Mitsui Sugar : Notice Regarding Conclusion of Capital and Business Alliance Agreement among Mitsui Sugar Co., Ltd., Dai-Nippon Meiji Sugar Co., Ltd., and Nippon Beet Sugar Manufacturing Co., Ltd.

	January 15, 2021
Company name:	Mitsui Sugar Co., Ltd.
Representative:	Taku Morimoto
	President and CEO
	(Code: 2109, TSE 1st section)
Inquiries to:	Hideaki Batori
	Executive Managing Officer
	Group Strategy Division
	TEL [phone]
Company name:	Dai-Nippon Meiji Sugar Co., Ltd.
Representative:	Yu Sato
	President and CEO
Inquiries to:	Kazuo Nakaso
	Managing Director Executive Officer
	General Manager, Corporate Division
	TEL [phone]
Company name:	Nippon Beet Sugar Manufacturing Co., Ltd.
Representative:	Tsukasa Emoto
	President
	(Code: 2108, TSE 1st section)
Inquiries to:	Yasushi Shirahata
	General Manager, General Affairs
	TEL [phone]

Notice Regarding Conclusion of Capital and Business Alliance Agreement

among Mitsui Sugar Co., Ltd., Dai-Nippon Meiji Sugar Co., Ltd., and

Nippon Beet Sugar Manufacturing Co., Ltd.

As Mitsui Sugar Co., Ltd. (Head office: 36-2,Nihonbashi-Hakozakicho,Chuo-ku, Tokyo; President &

CEO: Taku Morimoto; hereinafter referred to as "Mitsui Sugar"), Dai-Nippon Meiji Sugar Co., Ltd. (Head

office: 2-1-1, Uchisaiwaicho, Chiyoda-ku, Tokyo; President & CEO: Yu Sato; hereinafter referred to as

"Dai-Nippon Meiji"), and Nippon Beet Sugar Manufacturing Co., Ltd. (Head office: 3-12-14 Mita, Minato-

Ku, Tokyo; President: Tsukasa Emoto; hereinafter referred to as "Nitten") announced in the "Notice

Regarding Commencement of Talks for Business Integration between Mitsui Sugar Co., Ltd. and Dai-

Nippon Meiji Sugar Co., Ltd. and Capital and Business Alliance between Mitsui Sugar Co., Ltd., Dai-

Nippon Meiji Sugar Co., Ltd. and Nippon Beet Sugar Manufacturing Co., Ltd." dated March 25, 2020,

Mitsui Sugar, Dai-Nippon Meiji, and Nitten have held discussions and deliberations for a business

integration between Mitsui Sugar and Dai-Nippon Meiji (hereinafter referred to as the "Business

Integration"1) and a capital and business alliance between the Holding Company (as defined below2)

and Nitten (hereinafter referred to ｗas the "Capital and Business Alliance"). As a result of such

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discussions and deliberations, Mitsui Sugar, Dai-Nippon Meiji, and Nitten today announce the conclusion of a capital and business alliance agreement among the three parties (hereinafter referred to as the "Capital and Business Alliance Agreement").

Notes: 1. For details on the Business Integration, please refer to the "Notice Regarding Conclusion of Final Agreement on Business Integration between Mitsui Sugar Co., Ltd. and Dai- Nippon Meiji Sugar Co., Ltd.," released by Mitsui Sugar and Dai-Nippon Meiji on October 15, 2020, the "Notice Regarding Conclusion of Share Exchange Agreement with Dai- Nippon Meiji Sugar Co., Ltd., Reorganization into a Holding Company Structure through Absorption-Type Company Split, Trade Name Change, and Changes in Other Associated Companies and Major Shareholders" released by Mitsui Sugar on October 15, 2020, and the "Notice Regarding Conclusion of Absorption-Type Company Split Agreement for Reorganization into a Holding Company Structure upon Business Integration with Dai-Nippon Meiji Sugar Co., Ltd.," released by Mitsui Sugar on November 25, 2020.

2. Subject to the share exchange as provided in the share exchange agreement, dated October 15, 2020, between Mitsui Sugar and Dai-Nippon Meiji (hereinafter referred to as the "Share Exchange"), Mitsui Sugar is planning to reorganize into a holding company structure through an absorption-type company split as provided in the absorption-type company split agreement (hereinafter referred to as the "Absorption-Type Company Split"), dated November 25, 2020, between Mitsui Sugar and Mitsui Sugar Split Preparation Co., Ltd., which has been established as Mitsui Sugar's wholly owned subsidiary on October 16, 2020 (hereinafter referred to as the "Company Split Preparation Company"). Further, subject to the Share Exchange and Absorption-Type Company Split taking effect, Mitsui Sugar and the Company Split Preparation Company plan to change their trade names to "Mitsui DM Sugar Holdings Co., Ltd.," and "Mitsui Sugar Co., Ltd.," respectively (hereinafter Mitsui DM Sugar Holdings Co., Ltd., following the trade name change, is referred to as the "Holding Company"). For details on the

Share Exchange and the Absorption-Type Company Split, please refer to the press releases mentioned in Note 1 above.

