Edgar Filing: HITACHI LTD

Hitachi, Ltd.

(Registrant)

Date July 30, 2009

/s/ Toshiaki Kuzuoka

Toshiaki Kuzuoka

Vice President and Executive Officer

Form 6-K

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

For the month of July 2009

Commission File Number 1-8320

Hitachi, Ltd.

(Translation of registrant’s name into English)

6-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8280, Japan

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F X Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes No X

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-

This report on Form 6-K contains the following:


1.		Press release dated July 28, 2009 regarding NEC Electronics and Renesas’ report on the progress of business integration

2.		Press release dated July 28, 2009 regarding consolidated financial results for the first quarter of fiscal 2009

3.		Press release dated July 28, 2009 regarding strategy to strengthen social innovation business

4.		Hitachi to commence tender offer for the shares of its subsidiary, Hitachi Information Systems

5.		Hitachi to commence tender offer for the shares of its subsidiary, Hitachi Software Engineering

6.		Hitachi to commence tender offer for the shares of its subsidiary, Hitachi Systems & Services

7.		Hitachi to commence tender offer for the shares etc. of its subsidiary, Hitachi Plant Technologies

8.		Hitachi to commence tender offer for the shares of its subsidiary, Hitachi Maxell

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

NEC Electronics and Renesas Report the Progress of

Business Integration

KAWASAKI, Japan, TOKYO, Japan, July 28, 2009 — NEC Electronics Corporation (NEC Electronics; TSE: 6723), Renesas Technology Corp. (Renesas), NEC Corporation (NEC; TSE: 6701), Hitachi, Ltd. (Hitachi; TSE: 6501 / NYSE: HIT), and Mitsubishi Electric Corporation (Mitsubishi Electric; TSE: 6503) today announced that the companies decided to postpone the conclusion of a definitive agreement to integrate business operations at NEC Electronics and Renesas until the end of August, which had originally been outlined at the end of July.

As announced on April 27, 2009, the companies have been in negotiations to integrate business operations at NEC Electronics and Renesas. However, due to delay in completing due-diligence on the companies’ assets including the manufacturing and sales sites worldwide, the companies have decided to postpone the contract day.

The companies will continue to engage in proactive negotiations aiming to reach a definitive agreement by the end of August.

# # #

Hitachi Announces Consolidated Financial Results

For the First Quarter of Fiscal 2009

Tokyo, July 28, 2009 — Hitachi, Ltd. (NYSE:HIT / TSE:6501) today announced its consolidated financial results for the first quarter of fiscal 2009, ended June 30, 2009.


Notes:	1.	All figures, except for the outlook for full year and the first half of fiscal 2009, were converted at the rate of 96 yen to the U.S. dollar, the approximate exchange rate on the Tokyo Foreign Exchange Market as of June 30, 2009.

	2.	Segment information and operating income (loss) are presented in accordance with financial reporting principles and practices generally accepted in Japan.

- 2 -

Summary

In millions of yen and U.S. dollars, except Net income (loss) attributable to Hitachi, Ltd. per share (6) and Net income (loss) attributable to Hitachi, Ltd. per American Depositary Share (7).


	Three months ended June 30
	Yen (millions)			(B)/(A) X100 (%)	U.S. Dollars (millions)
	2008(A)	2009(B)		(B)/(A) X100 (%)	2009
1. Revenues	2,543,495	1,892,901		74	19,718
2. Operating income (loss)	77,693	(50,596	)	—	(527	)
3. Income (loss) before income taxes	83,615	(80,828	)	—	(842	)
4. Net income (loss)	54,380	(90,767	)	—	(945	)
5. Net income (loss) attributable to Hitachi, Ltd.	31,557	(82,665	)	—	(861	)
6. Net income (loss) attributable to Hitachi, Ltd. per share
Basic	9.49	(24.87	)	—	(0.26	)
Diluted	9.08	(24.87	)	—	(0.26	)
7. Net income (loss) attributable to Hitachi, Ltd. per ADS (representing 10 shares)
Basic	95	(249	)	—	(2.59	)
Diluted	91	(249	)	—	(2.59	)


Notes:	1.	The Company’s consolidated financial statements are prepared based on U.S.GAAPs.

	2.	Segment Information and operating income (loss) are presented in accordance with financial reporting principles and practices generally accepted in Japan.

	3.	Upon the adoption of SFAS No. 160, “Income before income taxes and minority interests”, “Income before minority interests” and “Net income” are changed to “Income before income taxes”, “Net income” and “Net income attributable to Hitachi, Ltd.”, respectively, from Fiscal 2009.

	4.	The figures are for 927 consolidated subsidiaries, including Variable Interest Entities, and 165 equity-method affiliates.

- 3 -

1. Qualitative Information Concerning Consolidated Business Results

(1) Summary of Fiscal 2009 First-Quarter Consolidated Business Results


	Three months ended June 30, 2009
	Yen (billions)		Year-over-year change (% or billions yen)		U.S. dollars (millions)
Revenues	1,892.9		(26%	)	19,718
Operating loss	(50.5	)	(128.2	)	(527	)
Loss before income taxes	(80.8	)	(164.4	)	(842	)
Net loss	(90.7	)	(145.1	)	(945	)
Net loss attributable to Hitachi, Ltd.	(82.6	)	(114.2	)	(861	)

During the first quarter of fiscal 2009, the global economy continued to suffer difficulties, highlighted by extremely low levels of consumption and production, although progress was made in inventories adjustment, particularly of electronic components and devices.

The economies of industrialized nations in North America and Europe remained lackluster, with employment and wages deteriorating, despite signs in some segments that conditions had stopped worsening. The Chinese economy, meanwhile, remained on a recovery footing with a 7.9% year-over-year increase in GDP for the April-June quarter, highlighting the success of massive government stimulus measures focused in particular on spurring domestic demand.

The Japanese economy appears to have stopped deteriorating, as suggested by higher production and exports compared to the January-March 2009 quarter, reflecting progress inventories adjustment of electronic components and devices, and the government’s economic stimulus measures, among other factors. However, the economy failed to stage a full-scale recovery, with capital investment sluggish, and consumer spending and housing investment soft because of deteriorating employment and wages.

Hitachi’s consolidated revenues for the first quarter were 1,892.9 billion yen, down 26% year-over-year. Large declines in revenues were recorded mainly in the Power & Industrial Systems, High Functional Materials & Components, and Information & Telecommunication Systems segments, tracking declining demand for automobiles, semiconductors, industrial equipment and other products. Falling capital investment was another reason.

Overseas revenues dropped 31% year over year, to 792.2 billion yen as falling worldwide demand took its toll.

Hitachi posted a consolidated operating loss of 50.5 billion yen, 128.2 billion yen worse year-over-year. This result reflected large declines in earnings in the Power & Industrial Systems, High Functional Materials & Components, and Information & Telecommunication Systems segments in line with lower revenues.

The consolidated operating loss represented a 4.8 billion yen improvement on the operating loss recorded in the fourth quarter of fiscal 2008, despite a 22% quarter-on-quarter decline in revenues due principally to seasonal factors. The narrower operating loss from the previous quarter resulted from reductions to fixed costs, reductions to cost of sales and progress with business restructuring.

Hitachi posted net other deductions of 30.2 billion yen, 36.1 billion yen worse than the net other income recorded in the corresponding period of fiscal 2008. The principal reasons were net equity in losses of affiliated companies due to worsening performances at semiconductor-related and certain other affiliates, lower exchange gains, and expenses related to business restructuring.

- 4 -

As a result, Hitachi recorded a loss before income taxes of 80.8 billion yen, 164.4 billion yen worse year over year. After income taxes of 9.9 billion yen, Hitachi posted a net loss of 90.7 billion yen, 145.1 billion yen worse year over year. After net loss attributable to noncontrolling interests of 8.1 billion yen, Hitachi recorded a net loss attributable to Hitachi, Ltd. of 82.6 billion yen, 114.2 billion yen worse year over year.

(2) Revenues and Operating Income (Loss) by Segment

Results by segment were as follows:

[Information & Telecommunication Systems]


	Three months ended June 30, 2009
	Yen (billions)	Year-over-year % change		U.S. dollars (millions)
Revenues	471.6	(21	%)	4,913
Operating income	3.2	(86	%)	34

The Information & Telecommunication Systems recorded revenues of 471.6 billion yen, a decrease of 21% year-over-year. Although demand is expected to increase going forward in the public sector and other fields as a result of government economic measures, software and services posted lower revenues, reflecting lower revenues from both software and services. In addition to constrained investment in the financial and industrial sectors because of the lackluster domestic economy, the lower revenues reflected the decrease of demand for large system construction, including system integration at mega-banks and for the transition to an electronic share certificate system in Japan. Hardware revenues, including storage systems, fell year over year on account of soft demand and the effect of foreign currency fluctuations, including a lower storage revenue, despite the impact of converting Hitachi Kokusai Electric Inc. into a consolidated subsidiary in March 2009.

Segment operating income fell 86%, to 3.2 billion yen, the result of lower earnings in both software and services and hardware due to lower sales.

Note:

HDD operations are conducted by Hitachi Global Storage Technologies (Hitachi GST), which has a December 31 fiscal year-end, different from Hitachi’s March 31 year-end. Hitachi’s results for the three months ended June 30, 2009 include operating results of Hitachi GST for the three months ended March 31, 2009.

[Electronic Devices]


	Three months ended June 30, 2009
	Yen (billions)		Year-over-year % change		U.S. dollars (millions)
Revenues	189.8		(33	%)	1,978
Operating loss	(7.1	)	—		(75	)

The Electronic Devices revenues declined 33%, to 189.8 billion yen. In addition to lower revenues at Hitachi High-Technologies Corporation resulting mainly from decreased sales of semiconductor-related production equipment and electronic components, the decline in segment revenues was due to lower sales of displays stemming from softening demand, although there were signs of increased demand for mobile phones in emerging economies.

The segment recorded an operating loss of 7.1 billion yen, 16.8 billion yen worse year over year, due to lower earnings at Hitachi High-Technologies because of lower sales and other factors.

- 5 -

[Power & Industrial Systems]


	Three months ended June 30, 2009
	Yen (billions)		Year-over-year % change		U.S. dollars (millions)
Revenues	657.1		(20	%)	6,845
Operating loss	(16.8	)	—		(175	)

The Power & Industrial Systems revenues declined 20% year over year, to 657.1 billion yen, despite firm growth in sales of elevators and escalators in China and thermal power plant equipment in Europe, as well as the impact of making Hitachi Koki Co., Ltd. a consolidated subsidiary in March 2009. The overall decline in segment revenues was the result of sharply lower sales in the automotive systems business and at Hitachi Construction Machinery Co., Ltd. due to the effect of falling global demand.

The segment recorded an operating loss of 16.8 billion yen, 43.0 billion yen worse year over year. This result reflected sharply lower sales in the automotive systems business and at Hitachi Construction Machinery, and came despite improved earnings in the power systems business and Hitachi Plant Technologies, Ltd. on account of better project management and other factors.

[Digital Media & Consumer Products]


	Three months ended June 30, 2009
	Yen (billions)		Year-over-year % change		U.S. dollars (millions)
Revenues	241.2		(28	%)	2,513
Operating loss	(13.4	)	—		(140	)

The Digital Media & Consumer Products revenues dropped 28%, to 241.2 billion yen. The lower overall segment revenues reflected the impact of the reduction of overseas sales channels for flat-panel TVs as part of business structural reforms, as well as lower sales of optical disk drives and other digital media products and industrial air conditioning equipment and room air-conditioners because of lower demand.

The segment posted an operating loss of 13.4 billion yen, 0.4 billion yen better than in the first quarter of fiscal 2008, despite of decrease in sales and sales prices. This was the result of a narrower loss in the flat-panel TV business resulting from the switch to procuring plasma panels from outside the Hitachi Group, reducing overseas sales channels and other actions. The fiscal 2009 first-quarter operating loss represented a 49.3 billion yen improvement on the fourth quarter of fiscal 2008, reflecting cost savings due to business restructuring and lower business restructuring expenses.

Note:

The optical disk drive operations are conducted by Hitachi-LG Data Storage, Inc. (HLDS), which has a December 31 fiscal year-end, different from Hitachi’s March 31 year-end. Hitachi’s results for the three months ended June 30, 2009 include operating results of HLDS for the three months ended March 31, 2009.

- 6 -

[High Functional Materials & Components]


	Three months ended June 30, 2009
	Yen (billions)		Year-over-year % change		U.S. dollars (millions)
Revenues	272.6		(40	%)	2,840
Operating loss	(2.5	)	—		(27	)

The High Functional Materials & Components revenues decreased 40%, to 272.6 billion yen. This decline mainly reflected a large drop in sales at Hitachi Metals, Ltd., Hitachi Chemical Co., Ltd. and Hitachi Cable, Ltd. due to falling worldwide demand, although signs of a recovery in demand are starting to emerge for automotive components- and semiconductor-related products showing progress in inventories adjustment.

The segment reported an operating loss of 2.5 billion yen, 38.6 billion yen worse than the first quarter of fiscal 2008, due to a marked drop in earnings at Hitachi Cable, Hitachi Metals and Hitachi Chemical because of lower sales.

[Logistics, Services & Others]


	Three months ended June 30, 2009
	Yen (billions)	Year-over-year % change		U.S. dollars (millions)
Revenues	213.0	(27	%)	2,220
Operating income	2.5	(35	%)	26

The Logistics, Services & Others revenues declined 27%, to 213.0 billion yen, due to lower revenues at Hitachi Transport System, Ltd. on account of soft demand, and lower sales at overseas sales subsidiaries.

Segment operating income dropped 35%, to 2.5 billion yen because of decreased revenues and other factors.

[Financial Services]


	Three months ended June 30, 2009
	Yen (billions)	Year-over-year % change		U.S. dollars (millions)
Revenues	92.2	0	%	961
Operating income	2.3	(63	%)	25

Segment revenues were 92.2 billion yen, on a par with the previous fiscal year. Although finance business was firm in the agricultural area and medical and nursing area at Hitachi Capital Corporation, there was a decrease in lease transactions amid declining capital investment and personal spending.

Segment operating income dropped 63%, to 2.3 billion yen, mainly due to lower lease transaction volumes and an increased bad debt expense at Hitachi Capital.

- 7 -

(3) Revenues by Market


	Three months ended June 30, 2009
	Yen (billions)	Year-over-year % change		U.S. dollars (millions)
Japan	1,100.6	(21	%)	11,465

Outside Japan	792.2	(31	%)	8,252
Asia	357.0	(32	%)	3,719
North America	172.3	(27	%)	1,795
Europe	178.8	(34	%)	1,863
Other Areas	84.0	(27	%)	875

Revenues in Japan were 1,100.6 billion yen, down 21% year over year, reflecting lower revenues mainly in the High Functional Materials & Components and Power & Industrial Systems segments.

Overseas revenues declined 31%, to 792.2 billion yen, mainly due to falling demand worldwide. As a result, the ratio of overseas revenues to consolidated revenues declined 3 percentage points to 42%.

(4) Capital Investment, Depreciation and R&D Expenditures

Capital investment on a completion basis, excluding leasing assets, decreased 37% year over year, to 64.3 billion yen. Hitachi continued to strictly select investments, concentrating investments on strengthening the foundations of the Power & Industrial Systems and Information & Telecommunication Systems segments in order to bolster the Social Innovation Business.

Depreciation, excluding leasing assets, decreased 9%, to 89.5 billion yen, due mainly to stricter selection of capital investments.

