KKR L P : Announcement Regarding the Tender Offer for the Shares of Hitachi Koki Co., Ltd.

January 13, 2017

Company Name: HK Holdings Co., Ltd. Representative: William Janetschek Contact: 03-6268-6000

Announcement Regarding the Tender Offer for the Shares of Hitachi Koki Co., Ltd. (Securities Code 6581)

We announce that as of today, HK Holdings Co., Ltd. ("we" or the "Offeror") has resolved to conduct a tender offer (the "Tender Offer") for the common shares and the share options issued based on the resolutions passed at the Board of Directors meeting on July 28, 2016 (the "Share Options") of Hitachi Koki Co., Ltd. (Securities Code: 6581, First Section of the Tokyo Stock Exchange) (the "Target Company") in accordance with the Financial Instruments and Exchange Act (Act No. 25 of 1948, as amended) (the "Act").

We intend to commence the Tender Offer on January 30, 2017, subject to the fulfillment of the following conditions:

① Submission by the independent committee established by the Target Company of a report approving

the Transaction (as defined in the section titled "(1) Summary of the Tender Offer" within "1. Purpose of the Tender Offer"), which has not been withdrawn;

② (a) Adoption of a resolution at a meeting of the Board of Directors of the Target Company with the

affirmative vote of all directors who do not have an interest in the Transaction to support the Transaction; and (b) no adoption of a resolution withdrawing that resolution or stating contrary to that resolution;

③ (a) Adoption of a resolution at a meeting of the Board of Directors of the Target Company to issue the

Special Dividend (as defined in the section titled "(1) Summary of the Tender Offer" within "1. Purpose of the Tender Offer") and no adoption of a resolution withdrawing that resolution or stating contrary to that resolution; and (b) determination of the lawfully set Special Dividend Record Date;

④ Fulfillment of certain other conditions (these items (i) to (iv), the "Conditions Precedent to the Tender

Offer") contained in the Tender Agreement (as defined in the section titled "(1) Summary of the Tender Offer" within "1. Purpose of the Tender Offer").

In the event that one or more of the Conditions Precedent to the Tender Offer is not satisfied, the Tender Offeror may, in its discretion, elect to waive such Conditions Precedent to the Tender Offer, in whole or in part, and proceed with the Tender Offer.

Note: Under the Tender Agreement, precondition (iv) includes, among other conditions, the following:

1. Execution of a transition services agreement regarding IT and systems services and use of the Hitachi brand, as described in "(4) Material agreements regarding the Tender Offer";

2. Confirmation by the Target Company that all material information (as defined in Article 166, Paragraph 2 of the Financial Instruments and Exchange Law) regarding the Target Company's business has been disclosed (as defined in Article 166, Paragraph 4 of the Financial Instruments and Exchange Law);

3. No decision has been rendered or is likely to be rendered by a judicial or administrative organ in Japan, the European Union, Russia, the United States or Australia restricting or prohibiting the Tender Offer or the Tendering Shareholders' (as hereinafter defined in "(1) Summary of the Tender Offer" under "1. Purpose of the Tender Offer") tendering of their shares in the Tender Offer;

4. The Tendering Shareholders have duly performed or complied with in all material respects all of their obligations to be performed or complied with under the Tender Agreement; and

5. The representations and warranties of the Tendering (as hereinafter defined in "(1) Summary of the Tender Offer" under "1. Purpose of the Tender Offer") are true and correct in all material respects.

1. Purpose of the Tender Offer

2. Summary of the Tender Offer

The Offeror is a stock company (kabushiki kaisha) established on November 10, 2016, with the primary goal of supporting and managing the business activities of the Target Company following completion of the Tender Offer, through which the Offeror will acquire and hold the common shares of the Target Company (the "Target Company Shares") and the Share Options (together with the Target Company Shares, the "Target Company Shares and Options"). All issued shares of the Offeror are currently owned by KKR HK Investment L.P. ("KKR Fund"), a limited partnership established under the laws of the Cayman Islands on November 4, 2016, which is an investment fund belonging to Kohlberg Kravis Roberts & Co. L.P. (together with its affiliates and other related entities, "KKR").

KKR's investment philosophy is to invest from a long-term perspective in partnership with the management of the acquired company. KKR partners with companies and management teams with outstanding potential and business foundations, and leverages its resources and network with the aim of creating industry leaders. Based on this philosophy, KKR focuses on carve-outs of subsidiaries and business units from large corporations and supports their development as independent enterprises by supporting their organic and inorganic growth, increasing their profitability and improving their business processes. KKR has a track record of more than 50 carve-outs globally.

Founded in 1976, KKR is a comprehensive asset management firm, included among the world's leading private equity funds, and is listed on the New York Stock Exchange. Since the opening of its Tokyo office in 2006, KKR has been actively investing in the Japanese market, with investment professionals from diverse backgrounds that possess an understanding of Japanese business practices. In 2010, KKR invested in Intelligence, Ltd., a provider of comprehensive HR services. In 2014, KKR supported the carve-out of Panasonic Healthcare Co., Ltd. ("PHC") from Panasonic Corporation, and subsequently through KKR's support PHC was able to acquire the diabetes care business of

Bayer Aktiengesellschaft and affiliates of its subsidiary, Bayer HealthCare, in 2016, demonstrating KKR's capability in helping its Japanese portfolio companies carry out follow-on acquisitions of overseas enterprises. In 2015, KKR invested in Pioneer DJ, then a business unit of Pioneer Corporation, building on its track record of supporting the stand-alone growth of subsidiaries and business units of major Japanese companies.

