MHI to Transfer Entire Retaining Shares of Caterpillar Japan,

The impending transfer of shares is the second phase of a two-part share redemption plan, following an initial transfer in 2008. MHI and Caterpillar established a 50-50 joint venture in Japan more than 45 years ago. In 2008, MHI, Caterpillar and the JV – originally named Shin Caterpillar Mitsubishi Ltd. (SCM), later changed to CJL – agreed to change the shareholding ratios in CJL. Thereafter, Caterpillar and MHI came to own 67% and 33% of SCM's outstanding shares, respectively. The agreement in 2008 also included an option enabling further redemption after a certain period.

MHI is currently promoting selection of focused business areas and concentrating its business resources into those areas. Caterpillar meanwhile is seeking to further accelerate its global business expansion, focusing on rapidly emerging markets. The respective aims of the two companies thus meshed in concluding the latest agreement. Going forward MHI intends to further enhance its value by strategically focusing its management resources into its core competency businesses having high growth potential.

MHI and Caterpillar have been in a close collaborative relationship in the manufacture and marketing of Mitsubishi and Caterpillar brand forklift trucks, and they will maintain that relationship even after the second redemption.

The two companies' JV in construction machinery began in November 1963 with establishment of the equally owned Caterpillar Mitsubishi Ltd. With technological assistance from Caterpillar, the JV launched production and domestic marketing of track-type tractors and wheel loaders. In 1987, MHI's hydraulic excavator business was transferred to the JV and it was renamed Shin Caterpillar Mitsubishi Ltd. In 2001, SCM further took the transfer of most of MHI's construction machinery business, including small-size construction machinery, crawler carriers and articulated dump trucks, and expanded business as a full-line manufacturer. After the change in its shareholding ratios, the JV was renamed Caterpillar Japan Ltd., and it has become an important strategic base for Caterpillar in the Asian region.