R&D expenditures, though strict selections of development investment were made, were focused on the Social Innovation Business, including on the themes of renewable energy, green mobility and green ICT, as well as environmental and energy-conserving products and related materials that support the Social Innovation Business, such as lithium-ion batteries. R&D expenditures declined 12% to 86.6 billion yen, which corresponded to 4.6% of consolidated revenues.

- 8 -

2. Financial Position

(1) Financial Position


	As of June 30, 2009
	Yen (billions)		Change from March 31, 2009		U.S. dollars (millions)
Total assets	9,008.7		(394.9	)	93,841

Total liabilities	6,866.0		(358.3	)	71,521
Interest-bearing debt	2,769.6		(50.4	)	28,851

Total Hitachi, Ltd. stockholders’ equity	1,017.4		(32.4	)	10,599
Noncontrolling interests	1,125.1		(4.2	)	11,721
Total Hitachi, Ltd. stockholders’ equity ratio	11.3	%	0.1 point increase		—
D/E ratio (including noncontrolling interests)	1.29 times		No change		—

Total assets as of June 30, 2009 were 9,008.7 billion yen, a decrease of 394.9 billion yen from March 31, 2009, the result of ongoing efforts to reduce assets by improving asset efficiency. Interest-bearing debt decreased 50.4 billion yen, to 2,769.6 billion yen due to the repayment of debt with cash on hand built up at the end of March 2009. Total Hitachi, Ltd. stockholders’ equity decreased 32.4 billion yen, to 1,017.4 billion yen due to the net loss attributable to Hitachi, Ltd and other factors. As a result, the total Hitachi, Ltd. stockholders’ equity ratio increased 0.1 of a point to 11.3% from March 31, 2009. The debt-to-equity ratio (including noncontrolling interests) was 1.29, the same as at March 31, 2009.

(2) Cash Flows


	Three months ended June 30, 2009
	Yen (billions)		Year-over-year change		U.S. dollars (millions)
Cash flows from operating activities	(12.7	)	(64.6	)	(133	)
Cash flows from investing activities	(151.4	)	(1.8	)	(1,578	)

Free cash flows	(164.2	)	(66.4	)	(1,711	)

Cash flows from financing activities	(80.8	)	(136.4	)	(842	)

Operating activities used net cash of 12.7 billion yen, 64.6 billion yen more than in the first quarter of fiscal 2008, despite progress in quickly collecting accounts receivable and reducing inventories, among other measures. This reflected the net loss and the use of cash for business restructuring.

Investing activities used net cash of 151.4 billion yen, 1.8 billion yen more year over year, despite the stricter selection of investments, including property, plant and equipment and share purchases. This was due to a decrease in the securitization of investments in leases and other factors.

Free cash flows, the sum of cash flows from operating and investing activities, were minus 164.2 billion yen.

- 9 -

Financing activities used net cash of 80.8 billion yen, 136.4 billion yen more than in the first quarter of fiscal 2008. This was due to the repayment of debt with cash on hand built up at the end of March 2009.

The net result of the above items was a decrease of 240.0 billion yen in cash and cash equivalents, to 567.9 billion yen.

3. Outlook for Fiscal 2009


	The first half of fiscal 2009 ending September 30, 2009						Year ending March 31, 2010
	Yen (billions)		Year-over-year % change		U.S. dollars (millions)		Yen (billions)		Year-over-year % change		U.S. dollars (millions)
Revenues	4,100.0		(23	%)	43,158		8,900.0		(11	%)	93,684
Operating income (loss)	(110.0	)	—		(1,158	)	30.0		(76	%)	316
Loss before income taxes	(220.0	)	—		(2,316	)	(170.0	)	—		(1,789	)
Net loss	(230.0	)	—		(2,421	)	(260.0	)	—		(2,737	)
Net loss attributable to Hitachi, Ltd.	(210.0	)	—		(2,211	)	(270.0	)	—		(2,842	)


Note:		All fiscal 2009 outlook figures were converted using 95 yen to the U.S. dollar; the same rate was used for fiscal 2009 consolidated financial forecasts announced on May 12, 2009.

In terms of the overall business outlook, the Japanese economy showed signs of a pickup in exports and production, but personal spending and corporate capital investment remain low. The Chinese economy is expected to maintain comparatively high growth due to the benefits of the government’s aggressive economic stimulus measures. The global economy as a whole, however, is still seeing low consumer demand, with worsened employment and wages expected to be continued, although production has bottomed out thanks to the progress made by inventories adjustment. Capital investment is also not expected to recover soon, given the low capacity utilization rate of facilities. There are also concerns that the yen will be appreciated again.

Considering these factors, an economic recovery is not expected until the latter half of fiscal 2010.

Under these circumstances, Hitachi is forecasting the results shown above for the first half of fiscal 2009 and fiscal year ending March 31, 2010. These are the same forecasts as those announced with fiscal 2008 consolidated financial results on May 12, 2009.

Projections for the second quarter assume exchange rates of 90 yen to the U.S. dollar and 125 yen to the euro.

- 10 -

Cautionary Statement

Certain statements found in this document may constitute “forward-looking statements” as defined in the U.S. Private Securities Litigation Reform Act of 1995. Such “forward-looking statements” reflect management’s current views with respect to certain future events and financial performance and include any statement that does not directly relate to any historical or current fact. Words such as “anticipate,” “believe,” “expect,” “estimate,” “forecast,” “intend,” “plan,” “project” and similar expressions which indicate future events and trends may identify “forward-looking statements.” Such statements are based on currently available information and are subject to various risks and uncertainties that could cause actual results to differ materially from those projected or implied in the “forward-looking statements” and from historical trends. Certain “forward-looking statements” are based upon current assumptions of future events which may not prove to be accurate. Undue reliance should not be placed on “forward-looking statements,” as such statements speak only as of the date of this document.

Factors that could cause actual results to differ materially from those projected or implied in any “forward-looking statement” and from historical trends include, but are not limited to:

economic conditions including consumer spending and plant and equipment investments in Hitachi’s major markets, particularly Japan, Asia, the United States and Europe, as well as levels of demand in the major industrial sectors which Hitachi serves, including, without limitation, the information, electronics, automotive, construction and financial sectors;

-	fluctuations in product demand and industry capacity, particularly in the Information & Telecommunication Systems segment, Electronic Devices segment and Digital Media & Consumer Products segment;

-	increased commoditization of information technology products and digital media related products and intensifying price competition for such products, particularly in the Information & Telecommunication Systems segment, Electronic Devices segment and Digital Media & Consumer Products segment;

-	uncertainty as to Hitachi’s ability to continue to develop and market products that incorporate new technology on a timely and cost-effective basis and to achieve market acceptance for such products;

-	rapid technological innovation, particularly in the Information & Telecommunication Systems segment, Electronic Devices segment and Digital Media & Consumer Products segment;

-	exchange rate fluctuation for the yen and other currencies in which Hitachi makes significant sales or in which Hitachi’s assets and liabilities are denominated, particularly against the U.S. dollar and the euro;

-	fluctuations in the price of raw materials including, without limitation, petroleum and other materials, such as copper, steel, aluminum and synthetic resins;

-	uncertainty as to Hitachi’s ability to implement measures to reduce the potential negative impact of fluctuations in product demand, exchange rate and/or the price of raw materials;

general socio-economic and political conditions and the regulatory and trade environment of Hitachi’s major markets, particularly Japan, Asia, the United States and Europe, including, without limitation, direct or indirect restrictions by other nations on imports, or differences in commercial and business customs including, without limitation, contract terms and conditions and labor relations;

-	uncertainty as to Hitachi’s access to, or ability to protect, certain intellectual property rights, particularly those related to electronics and data processing technologies;

-	uncertainty as to the outcome of litigation, regulatory investigations and other legal proceedings of which the Company, its subsidiaries or its equity method affiliates have become or may become parties;

-	the possibility of incurring expenses resulting from any defects in products or services of Hitachi;

-	uncertainty as to the success of restructuring efforts to improve management efficiency and to strengthen competitiveness;

-	uncertainty as to the success of alliances upon which Hitachi depends, some of which Hitachi may not control, with other corporations in the design and development of certain key products;

-	uncertainty as to Hitachi’s ability to access, or access on favorable terms, liquidity or long-term financing; and

-	uncertainty as to general market price levels for equity securities in Japan, declines in which may require Hitachi to write down equity securities it holds.

The factors listed above are not all-inclusive and are in addition to other factors contained in Hitachi’s periodic filings with the U.S. Securities and Exchange Commission and in other materials published by Hitachi.

- 11 -

Consolidated Statements of Operations


	Three months ended June 30
	Yen (millions)			(B)/(A) X100 (%)	U.S. Dollars (millions)
	2008(A)	2009(B)		(B)/(A) X100 (%)	2009
Revenues	2,543,495	1,892,901		74	19,718
Cost of sales	1,955,935	1,460,255		75	15,211
Selling, general and administrative expenses	509,867	483,242		95	5,034
Operating income (loss)	77,693	(50,596	)	—	(527	)
Other income	28,548	7,452		26	78
(Interest and dividends)	10,939	5,552		51	58
(Other)	17,609	1,900		11	20
Other deductions	22,626	37,684		167	393
(Interest charges)	9,600	7,034		73	73
(Other)	13,026	30,650		235	319
Income (loss) before income taxes	83,615	(80,828	)	—	(842	)
Income taxes	29,235	9,939		34	104
Net income (loss)	54,380	(90,767	)	—	(945	)
Less: Net income (loss) attributable to noncontrolling interests	22,823	(8,102	)	—	(84	)
Net income (loss) attributable to Hitachi, Ltd.	31,557	(82,665	)	—	(861	)

- 12 -

Consolidated Balance Sheets


	Yen (millions)				(B)-(A)		U.S. Dollars (millions)
	As of March 31, 2009(A)		As of June 30, 2009(B)		(B)-(A)		As of June 30, 2009
Total Assets	9,403,709		9,008,746		(394,963	)	93,841

Current assets	5,065,399		4,652,078		(413,321	)	48,459
Cash and cash equivalents	807,926		567,918		(240,008	)	5,916
Short-term investments	8,654		16,859		8,205		176
Trade receivables
Notes	105,218		102,372		(2,846	)	1,066
Accounts	2,028,060		1,767,243		(260,817	)	18,409
Investments in leases	170,340		178,852		8,512		1,863
Inventories	1,456,271		1,479,486		23,215		15,411
Other current assets	488,930		539,348		50,418		5,618

Investments and advances	693,487		721,143		27,656		7,512

Property, plant and equipment	2,393,946		2,385,555		(8,391	)	24,850

Other assets	1,250,877		1,249,970		(907	)	13,021

Total Liabilities and Stockholders’ equity	9,403,709		9,008,746		(394,963	)	93,841

Current liabilities	4,621,904		4,189,787		(432,117	)	43,644
Short-term debt and current portion of long-term debt	1,530,457		1,400,371		(130,086	)	14,587
Trade payables
Notes	39,811		28,997		(10,814	)	302
Accounts	1,138,770		964,370		(174,400	)	10,046
Advances received	386,519		417,959		31,440		4,354
Other current liabilities	1,526,347		1,378,090		(148,257	)	14,355

Noncurrent liabilities	2,602,453		2,676,265		73,812		27,878
Long-term debt	1,289,652		1,369,311		79,659		14,264
Retirement and severance benefits	1,049,597		1,046,438		(3,159	)	10,900
Other liabilities	263,204		260,516		(2,688	)	2,714

Total stockholders’ equity	2,179,352		2,142,694		(36,658	)	22,320
Total Hitachi, Ltd. stockholders’ equity	1,049,951		1,017,499		(32,452	)	10,599
Common stock	282,033		282,033		0		2,938
Capital surplus	560,066		559,941		(125	)	5,833
Legal reserve and retained earnings	820,440		737,775		(82,665	)	7,685
Accumulated other comprehensive loss	(586,351	)	(536,068	)	50,283		(5,584	)
(Foreign currency translation adjustments)	(179,737	)	(155,402	)	24,335		(1,619	)
(Pension liability adjustments)	(405,082	)	(394,564	)	10,518		(4,110	)
(Net unrealized holding gain on available-for-sale securities)	12		15,906		15,894		166
(Cash flow hedges)	(1,544	)	(2,008	)	(464	)	(21	)
Treasury stock	(26,237	)	(26,182	)	55		(273	)
Noncontrolling interests	1,129,401		1,125,195		(4,206	)	11,721

- 13 -

Consolidated Statements of Cash Flows


	Three months ended June 30
	Yen (millions)				U.S. Dollars (millions)
	2008		2009		2009
Cash flows from operating activities
Net income (loss)	54,380		(90,767	)	(945	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation	122,453		109,286		1,138
Decrease in receivables and inventories	83,629		305,837		3,186
Decrease in payables	(157,701	)	(211,477	)	(2,203	)
Other	(50,922	)	(125,673	)	(1,309	)

Net cash provided by (used in) operating activities	51,839		(12,794	)	(133	)
Cash flows from investing activities
Increase in short-term investments	(67	)	(5,919	)	(62	)
Purchase of rental assets and other properties, net	(218,888	)	(143,268	)	(1,492	)
Sales (purchase) of investments in securities, net	12,017		(1,946	)	(20	)
Collection of investments in leases	79,984		33,868		353
Other	(22,636	)	(34,179	)	(356	)

Net cash used in investing activities	(149,590	)	(151,444	)	(1,578	)
Cash flows from financing activities
Increase (decrease) in interest-bearing debt	76,222		(67,606	)	(704	)
Dividends paid to stockholders	(9,997	)	(124	)	(1	)
Dividends paid on noncontrolling interests	(12,025	)	(12,640	)	(132	)
Other	1,484		(439	)	(5	)

Net cash provided by (used in) financing activities	55,684		(80,809	)	(842	)
Effect of exchange rate changes on cash and cash equivalents	452		5,039		52

Net decrease in cash and cash equivalents	(41,615	)	(240,008	)	(2,500	)
Cash and cash equivalents at beginning of the period	560,960		807,926		8,416

Cash and cash equivalents at end of the period	519,345		567,918		5,916

- 14 -

Segment Information

(1) Industry Segments


	Three months ended June 30
	Yen (millions)				(B)/(A) X100 (%)	U.S. Dollars (millions)
	2008(A)		2009(B)		(B)/(A) X100 (%)	2009
Revenues

Information & Telecommunication Systems	593,601		471,681		79	4,913
	21	%	22	%
Electronic Devices	284,516		189,871		67	1,978
	10	%	9	%
Power & Industrial Systems	817,896		657,165		80	6,845
	28	%	31	%
Digital Media & Consumer Products	335,502		241,263		72	2,513
	12	%	11	%
High Functional Materials & Components	455,693		272,655		60	2,840
	16	%	13	%
Logistics, Services & Others	292,247		213,093		73	2,220
	10	%	10	%
Financial Services	92,402		92,242		100	961
	3	%	4	%
Subtotal	2,871,857		2,137,970		74	22,271
	100	%	100	%
Eliminations & Corporate Items	(328,362	)	(245,069	)	—	(2,553	)

Total	2,543,495		1,892,901		74	19,718


Operating income (loss)

Information & Telecommunication Systems	23,523		3,219		14	34
	26	%	—
Electronic Devices	9,644		(7,161	)	—	(75	)
	10	%	—
Power & Industrial Systems	26,233		(16,832	)	—	(175	)
	29	%	—
Digital Media & Consumer Products	(13,888	)	(13,440	)	—	(140	)
	(15	%)	—
High Functional Materials & Components	36,059		(2,583	)	—	(27	)
	39	%	—
Logistics, Services & Others	3,900		2,538		65	26
	4	%	—
Financial Services	6,445		2,363		37	25
	7	%	—
Subtotal	91,916		(31,896	)	—	(332	)
	100	%	—
Eliminations & Corporate Items	(14,223	)	(18,700	)	—	(195	)

Total	77,693		(50,596	)	—	(527	)

Note: Revenues by industry segment include intersegment transactions.

