offerors proposed a Tender Offer Price of 1,800 yen per share,
and based on advice from Deloitte Tohmatsu Financial Advisory from a financial
perspective that includes analysis of the premium in a recent case that is
similar to the Transaction, the Special Committee discussed and reviewed the
proposed price and requested the Offerors to raise the Tender Offer Price,
thereby involving itself in the process of negotiation with the Offerors. As a
result, on November 5, 2020, the Target accepted the proposal from the
Offerors to set the Tender Offer Price at 1,830 yen per share.

The Special Committee received an explanation on the Target's draft November
11, 2020 Press Release, and, having received advice from Nagashima Ohno &
Tsunematsu, confirmed that detailed informative disclosure would be made
concerning the Transaction.

Accordingly, the Special Committee, after carefully and repeatedly discussing
and reviewing the Items for Advice, by unanimous resolution, submitted its
November 10, 2020 Written Report substantially as described below on the Items
for Advice to the Target's board of directors on November 10, 2020.

(i) whether the purpose of the Transaction is reasonable (including whether
the Transaction will contribute to enhancement of enterprise value):

(a) The Offerors' explanation of the purposes of the Transaction, the
synergies of the Transaction, and the management policy after the Transaction
are, in summary, as indicated above in "(I) Background and purposes of the
Tender Offer and decision-making process leading to the consummation of the
Tender Offer" and "(II) Management policy after the Tender Offer" under "(2)
Background and purposes of the Tender Offer and decision-making process
leading to the consummation of the Tender Offer and management policy after
the Tender Offer." However, the Target's view of the purposes of the
Transaction and synergies of the Transaction are, in summary, as indicated
above in "(III) Decision-making process leading to and grounds for the opinion
in favor of the Tender Offer by the Target" under "(2) Background and purposes
of the Tender Offer and decision-making process leading to the consummation of
the Tender Offer and management policy after the Tender Offer."

(b) (Concerning the purposes of the Transaction) The Target and the Offerors'
views on the present state of the business environment surrounding the Target
and the Target's managerial issues are consistent with the contents of the
general explanation given concerning the Target's current business content and
the market environment and the contents of the explanation and the contents of
the materials provided from the Target, and the Special Committee has no
objections. The purposes of the Transaction are understood to be: (i) whereas
in a closed capital relationship of an equity method affiliate, there are
issues of conflicts of interests with minority shareholders and restrictions
on efficient and proactive introduction and mutual use of managerial
resources, the above issues and restrictions could be resolved by making the
Offerors the sole shareholders of the Target through the Transaction, by
achieving transition to a trinity management system with a more solid capital
relationship, and (ii) to enhance the Target's enterprise value by creating
synergy as indicated above in "(III) Decision-making process leading to and
grounds for the opinion in favor of the Tender Offer by the Target" under "(2)
Background and purposes of the Tender Offer and decision-making process
leading to the consummation of the Tender Offer and management policy after
the Tender Offer." Therefore, the purposes of the Transaction are reasonable.

(c) (Concerning synergy) The Target and Offerors' explanations concerning
synergy of the Transaction are not unreasonable and they gave a concrete
explanation of the basis for the Target's business content and managerial
conditions. Because there are also no facts that could raise doubts from other
materials provided to the Special Committee and explanations given from the
Target and Offerors, the Transaction could be expected to create reasonable
synergy in strengthening the Target's existing businesses and products,
creation of new businesses and products, personnel development, and
enhancement of a basis for sustainable development.

(d) (Concerning management system after the Transaction) In view of the
Target's history and corporate culture, in order for the Target to continue to
contribute to society by introducing products of value to customers, including
in niche fields, it is important to ensure a certain level of independence
(autonomy) for the Target and to maintain motivation of the employees, which
is the source of enterprise value. Also, where Mitsui Chemicals and Mitsui
& Co. will jointly operate the business after the Transaction, it is
important for a system to be established to enable these two companies to
conduct the Target's business smoothly and quickly, and with consistency and
continuity. In this regard, the Special Committee reviewed, from the
perspective of operating the business with independence, maintaining
motivation of the employees, and operating business smoothly, quickly,
consistently and continuously, how the privatization of the Target would
affect the officers and employees' motivation while maintaining the
confidentiality of the business counterparties' secrets, how the business
counterparties will react towards incorporation of the Target into the Mitsui
group, and how this would affect the systems, and the Special Committee
determined that reasonable measures were assumed from the perspective of
business operation, and that the Target was given a certain level of freedom
in its business operation, and that there are no conspicuous or detrimental
disadvantages in any other aspects.

Thus, the Special Committee believes that the Transaction will contribute to
enhancing the enterprise value of the Target, and that the purposes of the
Transaction are reasonable.

(ii) whether the terms of the Transaction (including the Tender Offer Price)
are appropriate from the view of protecting the interests of the Target's
minority shareholders:

(a) (Concerning the premises for calculating the value) The method for
calculating the share value per share of the Target's Shares by Deloitte
Tohmatsu Financial Advisory, a third party valuator, is the typical
calculation method, and the reasons given for applying each of the average
market price method, comparable company analysis method, and the DCF Method
are not unreasonable. Furthermore, because the results of calculation based on
each of these calculation methods are by Deloitte Tohmatsu Financial Advisory,
a third-party valuator with extensive experience, the results of calculation
of share value per share of the Target's Shares do not seem unreasonable.
There are also no unreasonable aspects with respect to financial forecast and
preconditions that are the bases for applying the above calculation methods
and their calculation results.

(b) (Appropriateness of the Tender Offer Price) The Tender Offer Price (1,830
yen per share of the Target's Share) exceeds the maximum of the price range
based on the average market price method, is within the price range based on
the comparable company analysis method and exceeds the median of the price
range based on the DCF Method; (ii) the price accounts for a 41.86% premium
(rounded to the second decimal place; hereinafter the same in calculation of
the premiums (%) over the stock prices) over the closing price (1,290 yen) of
the Target's Shares on the Second Section of the TSE as of November, 10, 2020,
i.e. the business day immediately prior to the date of publication of the
Offerors' November 11, 2020 Press Release, a 43.64% premium over the simple
average closing price (1,274 yen) for the month ending November 10, 2020, a
42.86% premium over the simple average closing price (1,281 yen) for the three
(3) months ending November 10, 2020, a 50.87% premium over the simple average
closing price (1,213 yen) for the six (6) months ending November 10, 2020, and
such premiums stand comparison with premiums adopted in recent transactions
similar to the Transaction.'' In addition, the Tender Offer Price is the price
proposed as a result of repeated discussions and negotiations held among the
Target and the Offerors, which was significantly increased from the initially
proposed price (1,550 yen per share of the Target's Share) from the Offerors
and the price can be evaluated as having been determined through sincere
negotiations. In addition, the Tender Offer Price is an amount that exceeds
1,782 yen which is the book net asset value per share as of the six months
ended September 2020. Thus, the Tender Offer Price is considered to be
appropriate.

(c) (Appropriateness of the terms other than the Tender Offer Price) The
Offerors anticipate that the so-called indirect market check will function,
and they are scheduled to set the Tender Offer Period to 20 business days,
which is a statutory minimum period. However, because there is a long period
of time from the date of publication of the Offerors' November 11, 2020 Press
Release to the actual commencement of the Tender Offer, the opportunities for
general shareholders of the Target to make appropriate judgments as to
tendering to the Tender Offer and the opportunities of parties other than the
Offerors to purchase the Target's Shares are ensured. Also, the Offerors and
the Target have not made any agreement containing a transaction protection
clause that prohibits the Target from contacting competitive purchasers, or
any agreement that restricts contacts between such competitive offerors and
the Target. Accordingly, an indirect market check is correspondingly
functioning for the Transaction, and fairness of the Transaction is not
hindered. Furthermore, although the Offerors do not intend to set the minimum
of the so-called "Majority of Minority" in the Tender Offer, the Offerors and
the Target assumed the measures stated in item (iii) below, so due
consideration was given to the interests of the Target's minority
shareholders. In addition, the Offerors' November 11, 2020 Press Release is
scheduled to disclose that, in this Transaction, squeeze out procedures are
scheduled to be conducted promptly after the settlement of the Tender Offer as
a second step, and that the consideration to be issued in the Share
Consolidation, i.e., the squeeze out method, to each of the Target's
shareholder who did not tender in the Tender Offer is scheduled to be in the
same amount as the Tender Offer Price. Accordingly, due consideration was
given to prevent pressuring the Target's minority shareholders.

Accordingly, the terms of the Transaction, including the Tender Offer Price,
are appropriate from the perspective of protection of interests of the
Target's minority shareholders.

(iii) whether due consideration is given to protect the interests of the
Target's minority shareholders through fair procedures of the Transactions:

(a) (Establishment of independent special committee) The Special Committee was
established promptly (on June 22, 2020) after receiving the proposal for the
Transaction from the Offerors. The members, authority, compensation, advisory
system, involvement in the course of negotiations on the terms of the
Transaction with the Offerors, and the treatment of the Special Committee's
decisions at the Target's board of directors' meeting are as set forth in
"(III) Establishment of independent special committee at the Target and
procurement of written report from the said committee."

