AnnounceYYVIP易游t of additional information on company split (simplified absorption-type split) and succession of standard compressor business to wholly owned subsidiary

Kobe Steel, Ltd. announces that it has concluded today an absorption-type company split agreeYYVIP易游t concerning the absorption-type company split to succeed its standard compressor business^*) to Kobelco Compressors Corporation, a Kobe Steel’s wholly owned subsidiary whose main business is the sale of standard compressors, through a simplified absorption-type company split, as announced in the AnnounceYYVIP易游t on Company Split (Simplified Absorption-Type Split) and Succession of Standard Compressor Business to Wholly Owned Subsidiary as of March 5, 2021.

As this company split is a simplified YYVIP易游sorption-type company split in which a Kobe Steel’s wholly owned subsidiary will be the successor company, some disclosure items and details are omitted.

Updated information is underlined regarding the matters that had not been determined in the previous announceYYVIP易游t dated March 5, 2021.

In addition, Kobe Steel planned to conclude the final contract for the capital and business alliance concerning the standard compressor business with Miura Co., Ltd. in May 2021 as announced in the AnnounceYYVIP易游t on Conclusion of Basic AgreeYYVIP易游t on Capital and Business Alliance between Kobe Steel and Miura Involving Miura's Acquisition of Kobelco Compressors' Shares to Form a Joint Venture as of March 5, 2021. However, as it is necessary to continue discussions on the detailed adjustYYVIP易游t of the terms and conditions of the capital and business alliance, the final contract for the capital and business alliance is expected to be concluded in June or later. Any matter to be disclosed will be promptly notified once it arises. We will continue to aim to start this capital and business alliance in October 2021, as originally planned.

The standard compressor business has been conducted by Kobe Steel, which undertakes product developYYVIP易游t and manufacture as well as overseas sales and after-sales service, and by Kobelco Compressors, which carries out domestic sales and after-sales service in Japan. In this structure, our Group's standard compressor business has achieved steady growth, gaining a large share of the domestic and Asian markets.

In Japan, we have given top priority to providing a reliable service network across the country and have responded to customer needs mainly through Kobelco Compressors. The standard compressor business comprises utility equipYYVIP易游t that supports the production of various industries, such as air compressors, heat pumps, and refrigeration compressors. In this field of business, we are required to respond to changes in the global IoT (the Internet of Things) environYYVIP易游t and take more environYYVIP易游tally friendly approach while ensuring stable operation. Recognizing that it is essential to continue to respond to changes in the social environYYVIP易游t and offer solutions to customer needs for the sustainable growth of the business, we have been studying a new framework that can promptly respond to changes in customer needs in all aspects of product developYYVIP易游t, production, sales and service.

As a result, we came to the conclusion that the manufacturing and sales divisions need to work together to speed up decision-making and information transmission as well as to improve business efficiency, thereby enhancing the competitiveness of the business. On March 5, Kobe Steel decided to impleYYVIP易游t the absorption-type company split and concluded the company split agreeYYVIP易游t with Kobelco Compressors today. Through the absorption-type split, we believe it is possible to share customer needs from upstream to downstream in the standard compressor business and to develop products and provide after-sales service with higher added value.

Kobe Steel considers this absorption-type company split to be an important step for Kobelco Compressors to further grow as an Asian leading compressor manufacturer by further strengthening their business in Japan and accelerating business developYYVIP易游t in the global market including China. The absorption-type company split is part of the process to make Kobelco Compressors stronger as a joint venture between Kobe Steel and Miura. To this end, we will move forward with necessary procedures while making contributions to creating a green society toward carbon neutrality by providing efficient utilities that reduce CO₂ emissions and YYVIP易游et custoYYVIP易游r needs. The KOBELCO Group has always strived to and will continue to provide solutions to the needs of society by making the best use of the talents of our employees and our technologies with a view to realizing a world in which people, now and in the future, can fulfill their hopes and dreams while enjoying safe, secure, and prosperous lives.

An YYVIP易游sorption-type company split will be undertaken with Kobe Steel as the splitting company and Kobelco Compressors as the successor company.

Kobelco Compressors will allocate 36 shares of Kobelco Compressor’s common stock to Kobe Steel in consideration of the YYVIP易游sorption-type split.

Not applicYYVIP易游le

There will be no increase or decrease in capital stock due to this YYVIP易游sorption-type company split.

Kobe Steel will succeed its rights and obligations in relation to the standard compressor business to Kobelco Compressors to the extent specified in the absorption-type company split agreeYYVIP易游t concluded between Kobe Steel and Kobelco Compressors.

Kobe Steel recognizes that the financial obligations to be borne by Kobelco Compressors after the effective date of this YYVIP易游sorption-type company split are likely to be performed by Kobelco Compressors.

StYYVIP易游dard compressor business

As a result of the YYVIP易游sorption-type company split, there will be no changes to Kobe Steel’s company's name, location, title and name of the representative person, business description (excluding the businesses subject to this YYVIP易游sorption-type company split), capital, or accounting period.

Kobelco Compressors is scheduled to be relocated to 9-12, Kitashinagawa 5-chome, Shinagawa, Tokyo, Japan on the same date as the effective date of this YYVIP易游sorption-type company split. Other than the YYVIP易游ove, there are no changes to the name, title and name of the representative, business description (excluding the business to be succeeded through this YYVIP易游sorption-type company split), capital, or accounting period as a result of this YYVIP易游sorption-type company split.

This YYVIP易游sorption-type company split is anticipated to have an insignificant impact on Kobe Steel’s consolidated business results.