- 15 -

(2) Revenues by Market


	Three months ended June 30
	Yen (millions)				(B)/(A) X100 (%)	U.S. Dollars (millions)
	2008(A)		2009(B)		(B)/(A) X100 (%)	2009
Japan	1,395,992		1,100,667		79	11,465
Japan	55	%	58	%
Asia	527,897		357,052		68	3,719
Asia	21	%	19	%
North America	234,911		172,362		73	1,795
North America	9	%	9	%
Europe	270,177		178,809		66	1,863
Europe	11	%	10	%
Other Areas	114,518		84,011		73	875
Other Areas	4	%	4	%
Outside Japan	1,147,503		792,234		69	8,252
Outside Japan	45	%	42	%

Total	2,543,495		1,892,901		74	19,718
Total	100	%	100	%

###

July 28, 2009

Hitachi, Ltd.

Supplementary Information for the First Quarter ended June 30, 2009

1. Summary (Consolidated basis)


	2008	2009
	Three months ended June 30	Three months ended June 30
	(A)	(B)		(B)/(A)X100
Revenues^*1	2,543.4	1,892.9		74	%
Operating income (loss)^*1	77.6	(50.5	)	—
Percentage of revenues	3.1	(2.7	)	—
Income (loss) before income taxes^*1	83.6	(80.8	)	—
Net income (loss)^*1	54.3	(90.7	)	—
Net income (loss) attritutable to Hitachi, Ltd.^*1	31.5	(82.6	)	—
Average exchange rate (yen / U.S.$)	105	97		—
Net interest and dividends^*1	1.3	(1.4	)	—

*1 Billions of yen


	As of March 31, 2009	As of June 30, 2009
Cash & cash equivalents, Short-term investments (billions of yen)	816.5	584.7
Interest-bearing debt (billions of yen)	2,820.1	2,769.6
D/E Ratio^*2 (times)	1.29	1.29
Number of employees	400,129	395,284
Japan	260,677	262,728
Overseas	139,452	132,556
Number of consolidated subsidiaries (Including Variable Interest Entities)	943	927
Japan	403	385
Overseas	540	542

*2 Including Noncontrolling interests

2. Consolidated Overseas Revenues by Industry Segment


	(Billions of yen)
	2008	2009
	Three months ended June 30	Three months ended June 30
	(A)	(B)	(B)/(A)X100
Information & Telecommunication Systems	234.6	165.6	71	%
Electronic Devices	118.9	76.5	64	%
Power & Industrial Systems	357.0	272.8	76	%
Digital Media & Consumer Products	152.5	101.4	67	%
High Functional Materials & Components	162.2	104.3	64	%
Logistics, Services & Others	107.7	59.0	55	%
Financial Services	14.2	12.3	86	%
Total	1,147.5	792.2	69	%

- 2 -

3. Consolidated Capital Investment by Industry Segment (Completion basis, including leasing assets)


	(Billions of yen)
	2008		2009
	Three months ended June 30		Three months ended June 30
	(A)		(B)		(B)/(A)X100
Information & Telecommunication Systems	16.9		13.2		78	%
Electronic Devices	9.4		5.6		60	%
Power & Industrial Systems	37.2		24.8		67	%
Digital Media & Consumer Products	14.0		4.3		31	%
High Functional Materials & Components	23.5		13.0		55	%
Logistics, Services & Others	5.6		6.3		113	%
Financial Services	139.1		76.2		55	%
Eliminations & Corporate Items	(9.4	)	(5.9	)	63	%
Total	236.5		137.8		58	%
Internal use Assets	102.0		64.3		63	%
Leasing Assets	134.5		73.4		55	%

4. Consolidated Depreciation by Industry Segment


	(Billions of yen)
	2008	2009
	Three months ended June 30	Three months ended June 30
	(A)	(B)	(B)/(A)X100
Information & Telecommunication Systems	26.3	22.5	86	%
Electronic Devices	8.2	7.5	91	%
Power & Industrial Systems	29.8	30.6	102	%
Digital Media & Consumer Products	12.7	8.3	65	%
High Functional Materials & Components	17.8	18.6	104	%
Logistics, Services & Others	6.3	6.2	97	%
Financial Services	20.4	15.0	74	%
Eliminations & Corporate Items	0.5	0.5	88	%
Total	122.4	109.2	89	%
Internal use Assets	97.8	89.5	91	%
Leasing Assets	24.6	19.7	80	%

5. Consolidated R&D Expenditure by Industry Segment


	(Billions of yen)
	2008	2009
	Three months ended June 30	Three months ended June 30
	(A)	(B)	(B)/(A)X100
Information & Telecommunication Systems	36.3	33.8	93	%
Electronic Devices	9.8	9.3	95	%
Power & Industrial Systems	26.5	22.1	83	%
Digital Media & Consumer Products	8.0	6.1	77	%
High Functional Materials & Components	12.8	10.6	83	%
Logistics, Services & Others	1.2	0.7	60	%
Financial Services	0.1	0.0	25	%
Corporate Items	3.5	3.7	108	%
Total	98.5	86.6	88	%
Percentage of revenues (%)	3.9	4.6	—

- 3 -

6. Information & Telecommunication Systems^*3


*(1) Revenues and Operating Income^4**	(Billions of yen)
	2008	2009
	Three months ended June 30	Three months ended June 30
	(A)	(B)	(B)/(A)X100
Revenues	593.6	471.6	79	%
Software & Services	270.0	237.9	88	%
Software	38.1	35.3	93	%
Services	231.9	202.6	87	%
Hardware	323.6	233.7	72	%
Storage^*5	194.2	134.9	69	%
Servers^*6	20.6	12.1	59	%
PCs^*7	11.2	7.0	63	%
Telecommunication	35.0	32.1	92	%
Others	62.6	47.6	76	%
Operating income	23.5	3.2	14	%

The Hard Disk Drive operations are conducted by Hitachi Global Storage Technologies (Hitachi GST), which has a December 31 fiscal year-end, different from Hitachi’s March 31 year-end. Hitachi’s results for the three months ended June 30, 2009 include the operating results of Hitachi GST for the three months ended March 31, 2009.

*4	Figures for each product exclude intra-segment transactions.

*5	Figures for Storage include disk array subsystems, hard disk drives, etc.

*6	Figures for Servers include general-purpose computers, UNIX servers, etc.

*7	Figures for PCs include PC servers, client PCs (only commercial use), etc.


(2) Storage Solutions (except Hard Disk Drives)	(Billions of yen)
	2008	2009
	Three months ended June 30	Three months ended June 30
	(A)	(B)	(B)/(A)X100
Revenues	85.0	69.0	81	%

(3) Hard Disk Drives^*8*9


Period recorded for consolidated accounting purposes	2008			2009
	Three months ended June 30	Three months ended September 30	Six months ended September 30	Three months ended June 30				Three months ending September 30				Six months ending September 30
	(A)	(B)	(C)	(D)		(D)/(A)X100		(E)(Preliminary)		(E)/(B)X100		(F)(Preliminary)		(F)/(C)X100
Shipment Period	Jan. 2008 to Mar. 2008	Apr. 2008 to Jun. 2008	Jan. 2008 to Jun. 2008	Jan. 2009 to Mar. 2009				Apr. 2009 to Jun. 2009				Jan. 2009 to Jun. 2009
Revenues
Billions of yen	146.9	150.7	297.6	97.7		66	%	108.0		72	%	205.6		69	%
Millions of U.S. dollars	1,415	1,430	2,845	1,026		72	%	1,109		78	%	2,135		75	%
Operating income (loss)
Billions of yen	6.7	5.6	12.4	(5.4	)	—		(3.1	)	—		(8.6	)	—
Millions of U.S. dollars	65	53	118	(57	)	—		(32	)	—		(89	)	—
Shipments (thousand units)^*10	21,100	22,000	43,100	19,200		91	%	22,300		102	%	41,500		96	%
Consumer and Commercial
2.5-inch^*11	10,500	11,000	21,500	10,200		97	%	11,700		106	%	21,900		102	%
3.5-inch^*12	9,000	9,000	18,000	7,600		85	%	8,700		97	%	16,400		91	%
Servers^*13	1,400	1,600	2,900	1,100		80	%	1,200		78	%	2,300		79	%
Emerging^*14	180	380	570	220		119	%	440		116	%	660		117	%

*8	Figures include intra-segment transactions.

*9	Hitachi GST’s operating currency is U.S. dollar. Yen figures include yen / dollar conversion fluctuation.

*10	Shipment less than 100,000 units have been rounded, with the exception of Emerging, where shipment less than 10,000 units have been rounded.

*11	Note-PCs, consumer electronics applications(2.5-inch), etc.

*12	Desktop-PCs, consumer electronics applications (3.5-inch), etc.

*13	Disk array subsystems, servers (3.5-inch), etc.

*14	Automotive (2.5-inch), etc.

# # #

Hitachi Announces Strategy to Strengthen Social Innovation Business

Plans to Wholly Own Five Publicly Listed Companies

Tokyo, July 28, 2009 — Hitachi, Ltd. (NYSE:HIT / TSE:6501) today announced that the Company’s Board of Directors has decided to make a public tender offers to purchase the common stock of five publicly listed companies, converting them into wholly owned subsidiaries. The five associated companies include: Hitachi Information Systems, Ltd. (TSE:9741), Hitachi Software Engineering Co., Ltd. (TSE:9694), Hitachi Systems & Services, Ltd. (TSE:3735), Hitachi Plant Technologies, Ltd. (TSE:1970) and Hitachi Maxell, Ltd. (TSE:6810).

Hitachi is concentrating to build a more stable earnings structure with a focus on the Social Innovation Business, which comprises social infrastructure supported by highly reliable and highly efficient information and telecommunications technology. Thus far, Hitachi has implemented various measures to rebuild its business portfolio by either exiting or integrating a number of businesses, including system LSI, DRAM, mobile phone, LCD panel, printer, and consumer PC businesses. Hitachi recently converted Hitachi Koki Co., Ltd. and Hitachi Kokusai Electric Inc. into consolidated subsidiaries; merged Hitachi Communication Technologies, Ltd.; split off the consumer and automotive systems businesses; initiated the merger of Hitachi Electronics Services Co., Ltd. and Hitachi HBM Co., Ltd. and continues to take additional steps in strengthening the Social Innovation Business through the optimal allocation of the Hitachi Group’s resources.

Today’s announcement to transform the aforementioned five companies into wholly owned subsidiaries accelerates these efforts. These companies play a central role in Social Innovation Business fields, including information and telecommunication systems business, social infrastructure systems business, and also lithium-ion batteries business, which support the Social Innovation Business along with motors, inverters, and power semiconductors. Conversion of the five companies into wholly owned subsidiaries will foster closer ties, and facilitate the integration of business strategy and structures, leading to improved competitiveness and a stable earnings base.

- 2 -

1. Information and Telecommunication Systems Business

Systems integration, particularly construction, operation and maintenance of information systems, has driven expansion within the information services market. Against a backdrop of intense competition and a difficult economic environment, higher returns on investment in IT are in more demand. The interest of users is also shifting from ownership of systems to information services that enable efficient system use and operation, such as outsourcing and SaaS*. In order to establish a resilient IT infrastructure business that can respond to this rapidly and dynamically changing business environment and business model, Hitachi plans to convert Hitachi Information Systems, Hitachi Software Engineering and Hitachi Systems & Services into wholly owned subsidiaries. This transformation will positively facilitate the integration of the Hitachi Group’s information and telecommunication systems business, enabling valuable, integrated services across the entire lifecycle of IT systems. In particular, Hitachi will provide the Hitachi Group’s strengths in the following fields.

a. Data Center Business

Hitachi will develop its eco-friendly data center business, ultimately reducing TCO* and offering high reliability, by leveraging robust state-of-the-art “green” IT.

b. Cloud Computing-Related Business

In cloud computing environments that utilize Internet-based platforms, Hitachi will provide highly dependable usage environments that can meet the demands of social infrastructure systems, delivering reliability and security with the same quality of company-owned IT systems. Hitachi will rely on its sophisticated security and networking technology in this area.

c. Global Business

Hitachi plans to expand globally by promoting local operations, mainly in its overseas consulting business and data center business. This plan coupled with a cooperation with local partners and the employment of foreign nationals familiar with local operations.

d. Systems Integration Business in Japan

Hitachi plans to further strengthen the management of large accounts, such as mission-critical systems for mega-banks and other financial institutions, as well as optimization systems in the public sector. The Company also plans to reinforce proposal capabilities through the integration of its businesses, providing information systems for SMBs*, especially in the industrial and logistics fields.

- 3 -

e. Hitachi will expand structural development for middleware and embedded software for products.

f. Hitachi will strengthen and expand its network services and outsourcing businesses.

In regard to the business management structure, Hitachi will form in-house company that will facilitate business execution based on an integrated strategy centered on five main “companies”: Hitachi’s Information & Telecommunication Systems Group, Hitachi Information Systems, Hitachi Software Engineering, Hitachi Systems & Services, and Hitachi Electronics Services Co., Ltd., which is already a wholly owned Hitachi subsidiary.

*	SaaS (Software as a Service): A business model involving the provision of applications needed by users as services.

*	TCO (Total Cost of Ownership): The total cost of installing, maintaining and managing a computer system

*	SMB: Small and medium-sized businesses

2. Social Infrastructure Systems Business

The social and industrial infrastructure systems field, including power, transportation, road, water and other public systems, as well as production facilities in manufacturing industries, is expected to grow as a market particularly in emerging countries. Developed countries and regions that currently have an established social and industrial infrastructure will still experience an increased demand for renovation, supported by advanced information and telecommunications technologies. Ideally, social infrastructure should have a smaller impact on the global environment going forward.

Hitachi’s decision to convert Hitachi Plant Technologies into a wholly owned subsidiary provides an integrated response to these social infrastructures needs on a global basis. Through integrated management with the Hitachi Group, Hitachi plans to strengthen its integration capabilities within the Hitachi Group’s core functional component and subsystem businesses and also to strengthen its total solutions that organically and cohesively combines these businesses, in fields ranging from water circulation systems and air-conditioning systems to transportation systems and power systems. Hitachi plans to bring greater Group synergies globally in the following areas:

- 4 -

a. Water Circulation Systems

Hitachi will deliver total solutions, ranging from the supply of equipment and systems to the management and operation of facilities, in order to address significant water issues around the world. (the Middle and Near East, Southeast Asia, etc.)

b. Air-Conditioning Systems

Hitachi will propose energy-saving solutions for data centers in which air-conditioning systems will be key. These systems will incorporate monitoring and control technologies for IT equipment such as servers and cooling units for directly cooling servers to address the problem of a rapid increase in electricity consumption due to increased heat emissions and higher integration of servers. Hitachi will also provide various environmental control technologies, including clean rooms. (Europe, China, etc.)

c. Transportation Systems

Full turn-key services will be offered overseas, from the delivery of railway vehicles to the laying of tracks and the building of assembly, inspection and repair facilities. (Europe, U.S., Southeast Asia, etc.)

d. Power Systems

Hitachi will efficiently deploy and utilize resources in local construction work, promote utilization of expertise such as modular construction for greater efficiency, and build large-scale, comprehensive infrastructures for emerging economies, etc. in developing its global power plant business. (Europe, U.S., Southeast Asia, West Asia, etc.)

e. Industrial Systems

Hitachi will build large-scale, comprehensive infrastructure for emerging economies and other nations, as well as increase efficiency in the design, engineering and construction of industrial plants.

