Business Portfolio Optimization Including Partnerships, Withdrawals, and Sales

「Following completion of the share transfer under the agreement, Hitachi GLS's ownership interest in the new company is expected to change from 100% to 19.9%, and the new company is expected to be excluded from our scope of consolidation and not qualify as an equity-method affiliate.」

「As a result of the transaction, our ownership interest in Hitachi Construction Machinery decreased from 25.4% to 18.4%, and Hitachi Construction Machinery ceased to be our equity-method affiliate.」

「Subsequently, on 1 August 2025, Hitachi GLS transferred all of its JCH shares to Bosch. The consideration was US$1,462 million (¥211,212 million), and the gain of ¥91,764 million recognized on the sale of the JCH shares has been recorded as other income in the condensed interim consolidated income statement for the current interim consolidated accounting period.」

「Under the agreement, Hitachi GLS will transfer all of its 40% interest in JCH to Bosch, and JCH is expected to cease being our equity-method affiliate after completion of the share transfer. Completion of the share transfer is scheduled for the second quarter of fiscal 2025 (1 July 2025 to 30 September 2025). The consideration is US$1.4 billion (approximately ¥200.0 billion), and we expect to recognize a gain of approximately ¥135.0 billion on the sale of the JCH shares as other income in the consolidated income statement for the consolidated fiscal year in which the sale is completed.」

「Hitachi Global Life Solutions, Ltd. (Hitachi GLS), a subsidiary of ours belonging to the Connective Industries segment, is a holding company for the air-conditioning business established as a joint venture with Johnson Controls, Inc. We decided to sell to Robert Bosch GmbH (Bosch) all of the shares in JCH held by Hitachi GLS, JCH being our equity-method affiliate, and entered into a share transfer agreement and related agreements on 23 July 2024.」

「The transaction was completed on 16 October 2023. The consideration received for our sale was ¥157,807 million. As a result, our ownership interest in Hitachi Astemo decreased from 66.6% to 40%, and Hitachi Astemo became an equity-method affiliate of ours.」

「After the transaction, the Company's ownership interest in 日立Astemo was expected to decrease from 66.6% to 40%, and 日立Astemo was expected to become an equity-method affiliate of the Company.」

「The tender offeror commenced the tender offer on 28 October 2022, and the tender offer was successful on 29 November 2022. The Company's sale consideration was expected to be approximately ¥222.0 billion.」

「As a result of the successful tender offer, the related transactions, including the above-mentioned share consolidation, were carried out, and the sale was completed on 5 January 2023. The Company's sale consideration was ¥382,042 million. As a result of the transaction, the Company's ownership interest in 日立金属 decreased from 53.4% to 0%, and 日立金属 was excluded from the Company's scope of consolidation.」

「The transfer of shares under the agreement was completed on 23 August 2022. As a result, the Company's ownership interest in 日立建機 decreased from 51.4% to 25.4%, and 日立建機 became an equity-method affiliate of the Company. The tender offeror commenced the tender offer on 28 October 2022, but it had not been completed as of the approval date of these condensed quarterly consolidated financial statements.」

「The sale consideration is expected to be approximately ¥382.0 billion. If the shares to be sold by the Company are sold in this transaction, the Company's ownership interest in 日立金属 is expected to decrease from 53.4% to 0%, and 日立金属 is expected to be excluded from the Company's scope of consolidation. The Company expects to recognize a gain of approximately ¥104.0 billion on the loss of control of 日立金属 and record it as other income in the consolidated statement of profit or loss for the current consolidated fiscal year.」

「On 28 April 2022, the Company entered into a basic agreement with HTSK株式会社 (the tender offeror), a wholly owned subsidiary of HTSKホールディングス株式会社 (the parent company of the tender offeror), whose issued shares are wholly owned by HTSK Investment L.P., indirectly held and managed by Kohlberg Kravis Roberts & Co. L.P., concerning the common shares of 日立物流, an equity-method affiliate of the Company, and covering the following three matters, among others, with the series of transactions stipulated in the basic agreement collectively referred to as the transaction.」

「Meanwhile, the decision to transfer part of the 日立建機 shares will eliminate all parent-subsidiary listing relationships within the Hitachi Group.」

