Notification Regarding Transfer of Specified Subsidiary (Disposal), Transfer of Fixed Assets, and Acquisition Acts Equivalent to a Tender Offer for Hokuetsu Corporation (Securities Code: 3865) as Defined by Government Ordinance

Overview and Background of This Transaction

Daio Paper has decided on a series of transactions that include transferring part of its stake in the specified subsidiary Forestal Anchile LTDA. and warehouse real estate of its Kawasaki plant to Daio Kaiun, while simultaneously acquiring common shares of Hokuetsu Corporation from Daio Kaiun and others. This aims to deepen a strategic business alliance with Hokuetsu Corporation, establish an equitable capital relationship, and enhance corporate value. The valuation of the transferred assets was conducted at a fair price by an external expert institution, and after review by a special committee, it was determined to be a fair and reasonable transaction.

Details of Transferred Assets and Future Outlook

Forestal Anchile LTDA., the transferred entity, is a specified subsidiary engaged in afforestation business, whose stake will be reduced from 90.2% to 10.0%. The transfer of warehouse real estate at the Kawasaki plant is expected to generate approximately 8 billion yen in gain on disposal. Daio Paper will acquire up to 17.33% of Hokuetsu Corporation shares, with the acquisition date set for 2026-03-27. The impact of these transactions on consolidated financial results is currently under review and will be disclosed promptly if necessary.