Itochu : Announcement in Relation to Commencement of Tender Offer for Shares in ITOCHU Techno-Solutions Corporation (Code No. 4739)

August 2, 2023

This document is an English translation

of a statement written originally in Japanese. The Japanese original should be considered as the primary version.

ITOCHU Corporation

(Code No. 8001, Prime Market)

Representative Director and President and Chief Operating Officer: Keita Ishii

Contact: Suguru Amano

General Manager, Investor Relations Division (TEL. [phone])

Digital Value Chain Partners GK

Representative Member: ITOCHU Corporation

Person Acting in its Capacity: Tatsushi Shingu

Contact: As above

Announcement in Relation to Commencement of Tender Offer

for Shares in ITOCHU Techno-Solutions Corporation (Code No. 4739)

ITOCHU Corporation (hereinafter referred to as "ITOCHU") and Digital Value Chain Partners GK (location of the head office: Minato-ku, Tokyo; Person acting in its capacity: Tatsushi Shingu; hereinafter referred to as the "Tender Offeror"), in which ITOCHU holds a 100% stake, individually decided today that the Tender Offeror will acquire the common shares of ITOCHU Techno-Solutions Corporation (which are listed on the Prime Market of the Tokyo Stock Exchange, Inc. (hereinafter referred to as the "TSE"): Code No. 4739; hereinafter referred to as the "Target Company") (such common shares, hereinafter referred to as the "Target Company Shares") by way of tender offer (hereinafter referred to as the "Tender Offer") as stipulated in the Financial Instruments and Exchange Act (Act No. 25 of 1948, as amended; hereinafter referred to as the "Act").

Due to major structural changes in the market and business environment surrounding the industry to which the Target Company belongs, in addition to the existing organic growth strategy, it is essential to mutually utilize the management resources of the ITOCHU Group (a corporate group consisting of ITOCHU and its 188 subsidiaries, including the Target Company, and 83 affiliates (as of March 31, 2023); hereinafter the same applies) promptly and flexibly, achieve a non-organic growth (Note), reforming the business model, and extending and developing its business fields/capability significantly and rapidly and as such. Under such circumstances, ITOCHU and the Target Company have come to a shared acknowledgement that it is imperative that ITOCHU and the Target Company dissolve structural conflicts of interest between ITOCHU and the Target Company and put in management resources to further enhance corporate value, and that ITOCHU and the Target Company as a group proceed together with flexible and steady management measures. Therefore, the Tender Offeror decided to launch the Tender Offer with the aim of taking the Target Company private.

(Note)	Non-organic growth refers to growth through capital and business alliance with or
	acquisition (M&A) of another company.
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This document is disclosed by ITOCHU in accordance with the Securities Listing Regulations, and also serves as an official announcement pursuant to Article 30, paragraph 1, item 4 of the Order for Enforcement of the Financial Instruments and Exchange Act (Cabinet Order No. 321 of 1965, as amended; hereinafter referred to as the "Order") based on the request of the Tender Offeror to ITOCHU (the parent company of the Tender Offeror).

1. Outline of the Tender Offeror

(1)	Name	Digital Value Chain Partners GK
(2)	Location	2-5-1Kita-Aoyama,Minato-ku, Tokyo
(3) Title and Name of Representative	Person acting in its capacity: Tatsushi Shingu
		1.	Consulting for the development of information
		processing services business
(4)	Description of Business Activities	2.	Investments and loans for information processing
		services business
		3.	All functions incidental to the foregoing
(5)	Capital	10,000 yen (as of August 2, 2023)

2. Purpose of the Tender Offer, etc.

1. Outline of the Tender Offer

The Tender Offeror is a Godo Kaisha (limited liability company) established on July 18, 2023 primarily for the purpose of acquiring and holding the Shares of the Target Company through the Tender Offer and, ITOCHU holds a 100% stake in the Tender Offeror. As of today, the Tender Offeror does not hold any Target Company Shares, which are listed on the Prime Market of the Tokyo Stock Exchange, Inc., while, as of today, ITOCHU, which is the parent company of the Tender Offeror, holds 141,601,600 Target Company Shares (Ownership Ratio (Note 1): 61.24% (rounded to two decimal places; hereinafter the same applies to the calculation of Ownership Ratio)), and the Target Company is a subsidiary of

ITOCHU.

(Note 1) The "Ownership Ratio" means the ratio of the relevant Target Company Shares held by the applicable person to the number of shares (231,227,366 shares) remaining after subtracting the number of treasury shares held by the Target Company as of June 30, 2023 (8,772,634 shares; however, the number of treasury shares does not include 145,100 shares held by Mizuho Trust & Banking Co., Ltd., which received consignment by the Target Company based on the Target Company's Board Benefit Trust (BBT) system (sub-trustee: Custody Bank of Japan, Ltd.). Hereinafter the same for the number of treasury shares held by the Target Company.), from the total number of issued shares of the Target Company (240,000,000 shares) as of the same date and disclosed in the "Summary of the Financial Results for the First Quarter of the Fiscal Year Ending March 2024 [IFRS] (Consolidated)" announced by the Target Company today (Japanese Only, hereinafter referred to as the "Target Company's Financial Results").

