Case 5:19-cv-00036-RWS Document 72-5 Filed 09/04/19 Page 1 of 19 PageID #: 3807
`Case 5:19-cv-00036—RWS Document 72-5 Filed 09/04/19 Page 1 of 19 PageID #: 3807
`
`EXHIBIT X
`
`EXHIBIT X
`
`

`

`8/24/2019
`
`Hitachi and Hitachi Maxell Announce Making Hitachi Maxell a Wholly Owned Subsidiary of Hitachi via a Share Exchange | News Release…
`Case 5:19-cv-00036-RWS Document 72-5 Filed 09/04/19 Page 2 of 19 PageID #: 3808
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`2/24/2010
`Hitachi and Hitachi Maxell Announce Making Hitachi Maxell a Wholly Owned
`Subsidiary of Hitachi via a Share Exchange
`
`Tokyo, February 24, 2010 – Hitachi, Ltd. (NYSE: HIT/TSE: 6501, “Hitachi”) and Hitachi
`Maxell, Ltd. (TSE: 6810, “Hitachi Maxell”) announced on January 14, 2010, that Hitachi
`would make Hitachi Maxell its wholly owned subsidiary via a share exchange with Hitachi
`as the wholly owning parent company and Hitachi Maxell as the wholly owned subsidiary
`(the “Share Exchange”). Agreements have subsequently been reached on the exchange
`ratio, effective date and other details of the Share Exchange, and the two companies
`hereby announce that they have concluded a share exchange agreement following
`today’s decision by Hitachi’s President and Chief Executive Officer and a resolution at
`Hitachi Maxell’s Board of Directors’ meeting held today (the “Share Exchange
`Agreement”).
`
`Both companies plan to implement the Share Exchange without obtaining approval by
`resolution at a General Meeting of Shareholders, with Hitachi using a simplified share
`exchange (kani kabushiki kokan) procedure pursuant to Article 796, Paragraph 3 of the
`Companies Act, and Hitachi Maxell using a summary share exchange (ryakushiki
`kabushiki kokan) procedure pursuant to Article 784, Paragraph 1 of the Companies Act.
`
`Hitachi Maxell shares are scheduled for delisting on March 29, 2010 (with a final trading
`date of March 26, 2010) prior to the effective date of the Share Exchange (April 1, 2010).
`
`1. Purpose of Making Hitachi Maxell a Wholly Owned Subsidiary
`via the Share Exchange
`
`As announced in its news releases “Hitachi to Commence Tender Offer for the Shares of
`its Subsidiary, Hitachi Maxell” on July 28, 2009, and “Hitachi Amends ‘Hitachi to
`Commence Tender Offer for the Shares of its Subsidiary, Hitachi Maxell’” on August
`19, 2009 (collectively the “Tender Offer News Releases”), Hitachi conducted a tender offer
`for the shares of Hitachi Maxell from August 20 to October 8, 2009, to make Hitachi Maxell
`a wholly owned subsidiary (the “Tender Offer”).
`
`In addition, as noted in their news release “Hitachi and Hitachi Maxell Announce Method
`of Making Hitachi Maxell a Wholly Owned Subsidiary of Hitachi (Share Exchange)” on
`January 14, 2010, Hitachi and Hitachi Maxell have determined the method for the share
`exchange to make Hitachi Maxell a wholly owned subsidiary of Hitachi, based on the
`result of the Tender Offer, etc.
`
`The purpose of Hitachi making Hitachi Maxell its wholly owned subsidiary is outlined in the
`Tender Offer News Releases and Hitachi Maxell’s announcements “Announcement
`Concerning Expression of Opinion for Tender Offer by Hitachi Ltd., for Shares of the
`Company” on July 28, 2009, and “Hitachi Maxell Amends ‘Announcement Concerning
`
`www.hitachi.us/press/02242010-01
`
`1/18
`
`

