Execution of Share Exchange Agreement and Conversion of Mitsubishi Cable Industries into a Wholly Owned Subsidiary of Mitsubishi Materials Corporation

At meetings of the Boards of Directors of Mitsubishi Materials Corporation (“MMC”) and Mitsubishi Cable Industries (“MCI”) held today, resolutions were approved to convert MCI into a wholly owned subsidiary of MMC through a share exchange pursuant to a share exchange agreement, which was also executed today (the “Share Exchange”). The share exchange agreement must be approved at an extraordinary general meeting of the shareholders of MCI scheduled for February 9, 2010, and the effective date of the Share Exchange is scheduled for March 12, 2010. In accordance with Article 796, Paragraph 3, of the Companies Act, MMC intends to conduct a simplified share exchange that will not require approval at a general meeting of its shareholders. In addition, it is expected that MCI’s shares will be delisted on March 9, 2010, in advance of the Share Exchange effective date, which is scheduled for March 12, 2010. The last day of trading for MCI’s shares is expected to be March 8, 2010. 1. The Purpose of Creating a Wholly Owned Subsidiary through the Share Exchange Despite MCI’s efforts to cultivate and strengthen its electronic and electrical distribution systems business and its instrumental components business as a part of its over all business structural reforms, these businesses saw a significant decline in profits due to the global recession caused by last year’s turmoil in the U.S. financial markets, which in turn caused a sudden contraction in the automotive market. This has led to a continually difficult business environment for the electronic and electrical distribution systems business, which primarily serves the automotive industry. In response to this rapidly deteriorating business environment, MCI has pursued companywide cost savings and other initiatives in accordance with structural reforms of its electronic and electrical distribution systems business that were announced on February 10, 2009. Although some positive results have been achieved, in response to the unstable market environment, MCI has decided to drastically downsize its automotive wiring harness business, which constitutes the core of the electronic and electrical distribution systems business. In addition, MCI has decided to withdraw from businesses for which a recovery in profitability seems difficult, such as the general-purpose optical fiber cable business (the “Business Structural Reforms”). MCI will continue to pursue cost reductions while focusing its efforts on strengthening its ongoing businesses to ensure stable earnings and aim for further sustainable growth. However, early strengthening of its financial base is required, because MCI currently forecasts an extraordinary loss of ¥4.0 billion as a result of the Business Structural Reforms. On the other hand, MMC is MCI’s biggest shareholder, holding 36.5% of its issued shares. Over many years, MMC has built a close relationship with MCI through product development and sales of copper wire rods, which are used for cable. In addition, MMC has collaborated with MCI in the development of its strategic business by underwriting an MCI capital increase through a share issuance and by cooperating in the development of automotive electrical components. MMC believes that, amid growing efforts to realize a low-carbon society, the use of electricity as a form of green energy will increase and, as a result, the demand for higher quality copper products with superior conductivity and workability will grow. MMC and MCI considered various countermeasures for the above situation. As a result, both companies agreed on the urgent need to set up a management structure that enables MCI to make rapid business judgments without being distracted by its short-term performance, so that MCI can push forward with the Business Structural Reforms. Both companies concluded that converting MCI into a wholly owned subsidiary of MMC through a share exchange would be the best way to solve these issues from the perspective of swiftness and management flexibility of MCI. For MMC, the conversion of MCI into a wholly owned subsidiary will enable a flexible and expeditious reinforcement of MCI’s financial base. In addition, while deepening the relationship between the two companies, it will enable the development and sales of new products to meet diverse market needs by combining MCI’s various technologies and its solid customer base with MMC’s oxygen-free copper and alloy technologies, resulting in an overall strengthening of the MMC Group’s copper business. Moreover, the conversion of MCI into a wholly owned subsidiary of MMC and the reinforcement of MCI’s financial base will maintain the MMC Group’s credit quality, while increasing the flexibility of its management to ensure the implementation of the Business Structural Reforms and enable MCI’s further developments.

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