「On 14 January 2022, the Company entered into an agreement with HCJIホールディングス合同会社, a special-purpose company to be jointly funded by HCJホールディングス２合同会社, a special-purpose company wholly owned by a fund managed, operated and supplied with information by 日本産業パートナーズ㈱, and シトラスインベストメント合同会社, a special-purpose company wholly owned by ITOCHU Corporation, to transfer part of its holdings of common shares in 日立建機, a subsidiary belonging to the Construction Machinery segment. The sale consideration is expected to be approximately ¥182.4 billion. After the transfer of shares, the Company's ownership interest in 日立建機 is expected to decrease from 51.4% to 25.4%, and 日立建機 is expected to become an equity-method affiliate of the Company.」

「The sale consideration is expected to be approximately ¥382.0 billion. If the shares to be sold by the Company are sold in this transaction, the Company's ownership interest in 日立金属 is expected to decrease from 53.4% to 0%, and 日立金属 is expected to be excluded from the Company's scope of consolidation. The Company expects to recognize a gain of approximately ¥114.0 billion on the loss of control of 日立金属 and record it as other income in the consolidated statement of profit or loss.」

「After the transfer of shares, 日立GLS's ownership interest in the new company decreased from 100% to 40%, and the new company became an equity-method affiliate of the Company.」

「On 13 July 2021, as a result of a series of procedures, including an absorption-type merger of an SPC with GlobalLogic Worldwide Holdings as the surviving company, HGDH acquired 100% of the issued shares of GlobalLogic Worldwide Holdings, and GlobalLogic Worldwide Holdings and GlobalLogic became wholly owned subsidiaries of the Company.」

「If the sale of the shares to be sold by the Company is completed in this transaction, the Company's ownership interest in 日立金属 is expected to decrease from 53.4% to 0%, and 日立金属 is expected to be excluded from the Company's scope of consolidation.」

「As the culmination of business portfolio reform under the 2021 Mid-term Management Plan, the Company will establish a business structure capable of fully leveraging GlobalLogic, the reorganized Hitachi ABB Power Grids Ltd and 日立Astemo㈱, while also building a business structure looking ahead to the next mid-term management plan, including by deciding to transfer 日立金属㈱.」

「日立GLS plans to establish a new company, transfer its white goods business outside Japan to that company with a target of spring 2021, and transfer 60% of the new company's shares to Arçelik. The sale consideration is expected to be approximately US$300 million (approximately ¥31.5 billion). After the transfer of shares, 日立GLS's ownership interest in the new company is expected to decrease from 100% to 40%, and the new company is expected to become an equity-method affiliate of the Company.」

「Under the agreement, on 1 January 2021, 日立AMS and Honda-related companies carried out an absorption-type merger in which 日立AMS was the surviving company and each Honda-related company was an absorbed company, establishing 日立Astemo㈱ (日立Astemo). After the merger, the Company's ownership interest in 日立Astemo was 66.6%, and 日立Astemo became a consolidated subsidiary of the Company.」

「On 1 September 2020, the Company transferred all MHPS shares classified as assets held for sale, with a carrying amount of ¥263,614 million, to 三菱重工, and MHPS ceased to be an affiliate of the Company.」

「In addition, as a result of carrying out the series of procedures for making 日立ハイテク a wholly owned subsidiary, the Company's ownership interest in 日立ハイテク reached 100% on 20 May 2020.」

「As a result of the tender offer, the Company's ownership interest in 日立化成 decreased from 51.4% to 0%, and 日立化成 was excluded from the Company's scope of consolidation.」

「In addition to advancing the restructuring of listed subsidiaries, including making ㈱日立ハイテク, which has strengths in measurement and analytical technologies, a wholly owned subsidiary and selling 日立化成㈱, the Company promoted a strategy of selective concentration toward building Hitachi's optimal business portfolio, including by deciding to sell the imaging-related business in its Healthcare business.」

「If the tender offer was successful, the Company would carry out the series of procedures for making 日立ハイテク a wholly owned subsidiary. As a result, the Company's ownership interest in 日立ハイテク was expected to increase from 51.7% to 100%.」

「From the perspectives of management rationality and business strategy, among others, the Company decided to settle the matter and entered into a settlement agreement with 三菱重工 on the same day. The effects of this settlement are described in Note 5, Business Restructuring and Other Activities.」