`

`Hitachi and Hitachi Maxell Announce Making Hitachi Maxell a Wholly Owned Subsidiary of Hitachi via a Share Exchange | News Release…
`8/24/2019
`Case 5:19-cv-00036-RWS Document 72-5 Filed 09/04/19 Page 3 of 19 PageID #: 3809
`Expression of Opinion for Tender Offer by Hitachi, Ltd. for Shares of the Company’” on
`August 19, 2009, and is reiterated below.
`
`The Hitachi Group, which consists of Hitachi, its subsidiaries and affiliated companies,
`conducts a wide range of business activities from the development, production and sales
`of offerings to the provision of relevant services in seven industry segments: Information &
`Telecommunication Systems; Electronic Devices; Power & Industrial Systems; Digital
`Media & Consumer Products; High Functional Materials & Components; Logistics,
`Services & Others; and Financial Services.
`
`In the severe economic environment of the worldwide structural recession that has been
`continuing since the second half of the previous fiscal year, the Hitachi Group must
`urgently optimize the allocation of the entire Group’s resources and accelerate the
`restructuring of the business portfolio to secure a foundation for future growth. The Group
`policy is to focus on the social innovation business to improve social infrastructure that is
`supported by highly reliable and efficient information and communication technologies.
`
`To reinforce this social innovation business, the Hitachi Group believes it is necessary to
`concentrate its business resources on the lithium ion batteries business, which will be a
`key device of the industry along with motors, invertors and power semiconductors. Hitachi
`considers that the lithium ion rechargeable batteries business will also be a core device of
`the social innovation business consisting of information & telecommunication systems
`business, the power systems business, the environmental, industrial and transport
`systems businesses, and the social and urban systems businesses and of environment-
`friendly automotive systems business such as hybrid and electric automobile businesses.
`
`Regarding Hitachi Maxell, Ltd., the dried batteries and magnetic tape divisions of Nitto
`Electric Industrial Co., Ltd. (currently Nitto Denko Corp.), were set up independently as
`Maxell Electric Industrial Co., Ltd., which commenced operations in 1961 and became
`Hitachi’s consolidated subsidiary in 1964, changing its corporate name to Hitachi Maxell,
`Ltd. Currently, in accordance with the long-term vision of “Breakthrough to New Horizons
`—challenge of seeking fresh possibilities” set in its medium-term business plan, Hitachi
`Maxell has been accelerating a change in its business portfolio to improve profitability and
`to ensure new growth toward the medium-term mission of “Change for Growth.”
`Specifically, Hitachi Maxell is concentrating its business resources in the priority
`businesses of “batteries,” “optical components” and “functional materials & components,”
`each of which has high potential of future growth and profitability. Hitachi Maxell promotes
`differentiation from competitors by optimizing its proprietary technologies and the
`development of high-value-added products to these three business areas. In its core
`Information Storage Media business, Hitachi Maxell will pursue higher profitability by
`introducing new products and reducing costs to restructure businesses.
`
`Hitachi Maxell has been steadily expanding the business related to lithium ion
`rechargeable batteries, which is the core product line of its batteries business, one of its
`priority businesses. Specifically, in addition to products for mobile phones, which had been
`a main business field, Hitachi Maxell aims to expand its batteries business into power
`tools and electric-supported bicycles fields by developing new cylindrical products and
`laminated products in addition to conventional prismatic lithium ion rechargeable batteries.
`In February 2009, to supply electrode materials not only for consumer use but also for use
`in automobiles and industries, Hitachi Maxell established a new electrode manufacturing
`plant with high-speed and high-precision coating systems that harness its outstanding
`proprietary technologies.
`
`The Hitachi Group and Hitachi Maxell have reinforced their collaborations in the lithium ion
`rechargeable batteries business. For instance, Hitachi and Hitachi Maxell have been using
`Hitachi’s laboratories to develop consumer-use lithium ion rechargeable batteries.
`
`In 2004, Hitachi Maxell and Hitachi both invested in Hitachi Vehicle Energy, Ltd., which
`was established by the Hitachi Group and develops and sells lithium ion rechargeable
`batteries for automobiles. Harnessing Hitachi Maxell’s technological experience
`
`www.hitachi.us/press/02242010-01
`
`2/18
`
`

