Notice Regarding Investment in a Special-Purpose Company for the Acquisition of Shares of SHINKO ELECTRIC INDUSTRIES CO., LTD.

Mitsui Chemicals, Inc. (head office: Chuo, Tokyo; President & CEO: HASHIMOTO Osamu; securities code: 4183; “Mitsui Chemicals”) announced today that it will work with funds managed and operated by JIC Capital, Ltd. (head office: Minato, Tokyo; President and CEO: IKEUCHI Shogo; “JICC” )(the “JICC Funds”, including a fund in which Hachijuni Sustainability No. 1 Fund (general partner: Hachijuni Investment Co., Ltd.) (“Hachijuni Investment”) will invest), as well as with Dai Nippon Printing Co., Ltd. (head office: Shinjuku, Tokyo; President: KITAJIMA Yoshinari; securities code: 7912; “DNP”), to invest in JICC-04, Ltd. (the “Tender Offeror”).  

The Tender Offeror is a stock company established on September 29, 2023, whose main business is to acquire and own share certificates of SHINKO ELECTRIC INDUSTRIES CO., LTD. (head office: Nagano, Nagano Prefecture; Representative Director of Board and President: KURASHIMA Susumu; securities code: 6967; the “Target”) and, once the acquisition of shares of common stock of the Target (the “Target Shares”) through a tender offer under the Financial Instruments and Exchange Act of Japan (the “Tender Offer”) has been completed, to control and manage the Target’s business activities.

In the event that the Tender Offer is completed, Mitsui Chemicals will accept the common shares and preferred shares (non-voting shares) of the Tender Offeror through third-party allotment by the time the Tender Offer is settled. Mitsui Chemicals plans to hold 5% of the voting rights of the Tender Offeror, and the total amount of this investment is planned of approximately 35 billion yen.

The investment in the Tender Offeror is scheduled to take place in the fiscal year ending March 2025, and the impact of this investment on the financial performance of Mitsui Chemicals in the fiscal year ending March 2025 is expected to be minor.

(Note) “Shareholding ratio” refers to the ratio (rounded to the second decimal place) to the number of the Target’s shares (135,117,512 shares) obtained by deducting the number of treasury shares owned by the Target as of September 30, 2023 (54,430 shares) from the total number of issued shares of the Target as of September 30, 2023 (135,171,942 shares), as stated in the “Consolidated Financial Results for the Six Months Ended September 2023 (Japanese GAAP)” submitted by the Target on October 26, 2023. The same applies to shareholding ratio calculations below.

Based on its VISION 2030 Long-Term Business Plan, the Mitsui Chemicals Group (the “Group”) aims to create and expand a unique ICT Solutions business, with the objective of establishing it as a high-growth, high-profitability global specialty chemicals business. Mitsui Chemicals’ ICT Solutions business strategy defines four business areas that the Group is working to bolster: semiconductor & assembly solutions, imaging solutions, battery material solutions and converting solutions. In the area of semiconductor & assembly solutions, the Group aims to align its business strategies with technology roadmaps drawn up by customers, and to create new businesses and products that contribute to semiconductor and assembly process innovations. In order for the Group to strengthen semiconductor & assembly solutions business, we need to adapt new materials created from our core molecular design and synthesis technologies to suitability assessments that satisfy our customers’ next-generation semiconductor packages and assembly processes.

There is no agreement regarding collaboration with the Target at this stage and it is not a condition of the Group’s investment in the Tender Offeror. However, through the investment in the Tender Offeror, the Target will strengthen and maintain its market competitiveness in the field of next-generation semiconductor package substrates by linking the Target's semiconductor package substrate technology with the material technology of the Group in the future. We believe that this will enable us to strengthen our ability to provide solutions to our customers.

As well as developing stronger tie-ups with external partners in the semiconductor field, the Group is collaborating with startups and world-class research institutions such as imec. In 2024, the Group plans to open a facility “Creative Integration Lab.™” at its Nagoya Works for co-creation with customers in the ICT realm, which will be furnished with equipment for customer process compatibility evaluation. The Group intends through these activities to strengthen its business in the area of next-generation semiconductor & assembly solutions.

*Disclaimer

The financial advisors to Mitsui Chemicals, JICC, the JICC Funds, DNP, the Tender Offeror and Target as well as the tender offer agent (including their respective affiliates) may, within their ordinary course of business, engage during the tender offer period in the purchase of, or an arrangement to purchase, Target’s shares for their own account or for their customers’ accounts outside the Tender Offer in accordance with Rule 14e-5(b) of the U.S. Securities Exchange Act of 1934, to the extent permitted under Japanese securities regulations and other applicable laws and regulations. Such purchases, etc. may be made at the market price through market transactions or at a price determined by negotiation outside of the market. In the event that information regarding such purchases, etc. is disclosed in Japan, such information will also be disclosed in a similar manner in the U.S.