(b) (Internal review system) At the Target, a project team comprised of seven
(7) directors of the Target (excluding Ms. Akiko Kurokochi and Mr. Keiji
Kabeya, who are members of the Special Committee), two (2) auditors (excluding
Messrs. Norihisa Nakano, who is a member of the Special Committee, and
Masafumi Takenaka, who concurrently holds an executive position at Mitsui
Chemicals), and eight (8) staff in charge, conducts reviews and negotiations
for the Transaction by receiving advice and opinions, etc. from the Special
Committee and each of the advisors. As indicated below in "(V) Unanimous
approval of all disinterested directors of the Target and the opinion of all
auditors that they have no objection," there are no conflicts of interests
with the Target, and no possibility for conflicts to occur as of November 10,
2020. Among the Target's auditors, Mr. Masafumi Takenaka, due to his
concurrent position held as executive of Mitsui Chemicals, did not participate
in the discussions concerning the Transaction held at the Target's board of
directors' meeting, in the review of the Transaction from the Target's
position, or in discussions and negotiations with the Offerors concerning the
Transaction in order to eliminate the possibility of being affected by the
issue of structural conflicts of interest in this Transaction. Furthermore,
there are persons seconded from the Offerors among the above eight (8) staff,
but those staff members are indispensable in the review of the Transaction at
the Target, and as these staff engage in operations relating to the
Transaction as Target's personnel, the Target explained that they will not
convey the Target's business information to the Offerors, which explanation
sounds reasonable.

(c) (Procurement of advice from legal advisor) As indicated below in "(IV)
Advice procured by the Target from an independent law firm," the Target
retained Nagashima Ohno & Tsunematsu as its legal advisor independent from
the Target and the Offerors and professionally qualified. The Target is
receiving necessary legal advice from the firm concerning the method and
process of decision making by the Target's board of directors concerning the
Transaction, including the Tender Offer and other matters that must be noted.

(d) (Procurement of Share Valuation Report from a third-party valuator) As
indicated above in "(II) Procurement of Share Valuation Report by the Target
from an independent third-party valuator," the Target retained Deloitte
Tohmatsu Financial Advisory as its independent and professional financial
adviser. The Target requested Deloitte Tohmatsu Financial Advisory, a
third-party valuator, to calculate the share value of the Target's Shares and
procured the Share Valuation Report from the same on November 10, 2020.

(e) (Ensure opportunity for other purchasers to make purchase offer (market
check), establishment of Majority of Minority terms) As indicated above in
"(ii) whether the terms of the Transaction (including the Tender Offer Price)
is appropriate from the view of protecting the interests of the Target's
minority shareholders; (c)," the opportunities of general shareholders of the
Target to make appropriate judgments in tendering to the Tender Offer and the
opportunities of parties other than the Offerors to purchase the Target's
Shares are ensured, and the Offerors and the Target have not made any
agreement that would restrict contact by competitive purchasers with the
Target. Accordingly, an indirect market check is correspondingly functioning
for the Transaction and the fairness of the Transaction is not hindered.
Furthermore, the Offerors are not scheduled to set the minimum of the
so-called "Majority of Minority" in the Tender Offer, but due consideration
will be given to the interests of the Target's minority shareholders because
the Offerors and the Target assumed the measures in this paragraph.

(f) (Provision of detailed information to general shareholders and enhancement
of transparency of the process) The Special Committee received an explanation
concerning the Target's November 11, 2020 Press Release and the Offerors’
November 11, 2020 Press Release, and having received advice from Nagashima
Ohno & Tsunematsu, confirmed that a detailed informative disclosure will
be made concerning the Transaction.

(g) (Elimination of pressure) As indicated below in "(4) Policies on the
organizational restructuring, etc. after the Tender Offer (matters concerning
"two-step acquisition")," after the Tender Offer is successfully completed,
the Offerors are scheduled to conduct Share Consolidation, which shall be
conducted promptly after completion of settlement for the Tender Offer.
Arrangements shall be made to allow the Target's shareholders who opposed the
Share Consolidation to claim for the Target to purchase all fractional shares
of the Target that they own at a fair price and to allow them to file with the
court to determine the price of the Target's Shares. In this respect, the
Offerors are scheduled to disclose in the Offerors’ November 11, 2020 Press
Release that the consideration to be paid to each shareholder of the Target
who did not tender in the Tender Offer will be in the same amount as the
Tender Offer Price.

Accordingly, due consideration was given to the interests of the Target's
minority shareholders by ensuring fair procedures in the Transaction.

(iv) whether the Target's board of directors should support or object to the
Tender Offer that is the subject of the Transaction under the final terms, and
whether it should recommend the Target's shareholders to tender in the Tender
Offer:

Based on the decisions made above in (i) to (iii), it is considered
appropriate for the Target's board of directors to support the Tender Offer
under the final terms, and to recommend the Target's shareholders to tender in
the Tender Offer.

(v) whether the Transaction (including the Target's opinion concerning the
Tender Offer) is disadvantageous to the Target's minority shareholders:

Based on the decisions made above in (i) to (iii), the Transaction (for the
Target's board of directors to support the Tender Offer under the final terms,
and to recommend the Target's shareholders to tender in the Tender Offer above
in (iv)) is not disadvantageous to the Target's minority shareholders.

In early March 2021, the Target received contact from the Offerors that if the
procedures and actions required by the antitrust laws of Japan, the EU, China,
Taiwan and Turkey were completed by early May 2021, the Offerors would
commence the Tender Offer on May 17, 2021, and the Target commenced
preparations to again review the various terms of the Tender Offer and
notified the Special Committee to this effect. Having received this notice,
the Special Committee, beginning from mid-March, 2021, began preparations to
review whether there were any changes to be made on the contents of its
November 10, 2020 Written Report by receiving advice from Deloitte Tohmatsu
Financial Advisory and Nagashima Ohno & Tsunematsu, and by collecting
information such as a confirmation by the Target regarding whether any
material change to the circumstances had occurred that could affect the
Transaction.

Thereafter, on May 10, 2021, the Target received contact from the Offerors
that they were scheduled to commence the Tender Offer from May 17, 2021 upon
the satisfaction of the Conditions, because the procedures and actions
required by the antitrust laws of Japan, the EU, China, Taiwan and Turkey had
been completed. Having received this contact, on May 11, 2021, the Target
requested that the Special Committee established by the Target review whether
there were any changes to be made on the contents of the November 10, 2020
Written Report, and either (i) advise the Target accordingly if there is no
need to make any changes thereto; or, (ii) if any changes were necessary,
state an opinion as to why it made those changes.

The Special Committee, having received the abovementioned request for review
on May 11, 2021, again confirmed with the Target the facts regarding whether
there had been any material change to the circumstances that could affect the
Transaction since November 11, 2020, and conducted review on the above
mentioned matters for which the review was requested, confirmed that there are
no reasons for which the contents of the November 10, 2020 Written Report
should be changed even after taking into account the situation from November
11, 2020 until May 13, 2021 (including the contents of the Target's Earnings
Forecast Revision Press Release), and on May 13, 2021, with a unanimous
resolution of the committee members, submitted to the Target's board of
directors the May 13, 2021 Written Report stating that the committee had no
changes to its above opinion.

(IV) Advice procured by the Target from an independent law firm

The Target, in order to ensure fairness and appropriateness in the method and
process of decision-making by the Target's board of directors concerning the
Transaction, including the Tender Offer, retained Nagashima Ohno &
Tsunematsu as its legal advisor independent from the Target and the Offerors.
The Target is receiving necessary legal advice from the firm concerning the
method and process of decision making by the Target's board of directors
concerning the Transaction, including the Tender Offer, and other matters that
must be noted.

Nagashima Ohno & Tsunematsu is not a related party of the Target and the
Offerors and has no material interests in the Transaction, including the
Tender Offer. Nagashima Ohno & Tsunematsu will be paid a fee calculated by
multiplying the hours of service rendered by an hourly rate regardless of
whether the Transaction is executed and its fee does not include a performance
fee conditioned on execution of the Transaction. The Special Committee
confirmed at its first meeting that Nagashima Ohno & Tsunematsu is
independent and approved this firm as the Target's legal advisor.

(V) Unanimous approval of all disinterested directors of the Target and the
opinion of all auditors that they have no objection

The Target, based on legal advice received from Nagashima Ohno &
Tsunematsu, and the Share Valuation Report received from Deloitte Tohmatsu
Financial Advisory, and giving full respect to the November 10, 2020 Written
Report from the Special Committee (see above "(III) Establishment of
independent special committee at the Target and procurement of written report
from the said committee" concerning the members of the Special Committee and
its concrete activities), carefully reviewed the terms of the Transaction,
including the Tender Offer.