`

`Hitachi and Hitachi Maxell Announce Making Hitachi Maxell a Wholly Owned Subsidiary of Hitachi via a Share Exchange | News Release…
`8/24/2019
`Case 5:19-cv-00036-RWS Document 72-5 Filed 09/04/19 Page 4 of 19 PageID #: 3810
`accumulated in the development and manufacture of consumer-use compact lithium ion
`rechargeable batteries, Hitachi and Hitachi Maxell have been collaborating in the research
`and development of highly reliable and safe lithium ion rechargeable batteries for
`automobiles and such collaborations have produced significant results in design,
`development and manufacturing of such products.
`
`As announced in the news release dated April 17, 2009 by Hitachi titled “Promotion of the
`lithium ion rechargeable batteries business,” the Hitachi Group decided to further reinforce
`collaborations with Group companies including Hitachi Maxell, Shin-Kobe Electric
`Machinery Co., Ltd. and Hitachi Vehicle Energy, Ltd., under its business strategy toward
`overall optimization, to promote a systems business using lithium ion rechargeable
`batteries and other rechargeable batteries as one of the core businesses. The Hitachi
`Group aims to strengthen its lithium ion rechargeable batteries related business with high
`quality and performance such as consumer-use lithium ion rechargeable batteries shipped
`a cumulative total of 600 million cells without recalled products (for collection and repair)
`and in-vehicle lithium ion rechargeable batteries promoted as commercialization of
`pioneering products. We also established the Battery Systems Division as of April 1, 2009,
`to integrate the lithium ion rechargeable batteries-related businesses across the Hitachi
`Group. In addition, the Hitachi Group newly established the Advanced Battery Research
`Center for R&D of materials for next-generation batteries.
`
`In the business field of rechargeable batteries centering on lithium ion rechargeable
`batteries, although high growth is expected by the expansion of the market for products in
`which such batteries are used and their new applications, there is concern over
`intensifying competition due to an increase of new entrants in the consumer-use products
`business, among which there is pressure to lower the prices of finished products. There is
`also the strong public demand for the establishment of a comprehensive global
`environment and energy saving-related system based on lithium ion rechargeable
`batteries in the automobile and industrial sectors. Rechargeable batteries including lithium
`ion rechargeable batteries are essential to make internal-combustion systems electric-
`driven and for practical application of new energy that replaces fossil fuels. The Hitachi
`Group must reinforce a system that can flexibly address such customer needs in order to
`improve its growth and profitability of the Hitachi Group in the lithium ion rechargeable
`batteries business.
`
`Under such circumstances, since the end of March 2009, Hitachi and Hitachi Maxell have
`discussed various measures to improve the enterprise value of both companies and
`concluded that Hitachi’s acquisition of Hitachi Maxell and making it a wholly owned
`subsidiary to establish a more stable capital relationship would be very beneficial to
`enhance the enterprise value not only of Hitachi Maxell but also of the entire Hitachi
`Group.
`
`Specifically,
`
`First, Hitachi and Hitachi Maxell believe that both companies can favorably survive the
`competition in the automobile, industrial sectors and railway vehicles by aggressively
`combining the lithium ion batteries development capability, mass production technology
`and other tangible and intangible assets in the lithium ion batteries-related business areas
`that Hitachi Maxell has acquired in the consumer products field and Hitachi’s system
`capability and diverse business infrastructure, which are expected to become a reliable
`part of proposals for system solutions in industrial sectors where future development is
`expected. By combining all such capabilities and assets, Hitachi and Hitachi Maxell can
`enhance the development capability of products using lithium ion rechargeable batteries in
`these fields and accelerate the exploration of new applications. Hitachi and Hitachi Maxell
`also believe that Hitachi’s system solutions in the industrial sector will significantly
`differentiate both companies from other consumer product manufacturers that produce
`lithium ion rechargeable batteries by expanding the lithium ion batteries business that is a
`key device of the social innovation business along with motors, invertors and power
`
`www.hitachi.us/press/02242010-01
`
`3/18
`
`

