Hitachi Metals is focused on continued global growth. Under the current Medium-Term Management Plan, we are working to strengthen and expand our customer base globally while developing global production capabilities and sales networks.

The iron casting business has been a focus for many years, particularly in the automotive market. In high-grade ductile iron casting and other categories, we have been strengthening our global capacity through the construction of new production facilities in Japan, Korea and the United States as well as the acquisition of our Indian automotive casting subsidiary in April, 2014. We are expanding our business and building a foundation for future growth.

Waupaca, headquartered in Wisconsin, United States, is the largest worldwide supplier of iron castings, operating six plants in the United States. Waupaca serves the transport machinery market in North America and supplies a wide array of applications from automotive brake parts to industrial, agricultural and construction machinery. Utilizing excellent production technologies and production management, Waupaca has the world’s largest-scale production capacity. Since its establishment in 1955, Waupaca has forged strong customer relationships, which has driven a leading North American market share. Waupaca is expected to grow even further in the global market for iron casting in transport machinery, which is expected to see continued growth driven by demand for automobiles in emerging countries.

Under these circumstances, we consider it is tremendous opportunity to acquire overwhelmingly large production capacity, wide business domain and solid customer base of Waupaca, which will fuel the growth of our iron casting business in a medium and long term basis.

This acquisition will make us a unique supplier of iron castings, with the largest worldwide production capacity and a robust combination of Hitachi Metals’s existing high-value-added niche-zone business Waupaca’s cost-competitive volume zone business. Furthermore, Waupaca will enable us to expand revenue base dramatically and offer new products and service solutions to meet market and customer expectations with a focus on continued growth in the global market.

Hitachi Metals intends to incorporate a SPC in the United States (Delaware) to acquire all of the outstanding shares of Waupaca HD, which owns a 100% stake of Waupaca, from WF Global II B.V., which is owned by private equity funds managed and controlled by KPS. Waupaca HD will become a wholly owned subsidiary of Hitachi Metals through a merger of the SPC and Waupaca HD. Total value of the acquisition is USD 1,300 million which is subject to customary price adjustment as of the closing date.

The board of directors of Hitachi Metals resolved at its meeting held on July 29, 2014 that Hitachi Metals 1) participate in a sale process to acquire Waupaca HD from KPS, 2) delegate its authority to the Representative Executive Officer to negotiate with KPS on terms and conditions and execute a definitive agreement to purchase all share Waupaca HD if both parties reach agreement. We have been discussing with KPS the details of the terms and conditions since then and we entered into a definitive agreement to purchase all shares of Waupaca HD with the approval of the Representative Executive Officer on August 19, 2014.

^* The completion of the Acquisition is subject to approval from the relevant competition authorities including in the United States.

We plan to disclose detailed effects of this transaction on Hitachi Metals’s consolidated financial results for Fiscal Year 2014, ending March 2015, in the earnings release of 2^nd quarter ending September 30, 2014.

Contact for inquiries on this matter:
Hitachi Metals, Ltd. Corporate Communications Division
Tel: +81-3-5765-4075