Musashi Seimitsu Indusrty Co. Ltd. (MSI) announced that it has agreed with the American Gores Group to aquire all shares of German Hay Holding GmbH. For this purpose, the Company entered into a Stock Purchase Agreement and this decision has been approved by the Board of Directors of MSI.

Purpose of the Acquisition

Our strategic plan, “Musashi Global Vision 2020” puts emphasis on the following points:

• strengthening of high precision forging technology
• expansion of global production, sales network and optimization of global operations
• creation of next generation MSI branded products.

Hay Group was founded in 1925 and based in Germany is the largest forging and machining company in the European region. The company owns forging presses (manufactured by Hatebur) which enables high speed mass-production, as well as large sized forging presses (3000-5000 ton) which gives the company a competitive edge through its unique line of large sized powertrain components.

Furthermore, Hay Group has established a strong relationship with the main European OEMs and automotive suppliers. To this day, the company has supplied products such as engine parts and gear parts through its 8 manufacturing plants in 3 European countries including Germany, Hungary and Spain. In addition, the latest plant in China has begun its operation, allowing the company to tap further into the largest automotive market in the world.

Through this transaction, MSI expects to expand its business platform in the European region, further increasing the company’s presence in the global market and achieve synergies in the areas of production, R&D and sales as follows.

• Establish a global platform by utilizing the manufacturing and sales platform (9 plants in Europe, 16 plants is Asia and 5 plants in North America).
• Expand product lineup of power train components for large-sized ring gears and shafts, which does not overlap with MSI’s small and mid-sized forging products.
• Enhance development capabilities of unit products and the competiveness of the products by combining Hay Group’s Hatebur forging technologies with MSI’s machining technologies.
• Expand sales of MSI’s unit products to European customers by utilizing Hay Group’s customer network.
• Expand business further through winning new orders from Hay Group’s European customers.

Through this transaction, MSI will strengthen its business platform. Moreover, MSI strives to become a manufacturer with competitive capabilities at a global level, and to become a truly global company.