`

`Hitachi and Hitachi Maxell Announce Making Hitachi Maxell a Wholly Owned Subsidiary of Hitachi via a Share Exchange | News Release…
`8/24/2019
`Case 5:19-cv-00036-RWS Document 72-5 Filed 09/04/19 Page 5 of 19 PageID #: 3811
`semiconductors and by enhancing solution proposals which is integrated with such
`lithium-ion rechargeable batteries business and social and industry systems.
`
`Further, concerning research and development, in the markets for in-vehicle products and
`products for industrial and social infrastructure where future growth is expected, there will
`be many opportunities to apply Hitachi’s research resources for products and services and
`it will be relatively easier for collaborations between Hitachi Maxell and Hitachi to lead to
`tangible results. Both companies expect tighter technological collaborations based on the
`integrated management of the Hitachi and Hitachi Maxell to generate significant
`synergies.
`
`In the promising lithium ion batteries business, competitors will also concentrate their
`business resources in this field. However, Hitachi Maxell’s competitiveness is expected to
`be substantially improved by reinforcing the capital relationship with Hitachi. Through the
`integration, Hitachi Maxell will receive further credit, supported by the Hitachi’s sturdy
`financial base, thereby enabling Hitachi Maxell to make flexible judgments for larger-scale
`investments.
`
`In addition, by reinforcing the capital relationship between Hitachi Maxell and Hitachi, it will
`become possible to reduce the investment burden of Hitachi Maxell by sharing
`manufacturing lines with other Group companies such as Hitachi Vehicle Energy which
`engages in the manufacture of in-vehicle large-scale lithium ion rechargeable batteries.
`That will help reinforce the Group wide cost competitiveness too. Optimizing the Hitachi
`Group’s operating base more than ever, such fundamental advances will become
`possible.
`
`It is also expected that Hitachi making Hitachi Maxell a wholly owned subsidiary and the
`establishment of a more stable capital relationship will be beneficial to Hitachi Maxell’s
`businesses other than the batteries business as well.
`
`Specifically, with regard to computer tapes and video tapes for broadcasting, for which
`Hitachi Maxell holds high market shares, and storage and broadcasting and
`telecommunications equipment, on which Hitachi’s Information & Telecommunication
`Systems Group has been focusing, equipment and media has been developed at
`separate companies. In the future, however, Hitachi can expect faster product
`development and the acquisition of more customers through the collaboration between
`Hitachi Maxell and Hitachi, harnessing each company’s specialties and converging the
`development resources of both companies. It will also become possible to offer
`increasingly valuable and optimal solutions to customers. With regard to camera lens and
`optical pickup lens, which are mainstay products in the optical components business on
`which Hitachi Maxell is focusing, such as the lens for finger vein authentication systems,
`monitoring camera systems for crime prevention, in-vehicle cameras and BD/DVD/CD all-
`compatible drives that the Hitachi Group has commercialized, cooperation from the
`development stage will make it possible to differentiate them from other companies’
`products and reinforce product competitiveness. Furthermore, as for adhesive tapes and
`adhesion technology in Hitachi Maxell’s Functional Materials & Components business,
`further reinforcement of competitiveness can be expected in the automobile and
`electronics fields developed by the Hitachi Group. In the medical field as well, synergies
`and the exploration of new markets can be expected, with such medical equipment as
`blood measurement devices and biomaterials and components such as bio-beads for
`DNA analysis. In addition, by optimizing the “Maxell” brand and sales channel that Hitachi
`Maxell has nurtured worldwide, significant reinforcement of Hitachi’s consumer products
`sales capability can be expected.
`
`Through reinforcement of the capital relationship between Hitachi and Hitachi Maxell in
`these ways, integrated business management will help optimize all the businesses
`conducted by Hitachi Maxell including the “batteries” business, thereby enabling larger-
`scale and more effective investments compared with utilization of business resources
`such as for R&D and capital investments conducted solely by Hitachi or Hitachi Maxell.
`
`www.hitachi.us/press/02242010-01
`
`4/18
`
`