As a result, as indicated above in "(III) Decision-making process leading to
and grounds for the opinion in favor of the Tender Offer by the Target" under
"(2) Background and purposes of the Tender Offer and decision-making process
leading to the consummation of the Tender Offer and management policy after
the Tender Offer," the Target's board of directors determined that with
respect to this Transaction, it could be expected that this Transaction,
including the Tender Offer, will enhance the Target's corporate value, the
Tender Offer Price and other terms of the Tender Offer are appropriate for the
Target's shareholders, and the Tender Offer provides a reasonable opportunity
for the Target's shareholders to sell their shares. At the Target's board of
directors meeting held on November 11, 2020, all of its nine (9) directors
held a discussion and all of those nine (9) directors unanimously resolved
that the Target's opinion as of the same date is that in the event the Tender
Offer is commenced, the Target will express its opinion in favor of the Tender
Offer and will recommend the Target's shareholders to tender in the Tender
Offer. At the board of directors meeting described above, three (3) auditors
of the Target (excluding Mr. Masafumi Takenaka) participated and all of the
auditors who participated stated an opinion that they have no objection to the
above resolution.

Furthermore, in early March 2021, the Target received contact from the
Offerors that if the procedures and actions required by the antitrust laws of
Japan, the EU, China, Taiwan and Turkey were completed by early May 2021, the
Offerors would commence the Tender Offer on May 17, 2021, and the Target
commenced preparations to again review the various terms of the Tender Offer.
Thereafter, on May 10, 2021, the Target received contact from the Offerors
that they were scheduled to commence the Tender Offer from May 17, 2021 upon
the satisfaction of the Conditions, because the procedures and actions
required by the antitrust laws of Japan, the EU, China, Taiwan and Turkey had
been completed. Accordingly, the Target, at its board of directors meeting
held on May 14, 2021, through discussion by all of its nine (9) directors,
having again carefully considered various terms concerning the Tender Offer by
taking into account the Target's business conditions (including the contents
of the Target's Earnings Forecast Revision Press Release) and the environment
surrounding the Transaction while giving maximum respect to the contents of
the May 13, 2021 Written Report submitted by the Special Committee, decided
that, even as of May 14, 2021, there were no reasons to change its opinion
concerning the Tender Offer as of November 11, 2020, and the nine (9)
directors of the Target unanimously resolved to again state the board’s
opinion in favor of the Tender Offer and to recommend that the Target's
shareholders tender their shares in the Tender Offer. Three (3) auditors of
the Target (excluding Mr. Masafumi Takenaka) participated in the above board
of directors meeting and stated their opinion that they had no objection to
the above resolution.

Of the nine (9) directors of the Target, six (6) were employees of the
Offerors within the most recent ten (10) years (Messrs. Yuji Fukuyama, Yoshiji
Ohori, Hidebumi Kasuga, Katsuya Okano, Nobuyoshi Ikeda, and Takuya Inagaki),
and of the three (3) auditors of the Target (excluding Mr. Masafumi Takenaka),
one (1) (Mr. Yoshinori Ashida) was a former employee of Mitsui Chemicals
within the most recent ten (10) years. However, none of them concurrently
holds offices in the Offerors nor are they in a position, or have
relationships that would cause them, to receive instructions, etc. from the
Offerors as officers of the Target as significant time has lapsed since they
transferred to the Target, and therefore, as of November 11, 2020 and May 14,
2021, they have no conflicting interests with the Target or the Target's
minority shareholders and there are no possibilities for conflicts of interest
to occur. The Special Committee confirmed this point as stated above in (iii)
(b) under "(III) Establishment of independent special committee at the Target
and procurement of written report from the said committee" and the Special
Committee submitted the May 13, 2021 Written Report indicating that it had no
change to its opinion stated in the November 10, 2020 Written Report
concerning this point.

Mr. Masafumi Takenaka, the Target's outside statutory auditor, presently
concurrently holds an executive position at Mitsui Chemicals, and, therefore,
he did not participate in the discussions at each of the above board of
directors meetings and refrained from stating his opinion regarding the
resolutions at each of the above board of directors meetings.

(VI) Measures to ensure purchase opportunities for other purchasers

Given that there is a long period of time between the date of publication of
the Offerors' November 11, 2020 Press Release and the commencement of the
Tender Offer, the Offerors believe that the opportunities for general
shareholders of the Target to make appropriate judgments in tendering to the
Tender Offer and the opportunities for parties other than the Offerors to
purchase the Target's Shares are ensured.

In addition, the Offerors and the Target have not made any agreement
containing a transaction protection clause that prohibits the Target from
contacting competitive purchasers, or any other agreement that restricts
contacts between competitive purchasers and the Target.

Because sufficient time is provided until commencement of the Tender Offer and
opportunities are provided to allow competitive offers to be made, the
Offerors are giving due consideration to ensure fairness of the Tender Offer.

(4) Policies on the organizational restructuring, etc. after the Tender Offer
(matters concerning "two-step acquisition")

As stated above in "(1) Outline of the Tender Offer," if the Offerors were
unable to acquire all of the Target's Shares in the Tender Offer, then after
the successful completion of the Tender Offer, the Offerors are scheduled to
implement a series of procedures to make the Offerors the sole shareholders of
the Target as follows.

Promptly after completion of settlement for the Tender Offer, the Offers will
request the Target to convene an extraordinary shareholders' meeting (the
"Extraordinary Shareholders' Meeting") preferably in August 2021 at which the
items for resolution shall include the Share Consolidation and, on condition
that the Share Consolidation takes effect, partial amendment of the articles
of incorporation to abolish the provision concerning unit shares. In this
regard, the Offerors intend to vote in favor of both of the above proposals.
If the proposal for the Share Consolidation is approved at the Extraordinary
Shareholders' Meeting, then on the date on which the Share Consolidation takes
effect, the shareholders of the Target will own the Target's Shares in the
number corresponding to the ratio of the Share Consolidation that was approved
at the Extraordinary Shareholders' Meeting. If any fraction of a share less
than one share results from the Share Consolidation, the shareholder will be
paid a sum payable to such shareholder by selling to the Target or to the
Offerors the Target's Shares equivalent to the total number of such fractional
shares (fractional shares resulting from aggregating those fractional shares
shall be discarded) in accordance with the procedures stipulated in Article
235 of the Companies Act and other relevant laws and regulations. With respect
to the sale price of the Target's Shares equivalent to such total number of
fractional shares, the Offerors are scheduled to set this price in such a way
as to make sure that, as a result of selling these shares, the amount of money
to be paid to each shareholder of the Target who did not tender in the Tender
Offer (excluding the Offerors and the Target) shall be the same as the price
that shall be obtained by multiplying the Tender Offer Price by the number of
the Target's Shares owned by such shareholder, and request the Target to file
with the court to obtain permission for voluntary sale. The provisions of the
Companies Act that protect the rights of the minority shareholders in
connection with the Share Consolidation stipulate that when a share
consolidation is implemented and fractional shares in the number of shares
arise as a result of share consolidation, the shareholders of the Target may
request the Target to purchase all fractional shares of the Target Company
that they own at a fair price and that they may file with the court to
determine the price of the Target's Shares pursuant to Article 182-4 and
Article 182-5 of the Companies Act and other relevant laws and regulations. If
such filing is made with the court, the purchase price will ultimately be
determined by the court.

The ratio of consolidation of the Target's Shares is undecided as of the date
of this Press Release, however, the Target shall be requested to decide such
ratio based on the number of the Target's Shares owned by the Offerors after
the Share Consolidation to result in the Offerors being the sole shareholders
of the Target's Shares (excluding the treasury shares owned by the Target).

The Offerors are also scheduled to implement procedures so that after the
Share Consolidation, Mitsui Chemicals' and Mitsui & Co.'s percentage of
voting rights held in the Target after it is privatized will be 51% and 49%,
respectively. As for a specific procedure, the Offerors plan to jointly
acquire and hold the total number of fractional shares of less than one share
of the Target’s Shares that will be generated from the Share Consolidation.
Thereafter, the Offerors plan to promptly request that the Target implement a
stock split in a ratio that would result in the percentage of voting rights
held by Mitsui Chemicals and Mitsui & Co. in the Target to be 51% and 49%,
respectively, and would further result in Mitsui Chemicals and Mitsui &
Co. being the sole owners of the formerly jointly-held fractional Target's
Shares. This procedure is scheduled to be implemented at a price that will not
undermine uniformity of the tender offer price.

The Tender Offer is not a solicitation for the Target's shareholders to vote
in favor of the proposals at the Extraordinary Shareholders' Meeting. The
Target's shareholders are also requested to confirm with professionals, such
as tax accountants, at their responsibility concerning tax treatment for
tendering in the Tender Offer or in each of the other procedures above.

(5) Possibility of delisting and reason

The Target's Shares are listed on the Second Section of the TSE as of the date
of this Press Release. Because the Offerors did not set a maximum number of
shares to be purchased in the Tender Offer, the Target's Shares may become
delisted through the prescribed procedures in accordance with TSE's delisting
criteria depending on the results of the Tender Offer. Also, even if such
delisting criteria are not met as of the time of establishment of the Tender
Offer, if the Tender Offer is established, the Offerors intend to implement a
series of procedures to make the Offerors the sole shareholders of the Target
thereafter as explained above in "(4) Policies on the organizational
restructuring, etc. after the Tender Offer (matters concerning "two-step
acquisition")" where in such case, the Target's Shares will be delisted
through the prescribed procedures in accordance with TSE's delisting criteria.
After the Target's Shares are delisted, the Target's Shares may no longer be
traded on the Second Section of the TSE.

