Hitachi Chemical

News Release

November 28, 2016
Hitachi Chemical Co., Ltd.

Notice Regarding the Share Acquisition of FIAMM Energy Technology S.p.A. in Italy

Hitachi Chemical Co., Ltd. (hereinafter “Hitachi Chemical”) announces the resolution at the board of directors’ meeting held today to conclude a contract with FIAMM S.p.A. (Veneto, Italy; CEO: Giuseppe Zanetti; hereinafter “FIAMM”) in the Italian Republic. In the contract, FIAMM’s automotive and industrial lead-acid battery business (except for part of its business in China) will be separated from the FIAMM Group and Hitachi Chemical will acquire 51 percent of the shares in the succeeding company known as FIAMM Energy Technology S.p.A. (hereinafter “FIAMM Energy Technology”).

1.Reason for the Share Acquisition

In the 2018 Medium-Term Management Plan ending in fiscal 2018, Hitachi Chemical's basic policy is to establish its energy storage business in the fast growing global market by strengthening product capabilities and expanding production bases.
FIAMM is a worldwide manufacturer and distributor of automotive and industrial lead-acid batteries, car horns and antennas, with its lead-acid batteries holding a large market share primarily in Europe.
This contract will allow Hitachi Chemical to utilize FIAMM's brand value, manufacturing bases and sales network with a view to further strengthening its lead-acid battery business in Europe, the United States and Southeast Asia. For automotive lead-acid batteries in particular, Hitachi Chemical will enhance its product capabilities by introducing the company's milestone battery storage technology for vehicles with an idling stop system (ISS) to FIAMM Energy Technology in order to boost its shares in major European markets. In addition to lead-acid batteries, Hitachi Chemical and FIAMM Energy Technology will share their product sales networks to extend their businesses to meet a wider range of customer needs.
Hitachi Chemical will maximize the synergistic effects generated with FIAMM Energy Technology to elevate its status in the global market for battery storage systems.

2.Outline of the Company Subject to the Share Acquisition

2.Outline of the Company Subject to the Share Acquisition
(1)Name FIAMM Energy Technology S.p.A. (planned)
(Current name:Fiamm Batterie S.r.l.) *The name will change to the above immediately before the share acquisition.
(2)Address Viale Europa, 75 Montecchio Maggiore – 36075(VI), Italy
(3)Name and title of the representative Stefano Dolcetta, Director
(4)Principal lines of business Manufacture and sales of automotive and industrial lead-acid batteries
(5)Capital 0.01 million euros (113 million yen)
*The conversion rate is 1 euro = 113 yen. Figures are rounded to the nearest unit.
*The figures above represent the amount before acquiring FIAMM’s manufacturing and sales business of automotive and industrial lead-acid batteries. Capital at the timing of acquiring shares is anticipated to increase to 65 million euros (7.3 billion yen) (rough estimation)
(6)Established July 4, 2016
(7)Major shareholder and shareholding ratio FIAMM S.p.A., 100%
(8)Relationship with Hitachi Chemical Group Capital Not applicable
Personnel Not applicable
Business Not applicable

3.Most Recent Consolidated Operating Results and Financial Condition of the Separated Business

Unit: million euros

3.Most Recent Consolidated Operating Results and Financial Condition of the Separated Business
Fiscal year end December 2013 December 2014 December 2015
Total net assets
(consolidated)
56.3
(6.4billion yen)
66.7
(7.5 billion yen)
49.9
(5.6 billion yen)
Total assets
(consolidated)
226.2
(25.6 billion yen)
243.3
(27.5 billion yen)
259.5
(29.3 billion yen)
Net sales
(consolidated)
356.0
(40.2 billion yen)
389.6
(44 billion yen)
425.8
(48.1 billion yen)
Operating income
(consolidated)
10.8
(1.2 billion yen)
16.1
(1.8 billion yen)
19.3
(2.2 billion yen)
Ordinary income
(consolidated)
9.4
(1.1 billion yen)
10.3
(1.2 billion yen)
11.8
(1.3 billion yen)
Net income
(consolidated)
7.4
(0.8 billion yen)
7.4
(0.8 billion yen)
8.3
(0.9 billion yen)
*
The conversion rate is 1 euro = 113 yen. Figures are rounded to the nearest unit.