`

`Hitachi and Hitachi Maxell Announce Making Hitachi Maxell a Wholly Owned Subsidiary of Hitachi via a Share Exchange | News Release…
`8/24/2019
`Case 5:19-cv-00036-RWS Document 72-5 Filed 09/04/19 Page 6 of 19 PageID #: 3812
`Hitachi intends to reinforce Hitachi Maxell’s businesses, even after making it a wholly
`owned subsidiary, by not only respecting Hitachi Maxell’s self-initiatives and independence
`but also paying attention to Hitachi Maxell’s business features and the management that
`can fully utilize the operational and structural strength.
`
`After making Hitachi Maxell its wholly owned subsidiary, Hitachi will strive for consistent
`growth of Hitachi Maxell in its priority areas by reinforcing Hitachi Maxell’s R&D capability
`and productivity through a stronger relationship with the Hitachi Group and the effective
`use of business resources.
`
`Hitachi believes that the reinforcement of Hitachi Maxell’s business base and
`management base by such a strong relationship will lead to the improvement of the
`enterprise value of Hitachi Maxell and the entire Hitachi Group.
`
`2. Summary of the Share Exchange
`
`(1) Schedule of the Share Exchange
`
`
`President and Chief Executive Officer’s decision to
`conduct the Share Exchange (Hitachi)
`
`Thu. January 14,
`2010
`
`Resolution at the Board of Directors’ meeting to
`conduct the Share Exchange (Hitachi Maxell)
`
`Thu. January 14,
`2010
`
`President and Chief Executive Officer’s decision to
`conclude the Share Exchange Agreement (Hitachi)
`
`Wed. February 24,
`2010
`
`Resolution at the Board of Directors’ meeting to
`conclude the Share Exchange Agreement
`(Hitachi Maxell)
`
`Wed. February 24,
`2010
`
`Conclusion of the Share Exchange Agreement
`(Hitachi and Hitachi Maxell)
`
`Wed. February 24,
`2010
`
`Final trading date (Hitachi Maxell)
`
`Delisting date (Hitachi Maxell)
`
`Scheduled execution date (effective date)
`
`Fri. March 26, 2010
`(planned)
`
`Mon. March 29, 2010
`(planned)
`
`Thu. April 1, 2010
`(planned)
`
`Note: Both companies plan to implement the Share Exchange without obtaining approval
`by resolution at a General Meeting of Shareholders, with Hitachi using a simplified share
`exchange procedure pursuant to Article 796, Paragraph 3 of the Companies Act, and
`Hitachi Maxell using a summary share exchange procedure pursuant to Article 784,
`Paragraph 1 of the Companies Act.
`
`www.hitachi.us/press/02242010-01
`
`5/18
`
`