(6) Matters concerning material agreements regarding the Tender Offer


 1. Shareholders Agreement



As indicated above in "(II) Management policy after the Tender Offer" under
"(2) Background and purposes of the Tender Offer and decision-making process
leading to the consummation of the Tender Offer and management policy after
the Tender Offer," as of November 11, 2020, the Offerors executed the
Shareholders Agreement containing the following contents concerning joint
operation of the Target Group. In this regard, it is stipulated that the
Shareholders Agreement, excluding general provisions and some other
provisions, shall take effect when the Offerors become the sole shareholders
of the Target (excluding the Target and persons who have rights to fractional
shares) in accordance with the provisions of the Joint Tender Offer Agreement.

(i) Matters concerning the organization and operation of the Target (to
provide that after the Transaction is completed: (a) the Target shall have no
more than seven (7) directors, the Offerors are entitled to appoint three (3)
directors respectively, and one (1) director from the Target may be appointed
by respecting the opinion of the representative directors of the Target, (b)
the number of representative directors of the Target will be two (2) and
Mitsui Chemicals is entitled to appoint the President and Representative
Director and Mitsui & Co. is entitled to appoint the Vice President and
Representative Director, (c) the Target's Audit & Supervisory Board shall
be abolished and the Target shall have three (3) auditors, the Target is
entitled to appoint one (1) full-time auditor and the Offerors are each
entitled to appoint one (1) part-time auditor, (d) the Offerors shall
establish a shareholder steering committee to smoothly and appropriately
operate the business of the Target, and the members of this committee shall be
comprised of the responsible persons of the Offerors and the persons appointed
by the Offerors, and (e) matters that are subject to agreement with the
Offerors concerning operation of the Target Group, etc. (amendment of
important internal regulations, M&A transactions, capital strategies,
major transactions, business plans and budgets, employment of key employees,
instituting and settling litigations, and other important matters), etc.);

(ii) Matters concerning the role, etc. of each party in operating the business
of the Target Group (After completion of the Transaction, for the Offerors to
support the Target Group in overall management, and enforce sales and
marketing inside and outside of Japan to enhance the Target Group's enterprise
value and maximize its profits, etc.);

(iii) Matters concerning rights and obligations of the Offerors ((a) the
rights and obligations of the Offerors when the Target Group requires
financing (for example, while the Offerors have no obligations to provide
financing to the Target Group, if the Target issues shares, the Offerors shall
have a preemptive right to subscribe to those shares in accordance with its
respective ratio of voting rights held in the Target as at the time of
issuance of those shares), (b) obligations to report when material events
concerning the Target Group occur, and (c) matters concerning the Target's
dividend policy); and

(iv) Matters concerning shares, etc. of the Target (in principle, to prohibit
the transfer of the Target's Shares owned by the Offerors for a certain
period, and preemptive purchase right and tag along right after lapse of a
certain period, etc.).

(II) Joint Tender Offer Agreement



As indicated above in "(1) Outline of the Tender Offer," the Offerors executed
the Joint Tender Offer Agreement that includes the following contents on
November 11, 2020.

(i) The Offerors shall consummate the Tender Offer jointly;

(ii) The commencement of the Tender Offer shall be conditional upon
satisfaction of all of the following preconditions:


 1. The Special Committee established by the Target issued a written report in
favor of the Target (i) supporting the Tender Offer, (ii) recommending the
shareholders of the Target to tender in the Tender Offer, and (iii)
implementing the Share Consolidation, and this report has not been withdrawn;

 2. The Target's board of directors, excluding directors who have, or may have,
interest in the Offerors, reached an unanimous resolution to support the
Tender Offer and to recommend the Target's shareholders to tender in the
Tender Offer, and this resolution was publicly announced and no resolution has
been made to withdraw this opinion or which conflicts with this opinion;

 3. It has been confirmed that there have been no material facts concerning the
Target's business (those facts stipulated in Article 166, Paragraph 2 of the
Act) that have not been publicly disclosed (as defined in Article 166,
Paragraph 4 of the Act) by the Target;

 4. The Offerors have agreed between themselves on the contents of the disclosure
documents to be filed or announced jointly by the Offerors by the date of
public notice concerning commencement of the Tender Offer;

 5. Necessary procedures were performed, necessary arrangements were made, and
waiting periods (if any) have lapsed (including to receive notice that no
cease and desist order will be issued) pursuant to the antitrust laws of
Japan, Europe, China, Taiwan, and Turkey with respect to the Transaction, and
it is reasonably projected that no measures or procedures will be assumed that
would prevent the implementation of the Transaction by the antitrust
authorities and other judicial or administrative agencies concerning antitrust
laws of those countries or regions;

 6. There are no filings, litigation or procedures pending at judicial or
administrative agencies that seek to restrict or prohibit any of the
Transaction, and there is no judgment, or a concrete possibility of a
judgment, by any judicial or administrative agency that restricts or prohibits
any of the Transaction;

 7. Written confirmations were received from the counterparties to the agreements
executed by each company in the Target Group that are materially important for
business stating that those counterparties will not exercise their rights upon
execution and performance of the Joint Tender Offer Agreement, and these
confirmations have not been rescinded (Note 1);

 8. The Shareholders Agreement is executed between the Offerors and has been
effective;

 9. The representations and warranties (Note 2) made by the Offerors pursuant to
the Joint Tender Offer Agreement are true and accurate in all material
respects;

 10. All obligations that must be performed or complied with by the Offerors by
15:00 on the business day immediately preceding the date of public notice of
commencement of the Tender Offer pursuant to the Joint Tender Offer Agreement
have been performed and complied with in all material respects; and

 11. There has not been any material change in the business or property of the
Target or any of its subsidiaries, nor has there been any other circumstance
that would materially impede the achievement of the purpose of the tender
offer as provided in the proviso to Article 27-11, Paragraph 1 of the Act.

(iii) On condition that the Tender Offer is established and the settlement is
completed, promptly as practically possible after the settlement is completed,
procedures shall be assumed to cause Mitsui Chemicals and Mitsui & Co.'s
percentage of voting rights held in the Target to become 51% and 49%,
respectively.

(iv) During the period from the date of execution of the Joint Tender Offer
Agreement until completion of the Transaction, the Offerors shall exercise
care as prudent managers to cause the Target Group to, in principle, engage in
its ordinary business that it conducted prior to execution of the Joint Tender
Offer Agreement.



(Note 1) The "counterparties to the agreements that are materially important
for business" were determined by the Offerors based on the results of due
diligence that were conducted towards the Target.

(Note 2) The Offerors made the following representations and warranties with
respect to themselves in the Joint Tender Offer Agreement: (a) that they are
duly and effectively established and are existing and have necessary power and
authority to conduct their business; (b) that the Shareholders Agreement and
Joint Tender Offer Agreement have been duly executed and procedures required
thereunder have been performed; (c) that they are in compliance with laws and
regulations; (d) that there are no possibilities for compulsory execution; (e)
that they acquired all necessary licenses and permits; (f) that they have
legitimate and effective ownership in the Target's Shares without any
encumbrances; and (g) that they have no transactions with anti-social forces.

2. Summary of tender offer

(1) Summary of the Target
 (i)     Name                                                                        Honshu Chemical Industry Co., Ltd.                                                        
 (ii)    Location                                                                    3-9, Nihombashi 3-chome, Chuo-ku, Tokyo                                                   
 (iii)   Name and title of representative                                            President and CEO, Yuji Fukuyama                                                          
 (iv)    Description of business                                                     Manufacture and sale of materials for high-performance resins, such as liquid             
                                                                                     crystal polymers, specialty polycarbonate resins and specialty epoxy resins,              
                                                                                     as well as various chemicals that serve as materials for electronic chemicals,            
                                                                                     pharmaceuticals and agricultural chemicals                                                
 (v)     Amount of share capital                                                     1,500,500,000 yen                                                                         
 (vi)    Date of incorporation                                                       March 23, 1949                                                                            
                                                                                     
                                                                                         
                                                                                     (Note) Originating from its predecessor, Yuraseiko & Company, Honshu                      
                                                                                     Chemical Industry Co., Ltd. (the "Former Company") merged with Honshu Chemical            
                                                                                     Industry Co., Ltd. (the "New Company") in July 1963 for the purpose of                    
                                                                                     reducing the par value of shares. In this merger, the Former Company was the              
                                                                                     absorbed company and the New Company was the surviving company. For this                  
                                                                                     reason, the date of incorporation of the Target Company as registered in its              
                                                                                     commercial register is March 23, 1949, which is the date that New Company was             
                                                                                     registered.                                                                               
 (vii)   Major shareholders and shareholding ratio                                   Mitsui & Co., Ltd.                              26.99%                                    
         
                                                                           
(Standing proxy: Custody Bank of Japan, Ltd.)                                            
         (as of September 30, 2020)                                                                                                                                            
         
                                                                                                                                                                     
         (Note)                                                                                                                                                                
         Mitsui Chemicals, Inc.                                                                                                      26.99%                                    
         BBH FOR FIDELITY LOW-PRICED STOCK FUND (PRINCIPAL ALL SECTOR SUBPORTFOLIO)                                                  6.52%                                     
         