1. Background and Purpose of Business Integration and Capital and Business Alliance

The business environment surrounding Mitsui Sugar, Dai-Nippon Meiji, and Nitten is becoming increasingly severe due to the declining population, diversification of demand for sweeteners, and progress in the TPP and economic partnership agreements with many countries which has caused increased global competition. In responding to these issues, it is necessary to further strengthen business bases of the three companies.

Against this backdrop, Mitsui Sugar, Dai-Nippon Meiji, and Nitten, which all have many years of experience in the Japanese sugar manufacturing industry, continued discussions for the Business Integration and the Capital and Business Alliance in order to further strengthen the foundation of a

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stable domestic supply system by combining their extensive management know-how, including long accumulated production technology, quality and cost control methods, logistics, and raw material procurement, and to strengthen international competitiveness to grow as companies. On October 15, 2020, Mitsui Sugar and Dai-Nippon Meiji reached a final agreement on the Business Integration and today Mitsui Sugar, Dai-Nippon Meiji, and Nitten also reached an agreement on the Capital and Business Alliance.

Through the Business Integration, Mitsui Sugar and Dai-Nippon Meiji aim to become a company with a solid profit base and growth potential by promoting efficiency in supply chain and operational management, maintaining a secure and sustainable supply chain with strengthened production system, enhancing group management, and strengthening portfolio allocation to R&D and growth areas through concentrating and reallocating the management resources of both companies, such as human resources and funds.

Through the Capital and Business Alliance, Nitten will continue to contribute to the local economy and the sound development of the Japanese sugar industry by securing raw materials, contributing to the stable operation of the sugar industry in Japan as a whole, and passing on and improving production technology through interaction among engineers by working together with Mitsui Sugar and Dai-Nippon Meiji.

In addition, Mitsui Sugar, Dai-Nippon Meiji, and Nitten believe that by combining the strengths of each company as a result of the Business Integration and the Capital and Business Alliance, they will be able to strengthen the strategies for value-added products through the domestic sugar business and R&D operations and accelerate globalization by leveraging their know-how and technological capabilities. It will be best for all stakeholders, including raw material producers, customers, local communities, shareholders, and employees, if such efforts contribute to the future development of the Japanese sugar industry and improvement of enterprise value.

2. Overview of Capital and Business Alliance

(1) Overview of Business Alliance

Subject to the Share Exchange taking effect, the Holding Company and Nitten will carry out the following to develop and strengthen their alliance.

1. Matters concerning production technology and product standards and quality assurance of each company
2. Matters concerning logistics rationalization
3. Matters concerning raw materials of sugar
4. Matters concerning sugar beet and sugar by-products
5. Matters concerning research and development
6. Matters concerning overseas business
7. Matters concerning establishing an efficient production system

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(2) Overview of Capital Alliance

On March 31, 2021, Nitten is scheduled to acquire from Mitsubishi Corporation (hereinafter referred to as "Mitsubishi") a portion of Dai-Nippon Meiji common stock held by Mitsubishi (3,950 shares) (hereinafter referred to "Share Acquisition 1"). Further, Mitsui Sugar is scheduled to acquire the common stock of Dai-Nippon Meiji acquired by Nitten on March 31, 2021 through the Share Exchange taking effect on April 1, 2021, and allot and deliver Mitsui Sugar's common stock to Nitten as consideration for the Share Exchange. For details, please refer to the "Notice on the Progress of Talks for Capital and Business Alliance" released by Nitten on October 15, 2020.

Also, subject to the Share Exchange taking effect, the Holding Company will acquire all of Nitten common stock held by Mitsubishi (265,300 shares, which represents 1.73% of all issued shares of 15,325,642 shares) on April 6, 2021 (hereinafter referred to as "Share Acquisition 2").

In addition to Share Acquisition 1 and Share Acquisition 2, Mitsui Sugar, Dai-Nippon Meiji, and Nitten have agreed to discuss in good faith after the Share Exchange taking effect: (a) additional acquisition of Nitten common stock by the Holding Company to the extent that the percentage of voting rights of the Nitten common stock held by the Holding Company remains within 10 % of all voting rights of Nitten; and (b) additional acquisition of the Holding Company common stock by Nitten with an equivalent amount of the investment required by the Holding Company for the additional acquisition of Nitten common stock.

Business Integration

Holding Company		Capital and
	Business Alliance

Nitten

	100%			100%
	Mitsui Sugar		Dai-Nippon Meiji

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