「On 18 December 2019, the Company entered into a tender offer agreement with 昭和電工㈱ (昭和電工) and its subsidiary HCホールディングス㈱ (HCホールディングス), under which the Company would tender all of its common shares in 日立化成, a subsidiary belonging to the 日立化成 segment, into the tender offer to be made by HCホールディングス (the tender offer).」

「On 18 December 2019, the Company entered into an agreement with 富士フイルム㈱ (富士フイルム) to transfer to 富士フイルム the Company's imaging-related business, including the imaging-related businesses of the Company's subsidiaries and affiliates belonging to the Life segment.」

「Gain on business restructuring and other activities from the partial sale of shares in Agility Trains West (Holdings) Limited in the railway systems business」

「As a result of the transfer of shares, Clarion㈱ ceased to be a subsidiary of the Company.」

「On 26 October 2018, the Company entered into a tender offer agreement with Faurecia S.A. and its subsidiary Hennape Six SAS (Hennape), under which the Company would tender all of its common shares in Clarion, a subsidiary belonging to the Automotive Systems segment, into the tender offer to be made by Hennape.」

「As a result of the successful tender offer, the related transactions, including the above-mentioned share consolidation, were carried out, and all such transactions were completed on 4 June 2018. As a result, the Company's ownership interest in 日立国際電気 decreased from 51.7% to 20.0%, and 日立国際電気 became an equity-method affiliate of the Company.」

「Under the amendment memorandum, HKE commenced the tender offer on 12 October 2017, and the tender offer was successful on 8 December 2017. As a result of the successful tender offer, the above-mentioned related transactions, including a share consolidation, were expected to be carried out. Once all related transactions were completed, the Company's ownership interest in 日立国際電気 would decrease from 51.7% to 20.0%, and 日立国際電気 would become an equity-method affiliate of the Company.」

「An amendment memorandum to the basic agreement was signed on 11 October 2017. Under the amendment memorandum, HKE commenced the tender offer on 12 October 2017, but it had not been completed as of the approval date of these condensed quarterly consolidated financial statements. If the tender offer was successful and all related transactions were completed, the Company's ownership interest in 日立国際電気 would decrease from 51.7% to 20.0%, and 日立国際電気 would become an equity-method affiliate of the Company.」

「A basic agreement was signed on 26 April 2017. As a result, the Company's ownership interest in 日立国際電気 decreased from 51.7% to 20.0%, and 日立国際電気 was expected to become an equity-method affiliate of the Company.」

「The transfer of shares under the agreement was completed on 29 March 2017. As a result, the Company's ownership interest in 日立工機 decreased from 51.2% to 0%, and 日立工機 was excluded from the Company's scope of consolidation.」

「On 13 January 2017, the Company and its subsidiary ㈱日立アーバンインベストメント entered into a tender offer agreement with HKホールディングス㈱, a special-purpose company wholly owned by an affiliated investment fund of Kohlberg Kravis Roberts & Co. L.P., under which the Company and ㈱日立アーバンインベストメント would tender all of their common shares in 日立工機㈱ (日立工機), a subsidiary belonging to the Electronic Equipment and Systems segment, into the tender offer to be made by HKホールディングス㈱ for the common shares of 日立工機 and the stock acquisition rights issued pursuant to a resolution of the 日立工機 board of directors dated 28 July 2015. The tender offer period was scheduled to run from 30 January 2017 to 22 March 2017. If the tender offer was successful, 日立工機 was expected to be excluded from the Company's scope of consolidation.」

「For the purpose of strengthening its financial functions and accelerating the concentration of management resources on the Social Innovation Business, among other objectives, the Company entered into an agreement on 13 May 2016 with ㈱三菱UFJフィナンシャル・グループ and 三菱UFJリース㈱ to transfer part of its holdings of common shares in its subsidiary 日立キャピタル㈱ (日立キャピタル), which belongs to the Financial Services segment. The transfer of shares under the agreement was completed on 3 October 2016. As a result, the Company's voting interest in 日立キャピタル decreased from 60.6% to 33.4%, and 日立キャピタル became an equity-method affiliate of the Company.」

「The transfer of shares under the transfer agreement was completed on 19 May 2016. As a result, the Company's voting interest in 日立物流 decreased from 59.02% to 30.01%, and 日立物流 became an equity-method affiliate of the Company.」

「The Company will continue to optimize its business portfolio by restructuring its businesses, including through alliances with other companies, withdrawals and divestitures, from the perspectives of growth potential, profitability and competitiveness.」