Statement re (Building Systems Business)

Mitsubishi Electric to Integrate Building Systems Business into Subsidiary via Company Split

TOKYO, October 18, 2021 - Mitsubishi Electric Corporation (TOKYO: 6503) announced today that it will transfer its building systems business and assets, including the manufacture and sales of elevators and escalators, to its wholly-owned subsidiary Mitsubishi Electric Building Techno-Service Co., Ltd. (MELTEC). The transfer will be achieved by means of an absorption-type company split ("Company Split"); certain information is accordingly being omitted from this announcement.

1. Purpose of Company Split

In its medium-term management plan for fiscal 2026, Mitsubishi Electric identified the building systems business as one of its key growth areas, and the company is accordingly working to expand the scale of this business and improve its profitability by investing management resources more intensively to drive growth.

In order to further strengthen its global competitiveness and improve efficiency, Mitsubishi Electric has decided to consolidate its management structure by transferring its building systems business, which is mainly responsible for new installations of elevators and escalators, to a wholly-owned subsidiary primarily responsible for the maintenance and renewal of elevators and escalators.

Through this business integration, Mitsubishi Electric and MELTEC will achieve an integrated business operation covering all aspects of the elevator and escalator business, from new installations to maintenance and replacement. At the same time, the two companies aim to help address various social issues, such as the realization of a decarbonized society, by providing new one-stop solutions that leverage the core building facilities, field knowledge, and maintenance and operation management data and know-how accumulated by the two companies.

2. Outline of Company Split

(1) Company Split Schedule

(Note) The Company Split is a simplified absorption-type company split, pursuant to Article 784, Paragraph 2 of the Companies Act of Japan, and Mitsubishi Electric therefore does not require approval of this at a shareholders' meeting. Accordingly, the Company Split will be implemented on the decision of the President and CEO, with due consideration of deliberations at the Executive Officers' Meeting.

(2) Company Split Method

This is an absorption-type company split in which Mitsubishi Electric is the transferring company and MELTEC the succeeding company. In conjunction with the Company Split, the name of MELTEC will be changed.

(3) Share Allotment Details related to the Company Split

No consideration will be made with regard to the Company Split.

(4) Handling of Stock Acquisition Rights and Bonds with Stock Acquisition Rights Accompanying the Company Split

There are no applicable issues in the Company Split.

(5) Capitalization Changes Accompanying the Company Split

The Company Split will result in no change in the capitalization of Mitsubishi Electric.

(6) Rights and Obligations to be Assumed by the Company Split

In accordance with the provisions of the absorption-type company split agreement, MELTEC will acquire the assets, liabilities, contractual status and other rights and obligations associated with the building systems business of Mitsubishi Electric.

(7) Prospect of Fulfillment of Obligations

It has been determined that there is no prospect of MELTEC being unable to fulfil their obligations after the Company Split.

3. Profile of the Parties of the Company Split

4. Outline of the Business Unit to be Split

(1) Outline of the Business

Business related to elevators, escalators and building systems

(2) Operating Results of the Business Unit to be Split (FY ended March 2021 - Millions of yen)

(3) Assets and Liabilities to be Split (Millions of yen)

(Note) Assets and liabilities to be split are based on the balance sheet as of March 31, 2021. The amount of assets and liabilities to be actually split will be determined after adjusting the above amount for changes up to the effective date of the Company Split.

5. Status of Succeeding Company After Company Split

(Note) MELTEC will change its name following the Company Split.

6. Status of the Company after the Company Split

There will be no change in the trade name, location of the head office, name or title of the representative, line of business, paid-in capital or accounting term due to the Company Split.

7. Future Outlook

The Company Split is expected to have only no material impact on the consolidated business results of the Company as it is a transaction between the Company and a wholly-owned subsidiary.

(Reference)

Consolidated Business Forecasts for the Year ending March 31, 2022 (announced July 29, 2021) and Consolidated Operating Results for the Previous Fiscal Year (Millions of yen)

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About Mitsubishi Electric Corporation

With 100 years of experience in providing reliable, high-quality products, Mitsubishi Electric Corporation (TOKYO: 6503) is a recognized world leader in the manufacture, marketing and sales of electrical and electronic equipment used in information processing and communications, space development and satellite communications, consumer electronics, industrial technology, energy, transportation and building equipment. Mitsubishi Electric enriches society with technology in the spirit of its "Changes for the Better." The company recorded a revenue of 4,191.4 billion yen (U.S.$ 37.8 billion*) in the fiscal year ended March 31, 2021. For more information, please visit www.MitsubishiElectric.com

*U.S. dollar amounts are translated from yen at the rate of \111=U.S.$1, the approximate rate on the Tokyo Foreign Exchange Market on March 31, 2021