On August 2, 2023, the Tender Offeror decided to commence the Tender Offer in order to acquire all of the Target Company Shares (excluding the Target Company Shares held by ITOCHU, and the treasury

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shares held by the Target Company), at 4,325 yen per share (as per the Target Company Shares of the Tender Offer referred to as the "Tender Offer Price"), as part of a series of transactions resulting in the Target Company's shareholders comprising only of ITOCHU and the Tender Offeror (collectively, the "Tender Offerors") (such transactions are hereinafter referred to as the "Transaction").

As the Tender Offeror will conduct the Tender Offer in order to have the Target Company's shareholders comprise of only the Tender Offerors, the lower limit on the number of shares to be purchased through the Tender Offer is set to 12,550,000 shares (Ownership Ratio: 5.43%). If the total number of shares that are offered for sale in response to the Tender Offer (the "Tendered Shares") falls short of the lower limit on the number of shares to be purchased through the Tender Offer, none of the Tendered Shares will be purchased. On the other hand, the upper limit on the number of shares to be purchased is not set in this Tender Offer; if the total number of the Tendered Shares is equal to or is more than the lower limit of the number of shares to be purchased (12,550,000 shares), all the Tendered Shares will be purchased.

In order to have the total of the Target Company's voting rights to be held by the Tender Offerors, when the Tender Offer has been completed, be equal to or more than two-thirds of the total of the Target Company's voting rights, the lower limit on the number of shares to be purchased through the Tender Offer (12,550,000 shares) was obtained by: (a) subtracting the number of treasury shares held by the Target Company as of June 30, 2023 (8,772,634 shares), from the total number of issued shares of the Target Company as of the same date as stated in the Target Company's Summary of Financial Results (240,000,000 shares), with the result (231,227,366 shares) equating to 2,312,273 voting rights, then (b) multiplying this voting rights (a) by 2/3 (resulting in 1,541,516 voting rights, rounded up to one decimal place), then (c) subtracting the number of voting rights (1,416,016) of the Target Company Shares (141,601,600 shares) held by ITOCHU, resulting in 125,500 voting rights, then (d) multiplying (c) by the number of share units of the Target Company (100 shares). Originally, the Transaction purports to have the Target Company's shareholders comprise of only the Tender Offerors, but the reason the lower limit of the number of shares to be purchased is set as above is because the Tender Offerors is required to hold equal to or more than two-thirds of the voting rights, which is equivalent to the voting rights ratio required for the special resolution for the Share Consolidation (as defined in "(4) Policy for Reorganization After the Tender Offer (Matters Concerning the So-Called"Two-Step Acquisition")" below, hereinafter the same applies) at the shareholders meeting, in the case where the Tender Offer has been completed but the Tender Offeror fails to acquire all of the Target Company Shares (other than those owned by ITOCHU and the treasury shares held by the Target Company) through the Tender Offer, and then conducts the procedures for the Share Consolidation stated in "(4) Policy for Reorganization After the Tender Offer (Matters Concerning the So-Called"Two-Step Acquisition")" below, which requires a special resolution of the shareholders meeting as set forth in Article 309, paragraph (2) of the Companies Act (Act No. 86 of 2005, as amended; hereinafter the same). As of today, the Tender Offeror does not hold any Target Company Shares. However, ITOCHU, the parent company of the Tender Offeror, holds 141,601,600 Target Company Shares (Ownership ratio: 61.24%). Therefore, considering that setting the lower limit on the number of shares to be purchased in the Tender Offer by the "majority of minority" will make completion of the Tender Offer unpredictable and will not be in the best interests of minority shareholders of the Target Company who wish to tender in the Tender Offer, no lower limit on the number of shares to be purchased in the Tender Offer by the "majority of minority" was set. For details on measures taken to ensure fairness of the Tender Offer, please see "Measures to Ensure the

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Fairness of the Tender Offer Including Measures to Ensure the Fairness of the Tender Offer Price and to Avoid Conflicts of Interest" below.

If the Tender Offer has been completed but not all of the Target Company Shares are acquired through the Tender Offer (excluding the Target Company Shares held by ITOCHU and the treasury shares held by the Target Company), the Tender Offeror plans to implement a series of procedures after the completion of the Tender Offer, to have the Target Company's shareholders comprise of only the Tender Offerors (the "Squeeze-Out Procedures").( Please refer to "(4) Policy for Reorganization After the Tender Offer (Matters Concerning the So-Called"Two-Step Acquisition")" below.