`

`8/24/2019
`Hitachi and Hitachi Maxell Announce Making Hitachi Maxell a Wholly Owned Subsidiary of Hitachi via a Share Exchange | News Release…
`Case 5:19-cv-00036-RWS Document 72-5 Filed 09/04/19 Page 7 of 19 PageID #: 3813
`(2) Share Exchange Method
`Under the Share Exchange, Hitachi will be the wholly owning parent company in share
`exchange and Hitachi Maxell the wholly owned subsidiary in share exchange.
`Furthermore, both companies plan to implement the Share Exchange without obtaining
`approval by resolution at a General Meeting of Shareholders, with Hitachi using a
`simplified share exchange procedure pursuant to Article 796, Paragraph 3 of the
`Companies Act, and Hitachi Maxell using a summary share exchange procedure pursuant
`to Article 784, Paragraph 1 of the Companies Act.
`(3) Details of the Allotment related to the Share Exchange
`
`
`
`
`
`Company Name
`
`
`
`
`
`Hitachi, Ltd.
`(Wholly Owning Parent
`Company in Share
`Exchange)
`
`Hitachi Maxell, Ltd.
`(Wholly Owned
`Subsidiary in Share
`Exchange)
`
`Allotment related to
`the Share Exchange
`
`1
`
`5.66
`
`31,164,967 shares of common stock (planned)
`
`Number of shares to
`be delivered under
`the Share Exchange
`
`Notes:
`
`Share allotment ratio
`5.66 shares of Hitachi will be allotted and delivered for each share of Hitachi Maxell.
`However, no allotment of shares will be made under the Share Exchange for Hitachi
`Maxell shares held by Hitachi (90,553,354 shares as of February 24, 2010).
`
`Number of shares to be delivered under the Share Exchange
`Upon the Share Exchange, Hitachi will deliver to Hitachi Maxell shareholders (other than
`Hitachi) immediately prior to the time at which it acquires all of the outstanding Hitachi
`Maxell shares (exclusive of those shares held by Hitachi) under the Share Exchange (the
`“Record Time”) Hitachi shares equivalent in number to 5.66 multiplied by the total number
`of Hitachi Maxell shares held by each Hitachi Maxell shareholder in exchange for those
`shares of Hitachi Maxell. Furthermore, Hitachi Maxell’s Board of Directors, at a meeting to
`be held by the day before the effective date of the Share Exchange, will resolve to cancel
`all of the treasury stock (including that acquired as a result of an application for purchase
`exercised by dissenting shareholders as per Article 785, Paragraph 1 of the Companies
`Act regarding the Share Exchange) by the Record Time.
`
`There is the possibility that the number of Hitachi shares to be delivered could be
`amended due to factors such as Hitachi Maxell’s cancellation of treasury stock.
`
`In addition, the Hitachi shares to be delivered are scheduled to be shares of treasury stock
`held. However, there is the possibility that a portion of these shares will be newly issued,
`depending on the number of Hitachi Maxell’s treasury stock to be cancelled by the Record
`Time as well as the number of shares to be delivered under Hitachi’s share exchange with
`Hitachi Plant Technologies, Ltd. to be conducted on the effective date of April 1, 2010.
`
`www.hitachi.us/press/02242010-01
`
`6/18
`
`

