Notice of Share Exchange Agreement (Simplified Share Exchange) and Business Integration Agreement Execution for Complete Subsidiarization of Toho Titanium Co., Ltd. by JX Nippon Metal Corporation

Overview of Business Integration

JX Nippon Metal Corporation resolved to make Toho Titanium Co., Ltd. a wholly owned subsidiary through a share exchange and has executed a share exchange agreement and business integration agreement with an effective date of June 1, 2026. Toho Titanium shares will be delisted from the Tokyo Stock Exchange Prime Market on May 28, 2026. The share exchange ratio is 0.70 shares of JX Nippon Metal for each 1 share of Toho Titanium, and JX Nippon Metal already holds 50.37% of Toho Titanium shares.

Purpose and Synergy Effects of the Business Integration

The purpose of this business integration is to share management resources of both companies, optimize their allocation, deepen strategic cooperation, expedite decision-making processes, and enhance the corporate value of the entire group. Specifically, it is expected to strengthen existing businesses through utilization of advanced material technologies, stabilize the titanium resource supply chain, accelerate new material development, and reinforce the business foundation through efficient use of management resources. Cost savings related to listing maintenance fees following Toho Titanium's delisting are also anticipated.

Fairness and Procedures of the Share Exchange

Regarding this share exchange, share exchange ratios were calculated by independent third-party valuation institutions from both companies (Daiwa Securities, Mizuho Securities, Plutus Consulting), and a fairness opinion was obtained from Plutus Consulting. An independent special committee was established in Toho Titanium to implement measures to avoid conflicts of interest and ensure fairness. The share exchange ratio is considered reasonable based on multiple valuation methods, including market prices and the DCF method.

Outlook

After the share exchange, Toho Titanium will become a wholly owned subsidiary of JX Nippon Metal and will be delisted, but shareholders of Toho Titanium will continue to benefit economically through the receipt of JX Nippon Metal shares. JX Nippon Metal is reviewing its capital policy, including treasury stock acquisitions, to improve capital efficiency. Employment for Toho Titanium’s employees will be maintained to the greatest extent possible under the agreement.