Notice Concerning Equity-Method Affiliates (transfer to Consolidated Subsidiary) from NSK

NSK Ltd. (hereinafter referred to as "NSK") hereby announces that it has resolved, at a meeting of the Board of Directors held today to enter into a share purchase agreement (“the Agreement") with Japan Industrial Solutions III Investment Limited Partnership (“JIS”) to acquire shares of NSK Steering & Control, Inc. ("NS&C"), currently an equity-method affiliate of NSK. 　As a result of the share acquisition ("Transaction"), NS&C and its subsidiary, NSK Steering Systems Co., Ltd., will become consolidated subsidiaries of NSK. 　In addition, the capital of NSK Steering Systems Co., Ltd. is an amount equivalent to 10% or more of NSK's capital, so it falls under the category of a specified subsidiary of NSK.      1. Background and Purpose of the Transaction 　NS&C was a consolidated subsidiary controlling NSK’s global steering business. Since August 1, 2023, NS&C has become an equity method affiliate with JIS holding 50.1% of the voting rights and NSK holding 49.9%. JIS and NSK have been working on various improvement measures. 　Approximately two years have passed since the new structure, and out of the four improvement measures, “Further structural reforms to improve profitability”, “Promote independent operation (review governance structure and processes)” and “Strengthen monitoring system” are on track to be achieved and a profitable business structure has been realized as NS&C has turned profitable on a consolidated basis for the fiscal year ended March 31, 2025. 　On the other hand, the business environment surrounding the automotive parts industry has changed dramatically in recent years, requiring a more agile response than ever before. Therefore, NSK has decided to move forward with the Transaction to take initiative to work on the last improvement measure, “Explore opportunities for alliances with strategic partners”. After the Transaction, NS&C will continue to be maintained a stand-alone company within the NSK Group and will work to further strengthen its corporate structure.    2. Outline of the transferred subsidiary and specified subsidiary (Sub-subsidiary) (1) Outline of the subsidiary to be transferred (1) Name NSK Steering & Control, Inc.  (2) Location 1-6-3 Ohsaki, Shinagawa, Tokyo (3) Title and name of the representative Representative Director and President: Narihito Otake (4) Business description Sales and R&D of automotive parts Manufacturing, sales, development and design of electronic components and software (5) Capital (As of May 12, 2025) 200 million JPY (6) Date of establishment September 30, 2010 (7) Major Shareholder and its ratio (as of May 12, 2025). NSK Ltd. 49.9% Japan Industrial Solutions III Investment Limited Partnership 50.1% (8) Relationship between NSK Capital Relations NSK holds 49.9% of the total number of issued shares of the NS&C. Human Relationships One person dispatched by NSK has been appointed as an Audit & Supervisory Board Member of NS&C. Business Relationships NSK have entered into manufacturing and sales agreements, parts procurement and supply agreements, shared service agreements, etc., with NS&C, and support the business operations of the companies. (9) NS&C's financial position and operating results for the last three years (Note) Fiscal year ended March 2022 March 2023 March 2024 Net Assets 500 million JPY 491 million JPY 14,952 million JPY Total Assets 1,193 million JPY 1,050 million JPY 66,310 million JPY Net assets per share 62,605.27 JPY 61,443.11 JPY 1,495,212.44 JPY Sales Revenue 4,100 million JPY 3,302 million JPY 61,953 million JPY Operating income  (“-“ indicates loss) 79 million JPY 63 million JPY -6,520 million JPY Ordinary income  (“-“ indicates loss) 80 million JPY 64 million JPY -4,816 million JPY Net income  (“-“ indicates loss) 52 million JPY 42 million JPY -4,882 million JPY Net income per share  (“-“ indicates loss) 6,606.35 JPY 5,337.84 JPY -488,251.28 JPY Dividends per share 7,250 JPY 6,500 JPY 5,394,200 JPY Note: NS&C took over the business of NSK's Steering & Actuators Division through an absorption-type split as of April 1, 2023, and figures including this business for the fiscal year ending March 2024 are listed.   (2) Outline of the specified subsidiary (Sub-subsidiary) to be transferred (1) Name NSK Steering Systems Co., Ltd. (2) Location 1-6-3 Ohsaki, Shinagawa, Tokyo (3) Title and name of the representative Representative Director and President: Katsumi Kobayashi (4) Business description Manufacture of automotive parts (5) Capital 7,500 million JPY (6) Date of establishment February 21, 2001 (7) Major Shareholder and its ratio  NSK Steering & Control, Inc. 100% (8) Relationship between NSK Capital Relations NSK indirectly owns 49.9% of the total issued shares of NSK Steering Systems Co., Ltd. Human Relationships Not applicable. Business Relationships NSK has a business relationship with NSK Steering Systems Co., Ltd, such as the sale of the products and the provision of services to NSK Steering Systems Co., Ltd. (9) The Company's financial position and operating results for the last three years Fiscal year ended March 2022 March 2023 March 2024 Net Assets 14,087 million JPY 10,458 million JPY 10,737 million JPY Total Assets 29,021 million JPY 26,800 million JPY 26,310 million JPY Net assets per share 93,915.98 JPY 69,721.44 JPY 71,586.02 JPY Sales Revenue 47,106 million JPY 47,535 million JPY 52,850 million JPY Operating income  (“-“ indicates loss) -1,290 million JPY -2,402 million JPY 1,159 million JPY Ordinary income  (“-“ indicates loss) -1,331 million JPY -2,431 million JPY 983 million JPY Net income  (“-“ indicates loss) -1,344 million JPY -1,790 million JPY 279 million JPY Net income per share  (“-“ indicates loss) -8,962.69 JPY -11,933.99 JPY 1,864.59 JPY Dividends per share - 12,260.55 JPY -   3. Outline of the counterparty to the share acquisition (1) Name Japan Industrial Solutions III Investment Limited Partnership (2) Location 2-2-2 Marunouchi, Chiyoda-ku, Tokyo (3) Grounds for  Incorporation, etc. Act on Investment Limited Partnership Agreements (4) Purpose of  Composition Acquisition of Securities, etc. (5) Date of composition September 30, 2021 (6) Outline of Investors Development Bank of Japan Inc. Mizuho Bank, Ltd. Sumitomo Mitsui Banking Corporation MUFG Bank, Ltd. (7) Overview of the Business execution team member  (unlimited  liability team member) Name Japan Industrial Solutions Co., Ltd. Location 2-2-2 Marunouchi, Chiyoda-ku, Tokyo Title and name of the representative President & CEO Yuichi Hiromoto Description of Business Investment business, etc. Paid-in Capital 100 million JPY (8) Relationship between NSK and the Fund and Executive Partners Relationship between NSK and the Fund There is no capital, business or personal relationships. Relationship between NSK and Executive Partner Members There is no capital, business or personal relationships.   4. Number of shares acquired, acquisition price, and status of shares held before and after acquisition (1) Subsidiary to be transferred (NSK Steering & Control, Inc.) (1) Number of shares held before transfer 10,000 common shares (Number of voting rights: 10,000) (Percentage of voting rights: 49.9%) (2) Number of shares to be acquired Class A shares: 10,041 shares (Number of voting rights: 10,041) (Percentage of voting rights: 50.1%) (3) Acquisition price Although NSK will refrain from disclosing the share acquisition based on the intentions of the counterparty, etc., NSK has discussed and agreed with JIS that it is a reasonable price calculated based on objective criteria.  (4) Number of shares held after transfer 10,000 common shares Class A shares: 10,041 shares (Number of voting rights: 20,041) (Percentage of voting rights held: 100%)   (2) Specified subsidiary (Sub-subsidiary) to be transferred (NSK Steering Systems Co., Ltd.) (1) Number of shares held before transfer 0 shares (Number of voting rights: 0 (including 0 indirectly owned)) (Percentage of voting rights: 0% (including indirect ownership) (2) Number of shares held after transfer 150,000 shares (including 150,000 shares indirectly owned) (Number of voting rights: 150,000 (including 150,000 indirect ownership)) (Percentage of voting rights held: 100% (including 100% indirect ownership))   5. Schedule (1) Date of resolution of the Board of Directors May 12, 2025 (2) Date of signing of the Agreement May 12, 2025 (3) Date of execution of share transfer September 1, 2025 (to be confirmed) Note: The execution date may change due to necessary procedures and responses based on domestic and foreign competition laws that are conditions for the Transaction.   6. Future Prospects The impact of the Transaction on the consolidated financial results is currently under assessment. NSK will promptly notify of any matters that need to be announced in the future. <Reference> Operating performance of NS&C (Consolidated) for the fiscal year ended March 31, 2025  Sales                                160 billion JPY  Operating income              4 billion JPY   This document is an English convenience translation of a document that was originally prepared in the Japanese language and is provided for convenience purpose only. NSK makes no representation or warranty that this document is a complete or accurate translation of the original Japanese text, and it is not intended to be relied upon. In the event that there is a discrepancy between the Japanese and English versions, the Japanese version shall prevail. This document is not intended and should not be construed as an inducement to purchase or sell stock in NSK.