`

`Hitachi and Hitachi Maxell Announce Making Hitachi Maxell a Wholly Owned Subsidiary of Hitachi via a Share Exchange | News Release…
`8/24/2019
`Case 5:19-cv-00036-RWS Document 72-5 Filed 09/04/19 Page 8 of 19 PageID #: 3814
`Handling of less-than-one-unit shares (tangen-miman-kabushiki)
`Shareholders who will hold less-than-one-unit shares of Hitachi as a result of the Share
`Exchange may make use of one of the methods below with regard to Hitachi shares.
`Less-than-one-unit shares cannot be sold on financial instrument exchanges.
`
`Additional purchase system for less-than-one-unit shares (additional purchase of up to
`1,000 shares)
`A system under which shareholders that hold less-than-one-unit shares of Hitachi may
`additionally purchase the incremental number of Hitachi shares to make one unit (tangen)
`(1,000 shares).
`
`Purchase system for less-than-one-unit shares (sale of less-than-one-unit shares)
`A system under which shareholders that hold less-than-one-unit shares of Hitachi may
`request Hitachi to repurchase those less-than-one-unit shares held.
`
`Treatment of fractions of less than one (1) share
`If the number of Hitachi shares to be delivered through the Share Exchange includes a
`fraction of less than one share, Hitachi will sell the number of shares equivalent to the sum
`of all such fractions (fractions of the aggregate number to be rounded down) and will
`deliver the proceeds of that sale to those Hitachi Maxell shareholders who are to receive
`such fractions in proportion to the fractions attributed to them pursuant to Article 234 of the
`Companies Act and other applicable laws and regulations.
`(4) Handling of Stock Acquisition Rights and Bonds with Stock
`Acquisition Rights under the Share Exchange
`Hitachi Maxell does not have any outstanding issues of stock acquisition rights or bonds
`with stock acquisition rights.
`
`3. Basis of Calculation, etc., for the Details of the Allotment
`related to the Share Exchange
`
`(1) Basis of Calculation
`In order to ensure fairness and adequacy in determining the share exchange ratio for the
`Share Exchange (the “Share Exchange Ratio”), each company individually requested a
`third-party appraiser independent of Hitachi and Hitachi Maxell to calculate the share
`exchange ratio. Hitachi designated Nomura Securities Co., Ltd., as its third-party
`appraiser and Hitachi Maxell designated Nikko Cordial Securities Inc., as its third-party
`appraiser.
`
`Nomura Securities analyzed the Tender Offer conducted prior to the Share Exchange, as
`well as its terms and conditions and its results, etc., and for Hitachi, in light of the fact that
`Hitachi shares are listed on the financial instrument exchanges and that market values are
`available, made a calculation using the average market share price method (in view of
`various terms and conditions, based on the closing price on the First Section of the Tokyo
`Stock Exchange on the record date of February 22, 2010, and the average closing prices
`for each trading day during the most recent one-week period, from February 16 to
`February 22, 2010, the most recent one-month period, from January 25 to February 22,
`2010, and the period from December 8, 2009, the business day immediately following the
`issuing of Hitachi’s December 7, 2009, news release titled, “Determination of Offer Price
`and Selling Price for Issuance and Sale of Shares and Conversion Price and Other
`Conditions for Issuance of Convertible Bond Type Bonds with Stock Acquisition Rights,” to
`February 22, 2010).
`
`For Hitachi Maxell, in light of the fact that Hitachi Maxell shares are listed on the financial
`instrument exchanges and that market values are available, Nomura Securities made a
`calculation using the average market share price method (in view of various terms and
`
`www.hitachi.us/press/02242010-01
`
`7/18
`
`

`

`Hitachi and Hitachi Maxell Announce Making Hitachi Maxell a Wholly Owned Subsidiary of Hitachi via a Share Exchange | News Release…
`8/24/2019
`Case 5:19-cv-00036-RWS Document 72-5 Filed 09/04/19 Page 9 of 19 PageID #: 3815
`conditions, based on the closing price on the First Section of the Tokyo Stock Exchange
`on the record date of February 22, 2010, and the average closing prices for each trading
`day during the most recent one-week period, from February 16 to February 22, 2010, the
`most recent one-month period, from January 25 to February 22, 2010, and the period from
`December 8, 2009, the business day immediately following the issuing of Hitachi’s
`December 7, 2009, news release titled, “Determination of Offer Price and Selling Price for
`Issuance and Sale of Shares and Conversion Price and Other Conditions for Issuance of
`Convertible Bond Type Bonds with Stock Acquisition Rights,” to February 22, 2010). In
`addition, given the existence of multiple similar listed companies that are comparable to
`Hitachi Maxell, Nomura Securities made a calculation using the comparable company
`analysis method, since it is possible to analogize the equity value by this method. Nomura
`Securities also made a calculation using the discounted cash flow method (the “DCF”
`method) to reflect the value of Hitachi Maxell’s future business activities.
`
`These calculations resulted in the following ranges of share exchange ratios per Hitachi
`share.
`
`Methods used
`
`Calculation results of share exchange ratio
`
`Average market share price method
`
`5.66 — 5.93
`
`Comparable company analysis
`method
`
`4.65 — 4.82
`
`DCF method
`
`5.29 — 6.37
`
`On the other hand, Nikko Cordial Securities analyzed the Tender Offer conducted prior to
`the Share Exchange, as well as its terms and conditions and its results, etc., and for
`Hitachi Maxell, in light of the fact that Hitachi Maxell shares are listed on the financial
`instrument exchanges, and that market values are available, made a calculation using the
`average market share price method (in view of various terms and conditions, with the
`record date of February 22, 2010, based on the average closing prices on the First
`Section of the Tokyo Stock Exchange for each trading day during the most recent one-
`month period, from January 25 to February 22, 2010 and the most recent three-month
`period, from November 24, 2009 to February 22, 2010). In addition, given the existence of
`multiple similar listed companies that are comparable to Hitachi Maxell, Nikko Cordial
`Securities made a calculation using the comparable company analysis method because it
`is possible to analogize the equity value by this method. Nikko Cordial Securities also
`made a calculation using the DCF method to reflect the value of Hitachi Maxell’s future
`business activities. For Hitachi, in light of the fact that Hitachi shares are listed on the
`financial instrument exchanges and that market values are available, Nikko Cordial
`Securities made a calculation using the average market share price method (in view of
`various terms and conditions, with the record date of February 22, 2010, based on the
`average closing prices on the First Section of the Tokyo Stock Exchange for each trading
`day during the period from February 5, 2010, the business day immediately following the
`issuing of Hitachi’s February 4, 2010, news release titled, “Hitachi Announces Revisions of
`Consolidated Business Forecasts for Fiscal 2009,” to February 22, 2010, the most recent
`one-month period, from January 25 to February 22, 2010, the period from December 8,
`2009, the business day immediately following the issuing of Hitachi’s December 7, 2009,
`news release titled, “Determination of Offer Price and Selling Price for Issuance and Sale
`of Shares and Conversion Price and Other Conditions for Issuance of Convertible Bond
`Type Bonds with Stock Acquisition Rights,” to February 22, 2010 and the most recent
`three-month period, from November 24, 2009 to February 22, 2010). These calculations
`resulted in the following ranges of share exchange ratios per Hitachi share.
`
`www.hitachi.us/press/02242010-01
`
`8/18
`
`