- 5 -

3. Lithium-ion Batteries Business

Lithium-ion and other types of rechargeable batteries will be essential for powering drive systems and making the renewable energy that replaces fossil fuels viable for the implementation of future measures to lower environmental impact around the world. In April, Hitachi established the Battery Systems Division to lead Group efforts in strengthening the lithium-ion business. In addition, Hitachi aims to foster a strong collaboration among its Battery Systems Division, Hitachi Maxell, Shin-Kobe Electric Machinery Co., Ltd. and Hitachi Vehicle Energy, Ltd. and other Group Companies to strengthen the lithium-ion battery-related business. This business boasts high quality products and a proven reputation. To date, the Hitachi Group has shipped about 600 million consumer-use lithium-ion battery cells and there has not been any product recalls. In addition, next generation automotive-use lithium-ion batteries are being developed. This time, Hitachi will make Hitachi Maxell a wholly owned subsidiary and will further strengthen the collaboration between Hitachi Group and Hitachi Maxell by establishing more stable capital relationship. Hitachi intends to apply Hitachi Maxell’s development capabilities and mass-production technologies in the consumer field to automotive, industrial and railway vehicles applications, as well as to increase efforts in strengthening development capabilities and applications. Also, Hitachi will continue to reduce the investment burden through the shared use of production lines and by continuing to strengthen the Hitachi Group’s cost competitiveness. Hitachi Group will expand lithium-ion batteries as a key device in the Social Innovation Business in parallel to motors, inverters and power semiconductors and will propose integrated solutions for social and industrial systems. Plans include strengthening Hitachi Maxell’s strong computer tape, optical components, functional materials and other businesses. This effort will be achieved by utilizing Group sales channels and collaboration in the development stage.

4. Bolster Group Management

In addition to converting the five listed subsidiaries into the wholly owned companies, Hitachi Group will thoroughly reexamine the in-house company system to further reinforce its operating base through the strengthening of the Social Innovation Business. This fiscal year, Hitachi intends to consider each of its in-house business divisions with the same independence and mobility as Group companies, further clarifying responsibility and authority, as well as accountability for earnings. In addition, Hitachi seeks to accelerate Group structural reforms and global development, optimize the related allocation of resources, and fundamentally strengthen cost competitiveness for global competition. The five new supervisory offices, which are headed by executive vice presidents, will lead reform efforts in their respective fields of responsibility — management reforms, sales and promotion, overseas plant construction, business infrastructure, and business coordination to accomplish these challenges. This will ensure greater focus on the Social Innovation Business and the continued pursuit of resource optimization of all in-house companies and Group companies collaboratively, with the maximization of Group synergies.

- 6 -

About Hitachi, Ltd.

Hitachi, Ltd., (NYSE: HIT / TSE: 6501), headquartered in Tokyo, Japan, is a leading global electronics company with approximately 400,000 employees worldwide. Fiscal 2008 (ended March 31, 2009) consolidated revenues totaled 10,000 billion yen ($102.0 billion). The company offers a wide range of systems, products and services in market sectors including information systems, electronic devices, power and industrial systems, consumer products, materials, logistics and financial services. For more information on Hitachi, please visit the company’s website at http://www.hitachi.com.

Cautionary Statement

Factors that could cause actual results to differ materially from those projected or implied in any “forward-looking statement” and from historical trends include, but are not limited to:

fluctuations in product demand and industry capacity, particularly in the Information & Telecommunication Systems segment, Electronic Devices segment and Digital Media & Consumer Products segment;

increased commoditization of information technology products and digital media related products and intensifying price competition for such products, particularly in the Information & Telecommunication Systems segment, Electronic Devices segment and Digital Media & Consumer Products segment;

uncertainty as to Hitachi’s ability to continue to develop and market products that incorporate new technology on a timely and cost-effective basis and to achieve market acceptance for such products;

rapid technological innovation, particularly in the Information & Telecommunication Systems segment, Electronic Devices segment and Digital Media & Consumer Products segment;

- 7 -

exchange rate fluctuation for the yen and other currencies in which Hitachi makes significant sales or in which Hitachi’s assets and liabilities are denominated, particularly against the U.S. dollar and the euro;

fluctuations in the price of raw materials including, without limitation, petroleum and other materials, such as copper, steel, aluminum and synthetic resins;

uncertainty as to Hitachi’s ability to implement measures to reduce the potential negative impact of fluctuations in product demand, exchange rate and/or the price of raw materials;

uncertainty as to Hitachi’s access to, or ability to protect, certain intellectual property rights, particularly those related to electronics and data processing technologies;

uncertainty as to the outcome of litigation, regulatory investigations and other legal proceedings of which the Company, its subsidiaries or its equity method affiliates have become or may become parties;

the possibility of incurring expenses resulting from any defects in products or services of Hitachi;

uncertainty as to the success of restructuring efforts to improve management efficiency and to strengthen competitiveness;

uncertainty as to the success of alliances upon which Hitachi depends, some of which Hitachi may not control, with other corporations in the design and development of certain key products;

uncertainty as to Hitachi’s ability to access, or access on favorable terms, liquidity or long-term financing; and

uncertainty as to general market price levels for equity securities in Japan, declines in which may require Hitachi to write down equity securities it holds.

- 8 -

Other Cautionary Matters

In accordance with the provisions of Article 167, Paragraph 3 of the Financial Instruments and Exchange Law and Article 30 of its Enforcement Regulations, anyone having read this news release is considered a primary recipient of information from the viewpoint of insider trading regulations. Hitachi accordingly urges you to exercise due care as you may be prohibited from purchasing the shares of Hitachi Information Systems, Hitachi Software Engineering, Hitachi Systems & Services, Hitachi Plant Technology and Hitachi Maxell (hereinafter collectively referred to as the “target companies”) before 12 hours have passed from the time of this announcement. If you are held liable under criminal, civil, or administrative laws for making such a prohibited purchase, Hitachi notes that it will assume no responsibility whatsoever.

This news release is to announce the tender offer for shares of the target companies (hereinafter referred to as the “Tender Offer”) and has not been prepared for the purpose of soliciting an offer to sell shares. If shareholders wish to make an offer to sell their shares, they should first read the Explanatory Document for the Tender Offer and make their own decision. This news release does not constitute, nor form part of, any offer or invitation to buy, sell, exchange or otherwise dispose of, or issue, or any solicitation of any offer to sell or issue, exchange or otherwise dispose of, buy or subscribe for, any securities. In addition, this news release does not constitute, or form part of, any offer or invitation to sell, or any solicitation of any offer to purchase any securities in any jurisdiction, nor shall it (or any part of it) or the fact of its distribution form the basis of or be relied on in connection with any agreement thereof.

The Tender Offer is targeted at the common stock of the target companies, all of which are incorporated in Japan. The Tender Offer is to be conducted in compliance with the procedures and information disclosure standards prescribed in the Financial Instruments and Exchange Law of Japan. These procedures and standards are not necessarily the same as the procedures and information disclosure standards in the United States. In particular, Section 13(e) and Section 14(d) of the U.S. Securities and Exchange Act of 1934 and the regulations stipulated thereunder are not applicable to the Tender Offer and the Tender Offer does not conform to those procedures and standards. Further, as the Hitachi is a company incorporated outside the U.S. and most officers of the Hitachi are residents outside the U.S., it may be impossible to exercise rights and claims that may be asserted under the securities-related laws of the U.S. There is also a chance that it may be difficult to institute proceedings in a court outside the U.S. against a company outside the U.S. or its officers based on a violation of the securities-related laws of the U.S. Additionally, there is no guarantee that it would be possible to make a company outside the U.S. and its subsidiary or affiliate subject to the jurisdiction of a U.S. court.

Some countries or regions may impose restrictions on the announcement, issue or distribution of this news release. In such cases, please take note of such restrictions and comply with them. In countries or regions where the implementation of the Tender Offer is illegal, even upon receiving this news release, such receipt shall not constitute a solicitation of an offer to sell or an offer to buy shares relating to the Tender Offer and shall be deemed a distribution of materials for informative purposes only.

# # #

Hitachi to Commence Tender Offer for the Shares of its Subsidiary,

Hitachi Information Systems

Tokyo, July 28, 2009 — Hitachi, Ltd. (NYSE:HIT/TSE:6501 “Hitachi”) today announced that it has decided to acquire the common stock of Hitachi Information Systems, Ltd. (Iwao Hara, President and Chief Executive Officer/TSE: 9741 “Hitachi Information Systems”), by way of a tender offer (the “Tender Offer”).

1. Purpose of the Tender Offer

(1) Outline of the Tender Offer

Hitachi currently holds 51.98% of Hitachi Information Systems’ issued shares, including indirect shareholdings of 0.35%, and thus accounts for Hitachi Information Systems as a consolidated subsidiary. Hitachi intends to acquire all the issued shares of Hitachi Information Systems (exclusive of its treasury stock) in order to make Hitachi Information Systems a wholly owned subsidiary through the Tender Offer. The Tender Offer does not set maximum and minimum limits to the number of shares to be purchased.

(2) Decision-Making Process of the Tender Offer, and Management Policy after the Tender Offer

The Hitachi Group, which consists of Hitachi Ltd., its subsidiaries and affiliated companies, conducts a wide range of business activities from the development, production and sales of offerings to the provision of relevant services in seven business segments: Information & Telecommunication Systems; Electronic Devices; Power & Industrial Systems; Digital Media & Consumer Products; High Functional Materials & Components; Logistics, Services & Others; and Financial Services.

In the information & telecommunication systems business, the Hitachi Group was quick in initiating, as a part of its effort to meet changing users’ needs, the development of various information and telecommunication systems that correspond to various types and lines of business (system integration). The Hitachi Group has also expanded its outsourcing business and has been a pioneer in the SasS (Software as a Service) business, which grants customers the use of software for their needs. These initiatives have progressed well.

- 2 -

As for the business, in countries and regions that have already built a certain degree of social infrastructure, including power systems, transportation systems, roads and water and other public systems, information and telecommunication systems are expected to grow further as part of social infrastructures and to be increasingly fused with existing social infrastructures. Therefore, with its extensive track record in the conventional fields of both the social infrastructure business and the information & telecommunication systems business, the Hitachi Group intends to utilize that experience, expertise and technological capability to concentrate on the “social innovation business” that fuses its social infrastructure business with its information & telecommunication systems business.

Hitachi Information Systems was established in 1959 and currently engages in the businesses of system operation, system building and equipment and supplies sales. Specifically, in the system operation business, Hitachi Information Systems is in charge of the operation of not only its own data centers but also major data centers of Hitachi as a core company in the data center operation business of the Hitachi Group, in addition to the development of outsourcing and network services. In the system building business, Hitachi Information Systems builds and provides IT environments such as backbone systems, information systems and their composite systems to meet diversifying customer needs. Thus, Hitachi Information Systems is positioned as a core company of the Hitachi Group in the system building business for municipalities, leading medium-sized enterprises and small to medium-sized enterprises. It is mainly providing solutions utilizing “e-ADWORLD,” a self-developed packaged software for municipalities, and other ERP-packaged software products of itself and leading foreign corporations. In the equipment and supplies sales business, Hitachi Information Systems offers comprehensive services covering the selection, procurement, sales and environmental protection measures of the equipment and supplies that are required for system operation and/or building.

However, the domestic information service market is currently at a critical turning point.

In the conventional information service market, users’ demand for hardware and software to establish, operate and maintain their own information and telecommunication systems led to the expansion and growth of the market. However, interest in system investments has been shifting recently from the maintenance of information systems (system integration) to the more efficient use and operation of information and telecommunication systems (e.g., outsourcing and SaaS). Consequently, it is expected that users’ demand for these new services, including the use of packaged software products and systems for shared use, will become a driving force in the market. At this turning point, we believe it essential that the Hitachi Group quickly make large-scale investments in R&D in advanced technologies and infrastructure such as data center or networks and put in place foundations that will allow Hitachi to enhance globalization so that the Hitachi Group can appropriately cope with market changes and further expand businesses in the information service market.

- 3 -

Hitachi anticipates that demand for the social innovation business, on which the Hitachi Group intends to focus its marketing efforts, will expand significantly. Hitachi sees urgent tasks in the business to be the Hitachi Group’s development of products and packages commensurate with the business and the swift establishment of service business foundations for the growth of the business. Consequently, Hitachi considers it necessary that the Hitachi Group invests its management resources in the information & telecommunication systems business.

Under these circumstances, since early April 2009, Hitachi and Hitachi Information Systems have worked together and continued to discuss and consider various measures for business structural reform with a goal of raising their respective enterprise values. As a result, Hitachi and Hitachi Information Systems have determined that i) the collaboration between Hitachi Information Systems and the Hitachi Group could be reinforced by establishing a closer capital relationship between both corporations; ii) diverse developments for business expansion can be swiftly conducted in the existing system operation and system building businesses for Hitachi Information Systems and in the focused social innovation business for both Hitachi and the Hitachi Group by collecting and organically combining management resources, such as R&D, intellectual properties, system development/software development/system operation-related expertise, human resources and technological capabilities regarding businesses in the information & telecommunication systems business; and iii) more efficient and effective distribution of Groupwide management resources should contribute to enabling the Hitachi Group to make large-scale investments with the aim of putting in place the appropriate infrastructure. Hitachi Information Systems have concluded that the aforementioned initiatives would lead to raising the enterprise value of Hitachi Information Systems and the Hitachi Group. Both parties therefore reached a judgment that making Hitachi Information Systems a wholly owned subsidiary of Hitachi would be indispensable to that end.

In an attempt to establish the business structure described above, concurrently with the commencement of the Tender Offer, Hitachi has initiated tender offers for the issued shares of Hitachi Software Engineering Co., Ltd. and Hitachi Systems & Services, Ltd, both of which will assume their respective businesses in the information & telecommunication systems business in the Hitachi Group, with the aim of making them wholly owned subsidiaries.

- 4 -

As a specific method to establish a new business structure, Hitachi and Hitachi Information Systems are considering the establishment of an information and telecommunication company as a virtual entity within the Hitachi Group. Five major existing companies—Hitachi (Information & Telecommunication Group), Hitachi Information Systems, Hitachi Software Engineering, Hitachi Systems & Services and Hitachi Electronics Services Co., Ltd., a wholly owned subsidiary of Hitachi—would be equal partners in this virtual company. They will decide and operate the most appropriate strategies and business structure for the future information and telecommunication company as a whole. They will also plan and implement strategies to reinforce the social innovation business.

Under such a business structure, the Hitachi Group intends to improve and expand the structure to flexibly cope with customer needs while taking into account the industry, scale and the type of business of each customer with the aim of providing valuable one-stop services throughout the whole IT life cycle to customers in the global market as follows.