The Offeror intends to conduct the Tender Offer, as part of the series of transactions for acquiring all of the Target Company Shares and Options (excluding treasury shares held by the Target Company), such that the Target Company will become a wholly-owned subsidiary of the Offeror (such transaction, the "Transaction").

As of today, the Offeror and Hitachi, Ltd. ("Hitachi"), the parent company of the Target Company, and Hitachi Urban Investment, Ltd., Hitachi's subsidiary, ("Hitachi Urban Investment") (together with Hitachi, the "Tendering Shareholders," and each, individually, a "Tendering Shareholder") have executed an agreement (the "Tender Agreement") pursuant to which Hitachi will tender all of its Target Company Shares (40,827,162 shares, representing an ownership percentage (see below Note) of 40.25% of the Target Company) ("Hitachi's Tendered Shares") and Hitachi Urban Investment will tender all of its Target Company Shares (11,058,191 shares, representing an ownership percentage of 10.90% of the Target Company) ("Hitachi Urban Investment's Tendered Shares") (together with Hitachi's Tendered Shares, the "Tendered Shares," and each individually, a "Tendered Share"), respectively, in the Tender Offer. For details regarding the Tender Agreement, please refer to "4. Material Agreements regarding the tendering to the Tender Offer between the Target Company and the Target Company's Shareholders."

Note: The ownership percentage, here and throughout this release, has been calculated by dividing the number of Target Company Shares (including the Target Company Shares subject to the Share Options) held by each Tendering Shareholder by 101,429,921 shares (the "Total Number of Target Company Shares") and rounding to the second decimal place, with the Total Number of Target Company Shares having been calculated as follows: (i) the 123,072,776 Target Company Shares issued as of September 30, 2016 (as stated in the 95th Fiscal Period Second Quarter Securities Report of the Target Company filed on November 11, 2016 (the "Target Company's Quarterly Securities Report")), minus (ii) the 21,681,655 treasury shares held by the Target Company as of September 30, 2016, plus (iii) the 38,800 Target Company Shares which are subject to the 388 Share Options issued as of May 31, 2016 (as stated in the 94th Fiscal Period Securities Report of the Target Company filed on June 24, 2016 (the "Target Company's Securities Report")). As of today, there has been no change in the number of the Share Options and the number of the Target Company Shares subject to the Share Options since May 31, 2016.

The Offeror has set 67,632,900 shares (representing an ownership percentage of 66.68% of the Target Company) as the minimum number of shares to be purchased in the Tender Offer. If the total number of the Target Company Shares and Options tendered by shareholders in the Tender Offer (the "Tendered Shares and Options") is less than the minimum number of shares to be purchased in the Tender Offer (67,632,900 shares), then the Offeror will not

purchase any of the Tendered Shares and Options. The Offeror has not set a limit on the maximum number of shares to be purchased in the Tender Offer, because the Offeror intends for the Target Company to become a wholly-owned subsidiary of the Offeror and delist the Target Company's shares, and if the total number of Tendered Shares and Options is equal to or exceeds the minimum threshold of 67,632,900 shares, the Offeror will purchase all of the Tendered Shares and Options. The minimum number of shares to be purchased in the Tender Offer (67,632,900 shares) has been calculated by multiplying 675,941, two-thirds of 1,013,911, which is the number of voting rights corresponding to the Total Number of Target Company Shares (123,072,776 shares, the number of issued Target Company Shares as of September 30, 2016 as stated in the Target Company's Quarterly Securities Report, minus 21,681,655 shares, the number of treasury shares held by the Company as of September 30, 2016), plus 388 (675,941 plus 388, equaling 676,329), with 388 being the number of voting rights corresponding to 38,800 shares, which is the number of Target Company Shares which are subject to the 388 Share Options issued as of May 31, 2016 as stated in the Target Company's Securities Report, by 100, the share unit number of the Target Company.

If the Offeror is unable to acquire all of the Target Company Shares and Options (other than the treasury shares held by the Target Company) in the Tender Offer, then, following the successful completion of the Tender Offer, the Offeror intends to undertake a series of procedures to become the sole shareholder of the Target Company (for details, see "(5) Policy for organizational restructuring after the Tender Offer (matters relating to 'Two-Step Acquisition')"). Furthermore, after implementing such procedures, the Offeror intends to conduct a Share Consolidation whereby the Target Company will be merged into another entity, with the Offeror as the surviving company, although the specific schedule and other details of such Share Consolidation, if conducted, has not yet been decided.

The Target Company has today issued a press release titled "Announcement Concerning Opinion Regarding the Tender Offer for the Shares of Hitachi Koki Co., Ltd. by HK Holdings Co., Ltd." (the "Target Press Release"). According to the Target Press Release, in light of the proposal from the Offeror, the Target Company, as part of the Transaction, adopted a resolution at the Board of Directors meeting held today to the effect that the Target Company will issue a special dividend (the "Special Dividend") of ¥580 per Target Company Share (here and hereinafter, before any withholding tax deduction) conditioned upon the success of the Tender Offer, with the record date (the "Special Dividend Record Date") of January 29, 2017, with March 31, 2017 being the effective date (Note 1). According to the Target Company, it is intended that the Special Dividend be issued on the closest business day following the commencement date of the Tender Offer. With regard to the Special Dividend, please refer to the other press release issued today, titled "Dividend of surplus (the Special Dividend), establishment of the record date for the issuance of surplus (the Special Dividend) and amendments to the expected dividends for the period ending March 31, 2017."

Note 1: As the Special Dividend is subject to the completion of the Tender Offer, in the event that the tender offer period of the Tender Offer is extended, it is intended that the effective date of the Special Dividend will also be extended to a day following the conclusion of the extended tender offer period.

Accordingly, Target Company shareholders as of the Special Dividend Record Date that tender their shares in