4.Outline of the Counterparty to the Share Acquisition (Transfer)

4.Outline of the Counterparty to the Share Acquisition (Transfer)
(1)Name FIAMM S.p.A.
(2)Address Viale Europa, 75 Montecchio Maggiore – 36075(VI), Italy
(3)Name and title of the representative Giuseppe Zanetti, CEO
(4)Principal lines of business Manufacture and sales of automotive and industrial lead-acid batteries, car horns and antennas
(5)Capital 50 million euros (5.7 billion yen)
*The conversion rate is 1 euro = 113 yen. Figures are rounded to the nearest unit.
(6)Established September 28, 2000
(7)Total net assets and total assets for the previous fiscal year Total net assets: 207 million euros (23.4 billion yen)
Total assets: 546 million euros (61.7 billion yen)
*The conversion rate is 1 euro = 113 yen. Figures are rounded to the nearest unit.
(8)Major shareholders and shareholding ratios Anorak S.r.l., 20.36%
Stream S.r.l., 20.36%
(9)Relationship with Hitachi Chemical Group Capital Not applicable
Personnel Not applicable
Business Not applicable

5.Outline of the Newly Acquired Subsidiary (indirectly)

5.Outline of the Newly Acquired Subsidiary (indirectly)
(1)Name Società Italiana Accumulatori Produzione Ricerca Avezzano -SIAPRA S.p.A.
(2)Address Via A. Volta 9. Avezzano - 67051(AQ), Italy
(3)Name and title of the representative Stefano Dolcetta, Chairman
(4)Principal lines of business Manufacture of automotive and industrial lead-acid batteries
(5)Capital 26 million euros (2.9 billion yen)
*The conversion rate is 1 euro = 113 yen. Figures are rounded to the nearest unit.
(6)Established December 21, 2009
(7)Major shareholder and shareholding ratio Before the Acquisition: FIAMM S.p.A., 93.87 %
After the Acquisition: FIAMM Energy Technology S.p.A., 93.87 %
(8)Relationship with Hitachi Chemical Group Capital Not applicable
Personnel Not applicable
Business Not applicable
(9)Most recent consolidated operating results and financial condition

Unit: million euros

Fiscal year end December 2013 December 2014 December 2015
Total net assets 27.9
(3.2 billion yen)
28.4
(3.2 billion yen)
28.8
(3.3 billion yen)
Total assets 75.0
(8.5 billion yen)
74.6
(8.4 billion yen)
85.2
(9.6 billion yen)
Net sales 100.9
(11.4 billion yen)
109.1
(12.3 billion yen)
114.0
(12.9 billion yen)
Operating income 2.9
(0.3 billion yen)
1.3
(0.1 billion yen)
3.5
(0.4 billion yen)
Net income 1.4
(0.2 billion yen)
0.5
(0.1 billion yen)
0.4
(0 billion yen)
*
The conversion rate is 1 euro = 113 yen. Figures are rounded to the nearest unit.

6.Number and Price of Shares Acquired and the Status of Shares Owned Before and After the Acquisition

6.Number and Price of Shares Acquired and the Status of Shares Owned Before and After the Acquisition
(1)Number of shares owned before the acquisition 0 shares
(Percent of voting rights: 0%)
(2)Number of shares acquired 33,150,000 shares*
(Number of voting rights: 33,150,000)
(3)Price of shares acquired Share acquisition price: 50 million euros (9.8 billion yen)
Other fees: 0.4 billion yen
Total (estimated): 10.2 billion yen
(4)Number of shares owned after the acquisition (projected) 33,150,000 shares (estimated)*
(Number of voting rights: 33,150,000)
(Percent of voting rights: 51%)
*
The number of shares acquired is a rough estimation, since it includes shares for subscription in addition to the shares transferred from “the counterparty to the share acquisition (transfer)” in Item 4.

7.Schedule

7.Schedule
(1)Resolution at the board of directors’ meeting November 28, 2016
(2)Share purchase contract agreement (planned) End of December 2016
(3)Share transfer (planned) February 2017
*
This schedule is as of November 28, 2016 and may be subject to change due to procedures and certain circumstances in the future.

8.Future Outlook

The expected impact of this subsidiary acquisition on Hitachi Chemical’s consolidated performance forecast for the fiscal year ending March 2017 is minor.