Notice of Basic Agreement on the Transfer of European Automotive Business

Overview of M&A

As part of the restructuring of its global framework under the second medium-term management plan, JTEKT Corporation has entered into a basic agreement to transfer seven consolidated subsidiaries engaged in the manufacture and sale of automotive parts in Europe to the German investment company LEO III.-VV25-A GmbH. The transfer target companies include subsidiaries across Europe led by JTEKT EUROPE S.A.S., with a view to concluding formal share transfer agreements by the end of August 2026. The rationale behind the transfer is to improve profitability and achieve a return to profitability by streamlining and integrating the business in the European market.

Future Outlook and Impact

The impact on the consolidated earnings forecast for the fiscal year ending March 2026 following the conclusion of the transfer agreement is currently unknown and will be promptly disclosed once discussions are finalized. Although the financial status of the transfer target companies continues to show deficits, there is a reduction in deficit in certain areas. Furthermore, consultation with employee representative bodies under French law is required before contract execution, which will proceed once these consultations are completed.