In addition, the Tender Offerors are considering searching for a partner enterprise that can contribute to creating synergy between the Tender Offerors and the Target Company after the completion of the Squeeze-Out Procedures. If an applicable enterprise exists, the Tender Offerors are considering accepting a few percent or less investment by such enterprise in the Tender Offeror or the Target Company through good faith consultations with the Target Company and the enterprise. However, details such as the specific method, investment ratio, and the date have not yet been determined as of today. It is noted that even if the investment by such enterprise has been accepted, the management policy after the Tender Offer or the holding policy of the Target Company Shares after the Transaction are not expected to change. (Please refer to "(b) Management Policy after the Completion of the Tender Offer" below.)

According to the "Announcement of Opinion in Support of the Tender Offer for the Company Shares by Digital Value Chain Partners, GK, a Subsidiary of ITOCHU Corporation, the Parent Company and Recommendation for our Shareholders to Tender their Shares in the Tender Offer" published by the Target Company on August 2, 2023 (the "Target Company Press Release"), at the Target Company's board of directors meeting held on August 2, 2023, the Target Company made a resolution declaring the Target Company's opinion supporting the Tender Offer, and recommending to its shareholders that they tender their shares in the Tender Offer.

For details of the decision-making process of the Target Company, please see the Target Company Press Release and "(iii) Target Company's Decision-making Process and Reasons" of "(a) Background, Purpose, and Decision-making Process Leading to the Decision to Conduct the Tender Offer" of "(2) Background, Purpose, and Decision-making Process Leading to Conduct the Tender Offer, and Management Policy Following the Tender Offer" below.

1. Background, Purpose, and Decision-making Process Leading to Conduct the Tender Offer, and Management Policy Following the Tender Offer

1. Background, Purpose, and Decision-making Process Leading to the Decision to Conduct the Tender Offer

1. Background of the Tender Offer

ITOCHU, which is the parent company of the Tender Offeror, has been listed on Osaka Securities Exchange Co., LTD. and the TSE since July 1950. ITOCHU forms the ITOCHU Group. Through domestic and overseas business networks, "Textile Company," "Machinery Company," "Metals &

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Minerals Company," "Energy & Chemicals Company," "Food Company," "General Products & Realty Company," "ICT & Financial Business Company," and "The 8th Company (Note 1)," whose business areas have been extended from "upstream" business areas, such as those relating to raw materials, to "downstream" consumer business areas, have been running diversified businesses, in order to offer a variety of products and services that support people's daily lives.

Through the reorganization in 2016, ITOCHU established the ICT & Financial Business Company, which consists of two divisions, the "ICT Division" and the "Financial & Insurance Business Division," and engages in businesses focused on service fields such as ICT (Note 2) and BPO (Note 3). The "ICT Division" involves businesses such as IT service, communication and mobile, space/satellite and media, BPO, and medicine and healthcare businesses. The IT service business comprehensively supports customers with digitalization and digital transformation (DX) (Note 4), focusing mainly on IT solutions, over a wide range of fields, including data utilization, internet-related services, and venture capital businesses. In the DX support business, which is a particular focus for the ICT & Financial Business Company, it is affiliated with companies or the like that have strengths in consulting and data utilization, in order to respond to needs at all stages of the value chain (Note 5), from upstream to downstream. ITOCHU aims to expand its profit base further by horizontally developing across other industries the knowledge and know-how it has accumulated through its engagement in the DX support business.

The Tender Offeror, the trade name of which is Digital Value Chain Partners GK, was incorporated on July 18, 2023, mainly for the purpose of acquiring and owning Shares of the Target Company through the Tender Offer, and is a limited liability company, 100% of the capital of which is invested by

ITOCHU.

(Note 1) A "Company" in the applicable sentence refers to a business division within ITOCHU that is deemed to be one highly independent unit. Delegation of management resources and discretion to each Company allows it to manage responsibly, rapidly and flexibly, and develop businesses meeting the needs in each field.

(Note 2) "ICT" refers to Information and Communication Technology.

(Note 3) "BPO" (business process outsourcing) refers to the collective outsourcing of a part of a company's business process (from planning/designing to implementation).

(Note 4) "DX" (digital transformation) refers to utilizing data and digital technology for the

generation of a new business model and the reformation of existing business.

(Note 5) "Value chain" refers to the complexly linked value, not the simply aggregated value, focusing on what kind of added value is generated by each business activity in companies.

On the other hand, according to the Target Company, the Target Company was founded in July 1979 as Hamilton/Avnet Electronics Japan Limited; and as a result of capital participation in October 1984 by ITOCHU (the Tender Offeror's parent company) and by C. ITOH Data Systems Co., Ltd. (ITOCHU's then wholly-owned subsidiary) (founded in April 1972) ("C. ITOH Data Systems"), it became a subsidiary of ITOCHU. Thereafter, in April 1985 the Target Company changed its trade name to C. ITOH Micronics Corp., and then to ITOCHU Techno-Science Corporation in June 1986. Then, in

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