(Standing proxy: MUFG Bank, Ltd.)                                                                                                                                    
         Custody Bank of Japan, Ltd. (Trust account)                                                                                 3.19%                                     
         Osamu Taneda                                                                                                                2.88%                                     
         The Master Trust Bank of Japan, Ltd. (Trust account)                                                                        2.33%                                     
         STATE STREET BANK AND TRUST COMPANY 505224                                                                                  1.74%                                     
         
(Standing proxy: Mizuho Bank, Ltd., Settlement Service Dept.)                                                                                                        
         BNY GCM CLIENT ACCOUNT JPRD AC ISG (FE-AC)                                                                                  1.72%                                     
         
(Standing proxy: MUFG Bank, Ltd.)                                                                                                                                    
         Gakko-hojin Tanaka Ikuei-kai (incorporated educational institution)                                                         1.22%                                     
         BBH FOR FIDELITY GROUP TRUSTBENEFIT (PRINCIPAL ALL SECTOR SUBPORTFORIO)                                                     1.09%                                     
         
(Standing proxy: MUFG Bank, Ltd.)                                                                                                                                    
 (viii)  Relationships between the Offerors and the Target                                                                                                                     
         Capital relationship                                                        As of the date of this Press Release, the Offerors each own 3,098,000 shares              
                                                                                     of the Target's Shares (Shareholding Ratio: 26.99%).                                      
         Personal relationship                                                       One among four auditors of the Target concurrently serves as an employee of               
                                                                                     Mitsui Chemicals. Mitsui Chemicals also dispatches four employees to the                  
                                                                                     Target and Mitsui & Co. dispatches two employees to the Target.                           
         Business relationship                                                       The Target purchases raw materials from Mitsui Chemicals and sells products               
                                                                                     manufactured by consignment to the same. The Target purchases raw materials               
                                                                                     from Mitsui & Co. and sells products to the same.                                         
         Status as related party                                                     The Target is an equity method affiliate of each of the Offerors, and                     
                                                                                     constitutes a related party of the Offerors.                                              


(Note) "Major shareholders and shareholding ratio (as of September 30, 2020)"
is extracted from "Major Shareholders" in the Quarterly Securities Report for
the Second Quarter of the 92nd Fiscal Year filed on November 13, 2020.

(2) Schedule

(I) Schedule
 Date of resolution                                                 May 14, 2021 (Friday)                                                                                                                                                                                                                                                                 
 Date of public notice concerning commencement of the tender offer  May 17, 2021 (Monday)                                                                                                                                                                                                                                                                 
 Name of daily newspaper on which the public notice is posted       Public notice shall be given electronically and publication shall be made on                                                                                                                                                                                                          
                                                                    the Nihon Keizai Shimbun to the effect that public notice was given.                                                                                                                                                                                                                  
                                                                    
                                                                                                                                                                                                                                                                                     
                                                                    (Electronic notice is posted on https://disclosure.edinet-fsa.go.jp/                                                                                                                                                                                                                  
                                                                    (https://cts.businesswire.com/ct/CT?id=smartlink&url=https%3A%2F%2Fdisclosure.edinet-fsa.go.jp%2F&esheet=52429741&newsitemid=20210514005199&lan=en-US&anchor=https%3A%2F%2Fdisclosure.edinet-fsa.go.jp%2F&index=1&md5=22228ed7a80b4065aed44923a59bf9df)                               
                                                                    )                                                                                                                                                                                                                                                                                     
 Date of submission of the tender offer registration statement      May 17, 2021 (Monday)                                                                                                                                                                                                                                                                 


(II) Tender offer period as of the submission date of the tender offer
registration statement

From May 17, 2021 (Monday) through June 11, 2021 (Friday) (20 business days)

(III) Possibility of extending the above period upon request from the Target

If the Target submits a statement of opinion requesting an extension of the
tender offer period pursuant to Article 27-10, Paragraph 3 of the Act, the
Tender Offer Period shall be extended to June 25, 2021 (Friday) (30 business
days).

(3) Price of tender offer

1,830 yen per share of the common stock

(4) Basis of calculation of the price of tender offer

(I) Basis of calculation

Mitsui Chemicals retained SMBC Nikko Securities, Mitsui Chemicals' financial
advisor, to serve as the third-party valuator independent from the Offerors
and the Target to calculate the stock value of the Target's Shares in order to
determine the Tender Offer Price.

SMBC Nikko Securities considered several methods to apply in calculating the
share value of the Target Shares from among multiple share value calculation
methods. SMBC Nikko Securities decided to apply: (i) the average market price
method given that the Target's Shares are listed on the Second Section of the
TSE and thus the market price thereof is available; and (ii) the DCF Method to
reflect the future business activities of the Target in valuation. Mitsui
Chemicals procured the Share Valuation Report (SMBC Nikko Securities) from
SMBC Nikko Securities on November 10, 2020. Mitsui Chemicals has not obtained
an opinion concerning fairness of the Tender Offer Price (fairness opinion)
from SMBC Nikko Securities.

According to the Share Valuation Report (SMBC Nikko Securities), the range of
share value per share of the Target's Shares calculated through each of the
above methods is as follows:

Average market price method: from 1,213 yen to 1,281 yen

DCF Method: from 1,718 yen to 2,082 yen

Pursuant to the average market price method, as of the reference date of
calculation on November 10, 2020, the share value range per share of the
Target's Shares was calculated to be 1,213 yen to 1,281 yen, based on the
simple average closing price of 1,274 yen for the most recent one (1) month
through the reference date of calculation of the Target's Shares on the Second
Section of the TSE (from October 12, 2020 until November 10, 2020), simple
average closing price of 1,281 yen for the most recent three (3) months
through the same date (from August 11, 2020 until November 10, 2020), and the
simple average closing price of 1,213 yen for the most recent six (6) months
through the same date (from May 11, 2020 until November 10, 2020).

Pursuant to the DCF Method, the share value range per share of the Target's
Shares was calculated to be 1,718 yen to 2,082 yen, based on various elements,
such as its business plan from its Fiscal Year ending March 2021 to its Fiscal
Year ending March 2024 that were confirmed by the Offerors, and information
generally disclosed to the public, and by discounting at a certain discount
rate to the present value the free cash flow projected to be generated by the
Target from on and after its Fiscal Year ending March 2021. The Target's
future financial forecast that was referenced in the DCF Method does not
include any fiscal year in which a significant increase in profits is
anticipated. Also, because the synergistic effects that could be expected by
executing the Transaction were difficult to estimate as of the time of
calculation, the contents of the Target's business plan do not take into
account the synergies with the Offerors through the Transaction.

Mitsui & Co. retained Nomura Securities, Mitsui & Co.'s financial
advisor, to serve as the third-party valuator independent from the Offerors
and the Target to calculate the stock value of the Target's Shares in order to
determine the Tender Offer Price.

Nomura Securities considered several methods to apply in calculating the share
value of the Target's Shares from among multiple share value calculation
methods. Nomura Securities decided to apply: (i) the average market price
method given that the Target's Shares are listed on the Second Section of the
TSE; and (ii) the DCF Method to reflect the future business activities of the
Target in valuation. Mitsui & Co. procured the Share Valuation Report
(Nomura Securities) from Nomura Securities on November 10, 2020. Mitsui &
Co. has not obtained an opinion concerning fairness of the Tender Offer Price
(fairness opinion) from Nomura Securities.

According to the Share Valuation Report (Nomura Securities), the range of
share value per share of the Target's Shares calculated through each of the
above methods is as follows:

Average market price method: from 1,213 yen to 1,290 yen

DCF Method: from 1,358 yen to 1,979 yen

Pursuant to the average market price method, as of the reference date of
calculation on November 10, 2020, the share value range per share of the
Target's Shares was calculated to be 1,213 yen to 1,290 yen, based on the
closing price of 1,290 yen as of the reference date, simple average closing
price of 1,284 yen for the most recent five (5) business days, simple average
closing price of 1,274 yen for the most recent one (1) month, simple average
closing price of 1,281 yen for the most recent three (3) months, and the
simple average closing price of 1,213 yen for the most recent six (6) months,
of the Target's Shares on the Second Section of the TSE.

Pursuant to the DCF Method, the share value range per share of the Target's
Shares was calculated to be 1,358 yen to 1,979 yen based on the Target's
enterprise value and share value based on various elements such as profits
projected in the Target's business plan and investment plan from its Fiscal
Year ending March 2021 to its Fiscal Year ending March 2024, which were
confirmed by the Offerors, and information generally disclosed to the public,
and by discounting at a certain discount rate to the present value the free
cash flow projected to be generated by the Target from on and after its Fiscal
Year ending March 2021. As a note, the Target's financial forecast based on
the DCF Method does not include any fiscal year in which a significant
increase in profits is projected. Also, because the synergistic effects that
could be expected by executing the Transaction were difficult to estimate as
of the time of calculation, the contents of the Target's business plan do not
take into account the synergies with the Offerors through the Transaction.