Development of the data center operation business optimizing green IT technologies;

Offer of highly reliable cloud computing environment;

Expansion of global businesses utilizing collaborations with local business partners and localized operations;

Strengthen the Hitachi Group’s readiness for projects of large-scale accounts, such as backbone systems for financial institutions including megabanks and optimization systems in the public sector;

Unify the information system businesses for the SMB (small to medium business) markets, mainly in the industrial and distribution fields;

Expand the development system for middleware and embedded software for products; and

Strengthen and expand the network service business and the outsourcing business.

Although the optimal solution for the basic strategies and future orientation of the information and telecommunication company after making Hitachi Information Systems a wholly owned subsidiary will be determined in consultation with Hitachi Information Systems, Hitachi intends to reinforce Hitachi Information Systems’ businesses, even after making it into a wholly owned subsidiary, not only with respect for Hitachi Information Systems’ self-initiatives and independence but also paying attention to itsbusiness features and the management which fully utilize operational and structural strengths.

- 5 -

(3) Measures to Ensure the Fairness of the Tender Offer including Measures to Ensure the Fairness of the Tender Offer Price and to Avoid Conflicts of Interest

Hitachi principally took into consideration the following matters to ensure the fairness of the Tender Offer.

1) Acquisition of the valuation report on the equity value received from an independent third-party appraiser

In determining the purchase price for the Tender Offer (the “Tender Offer Price”), Hitachi requested that Nomura Securities Co., Ltd., a financial adviser as a third-party appraiser independent from Hitachi and Hitachi Information Systems, calculate the equity value of Hitachi Information Systems as one of the measures to ensure the fairness of the Tender Offer Price.

To calculate the equity value of Hitachi Information Systems, Nomura Securities used the average market share price method, the comparable company analysis method and the discounted cash flow method (the “DCF” method). Hitachi received the valuation report on the equity value of Hitachi Information Systems (the “Valuation Report for Hitachi”) today, from Nomura Securities. (Hitachi did not obtain an opinion on the fairness of the valuation results of the Tender Offer Price, the so-called Fairness Opinion, from Nomura Securities.)

The range of valuations per share of common stock of Hitachi Information Systems calculated according to each method is as follows.


Average market share price method	¥	1,753 to	¥2,175

Comparable company analysis method	¥	2,164 to	¥2,572

DCF method	¥	2,654 to	¥3,668

First, under the average market share price method, Nomura Securities judged the range per share of common stock to be ¥1,753 to ¥2,175 based on the closing price of Hitachi Information Systems’ common stock on the First Section of the Tokyo Stock Exchange on the record date of July 24, 2009, the average closing price for the most recent one week, for the most recent one month, for the most recent three months and for the most recent six months.

Secondly, under the comparable company analysis method, Nomura Securities judged the range per share of common stock to be ¥2,164 to ¥2,572, evaluating Hitachi Information Systems’ equity value by comparing share prices and financial indicators such as the profitability of listed companies engaged in relatively similar businesses to those of Hitachi Information Systems.

- 6 -

Finally, under the DCF method, Nomura Securities judged the range per share of common stock to be ¥2,654 to ¥3,668 after analyzing enterprise value and equity value by discounting free cash flows Hitachi Information Systems is expected to generate in the future by a certain discount rate to arrive at a net present value. This analysis was based on Hitachi Information Systems’ estimated future profits from the fiscal year ending March 31, 2010 and later, taking into consideration Hitachi Information Systems’ business plans, an interview with the management of Hitachi Information Systems, recent business performance, public information disclosure and other contributing factors.

Hitachi took into account the valuation results received from Nomura Securities using each method in its Valuation Report for Hitachi as a reference and comprehensively considered examples of premiums added as of determining tender offer prices in past examples of tender offers for shares by entities other than issuers; whether the Board of Directors of Hitachi Information Systems would accept the Tender Offer; the market share price trend of Hitachi Information Systems’ common stock; the expected number of subscriptions to the Tender Offer; and other factors. Furthermore, taking into account the results of consultations and negotiations with Hitachi Information Systems, the final Tender Offer Price was determined at ¥2,900 per share of common stock by Hitachi’s President and Chief Executive Officer today.

The Tender Offer Price per share of ¥2,900 represents a premium of 33.3% (rounded to the first decimal place) on the closing price of ¥2,175 of common stock of Hitachi Information Systems on the First Section of the Tokyo Stock Exchange on July 24, 2009*. It also represents a premium of 40.5% (rounded to the first decimal place) on the simple average of ¥2,064 (rounded to the nearest yen) of the closing share prices of common stock of Hitachi Information Systems for the past month (from June 25 to July 24, 2009), a premium of 51.4% (rounded to the first decimal place) on the simple average of ¥1,915 (rounded to the nearest yen) of the closing share prices of common stock of Hitachi Information Systems for the past three months (from April 27 to July 24, 2009), and a premium of 65.4% (rounded to the first decimal place) on the simple average of ¥1,753 (rounded to the nearest yen) of the closing share prices of common stock of Hitachi Information Systems for the past six months (from January 26 to July 24, 2009).

(*)

The stock price of Hitachi Information Systems rose following a news report regarding the business restructuring of the Hitachi Group on July 27, 2009, which is the day before the day when the aforementioned decision was made by Hitachi’s President and Chief Executive Officer. Considering this rise in the stock price, the premium was calculated using the stock price on July 24, 2009, a business day before July 27, 2009. The calculations of the respective premiums on the simple average of the closing share prices of common stock for the past one month, for the past three months and for the past six months were made in the same manner.

- 7 -

On the other hand, according to Hitachi Information Systems, Hitachi Information Systems had Mizuho Securities Co., Ltd. calculate its equity value to ensure the fairness of the Tender Offer Price. Mizuho Securities is a financial adviser as a third party. Mizuho Securities does not fall in a category of Special Related Parties and therefore is independent of Hitachi and Hitachi Information Systems. Mizuho Securities used the DCF method, the comparable company analysis method and the average market share price method for valuation.

The DCF method calculates the share value of the Company by discounting all future free cash flows generated from the Company’s business activities using an estimated discount factor to their current values, then adding the value of non-operating assets, less net debt. This method was adopted, as it is considered effective from the financing theory perspective and is a generally accepted valuation method.

The comparable company analysis method calculates the share value of the Company by selecting more than one company that conducts business operations similar to those of the Company, and analyzing the percentages of their financial indicators to their aggregate stock market prices and others.

The average market share price method calculates the share value of the Company based on the prices of the Company’s shares in the stock market. This method was adopted as the share price is determined through market competition principle that can be affected by the number of market participants and the principle need to be considered when evaluating shares of a public company. The evaluation was based on the average closing price of Hitachi Information Systems’ common stock on the First Section of the Tokyo Stock Exchange, for the most recent one month, for the most recent three months and for the most recent six months on the record date of July 24, 2009.

- 8 -

Hitachi Information Systems received the valuation report on its equity value (the “Valuation Report for Hitachi Information Systems”) prepared on July 27, 2009, and heard an explanation of the valuation results of each analysis method from Mizuho Securities. The outline of the analysis results on its equity value according to the Valuation Report is as follows. Hitachi Information Systems did not obtain an opinion on the fairness of the Tender Offer Price, the so-called Fairness Opinion, from Mizuho Securities, according to their announcement.


Analysis methods		Valuation range of Hitachi Information Systems’ per-share price (Yen)
DCF method		2,774 ~ 4,244
Comparable company analysis method		2,537 ~ 3,356
Average market share price method		1,753 ~ 2,175

Based on these valuation results, Hitachi Information Systems carefully inspected the Tender Offer Price comprehensively taking into account the conditions of the Tender Offer. As a result, Hitachi Information Systems judged the Tender Offer Price to be at an appropriate level because the Tender Offer Price exceeds the evaluation by average market share price and are comparable to the evaluations of DCF method and Comparable company analysis method.

Hitachi Information Systems has concluded, based on a review of various restructuring measures with the aim of increasing its enterprise value and the recognition as to the domestic information services market and the information and telecommunication systems market, as well as an analysis of the appropriateness of the Tender Offer Price and other matters, that the Tender Offer will contribute to reinforcement of Hitachi Information Systems’ operating base, accelerating business strategies and future development, and that the terms and conditions of the Tender Offer, including the Tender Offer Price, are reasonable and provide Hitachi Information Systems’ shareholders with an opportunity to sell their shares at a reasonable price. Therefore Hitachi Information Systems has resolved to approve the implementation of the Tender Offer for the purpose of Hitachi making Hitachi Information Systems a wholly owned company and recommend that Hitachi Information Systems’ shareholders subscribe to the Tender Offer.

2) Legal advice from law office

According to Hitachi Information Systems, Hitachi Information Systems appointed Miyakezaka Sogo Law Offices as its legal adviser and received legal advice concerning the Board of Directors’ decision-making method and process, etc. of the Tender Offer, to ensure the fairness and appropriateness of the decision making by Hitachi Information Systems’ Board of Directors concerning the Tender Offer.

- 9 -

3) Approval of all the directors attending the Board of Directors meeting

Furthermore, according to Hitachi Information Systems, Hitachi Information Systems carefully discussed on the Tender Offer at a meeting of its Board of Directors held today, which was attended by all Directors who have no vested interest with Hitachi, and resolved to approve the Tender Offer by unanimous approval of the attending Directors. Among Hitachi Information Systems’ Directors, Takeo Ueno concurrently serves as a director of Hitachi and therefore did not participate in the discussions and the resolution of the proposals concerning the resolutions at said meeting to avoid any conflict of interest. He refrained from expressing his opinions and was not involved in negotiations with Hitachi representing Hitachi Information Systems.

4) Setting the Tender Offer Period at a relatively long period

By setting the Tender Offer Period at 33 business days, which is a relatively long period, Hitachi provides the shareholders of Hitachi Information Systems with the opportunity to fully reflect on the application for the Tender Offer and ensures the fairness of the Tender Offer Price.

(4) Policy on Matters including Organizational Restructuring after the Tender Offer

(Matters concerning the so-called Two-Step Acquisition)

As described in Item (1) Outline of the Tender Offer above, Hitachi aims to make Hitachi Information Systems a wholly owned subsidiary and intends to acquire all the issued shares of Hitachi Information Systems (exclusive of its treasury stock) through the Tender Offer and a series of subsequent procedures.

If Hitachi cannot acquire all the issued shares of Hitachi Information Systems (exclusive of its treasury stock) through the Tender Offer, Hitachi intends to acquire all the issued shares of Hitachi Information Systems (exclusive of its treasury stock) by the following measures.

Specifically, after the Tender Offer comes into effect, Hitachi intends to request that Hitachi Information Systems hold an extraordinary general meeting of shareholders (the “Extraordinary Shareholders’ Meeting”), which would include in the agenda Items 1) through 3) as follows: 1) The Articles of Incorporation of Hitachi Information Systems shall be partly amended to make Hitachi Information Systems a corporation issuing class shares (shurui kabushiki hakkou kaisha) under the Companies Act; 2) The Articles of Incorporation of Hitachi Information Systems shall be partly amended to the effect that all issued shares of common stock of Hitachi Information Systems shall be appended with a call provision (zenbu-shutoku-joko) (a provision regarding the redeemable right of Hitachi Information Systems for all the shares as stipulated in Article 108, Paragraph 1, Item 7 of the Companies Act; hereinafter the same shall apply); and 3) a different class of Hitachi Information Systems shares shall be issued in exchange for acquiring all the stocks with the call provision of Hitachi Information Systems (exclusive of its treasury stock).

- 10 -

Furthermore, as Hitachi Information Systems will become a corporation issuing class shares under the Companies Act on the condition that agenda Item 1) above is approved by the Extraordinary Shareholders’ Meeting, with respect to agenda Item 2), pursuant to Article 111, Paragraph 2, Item 1 of the Companies Act, it will be necessary, in addition to the resolution adopted by the Extraordinary Shareholders’ Meeting, to have a resolution at a meeting of shareholders with class shares (the “Class Shareholders’ Meeting”), at which the participants will be shareholders who hold all the stocks with the call provision of Hitachi Information Systems. For this purpose, Hitachi will also request that Hitachi Information Systems hold the Class Shareholders’ Meeting to include agenda Item 2) above for partial amendment to the Articles of Incorporation. Meanwhile, Hitachi will vote for the respective agenda items above at the Extraordinary Shareholders’ Meeting and the Class Shareholders’ Meeting.

If all of the above procedures are completed, all shares issued by Hitachi Information Systems will be subject to the call provision and shall be acquired by Hitachi Information Systems (exclusive of its treasury stock) and a different class of Hitachi Information Systems shares shall be delivered to such shareholders of Hitachi Information Systems as consideration for such acquisition by Hitachi Information Systems. Shareholders who are to receive fractions of the different class of Hitachi Information Systems shares as consideration will receive cash, which will be obtained through a sale of the different class of Hitachi Information Systems shares that correspond to the sum of all such fractions (including the purchase of a whole or a part of the sum of such fractions by Hitachi Information Systems) (fractions of the aggregate number to be rounded down) through the procedures pursuant to Article 234 of the Companies Act and other applicable laws and regulations. The selling price of the different class of Hitachi Information Systems shares corresponding to the sum of all such fractions (and the cash amount to be delivered to each of the relevant shareholders, resulting from the sale of the aggregate number of fractions) is expected to be calculated on the basis of the Tender Offer Price. Although the class and number of shares of Hitachi Information Systems to be delivered as consideration for the acquisition of the stocks with the call provision of Hitachi Information Systems have not been determined as of today, Hitachi intends to request Hitachi Information Systems to determine that the shares that must be delivered to shareholders who have not tendered the Tender Offer other than Hitachi shall be limited to such fractions of the different class of Hitachi Information Systems for the purpose of enabling Hitachi to acquire all the issued shares of Hitachi Information Systems (exclusive of its treasury stock).

- 11 -

As provisions to protect the rights of minority shareholders in connection with the above respective procedures, the Companies Act provides that (i) in the event that the Articles of Incorporation are partly amended to the effect that all the common stock issued by Hitachi Information Systems shall be subject to the call provision as stated in agenda Item 2) above, any shareholder may request that Hitachi Information Systems purchase his/her shares in accordance with Articles 116 and 117 of the Companies Act and other applicable laws and regulations, and that (ii) in the case where acquisition of all the stocks with the call provision, as described in agenda Item 3) above, has been resolved by the General Meeting of Shareholders, any shareholder may file a petition for determination of a fair price for the acquisition in accordance with Article 172 of the Companies Act and other applicable laws and regulations. In addition, the purchase price and the acquisition price per share under (i) and (ii) above would be determined in the last instance by a competent court.

With regard to the above procedures, there is a possibility that Hitachi may request Hitachi Information Systems to conduct another method that would have similar effects depending on such factors as Hitachi’s holding status of Hitachi Information Systems shares after the Tender Offer, the holding status of Hitachi Information Systems shares by shareholders other than Hitachi, or the interpretation of the competent authorities on the applicable laws and regulations or the like [and such steps might require some time to be successfully completed]. Even in such a case, however, Hitachi intends to make Hitachi Information Systems a wholly owned subsidiary by adopting the method of finally delivering cash to shareholders of Hitachi Information Systems other than Hitachi. In such cases, the resulting cash amount to be delivered to the relevant shareholders is also expected to be calculated on the basis of the Tender Offer Price.

The Tender Offer is not intended to solicit shareholders of Hitachi Information Systems to vote in favor of the proposals to be put to the Extraordinary Shareholders’ Meeting and the Class Shareholders’ Meeting.