`

`Hitachi and Hitachi Maxell Announce Making Hitachi Maxell a Wholly Owned Subsidiary of Hitachi via a Share Exchange | News Release…
`8/24/2019
`Case 5:19-cv-00036-RWS Document 72-5 Filed 09/04/19 Page 10 of 19 PageID #: 3816
`Methods used
`Calculation results of share exchange ratio
`
`Average market share price method
`
`5.52 — 6.21
`
`Comparable company analysis
`method
`
`3.31 — 5.20
`
`DCF method
`
`4.25 — 6.00
`
`(2) Basis of the Valuation
`Hitachi and Hitachi Maxell carefully considered the calculation results of the share
`exchange ratio received from the third-party appraisers. The two companies also studied
`the terms and conditions and outcome of the Tender Offer as well as the market value
`level of Hitachi shares and other various factors. Based on these considerations, they
`conducted numerous negotiations and consultations on the evaluation of Hitachi Maxell
`shares using the equivalent in value to the Tender Offer Price as a standard as described
`in the Tender Offer News Releases. As a result, Hitachi and Hitachi Maxell have
`concluded that the Share Exchange Ratio in 2.(3) “Details of the Allotment related to the
`Share Exchange” above is adequate and that the ratio will not harm the interests of either
`company’s shareholders. Therefore, Hitachi and Hitachi Maxell concluded a share
`exchange agreement to conduct the Share Exchange using the share exchange ratio in 2.
`(3) “Details of the Allotment related to the Share Exchange” above following the decision
`by Hitachi’s President and Chief Executive Officer and the resolution at Hitachi Maxell’s
`Board of Directors’ meeting.
`
`With the calculation results of the share exchange ratio provided by the aforementioned
`third-party appraisers, no opinions are being expressed with regard to the fairness of the
`Share Exchange Ratio.
`
`If any major changes were to emerge in the terms and conditions used as the basis of the
`calculation, the share exchange ratio may be changed through consultations between the
`both companies.
`(3) Relationship with Third-Party Appraisers
`Nomura Securities, Hitachi’s third-p