The Offerors comprehensively considered the results of valuation indicated in
the Share Valuation Report (SMBC Nikko Securities) and the Share Valuation
Report (Nomura Securities) respectively procured from SMBC Nikko Securities
and Nomura Securities on November 10, 2020, the results of due diligence
conducted towards the Target during the period from mid-July 2020 until
mid-September 2020, the actual examples of premiums granted in determining the
tender offer price in past tender offers, i.e., by a party other than the
issuer similar to the Tender Offer (examples of tender offer for equity method
affiliate on the basis of becoming delisted), the trends in market price of
the Target's Shares in the most recent six (6) months prior to November 10,
2020, which is the business day immediately prior to the date of publication
of the Offerors' November 11, 2020 Press Release, whether the Target's board
of directors are in favor of the Tender Offer, and the prospects on tender
towards the Tender Offer, and based on the results of discussions and
negotiations with the Target, decided to set the Tender Offer Price at 1,830
yen per share as of November 11, 2020.

Thereafter, the Offerors decided that (i) there had been no material change to
the Target's business conditions, the environment surrounding the Transaction,
etc.; and (ii) based on the results of additional due diligence towards the
Target implemented from early March to mid-May, 2021, among others, there had
been no events that would materially affect the Target's enterprise value and
thus decided on May 14, 2021 that they would not change the Tender Offer
Price.

As a note, the Tender Offer Price of 1,830 yen is the price obtained by adding
a premium of 41.86% on the closing price of 1,290 yen of the Target's Shares
on the Second Section of the TSE on November 10, 2020, which is the business
day immediately prior to the date of publication of the Offerors' November 11,
2020 Press Release, is the price obtained by adding a premium of 43.64% on the
simple average closing price of 1,274 yen for the most recent month, is the
price obtained by adding a premium of 42.86% on the simple average closing
price of 1,281 yen for the most recent three (3) months, is the price obtained
by adding a premium of 50.87% on the simple average closing price of 1,213 yen
for the most recent six (6) months.

(II) Process of calculation



(Background of decision to consummate the Tender Offer Price)

As indicated in "(2) Background and purposes of the Tender Offer and
decision-making process leading to the consummation of the Tender Offer and
management policy after the Tender Offer" under "1. Purposes of the Purchase,"
formal discussions and negotiations were conducted several times with the
Target concerning the management system and business policies and terms for
the Transaction since early July 2020. As a result of these discussions and
negotiations, the Offerors and the Target reached the same view that in order
to adapt to the difficult business environment in which customers' demands are
diversifying and becoming more sophisticated, and to pursue growth strategies
that have a sense of speed ahead of competitors, the best method to contribute
to the enhancement of enterprise value of the Target is to have the Offerors
jointly introduce various managerial resources more flexibly than in the past,
and to change to a privatized system where the Offerors are the sole
shareholders of the Target that allows decisions on strategies and policies
and flexible managerial decisions based on middle to long-term perspective,
and implement each of the above measures, and the Offerors each decided to
jointly consummate the Tender Offer targeting all of the Target's Shares, and
the Tender Offer Price was decided from the below circumstances.

(a) Names of third parties from whom opinion was heard in the process of
calculation

Mitsui Chemicals referred to the Share Valuation Report (SMBC Nikko
Securities) that was submitted from SMBC Nikko Securities, a third-party
valuator independent from the Offerors and the Target in determining the
Tender Offer Price. Mitsui Chemicals has not obtained an opinion concerning
fairness of the Tender Offer Price (fairness opinion) from SMBC Nikko
Securities.

Mitsui & Co. referred to the Share Valuation Report (Nomura Securities)
that was submitted from Nomura Securities, a third-party valuator independent
from the Offerors and the Target in determining the Tender Offer Price. Mitsui
& Co. has not obtained an opinion concerning fairness of the Tender Offer
Price (fairness opinion) from Nomura Securities.

(b) Summary of those opinions

SMBC Nikko Securities calculated the share value of the Target's Shares by
applying each of the average market price method and the DCF Method and the
range of share value per share of the Target's Shares calculated through each
method is as follows:

Average market price method: from 1,213 yen to 1,281 yen

DCF Method: from 1,718 yen to 2,082 yen

Nomura Securities calculated the share value of the Target's Shares by
applying each of the average market price method and the DCF Method and the
range of share value per share of the Target's Shares calculated through each
method is as follows.

Average market price method: from 1,213 yen to 1,290 yen

DCF Method: from 1,358 yen to 1,979 yen

(c) Circumstances leading to the decision of the purchase price based on those
opinions

As indicated above in "(I) Basis of calculation," in addition to the results
of calculation set forth in the Share Valuation Report (SMBC Nikko Securities)
and the Share Valuation Report (Nomura Securities) that the Offerors
respectively procured from SMBC Nikko Securities and Nomura Securities on
November 10, 2020, the Offerors comprehensively considered the results of due
diligence conducted on the Target during mid-July 2020 to mid-September 2020,
actual examples of premiums granted in determining the tender offer price in
past tender offers, i.e., by a party other than the issuer similar to the
Tender Offer (examples of tender offer for equity method affiliate or equity
method subsidiary on the basis of becoming privatized), trends in market share
price of the Target's Shares in the recent six (6) months prior to November
10, 2020, which is the business day immediately prior to the date of
publication of the Offerors' November 11, 2020 Press Release, whether the
Target's board of directors are in favor of the Tender Offer, and prospects on
tender towards the Tender Offer, and based on the results of discussions and
negotiations with the Target, decided on November 11, 2020 to set the Tender
Offer Price at 1,830 yen per share.

Thereafter, the Offerors decided that (i) there had been no material change to
the Target's business conditions, the environment surrounding the Transaction,
etc.; and (ii) based on the results of additional due diligence towards the
Target implemented from early March to mid-May, 2021, among others, there had
been no events that would materially affect the Target's enterprise value, and
thus decided on May 14, 2021 that they would not change the Tender Offer
Price.

(III) Relationship with valuation agencies

SMBC Nikko Securities as a financial advisor and third-party valuator for
Mitsui Chemicals is not a related party of the Offerors or of the Target, and
does not have any material interest in the Transaction, including the Tender
Offer.

Nomura Securities as a financial advisor and third-party valuator for Mitsui
& Co. is not a related party of the Offerors or of the Target, and does
not have any material interest in the Transaction, including the Tender Offer.

(5) Number of shares to be purchased
 Type of shares  Number of tendered shares to be purchased  Minimum number of tendered shares to be purchased  Maximum number of shares to be purchased  
 Common stock    5,280,788 shares                           1,455,200 shares                                   -                                         
 Total           5,280,788 shares                           1,455,200 shares                                   -                                         


(Note 1) If the total number of the Tendered Shares is less than the minimum
number of tendered shares to be purchased in the Tender Offer (1,455,200
shares), the Offerors will purchase none of the Tendered Shares. If the total
number of the Tendered Shares is no less than the minimum number of tendered
shares to be purchased in the Tender Offer, the Offerors will purchase all of
the Tendered Shares.

(Note 2) The number of tendered shares to be purchased is the maximum number
of the Target's Shares (5,280,788 shares) that the Offerors will acquire by
the Tender Offer. This maximum number is obtained by deducting the number of
treasury shares owned by the Target as of March 31, 2021 (23,212 shares), the
number of shares owned by Mitsui Chemicals on the same date (3,098,000
shares), and the number of shares owned by Mitsui & Co. as of the same
date (3,098,000 shares) from the total number of issued shares of the Target
as of the same date (11,500,000 shares) as stated in the Target's Annual
Earnings Briefing.

(Note 3) Shares less than one unit are also subject to the Tender Offer. If a
shareholder exercises the right to claim for purchase of shares less than one
unit pursuant to the Companies Act, the Target may purchase its shares during
the Tender Offer Period in accordance with statutory procedures.

(Note 4) The treasury shares owned by the Target are not scheduled to be
acquired through the Tender Offer.

(Note 5) With respect to Mitsui Chemicals and Mitsui & Co.’s method of
purchasing the Tendered Shares, (a) if the total number of the Tendered Shares
is 2,487,859 or more, Mitsui Chemicals will purchase the Tendered Shares up to
2,640,394 shares and Mitsui & Co. will purchase the remainder of the
Tendered Shares up to the total number of the Tendered Shares; and (b) if the
total number of the Tendered Shares is less than 2,487,859, each of the
Offerors will purchase one half of the total number of the Tendered Shares
(fractional numbers, if any, shall be rounded up with respect to the shares to
be purchased by Mitsui Chemicals, and rounded down with respect to the shares
to be purchased by Mitsui & Co.).