(5) Likelihood of the Delisting of the Shares and the Reasons thereof

As of the date hereof, the common stock of Hitachi Information Systems is listed on the First Section of the Tokyo Stock Exchange. As Hitachi has not set the maximum limit to the number of shares to be purchased through the Tender Offer, Hitachi Information Systems shares may be subject to delisting upon the fulfillment of certain predetermined procedures if the result of the Tender Offer falls under the delisting standards of the Tokyo Stock Exchange. In addition, even if the delisting standards are not met upon completion of the Tender Offer, the shares of Hitachi Information Systems will be delisted in accordance with the delisting standards because Hitachi intends to hold all the issued shares of Hitachi Information Systems (exclusive of its treasury stock) in accordance with the procedures set forth in Item (4) Policy on Matters including Organizational Restructuring after the Tender Offer (Matters concerning the so-called Two-Step Acquisition). Trading of common stock of Hitachi Information Systems will become unavailable on the Tokyo Stock Exchange after the delisting.

- 12 -

(6) Matters concerning Material Agreement regarding the Application to the Tender Offer between the Tender Offeror and Shareholders of the Target Company

Not applicable

- 13 -

2. Outline of the Tender Offer and Other Information

(1) Outline of the Target Company


Corporate Name	Hitachi Information Systems, Ltd.
Description of Businesses	• Information processing and network services • System integration • Software development • Equipment and supplies sales

Date Established	June 15, 1959

Head Office	2-1, Osaki 1-chome, Shinagawa-ku, Tokyo, Japan

Name and Title of Representative	Iwao Hara, President and Chief Executive Officer

Paid-in Capital	¥13,162 million (As of March 31, 2009)
Major Shareholders and Shareholdings	Hitachi, Ltd.		51.63	%
	Japan Trustee Services Bank, Ltd.		13.42	%
	The Master Trust Bank of Japan, Ltd.		4.34	%
	Hitachi Information Systems Group Employees’ Shareholding Association		1.80	%
	State Street Bank and Trust Company (Standing proxy: Mizuho Corporate Bank, Ltd.)		1.57	%
	Trust & Custody Services Bank, Ltd.		1.48	%
	NikkoCiti Trust and Banking Corporation		0.89	%
	Mellon Bank, N.A. as Agent for its Client Mellon Omnibus US Pension (Standing proxy: Mizuho Corporate Bank, Ltd.)		0.76	%
	Nomura Asset Management U.K. Limited Sub A/C Evergreen Nominees Ltd. (Standing proxy: The Bank of Tokyo-Mitsubishi UFJ, Ltd.)		0.68	%
	Kishu Paper Co., Ltd.		0.67	%
			(As of March 31, 2009	)

Relationships between the Tender Offeror and the Target Company	Capital Relationships	Hitachi holds 22,464,400 shares of Hitachi Information Systems, equivalent to a shareholding of 51.98% of the total number of issued shares, including indirect holdings of 0.35%. (As of March 31, 2009)
	Personnel Relationships	One Hitachi director sits on Hitachi Information Systems’ Board of Directors.
	Transaction Relationships	Hitachi outsources services including system operations to Hitachi Information Systems, and sells them equipment and supplies sales, etc. Hitachi conducts fund transactions with Hitachi Information Systems under the Hitachi Group’s cash pooling system.
	Status as a Related Party	Hitachi Information Systems is a consolidated subsidiary of Hitachi, and therefore a Related Party of Hitachi.

- 14 -

(2) Tender Offer Period

1) Initial Period of the Tender Offer in the Registration

From Thursday, August 20, 2009 to Thursday, October 8, 2009 (both inclusive) (33 business days)

2) Possibility of Extending the Above Period upon Request of the Target Company

None

(3) Tender Offer Price: ¥2,900 per share of common stock

(4) Basis of Calculation of the Tender Offer Price

1) Basis of Calculation

For reference in determining the Tender Offer Price, Hitachi requested that Nomura Securities, a financial adviser as a third-party appraiser independent from Hitachi and Hitachi Information Systems, calculate the equity value of Hitachi Information Systems shares. To calculate the equity value of Hitachi Information Systems , Nomura Securities used the average market share price method, the comparable company analysis method and the DCF method. Hitachi received the Valuation Report for Hitachi today, from Nomura Securities. (Hitachi did not obtain an opinion on the fairness of the valuation results of the Tender Offer Price, the so-called Fairness Opinion, from Nomura Securities.) The range of valuations per share of common stock of Hitachi Information Systems calculated according to each method is as follows.


Average market share price method		¥1,753 to ¥2,175

Comparable company analysis method		¥2,164 to ¥2,572

DCF method		¥2,654 to ¥3,688

Under the comparable company analysis method, Nomura Securities judged the range per share of common stock to be ¥2,164 to ¥2,572, evaluating Hitachi Information Systems’ equity value by comparing share prices and financial indicators such as the profitability of listed companies engaged in relatively similar businesses to those of Hitachi Information Systems.

- 15 -

Finally, under the DCF method, Nomura Securities judged the range per share of common stock to be ¥2,654 to ¥3,688 after analyzing enterprise value and equity value by discounting free cash flows Hitachi Information Systems is expected to generate in the future by a certain discount rate to arrive at a net present value. This analysis was based on Hitachi Information Systems’ estimated future profits from the fiscal year ending March 31, 2010 and later, taking into consideration Hitachi Information Systems’ business plans, a management interview conducted to Hitachi Information Systems, recent business performance, public information disclosures and other contributing factors.

Hitachi took into account the valuation results received from Nomura Securities using each method in its Valuation Report for Hitachi as reference and comprehensively considered examples of premiums added as of determining tender offer prices in past examples of tender offers for shares by entities other than issuers; whether the Board of Directors of Hitachi Information Systems would accept the Tender Offer; the market share price trend of Hitachi Information Systems’ common stock; the expected number of subscriptions to the Tender Offer; and other factors. Furthermore, taking into account the results of consultations and negotiations with Hitachi Information Systems, the final Tender Offer Price was determined at ¥2,900 per share of common stock by Hitachi’s President and Chief Executive Officer today.

(*)

- 16 -

2) Background of the Valuation

(Background to the decision regarding the Tender Offer Price)

Hitachi Information Systems, a consolidated subsidiary of Hitachi, currently engages in system operation, system building and equipment and supplies sales. The Hitachi Group including Hitachi, Ltd., was quick in initiating approaches to meet changing users’ needs in the information & telecommunication systems business. These initiatives have achieved significant progress to this point.

In countries and regions that have already built a certain degree of social infrastructure, which includes power systems, transportation systems, roads and water and other public systems, the Hitachi Group intends to utilize that experience, expertise and technological capability to concentrate on the “social innovation business” that fuses the social infrastructure business with the information & telecommunication systems business.

However, the domestic information service market is currently at a critical turning point. Interest in system investments has been shifting to users’ demand for hardware and software, and consequently, it is considered that demand for these new information system services, including the use of packaged software products and systems for shared use, will become a driving force in the market. At this turning point, we believe it essential that the Hitachi Group quickly make large-scale investments in such infrastructure as R&D subjects in the advanced technologies and put in place foundations that will allow Hitachi to take steps for globalization so that the Hitachi Group can appropriately cope with market changes and further expand businesses in the information service market.

Furthermore, as for the social innovation business, the Hitachi Group considers it necessary to develop products and packages commensurate with such businesses and swiftly develop service business foundations for the growth of the social innovation business. Consequently, the Hitachi Group must invest its management resources in the information & telecommunication systems business.

- 17 -

Under these circumstances, since early April 2009, Hitachi and Hitachi Information Systems have worked together and continued to discuss and consider various measures for business structural reform with a goal of raising their respective enterprise values. As a result, Hitachi and Hitachi Information Systems have determined that i) the collaboration between Hitachi Information Systems and the Hitachi Group could be reinforced by establishing a closer capital relationship between both corporations; ii) diverse developments for business expansion can be swiftly conducted by collecting and organically combining management resources, such as expertise, human resources and technological capabilities; and iii) more efficient and effective distribution of the Groupwide management resources should contribute to enabling the Hitachi Group to make large-scale investments with the aim of putting in place the appropriate infrastructure and concluded that the aforementioned initiatives would lead to raising the enterprise value of Hitachi Information Systems and the Hitachi Group. Both parties therefore reached a judgment that converting Hitachi Information Systems into a wholly owned subsidiary of Hitachi would be indispensable to that end. Consequently, Hitachi determined to conduct the Tender Offer and decided on the Tender Offer Price in the following manner.

(i) Name of the Third Party from Which Hitachi Obtained Valuations

In determining the Tender Offer Price, Hitachi, around May 2009, requested that Nomura Securities, a financial adviser as a third-party appraiser independent from Hitachi and Hitachi Information Systems, calculate the equity value of Hitachi Information Systems. Hitachi received the Valuation Report for Hitachi todya, from Nomura Securities. (Hitachi did not obtain an opinion on the fairness of its valuations of the Tender Offer Price, the so-called Fairness Opinion, from Nomura Securities.)

(ii) Outline of the Valuation Report for Hitachi

To calculate the equity value of Hitachi Information Systems, Nomura Securities used the average market share price method, the comparable company analysis method and the DCF method. The range of valuations per share of common stock of Hitachi Information Systems calculated according to each method is as follows.


Average market share price method		¥1,753 to ¥2,175

Comparable company analysis method		¥2,164 to ¥2,572

DCF method		¥2,654 to ¥3,668

- 18 -

(iii) Process for Determining the Tender Offer Price Based on the Valuation Report for Hitachi

(Measures to Ensure the Fairness of the Tender Offer including Measures to Ensure the Fairness of the Tender Offer Price and to Avoid Conflicts of Interest)

Hitachi principally took into consideration the following matters to ensure the fairness of the Tender Offer.

(i) Acquisition of the valuation report on the equity value from the Independent Third-Party Appraiser

In determining the Tender Offer Price, Hitachi requested that Nomura Securities, a financial adviser as a third-party appraiser independent from Hitachi and Hitachi Information Systems, calculate the equity value of Hitachi Information Systems as one of the measures to ensure the fairness of the Tender Offer Price.

To calculate the equity value of Hitachi Information Systems, Nomura Securities used the average market share price method, the comparable company analysis method and the DCF method. Hitachi received the Valuation Report for Hitachi from Nomura Securities today. (Hitachi did not obtain an opinion on the fairness of the valuation results of the Tender Offer Price, the so-called Fairness Opinion, from Nomura Securities.)

Hitachi took into account the valuation results received from Nomura Securities using each method in its Valuation Report of Hitachi as reference and comprehensively considered examples of premiums added as of determining tender offer prices in past examples of tender offers for shares by entities other than issuers; whether the Board of Directors of Hitachi Information Systems would accept the Tender Offer; the market share price trend of Hitachi Information Systems’ common stock; the expected number of subscriptions to the Tender Offer; and other factors. Furthermore, taking into account the results of consultations and negotiations with Hitachi Information Systems, the final Tender Offer Price was determined at ¥2,900 per share of common stock by Hitachi’s President and Chief Executive Officer today.

- 19 -

Hitachi Information Systems received the Valuation Report of Hitachi Information Systems and heard explanation on the valuation results of each analysis method from Mizuho Securities. The outline of the analysis results on the equity value of Hitachi Information Systems according to the Valuation Report of Hitachi Information Systems is as follows. Hitachi Information Systems did not obtain an opinion on the fairness of the Tender Offer Price, the so-called Fairness Opinion, from Mizuho Securities, according to their announcement.

- 20 -


Analysis methods		Valuation range of Hitachi Information Systems’ per-share price (Yen)
DCF method		2,774 ~ 4,244
Comparable company analysis method		2,537 ~ 3,356
Average market share price method		1,753 ~ 2,175

(ii) Legal advice from law office

- 21 -

(iii) Approval of all the directors attending the Board of Directors’ meeting

(iv) Setting the Tender Offer Period at a relatively long period

3) Relationship with the Third-Party Appraiser

Nomura Securities is not a Related Party of Hitachi.

(5) Number of Shares to Be Purchased

Number of Shares

to Be Purchased

Minimum Number of Shares

to Be Purchased

Maximum Number of Shares

to Be Purchased

20,905,832 shares

— shares


Notes:	1.	As the maximum and minimum limits to the number of shares to be purchased through the Tender Offer are not set, all of the tendered shares will be purchased.

	2.	Less-than-one-unit shares (tangen-miman-kabushiki) are also eligible for the Tender Offer. In addition, Hitachi Information Systems may purchase its own shares during the Tender Offer Period, pursuant to applicable laws and regulations, if shareholders owning less-than-one-unit shares exercise their right to request purchase of their shares in accordance with the relevant provisions of the Companies Act.

	3.	Hitachi does not intend to acquire treasury stock held by Hitachi Information Systems through the Tender Offer.

	4.	The maximum number of shares of Hitachi Information Systems to be acquired by Hitachi through the Tender Offer is stated in the “Number of Shares to Be Purchased.” This number indicates Hitachi Information Systems shares (20,905,832 shares) that are to be obtained by deducting the total of the number of shares held by Hitachi as of the date hereof (22,315,000 shares) and the number of shares of treasury stock held by Hitachi Information Systems as of March 31, 2009 (523 shares), from the total number of issued shares of Hitachi Information Systems as of March 31, 2009 (43,221,355 shares), which are stated in the securities report of the 50th term filed by Hitachi Information Systems on June 25, 2009.

- 22 -

(6) Changes in the Shareholdings due to the Tender Offer


Number of voting rights represented by shares held by the Tender Offeror immediately before the Tender Offer	223,150 units	(Shareholdings immediately before the Tender Offer: 51.63%)

Number of voting rights represented by shares held by Special Related Parties immediately before the Tender Offer	— units	(Shareholdings immediately before the Tender Offer: — %)

Number of voting rights represented by shares to be purchased by the Tender Offer	209,058 units	(Shareholdings after the Tender Offer: 100.00%)

Total number of voting rights held by all the shareholders in the Target Company	432,172 units


Notes:	1.	The “Shareholdings immediately before the Tender Offer” was calculated using the “Total number of voting rights held by all the shareholders in the Target Company” as the denominator.

	2.	The “Number of voting rights represented by shares held by Special Related Parties immediately before the Tender Offer” represents the total of voting rights relating to shares held by respective Special Related Parties as identified by Hitachi as of the date hereof. Provided, however, that such Special Related Parties shall exclude those to be excluded from the category of Special Related Parties in accordance with Article 3, Paragraph 2, Item 1 of the Cabinet Office Ordinance regarding Disclosure of Tender Offers for Shares, etc., by Entities Other than Issuers (Ministry of Finance Ordinance No. 38 of 1990; including amendment thereof; the “Ordinance”) in calculating the shareholdings, as set forth in the respective items of Article 27-2, Paragraph 1 of the Financial Instruments and Exchange Law (Law No. 25 of 1948; including amendment thereof; the “Law”).

	3.	The “Number of voting rights represented by shares to be purchased by the Tender Offer” indicates the number of voting rights relating to the number of shares to be purchased in the Tender Offer (20,905,832 shares).

	4.	Because the shares held by respective Special Related Parties (exclusive of its treasury stock held by Hitachi Information Systems being a Special Related Party) are also subject to the Tender Offer, the “Number of voting rights represented by shares held by Special Related Parties immediately before the Tender Offer” is not included in the numerator in the calculation of “Shareholdings after the Tender Offer.”

