Notice Regarding Transfer of Shares of Shin Nippon Machinery Co., Ltd.

Overview of the M&A

Sumitomo Heavy Industries, Ltd. resolved to transfer all 17,397,200 shares of its consolidated subsidiary Shin Nippon Machinery Co., Ltd. to Torishima Pump Mfg. Co., Ltd. The transfer price is 14.9 billion yen (estimated), and the transfer execution is scheduled for July 1, 2026. The rationale for the transfer is to promote portfolio reform based on the Medium-Term Management Plan 2026, improve capital efficiency, and enhance agility for growth investments. Although Shin Nippon Machinery possesses technology and track record in steam turbines and pumps, opportunities for collaboration within our group are limited; therefore, it was judged best for the business to operate under Torishima Pump Mfg., a comprehensive manufacturer of fluid rotating machinery.

Impact on Shareholders and Future Outlook

With this transfer, Sumitomo Heavy Industries, Ltd. will fully divest its shares in Shin Nippon Machinery, aiming to improve capital efficiency and accelerate growth investments. The impact of the transfer on business results is partially factored into the consolidated earnings forecast for the fiscal year ending December 2026; however, the final gain or loss on sale is currently being calculated and will be promptly disclosed once determined. Torishima Pump Mfg., which has strengths in social infrastructure fields such as high-temperature, high-pressure, and large flow pumps, is expected to enhance Shin Nippon Machinery's competitiveness through complementary technologies and product portfolios of both companies.