(6) Change in shareholding ratio after the Tender Offer
 Number of voting rights pertaining to the shares held by the Offerors before    61,960   (Shareholding Ratio before the Tender Offer 53.99%)  
 the Tender Offer                                                                                                                              
 Number of voting rights pertaining to the shares held by special related        118      (Shareholding Ratio before the Tender Offer 0.01%)   
 parties before the Tender Offer                                                                                                               
 Number of voting rights pertaining to the shares held by the Offerors after     114,767  (Shareholding Ratio after the Tender Offer100.00%)   
 the Tender Offer                                                                                                                              
 Number of voting rights pertaining to the shares, etc. held by special related  0        (Shareholding Ratio after the Tender Offer0.00%)     
 parties after the Tender Offer                                                                                                                
 Total number of voting rights of all shareholders of the Target                 114,671                                                       


(Note 1) "Number of voting rights pertaining to the shares held by special
related parties before the Tender Offer" is the total number of voting rights
pertaining to shares, etc. held by each special related party (excluding
parties that shall be excluded from special related parties pursuant to
Article 3, Paragraph 2, Item (i) of the Cabinet Office Ordinance on Disclosure
Required for Tender Offer for Share Certificates, etc. by Person Other Than
Issuer (Ordinance of the Ministry of Finance No. 38 of 1990, as amended;
hereinafter the "Cabinet Office Ordinance") for the purpose of calculating the
holding ratio of shares, etc. set out in each item of Article 27-2, Paragraph
1 of the Act, and the Offerors which mutually constitute a special related
party of the other). As the shares, etc. held by special related parties
(excluding the treasury shares held by the Target and the Target's Shares held
by the Offerors which mutually constitute a special related party of the
other) are also subject to the Tender Offer, the "Number of voting rights
pertaining to the shares, etc. held by special related parties after the
Tender Offer" is indicated as 0.

(Note 2) "Total number of voting rights of all shareholders of the Target" is
the number of the voting rights of all shareholders as of September 30, 2020
as indicated in the Target's Quarterly Securities Report for the Third Quarter
of the 92nd Fiscal Year filed on February 10, 2021. However, because less than
unit shares are also subject to purchase in the Tender Offer, "Shareholding
Ratio before the Tender Offer" and "Shareholding Ratio after the Tender Offer"
are calculated based on the denominator of voting rights (114,767) pertaining
to the number of shares (11,476,788 shares) obtained by deducting the treasury
shares (23,212 shares) held by the Target as of March 31, 2021 from the total
number of issued shares (11,500,000 shares) as of the same day as indicated in
the Target's Annual Earnings Briefing.

(Note 3) "Shareholding Ratio before the Tender Offer" and "Shareholding Ratio
after the Tender Offer" are indicated by rounding to the second decimal place.

(7) Aggregate tender offer price 9,663,842,040 yen

(Note) The aggregate tender offer price indicated is the amount obtained by
multiplying the number of shares scheduled to be purchased in the Tender Offer
(5,280,788 shares) by the Tender Offer Price (1,830 yen).

(8) Method of settlement

(I) Name and location of head office of the financial instruments business
operator or bank, etc. in charge of settlement of the tender offer
 SMBC Nikko Securities Inc.  3-1, Marunouchi 3-Chome, Chiyoda-ku, Tokyo  


(II) Commencement date of settlement

June 18, 2021 (Friday)

(Note) If the Target submits a statement of opinion requesting an extension of
the tender offer period pursuant to Article 27-10, Paragraph 3 of the Act, the
commencement date of settlement shall be July 2, 2021 (Friday).

(iii) Method of settlement

A written notice concerning purchase, etc. through the Tender Offer shall be
sent by post to the address or location of the tendering shareholders (or the
standing proxy in the case of non-resident shareholders) without delay after
completion of the Tender Offer Period. The notice shall be given
electronically for tenders made through Nikko Easy Trade.



The purchase shall be made in cash. The sales proceeds for the purchased
shares, etc. shall be remitted from the tender offer agent to the location
designated by the tendering shareholders (or the standing proxy in the case of
non-resident shareholders) without delay after the commencement date of the
settlement as instructed by the tendering shareholders (or the standing proxy
in the case of non-resident shareholders).

(IV) Method of returning the shares, etc.

If all of the Tendered Shares are not purchased pursuant to the conditions set
out in "(I) Conditions in each item of Article 27-13, Paragraph 4 of the Act
and contents thereof" or "(II) Conditions for withdrawal, etc. of the Tender
Offer, contents thereof and method of disclosing the withdrawal, etc." in "(9)
Other conditions and method of the Tender Offer", the tender offer agent will
reinstate the shares, etc. that must be returned to the state when tender was
made (i.e., the state when execution of the tender order for the Tender Offer
was canceled) in the tendering shareholders’ accounts held by the tender
offer agent on the second business day after the last day of the Tender Offer
Period (if the Tender Offer is withdrawn, etc., on the day it is withdrawn,
etc.).

(9) Other conditions and method of the Tender Offer

(I) Conditions in each item of Article 27-13, Paragraph 4 of the Act and
contents thereof

If the total number of the Tendered Shares is less than the minimum number of
tendered shares to be purchased in the Tender Offer (1,455,200 shares), the
Offerors will purchase none of the Tendered Shares. If the total number of the
Tendered Shares is no less than the minimum number of tendered shares to be
purchased in the Tender Offer (1,455,200 shares), the Offerors will purchase
all of the Tendered Shares.

(II) Conditions for withdrawal, etc. of the Tender Offer contents thereof and
method of disclosing the withdrawal, etc.



Upon the occurrence of any items provided in Article 14, Paragraph 1, Items
(i) (a) to (j) and (m) to (s), Items (iii) (a) to (h) and (j), and Article 14,
Paragraph 2, Items (iii) to (vi) of the Order for Enforcement of the Financial
Instruments and Exchange Act (Cabinet Order No. 321 of 1965, as amended; the
"Order"), the Tender Offer may be withdrawn, etc. In the Tender Offer, "the
facts equivalent to those set forth in (a) to (i)" stipulated in Article 14,
Paragraph 1, Item (iii) (j) of the Order means: (1) discovery of a false
statement concerning a material item or an omission of a statement concerning
a material item that is required to be stated in the statutory disclosure
documents submitted by the Target in the past or (2) occurrence of any of the
events listed in (a) to (g) of the same Item with respect to the Target's
important subsidiary.

If the Offerors withdraw, etc. the Tender Offer, they shall give a public
notice electronically and publish a notice to that effect in the Nihon Keizai
Shimbun. If it is difficult to make a public notice by the last day of the
Tender Offer Period, the Offerors shall make an announcement by the method
prescribed in Article 20 of the Cabinet Office Ordinance, and give public
notice immediately thereafter.

(III) Conditions for reducing the price of tender offer, contents thereof and
method of disclosing the reduction.



If the Target conducts any act prescribed in Article 13, Paragraph 1 of the
Order during the Tender Offer Period, then pursuant to the provisions of
Article 27-6, Paragraph 1, Item (i) of the Act, the Offerors may reduce the
price of tender offer in accordance with the standards prescribed in Article
19, Paragraph 1 of the Cabinet Office Ordinance.

If the Offerors decide to reduce the purchase price, they shall give a public
notice electronically and publish a notice to that effect in the Nihon Keizai
Shimbun. If it is difficult to make a public notice by the last day of the
Tender Offer Period, the Offerors shall make an announcement by the method
prescribed in Article 20 of the Cabinet Office Ordinance, and give public
notice immediately thereafter.

If the price of tender offer is reduced, the Tendered Shares that were
tendered on or before the date of the relevant public notice shall also be
purchased at the reduced price of tender offer.

(IV) Matters concerning the tendering shareholders' rights to cancel
agreements

The tendering shareholders may cancel the agreement concerning the Tender
Offer at any time during the Tender Offer Period.

If a tendering shareholder intends to cancel agreement , the relevant
tendering shareholder is requested to deliver or send a written notice that
he/she will cancel the agreement concerning the Tender Offer (the
"Cancellation Notice") to the party designated below no later than 15:30 on
the last day of the Tender Offer Period. (Please note that the business hours
vary for each sales office. Please confirm in advance the business hours of
the relevant sales office.). If the Cancellation Notice is sent by post, it
must reach the party designated below no later than 15:30 on the last day of
the Tender Offer Period (Please note that the business hours vary for each
sales office. Please confirm in advance the business hours of the relevant
sales office.).

When cancelling the agreement for a tender made through Nikko Easy Trade,
please complete the cancellation procedures by no later than 15:30 on the last
day of the Tender Offer Period by logging into Nikko Easy Trade and following
the procedures shown on the screen.

The designated party that is authorized to receive the Cancellation Notice:

SMBC Nikko Securities Inc. 3-1, Marunouchi 3-Chome, Chiyoda-ku, Tokyo

(and its other sales offices in Japan)

The Offerors will not seek compensatory damages or penalties from the
tendering shareholders for cancelling the agreement. The Offerors will also
bear the cost for returning the Tendered Shares.

(V) Method of disclosure if the terms, etc. for purchase are changed

The Offerors may change the terms for purchase during the Tender Offer Period,
excluding the changes prohibited by Article 27-6, Paragraph 1 of the Act and
Article 13 of the Order.

If the Offerors decide to change the terms for purchase, they shall give a
public notice electronically on the contents of the change and publish a
notice to that effect in the Nihon Keizai Shimbun. If it is difficult to make
a public notice by the last day of the Tender Offer Period, the Offerors shall
make an announcement by the method prescribed in Article 20 of the Cabinet
Office Ordinance, and give public notice immediately thereafter.

If the terms for purchase are changed, the Tendered Shares that were tendered
on or before the date of the relevant public notice shall also be purchased at
the terms of purchase after the change.