	5.	The “Total number of voting rights held by all the shareholders in the Target Company” (100 shares represent the number of shares per unit (tangen)) indicates the number of voting rights of all the shareholders of Hitachi Information Systems as of March 31, 2009, which is stated in the securities report of the 50th term filed by Hitachi Information Systems on June 25, 2009. Because all the shares issued by Hitachi Information Systems (exclusive of treasury stock held by Hitachi Information Systems) are subject to the Tender Offer, the “Shareholdings after the Tender Offer” was calculated using the number of voting rights (432,208 units) relating to the number of shares of Hitachi Information Systems (43,220,832 shares)—which corresponds to the number derived by deducting the number of shares of treasury stock held by Hitachi Information Systems as of March 31, 2009 (523 shares) stated in said securities report from the total number of issued shares of Hitachi Information Systems as of March 31, 2009 (43,221,355 shares) stated in said securities report—as the denominator.

	6.	The figures in the “Shareholdings immediately before the Tender Offer” and the “Shareholdings after the Tender Offer” were rounded to two decimal places.

(7) Tender Offer Cost: ¥60,627 million

Note:

The Tender Offer Cost is calculated by multiplying 20,905,832 shares ( Number of Shares to Be Purchased) by the Tender Offer Price for each share of ¥2,900.

- 23 -

(8) Method of Settlement

1) Name and Location of Head Office of Securities Companies/Banks, etc., in Charge of Settlement

Nomura Securities Co., Ltd.

9-1, Nihonbashi 1-chome, Chuo-ku, Tokyo

JOINVEST Securities Co., Ltd. (Sub-Agent)

15-1, Konan 2-chome, Minato-ku, Tokyo

2) Commencement Date of Settlement

Friday, October 16, 2009

3) Method of Settlement

With respect to tendering shareholders through the Tender Offer Agent, upon expiration of the Tender Offer Period, Hitachi will, without delay, send notice of the Tender Offer purchases to the addresses of tendering shareholders (in the case of a foreign resident who does not hold a working account with the Tender Offer Agent [including the case of an institutional shareholder], to its standing proxy). With respect to tendering shareholders through JOINVEST Securities Co., Ltd., the Sub-Agent, the notice will be delivered in accordance with the method described on the Sub-Agent’s website (https://www.joinvest.jp/).

Purchases will be made in cash. Payment for purchased shares will be made by means of remittance, etc., in accordance with the instructions of tendering shareholders. (Fees may be incurred for remitting payment.)

4) Method of Returning Shares

(9) Other Conditions and Methods of the Tender Offer

1) Conditions and Details in Each Item of Article 27-13, Paragraph 4 of the Law

As the maximum and minimum limits to the number of shares to be purchased through the Tender Offer are not set, Hitachi will purchase all of the tendered shares.

- 24 -

2) Conditions of Withdrawal of the Tender Offer, Details thereof and Method of Disclosing the Withdrawal

Upon the occurrence of any event falling under the provisions of Article 14, Paragraph 1, Items 1.1 or 1.9 and 1.12 or 1.18, Item 2, Items 3.1 or 3.8, Item 4, Item 5 and Article 14, Paragraph 2, Items 3 or 6 of the Enforcement Regulations of the Financial Instruments and Exchange Law (Regulation No. 321 of 1965; including amendment thereof; the “Enforcement Regulations”), Hitachi may withdraw the Tender Offer. If Hitachi decides to withdraw the Tender Offer, it will make a public notice electronically, and publish a notice in the Nihon Keizai Shimbun. Provided, however, that if it is difficult to make such a public notice by the end of the Tender Offer Period, Hitachi will make an announcement as provided for in Article 20 of the Ordinance and thereafter give notice without delay.

3) Conditions for Reducing the Tender Offer Price, Details thereof and Method of Disclosing the Reduction

If Hitachi Information Systems takes any actions provided for in Article 13, Paragraph 1 of the Enforcement Regulations during the Tender Offer Period in accordance with the provisions of Article 27-6, Paragraph 1, Item 1 of the Law, the Tender Offer Price may be reduced in accordance with the provisions of Article 19, Paragraph 1 of the Ordinance. If Hitachi decides to reduce the Tender Offer Price, it will make a public notice electronically, and publish a notice in the Nihon Keizai Shimbun. Provided, however, that if it is difficult to make such a public notice by the end of the Tender Offer Period, Hitachi will make an announcement as provided for in Article 20 of the Ordinance and thereafter give notice without delay. If the Tender Offer Price is reduced, the shares tendered before the public notice, will also be purchased at the reduced Tender Offer Price.

4) Matters concerning Tendering Shareholders’ Rights to Cancel Agreements

Any tendering shareholder may cancel agreements relating to the Tender Offer at any time during the Tender Offer Period. If tendering shareholders who tendered for share certificates through the Tender Offer Agent intend to cancel agreements relating to the Tender Offer, they should deliver or send a Cancellation Statement for Tender Offer Agreement (the “Cancellation Statement”) along with the tender offer application acceptance receipt to the head office or nationwide branch offices of the Tender Offer Agent who accepted the application, by 3:30 p.m. on the last day of the Tender Offer Period. Provided, however, that cancellations sent by tendering shareholders, must reach the said offices by no later than 3:30 p.m. on the last day of the Tender Offer Period. If tendering shareholders who tendered for share certificates through JOINVEST Securities Co., Ltd., the Sub-Agent, intend to cancel agreements relating the Tender Offer, they must complete the cancellation procedures by 3:30 p.m. on the last day of the Tender Offer Period in accordance with the instructions on the Sub-Agent’s website (https://www.joinvest.jp/).

- 25 -

The agents with the authority to receive a Cancellation Statement:

Nomura Securities Co., Ltd.

9-1, Nihonbashi 1-chome, Chuo-ku, Tokyo

(other nationwide branch offices in Japan)

JOINVEST Securities Co., Ltd. (Sub-Agent)

15-1, Konan 2-chome, Minato-ku, Tokyo

Hitachi will not make any claim for damages or the payment of penalties to a tendering shareholder if a tendering shareholder cancels an agreement. In addition, Hitachi will bear the costs of returning tendered shares.

5) Method of Disclosure If Conditions, etc., of the Tender Offer Are Changed

If Hitachi decides to change the Tender Offer conditions, etc., it will make a public notice electronically, and publish a notice in the Nihon Keizai Shimbun detailing the changes. Provided, however, that it is difficult to make such a public notice by the end of the Tender Offer Period, Hitachi will make an announcement as provided for in Article 20 of the Ordinance and thereafter give notice without delay. If Tender Offer conditions, etc., are changed, shares tendered before the public notice will also be purchased under the amended conditions.

6) Method of Disclosure When Submitting an Amendment Statement

If an Amendment Statement is filed with the Director of the Kanto Local Finance Bureau in Japan, Hitachi will immediately announce details from the Amendment Statement that relate to the contents of the public notice of the commencement of the Tender Offer, in accordance with the manner prescribed by Article 20 of the Ordinance. Hitachi will also immediately change the Tender Offer Explanatory Statement and deliver the amended document to tendering shareholders who have already received the Tender Offer Explanatory Statement. However, if the changes are only minor in nature, Hitaxhi will prepare a document stating the reasons for such amendments, the items that have been amended and the details, and deliver said document to tendering shareholders.

7) Method of Disclosing Tender Offer Results

Hitachi will publicly announce the results of the Tender Offer the day after the last day of the Tender Offer Period, in accordance with the provisions of Article 9-4 of the Enforcement Regulations and of Article 30-2 of the Ordinance.

- 26 -

(10) Date of Public Notice of Commencement of the Tender Offer

Thursday, August 20, 2009

(11) Tender Offer Agent

Nomura Securities Co., Ltd.

9-1, Nihonbashi 1-chome, Chuo-ku, Tokyo

To delegate a part of its duties, the Tender Offer Agent has appointed the following company as a Sub-Agent:

JOINVEST Securities Co., Ltd. (Sub-Agent)

15-1, Konan 2-chome, Minato-ku, Tokyo

3. Management Policy and Outlook after the Tender Offer

(1) Management Policy after the Tender Offer

Refer to “1. Purpose of the Tender Offer” with regard to the management policy after the Tender Offer.

(2) Outlook for Future Business Performance after the Tender Offer

[The expected impact of the Tender Offer on the Hitachi Group’s business results will be announced as soon as it is determined.]

4. Other Information

(1) Agreement between the Tender Offeror and the Target Company and/or Its Directors

According to Hitachi Information Systems, Hitachi Information Systems resolved to approve the Tender Offer and to recommend that the shareholders of Hitachi Information Systems subscribe to the Tender Offer at a meeting of its Board of Directors held today. This meeting was attended by all Directors who have no vested interest with Hitachi, and after careful discussions, said resolution to approve the Tender Offer was made by unanimous approval of the attending Directors.

Refer to “(2) Decision-Making Process of the Tender Offer, and Management Policy after the Tender Offer” and “(3) Measures to Ensure the Fairness of the Tender Offer including Measures to Ensure the Fairness of the Tender Offer Price and to Avoid Conflicts of Interest” of “1. Purpose of the Tender Offer” with regard to the “Decision-Making Process of the Tender Offer” and “Details of Measures to Avoid Conflicts of Interest.”

- 27 -

(2) Other Information Considered Necessary for Helping Investors Decide Whether to Subscribe to the Tender Offer

Hitachi Information Systems publicly announced its closing of accounts information for the first quarter of the 51st fiscal term today, at the Tokyo Stock Exchange. A summary of Hitachi Information Systems’ consolidated operating results and other financial information based on this release is provided below. The summary of this disclosed information is an excerpt of the announcement released by Hitachi Information Systems, and Hitachi is not in a position to independently verify the precision and truthfulness thereof and has not verified it, in effect.

1) Operating Results (millions of yen)


Accounting Period		First Quarter of 51st Business Period (From April 1, 2009 to June 30, 2009)
Revenues		37,740
Cost of sales		30,249
Selling, general and administrative expenses		6,720
Non-operating income		178
Non-operating expenses		113
Net income		492

Note: Revenues exclude consumption tax, etc.

2) Data per Share (yen)


Accounting Period		First Quarter of 51st Business Period (From April 1, 2009 to June 30, 2009)
Net income per share		11.38
Dividend per share		—
Net assets per share		1,988.23

- 28 -

Cautionary Statement

Factors that could cause actual results to differ materially from those projected or implied in any “forward-looking statement” and from historical trends include, but are not limited to:

economic conditions, including consumer spending and plant and equipment investments in Hitachi’s major markets, particularly Japan, Asia, the United States and Europe, as well as levels of demand in the major industrial sectors which Hitachi serves, including, without limitation, the information, electronics, automotive, construction and financial sectors;

fluctuations in product demand and industry capacity, particularly in the Information & Telecommunication Systems segment, the Electronic Devices segment and the Digital Media & Consumer Products segment;

increased commoditization of information technology products and digital media related products and intensifying price competition for such products, particularly in the Information & Telecommunication Systems segment, the Electronic Devices segment and the Digital Media & Consumer Products segment;

rapid technological innovation, particularly in the Information & Telecommunication Systems segment, the Electronic Devices segment and the Digital Media & Consumer Products segment;

fluctuations in the price of raw materials including, without limitation, petroleum and other materials, such as copper, steel, aluminum and synthetic resins;

uncertainty as to Hitachi’s ability to implement measures to reduce the potential negative impact of fluctuations in product demand, exchange rate and/or price of raw materials;

uncertainty as to Hitachi’s access to, or ability to protect, certain intellectual property rights, particularly those related to electronics and data processing technologies;

the possibility of incurring expenses resulting from any defects in products or services of Hitachi;

uncertainty as to the success of restructuring efforts to improve management efficiency and to strengthen competitiveness;

uncertainty as to the success of alliances upon which Hitachi depends, some of which Hitachi may not control, with other corporations in the design and development of certain key products;

uncertainty as to Hitachi’s ability to access, or access on favorable terms, liquidity or long-term financing; and

uncertainty as to general market price levels for equity securities in Japan, declines in which may require Hitachi to write down equity securities it holds.

- 29 -

Other Cautionary Matters

In accordance with the provisions of Article 167, Paragraph 3 of the Financial Instruments and Exchange Law and Article 30 of its Enforcement Regulations, anyone having read this news release is considered a primary recipient of information from the viewpoint of insider trading regulations. Hitachi accordingly urges you to exercise due care as you may be prohibited from purchasing the shares of Hitachi Information Systems before 12 hours have passed from the time of this announcement. If you are held liable under criminal, civil, or administrative laws for making such a prohibited purchase, Hitachi notes that iti will assume no responsibility whatsoever.

This news release is to announce the Tender Offer and has not been prepared for the purpose of soliciting an offer to sell shares. If shareholders wish to make an offer to sell their shares, they should first read the Explanatory Document for the Tender Offer and make their own decision. This news release does not constitute, nor form part of, any offer or invitation to buy, sell, exchange or otherwise dispose of, or issue, or any solicitation of any offer to sell or issue, exchange or otherwise dispose of, buy or subscribe for, any securities. In addition, this news release does not constitute, or form part of, any offer or invitation to sell, or any solicitation of any offer to purchase any securities in any jurisdiction, nor shall it (or any part of it) or the fact of its distribution form the basis of or be relied on in connection with any agreement thereof.

The Tender Offer is targeted at the common stock of Hitachi Information Systems, a company incorporated in Japan. The Tender Offer is to be conducted in compliance with the procedures and information disclosure standards prescribed in the Financial Instruments and Exchange Law of Japan. These procedures and standards are not necessarily the same as the procedures and information disclosure standards in the United States. In particular, Section 13(e) and Section 14(d) of the U.S. Securities and Exchange Act of 1934 and the regulations stipulated thereunder are not applicable to the Tender Offer and the Tender Offer does not conform to those procedures and standards. Not all financial information included in this news release is in conformity with the U.S. GAAP. Further, as Hitachi is a company incorporated outside the U.S. and most of its officers are residents outside the U.S., it may be impossible to exercise rights and claims that may be asserted under the securities-related laws of the U.S. There is also a chance that it may be difficult to institute proceedings in a court outside the U.S. against a company outside the U.S. or its officers based on a violation of the securities-related laws of the U.S. Additionally, there is no guarantee that it would be possible to make a company outside the U.S. and its subsidiary or affiliate subject to the jurisdiction of a U.S. court.

# # #

Hitachi to Commence Tender Offer for the Shares of its Subsidiary,

Hitachi Software Engineering

Tokyo, July 28, 2009—Hitachi, Ltd. (NYSE: HIT / TSE: 6501 / “Hitachi”) today announced that it has decided to acquire the common stock of Hitachi Software Engineering Co., Ltd. (TSE: 9694), by way of a tender offer (the “Tender Offer”).

1. Purpose of the Tender Offer

(1)

Outline of the Tender Offer

Hitachi currently holds 51.55% of Hitachi Software Engineering’s issued shares, including indirect shareholdings of 0.20%, and thus accounts for Hitachi Software Engineering as a consolidated subsidiary. Hitachi intends to acquire all the issued shares of Hitachi Software Engineering (exclusive of its treasury stock) in order to make Hitachi Software Engineering a wholly owned subsidiary through the Tender Offer. The Tender Offer does not set maximum and minimum limits to the number of shares to be purchased.

According to Hitachi Software Engineering, its Board of Directors resolved to approve the Tender Offer and to recommend that the shareholders of Hitachi Software Engineering subscribe to the Tender Offer at a meeting of its board of directors held today.

(2)

Decision-Making Process of the Tender Offer, and Management Policy after the Tender Offer

The Hitachi Group, which consists of Hitachi, its subsidiaries and affiliated companies, conducts a wide range of business activities from the development, production and sales of offerings to the provision of relevant services in seven business segments: Information & Telecommunication Systems; Electronic Devices; Power & Industrial Systems; Digital Media & Consumer Products; High Functional Materials & Components; Logistics, Services & Others; and Financial Services.