(VI) Method of disclosure if amended tender offer registration statement is
submitted

If the Offerors submitted an amended tender offer registration statement to
the Director of the Kanto Local Finance Bureau (excluding a submission
pursuant to the proviso of Article 27-8, Paragraph 11 of the Act), they shall
immediately announce the contents stated in the amended tender offer
registration statement that relate to the contents stated in the public notice
by the method prescribed in Article 20 of the Cabinet Office Ordinance. The
Offerors must also immediately amend the tender offer explanatory statement
and deliver the amended tender offer explanatory statement to the tendering
shareholders who have already received the tender offer explanatory statement.
However, if the amendment is minor, the Offerors shall instead prepare a
document stating the reasons for the amendment, the items that were amended,
and the contents after the amendment, and deliver that document to the
tendering shareholders.

(VII) Method of disclosing the results of the Tender Offer

The Offerors will announce the results of the Tender Offer on the day
immediately after the last day of the Tender Offer Period by the method
stipulated in Article 9-4 of the Order and Article 30-2 of the Cabinet Office
Ordinance.

(VIII) Others

The Tender Offer is not, and will not be, made, directly or indirectly, in or
to the U.S., or by using the U.S. Postal Service or any other means or
instruments of interstate or foreign commerce (including, but not limited to
telephone, telex, facsimile, e-mail, and internet communication), or through
any facilities of a securities exchange in the U.S. No one may tender shares
in the Tender Offer by any means or instruments above, or through any facility
above, or from the U.S.

In addition, the tender offer registration statement or other related
documents are not, and may not be, sent or delivered by the postal service or
any other means in, to, or from the U.S. Any tender of shares in the Tender
Offer that directly or indirectly breaches any of the restrictions above will
not be accepted.

Each person who tenders shares in the Tender Offer (or the standing proxy in
the case of non-resident shareholders) is required to represent and warrant
the following: (i) the person is not located in the U.S. at the time of
tendering shares or sending the tender offer acceptance form; (ii) the person
did not receive or send any information regarding the Tender Offer or any
document regarding the purchase within, to or from the U.S.; (iii) the person
did not use, directly or indirectly, the U.S. Postal Service or any other
means or instruments of interstate or foreign commerce (including but not
limited to telephone, telex, facsimile, e-mail and internet communication) or
facilities of a securities exchange in the U.S. with respect to the purchase
or to signing or delivering the tender offer acceptance form; and (iv) the
person is not acting as an attorney, a trustee or a mandatary without
discretion for any other person (except for the case where the latter provides
all instructions for the purchase outside the U.S.).

(10) Date of public notice of commencement of the tender offer

May 17, 2021 (Monday)

(11) Tender offer agent

SMBC Nikko Securities Inc. 3-1, Marunouchi 3-Chome, Chiyoda-ku, Tokyo

3. Policies after the Tender Offer and perspectives

For our policies after the Tender Offer, see "(2) Background and purposes of
the Tender Offer and decision-making process leading to the consummation of
the Tender Offer and management policy after the Tender Offer," "(4) Policies
on the organizational restructuring, etc. after the Tender Offer (matters
concerning "two-step acquisition")" and "(5) Possibility of delisting and
reason" under "1. Purposes of the Purchase" above.

4. Others

(1) Agreements between the Offerors and the Target or its directors and
officers, and the details thereof

According to the Target's Press Release, it was resolved at the Target's board
of directors' meeting held on November 11, 2020 that if the Tender Offer is
commenced, the Target will express its opinion as of that date in favor of the
Tender Offer and the Target will recommend the shareholders of the Target to
tender in the Tender Offer.

At the Target's board of directors meeting held on May 14, 2021, all nine (9)
directors of the Target held a discussion, and in view of the Target's
business conditions and the environment surrounding the Transaction, again
carefully considered the various terms of the Tender Offer, decided that even
as of May 14, 2021 there were no factors to change its opinion concerning the
Tender Offer as of November 11, 2020, and those nine (9) directors of the
Target resolved with a unanimous vote that the Target will again express its
opinion in favor of the Tender Offer and recommend to its shareholders to
tender their shares in the Tender Offer.

For the details of the process of decision-making by the board of directors of
the Target at each of its meetings held on November 11, 2020 and May 14, 2021,
see "(V) Unanimous approval of all disinterested directors of the Target and
the opinion of all auditors that they have no objection" under "(3) Measures
to ensure the fairness of the Tender Offer, such as measures to ensure the
fairness of the Tender Offer Price and measures to avoid conflicts of
interest" under "1. Purposes of the Purchase" above.

(2) Other information considered to be necessary for investors to determine
whether to tender their shares in the Tender Offer


 1. Publication of "Consolidated Financial Results for the Fiscal Year Ended March
31, 2021 (Japanese GAAP)"



The Target announced its Annual Earnings Briefing on May 14, 2021, which is
summarized as follows. The contents of these financial results were not
audited by an audit corporation pursuant to Article 193-2, Paragraph 1 of the
Act. The following summary of the announcement is an extract from of the
contents announced by the Target. Please see the actual financial results for
details.



(i) Consolidated profit and loss
 Six month results                             For the consolidated fiscal year ended March 31, 2021  
                                               
(from April 1, 2020 to March 31, 2021)                
 Net sales                                     20,478 million yen                                     
 Cost of sales                                 14,726 million yen                                     
 Selling, general and administrative expenses  5,751 million yen                                      
 Non-operating income                          26 million yen                                         
 Non-operating expenses                        79 million yen                                         
 Net income attributable to owners of parent   2,063 million yen                                      


(ii) Consolidated per share information
 Six month results     For the consolidated fiscal year ended March 31, 2021  
                       
(from April 1, 2020 to March 31, 2021)                
 Net income per share  179.77 yen                                             
 Dividends per share   12.00 yen                                              



 1. Publication of "Notice Concerning Change of Officers"



On May 14, 2021, the Target published "Notice Concerning Change of Officers."
The change pertaining to this notice is as follows. Please see the actual
notice for details.



Change of Auditor (Effective June 24, 2021)

Auditor who is scheduled to resign:
 Name              Current Title        
 Yoshinori Ashida  Auditor (part-time)  
                   
                    
                                        


END
 Soliciting Regulations                                                           
 
                                                                                
 This Press Release is intended to announce the Tender Offer to the public and    
 has not been prepared for the purpose of soliciting an offer to sell shares.     
 If shareholders wish to make an offer to sell their shares, they should first    
 read the Tender Offer Explanation Statement concerning the Tender Offer and      
 make an offer to sell their shares at their own discretion. This press release   
 shall neither be, nor constitute a part of, an offer or solicitation to sell,    
 or solicitation of an offer to purchase any securities, and neither this Press   
 Release (or a part of this Press Release) nor its distribution shall be          
 interpreted to constitute the basis of any agreement in relation to the Tender   
 Offer, and this Press Release may not be relied upon at the time of entering     
 into any such agreement.                                                         
 
                                                                                
                                                                                  
 
                                                                                
 Forward-Looking Statements                                                       
 
                                                                                
 This information may contain expressions concerning future prospects for         
 business of the Offerors and other companies, including "expect,"                
 "anticipate," "intend," "plan," "strongly believe," and "project." These         
 expressions are based on the business prospects of the Offerors at present,      
 and are subject to change depending on the future circumstances. In respect of   
 this information, the Offerors assume no obligation to update these              
 expressions concerning future prospects to reflect actual performance and        
 other circumstances, and changes in the terms.                                   
 
                                                                                
                                                                                  
 
                                                                                
 U.S. Regulations                                                                 
 
                                                                                
 The Tender Offer is not and will not be made, directly or indirectly, in or to   
 the U.S., or by using the U.S. postal service or any other means or              
 instruments of interstate or foreign commerce (including but not limited to      
 telephone, telex, facsimile, e-mail, and internet communication), or through     
 any facilities of a securities exchange in the U.S. No one can tender shares     
 in the Tender Offer by any means or instruments above, or through any facility   
 above, or from the U.S. facilities within the U.S. The Tender Offer may not be   
 tendered using the above methods and means, through the above facilities, or     
 from within the U.S. Furthermore, the press release concerning the Tender        
 Offer or other related documents are not and may not be sent or delivered by     
 the postal service or any other means in, to, or from the U.S. Any tender of     
 shares in the Tender Offer that directly or indirectly breaches any of the       
 restrictions above will not be accepted.                                         
 
                                                                                
 Solicitation to purchase securities or other equivalents is not conducted to     
 residents in the U.S. or within the U.S., and those sent to the Offerors by      
 residents in the U.S. or from the U.S. will not be accepted.                     
 
                                                                                
                                                                                  
 
                                                                                
 Other Countries                                                                  
 
                                                                                
 The announcement, issuance, or distribution of this Press Release may be         
 legally restricted in some countries or territories. In such case,               
 shareholders should be aware of and comply with such restriction. The            
 announcement, issue or distribution of this Press Release shall not be           
 interpreted as an offer to purchase or solicitation of an offer to sell shares   
 concerning the Tender Offer, but simply as a distribution of information.        


 



View source version on businesswire.com:
https://www.businesswire.com/news/home/20210514005199/en/
(https://www.businesswire.com/news/home/20210514005199/en/)

Mitsui & Co Ltd


Copyright Business Wire 2021