- 2 -

In the information & telecommunication systems business, the Hitachi Group was quick in initiating, as part of its effort to meet changing users’ needs, the development of various information and telecommunication systems that correspond to various types and lines of business (system integration). The Hitachi Group has also expanded its outsourcing business and has been a pioneer in the SaaS (Software as a Service) business, which grants customers the use of software for their needs. These initiatives have progressed well.

Hitachi Software Engineering was established in 1970 and currently engages in software service businesses, including systems development, services and products & packages, and the information processing equipment business. The systems development business mainly handles the development of large-scale systems for major financial and public institutions—Hitachi’s principle clients. The services business conducts an Internet banking service “FINEMAX,” and SaaS businesses utilizing “Salesforce”, a product of Salesforce.com, Inc. of the U.S. The products & packages business offers package software solutions including “HIBUN,” which is used in security fields, and “KATSUBUN,” which contributes to promoting the paperless office. The information processing equipment business offers electronic blackboard system “StarBoard,” which enjoys a high market share at home and abroad.

- 3 -

However, the domestic information service market is currently at a critical turning point. In the conventional information service market, users’ demand for hardware and software to establish, operate and maintain their own information and telecommunication systems led to the expansion and growth of the market. However, interest in system investments has been shifting recently from the maintenance of information systems (system integration) to the more efficient use and operation of information and telecommunication systems (e.g., outsourcing and SaaS). Consequently, it is expected that users’ demand for these new services, including the use of packaged software products and systems for shared use, will become a driving force in the market. In order to secure earnings and achieve further growth by responding to the changing market needs at this period of transition in the information service market, the Hitachi Group believes it necessary to enlarge the global business that have been led solely by Hitachi Software Engineering, as well as to further enhance the Group’s advanced and large-scale system-building capability and high-quality software development abilities.

Under these circumstances, since early April 2009, Hitachi and Hitachi Software Engineering have worked together and continued to discuss and consider various measures for business structural reform with the goal of raising their respective enterprise values. As a result, Hitachi and Hitachi Software Engineering have determined that strengthening the collaboration between Hitachi Software Engineering and the Hitachi Group and promoting the integration of the information telecommunication systems businesses in the Hitachi Group could be reinforced by establishing a closer capital relationship between both corporations, and thereby:

Hitachi Software Engineering, as a core company in the Hitachi Group, will be able to reinforce its response capabilities to big accounts, expansion of businesses for leading medium-sized enterprises, and development of products & packages or service business foundation in market demands as well as high-quality basic software and embedded software;

Hitachi Software Engineering will be able to strengthen its earning power by utilizing the Hitachi Group’s human resources, sales and marketing and technological capabilities;

Hitachi Software Engineering will be able to further expand its global businesses through the active utilization of the Hitachi Group’s overseas sales and marketing strengths; and

The social innovation business on which the Hitachi Group focuses its efforts will create and expand new business opportunities by swiftly conducting various developments required for the business expansion.

- 4 -

Hitachi and Hitachi Software Engineering have reached a conclusion that these effects will enhance the enterprise value of both companies and the Hitachi Group and to achieve the intended effects it is essential to make Hitachi Software Engineering a wholly owned subsidiary of Hitachi. Hitachi believes that making Hitachi Software Engineering a wholly owned subsidiary will enable the concentration and organic combination of the Hitachi Group’s management resources, including intellectual properties, human resources and technological capabilities associated with system development, software development and system operations, thereby facilitating various developments required for the expansion of the social innovation business on which the Hitachi Group focuses its efforts.

In an attempt to establish the business structure described above, concurrently with the commencement of the Tender Offer, Hitachi has initiated tender offers for the issued shares of Hitachi Systems & Services, Ltd. and Hitachi Information Systems, Ltd., both of which will assume their respective businesses in the information & telecommunication systems business in the Hitachi Group, with the aim of making them wholly owned subsidiaries.

As a specific method to establish a new business structure, establishment of an information and telecommunication company as a virtual entity within the Hitachi Group is been considered. Five major existing companies—Hitachi (Information & Telecommunication Group), Hitachi Software Engineering, Hitachi Systems & Services, Hitachi Information Systems and Hitachi Electronics Services Co., Ltd., a wholly owned subsidiary of Hitachi—would be equal partners in this virtual company. The most appropriate strategies and business structure for the future information and telecommunication company as a whole, as well as the strategies to reinforce the social innovation business will be decided and implemented.

Under such business structure, the Hitachi Group intends to improve and expand the structure to flexibly cope with customer needs while taking into account the industry, scale and the type of business of each customer with the aim of providing valuable one-stop services throughout the whole IT life cycle to customers in the global market as follows.

Development of the data center operation business optimizing green IT technologies;

Offer of highly reliable cloud computing environment;

Expansion of global businesses utilizing collaborations with local business partners and localized operations;

Strengthen our readiness for projects of large-scale accounts, such as backbone systems for financial institutions including megabanks and optimization systems in the public sector;

Unify the information system businesses for the SMB (small to medium business) markets, mainly in the industrial and distribution fields;

Expand the development system for middleware and embedded software for products; and

Strengthen and expand the network service business and the outsourcing business.

- 5 -

Although the optimal solution for the basic strategies and future orientation of the information and telecommunication company after making Hitachi Software Engineering a wholly owned subsidiary will be determined in consultation with Hitachi Software Engineering, Hitachi intends to reinforce Hitachi Software Engineering’s businesses, even after making it a wholly owned subsidiary, by not only respecting its self-initiatives and independence but also paying attention to the business features and the management which fully utilizes operational and structural strengths.

(3)

Measures to Ensure the Fairness of the Tender Offer including Measures to Ensure the Fairness of the Tender Offer Price and to Avoid Conflicts of Interest

Hitachi principally took into consideration the following matters to ensure the fairness of the Tender Offer.

1)	Acquisition of the valuation report on the equity value received from an independent third-party appraiser

In determining the purchase price for the Tender Offer (the “Tender Offer Price”), Hitachi requested that Nomura Securities Co., Ltd. (“Nomura Securities”), a financial adviser as a third-party appraiser independent from Hitachi and Hitachi Software Engineering, calculate the equity value of Hitachi Software Engineering as one of the measures to ensure the fairness of the Tender Offer Price.

To calculate the equity value of Hitachi Software Engineering, Nomura Securities used the average market share price method, the comparable company analysis method and the discounted cash flow method (the “DCF” method). Hitachi received the valuation report regarding the valuation results on the equity value of Hitachi Software Engineering (the “Valuation Report for Hitachi”) today, from Nomura Securities (Hitachi did not obtain an opinion on the fairness of the valuation results of the Tender Offer Price, the so-called Fairness Opinion, from Nomura Securities.)

- 6 -

The range of valuations per share of common stock of Hitachi Software Engineering calculated according to each method is as follows.


Average market share price method		¥1,364 to ¥1,712

Comparable company analysis method		¥1,417 to ¥1,872

DCF method		¥2,044 to ¥2,932

First, under the average market share price method, Nomura Securities judged the range per share of common stock to be ¥1,364 to ¥1,712 based on the closing price of Hitachi Software Engineering’s common stock on the First Section of the Tokyo Stock Exchange on the record date of July 24, 2009, the average closing price for the most recent one week, the average closing price for the most recent one month, the average closing price for the most recent three months and the average closing price for the most recent six months.

Secondly, under the comparable company analysis method, Nomura Securities judged the range per share of common stock to be ¥1,417 to ¥1,872, evaluating Hitachi Software Engineering’s equity value by comparing share prices and financial indicators such as the profitability of listed companies engaged in relatively similar businesses to those of Hitachi Software Engineering.

Finally, under the DCF method, Nomura Securities judged the range per share of common stock to be ¥2,044 to ¥2,932 after analyzing enterprise value and equity value by discounting free cash flows Hitachi Software Engineering is expected to generate in the future by a certain discount rate to arrive at a net present value. This analysis was based on Hitachi Software Engineering’s estimated future profits from the fiscal year ending March 31, 2010 and later, taking into consideration Hitachi Software Engineering’s business plans, an interview with management of Hitachi Software Engineering, recent business performance, public information disclosures and other contributing factors.

Hitachi took into account the valuation results received from Nomura Securities using each method in its Valuation Report for Hitachi as a reference and comprehensively considered examples of premiums added as of determining tender offer prices in past examples of tender offers for shares by entities other than issuers; whether the Board of Directors of Hitachi Software Engineering would accept the Tender Offer; the market share price trend of Hitachi Software Engineering’s common stock; the expected number of subscriptions to the Tender Offer; and other factors. Furthermore, taking into account the results of consultations and negotiations with Hitachi Software Engineering, the final Tender Offer Price was determined at ¥2,650 per share of common stock by Hitachi’s President and Chief Executive Officer today.

- 7 -

The Tender Offer Price per share of ¥2,650 represents a premium of 54.8% (rounded to the first decimal place) on the closing price of ¥1,712 of Hitachi Software Engineering shares on the First Section of the Tokyo Stock Exchange on July 24, 2009 (*). It also represents a premium of 56.9% (rounded to the first decimal place) on the simple average of ¥1,689 (rounded to the nearest yen) of the closing share prices of common stock of Hitachi Software Engineering for the past month (from June 25 to July 24, 2009) as well as a premium of 72.4% (rounded to the first decimal place) on the simple average of ¥1,537 (rounded to the nearest yen) of the closing share prices of common stock of Hitachi Software Engineering for the past three months (from April 27 to July 24, 2009) and a premium of 94.3% (rounded to the first decimal place) on the simple averages of ¥1,364 (rounded to the nearest yen) of the closing share prices of common stock of Hitachi Information Systems for the past six months (from January 26, 2009, to July 24, 2009).

(*)

The stock price of Hitachi Software Engineering rose following a news report regarding the business restructuring of the Hitachi Group on July 27, 2009, which is the day before the day when the aforementioned decision was made by Hitachi’s President and Chief Executive Officer. Considering this rise in the stock price, the premium was calculated using the stock price on July 24, 2009, a business day before July 27, 2009. The calculations of the respective premiums on the simple average of the closing share prices of common stock for the past one month, for the past three months and for the past six months were made in the same manner.

On the other hand, according to Hitachi Software Engineering, in determining an opinion on the Tender Offer Price, Hitachi Software Engineering had Mizuho Securities Co., Ltd. calculate its equity value as a measure to ensure the fairness of the evaluation of the Tender Offer Price. Mizuho Securities is a financial advisor as a third party appraiser independent of Hitachi and Hitachi Software Engineering, and also does not hold the status as a Related Party. On this basis, Mizuho Securities calculated the equity value of Hitachi Software Engineering and Hitachi Software Engineering received a valuation report on its equity value (the “Valuation Report for Hitachi Software Engineering”) as of July 27, 2009 from Mizuho Securities. Mizuho Securities used the market share price method, the comparable company analysis method and the DCF method. Valuation results on the value per share of common stock of Hitachi Software Engineering computed using each method was as follows. According to Hitachi Software Engineering, carefully inspected the Tender Offer Price based on these valuation results and judged the Tender Offer Price to be at an appropriate level and reasonable. Hitachi Software Engineering did not obtain an opinion on the fairness of the Tender Offer Price, the so-called Fairness Opinion, from Mizuho Securities, according to Hitachi Software Engineering.

- 8 -

(i)

market share price method: ¥1,364 to ¥1,712—¥

According to Hitachi Software Engineering, the average market price method is a method to compute the equity value of Hitachi Software Engineering based on the share prices of Hitachi Software Engineering in the stock market. The share prices are determined through the principle of market competition with many entrants, widely disclosed and objective. They are taken into account in the valuation of share prices of listed companies. For these reasons, this method was employed. With the average market price method, based on the simple average of closing prices based on July 24, 2009, the record date, of the common stock of Hitachi Software Engineering on the First Section of the Tokyo Stock Exchange for the past six months until the record date, the per share price of the shares of Hitachi Software Engineering was calculated to be ¥1,364 to ¥1,712.

(ii)

Comparable Company Analysis method: ¥1,813 to ¥2,502

According to Hitachi Software Engineering, the comparable company analysis method is a method to calculate Hitachi Software Engineering’s share price using multipliers of financial indicators relative to aggregate stock prices of listed companies operating in the same business as that of Hitachi Software Engineering. Taking into account the situation of major markets and business scale, Hitachi Software Engineering judged that this method would produce probable results and employed this method. Using the Comparable Company Analysis method, the per share price of the shares of Hitachi Software Engineering was calculated to be ¥1,813 to 2,502—.

(iii)

DCF method: ¥2,107 to ¥3,081—

According to Hitachi Software Engineering, the DCF method is a method to calculate the value of Hitachi Software Engineering’s business and share price by estimating and discounting future free cash flows that Hitachi Software Engineering will produce through business activities by a certain discount rate to give their present values. Adding value of non-operating assets to the resulting Hitachi Software Engineering’s business value and deducting net liabilities, the share price is derived. Regarding this method as an effective and general financial theory, Hitachi Software Engineering employed this method. Using the DCF method, the per share price of the shares of Hitachi Software Engineering was calculated to be ¥2,107 to ¥3,081—.

According to Hitachi Software Engineering, in view of the above recognition and discussions as well as the analyses of the appropriateness of the Tender Offer Price and other matters, Hitachi Software Engineering has concluded that the Tender Offer will contribute to reinforce Hitachi Software Engineering’s operating base, accelerating business strategies and future development, and that the conditions of the Tender Offer are reasonable, providing Hitachi Software Engineering’s shareholders with an opportunity to sell their shares at a reasonable price. Therefore, Hitachi Software Engineering has agreed that Hitachi would conduct the Tender Offer with the aim of making Hitachi Software Engineering its wholly owned subsidiary and further decided to recommend that Hitachi Software Engineering’s shareholders subscribe to the Tender Offer.

- 9 -

2)	Legal advice from law office

According to Hitachi Software Engineering, Hitachi Software Engineering received legal advice from its legal advisor the MIYAKEZAKA SOGO LAW OFFICES on the fairness and appropriateness of the decision-making process of the Board of Directors.

3)	Approval of all the directors attending the Board of Directors’ meeting

Furthermore, according to Hitachi Software Engineering, Hitachi Software Engineering carefully discussed on the Tender Offer at a meeting of its Board of Directors of held today, which was attended by all Directors who have no vested interest with Hitachi, and resolved to approve the Tender Offer by unanimous approval of the attending Directors and to recommend that Hitachi Software Engineering’s shareholders subscribe to the Tender Offer. Among Hitachi Software Engineering’s Directors, Kotaro Muneoka and Koichiro Nishikawa, who concurrently serve as an advisor or executive officer of Hitachi, respectively, did not participate in the discussion or the decisions with regard to the Tender Offer to avoid any conflict of interest and refrained from expressing their opinions at the meeting. In addition, neither has participated in the consultations and negotiations with Hitachi from the standpoint of being director of Hitachi Software Engineering.

4)	Setting the Tender Offer Period at a relatively long period

By setting the Tender Offer Period at 33 business days, which is a relatively long period, Hitachi provides the shareholders of Hitachi Software Engineering with the opportunity to fully reflect on the application for the Tender Offer and ensures the fairness of the Tender Offer Price.

- 10 -

(4)

Policy on Matters including Organizational Restructuring after the Tender Offer (Matters concerning the so-called Two-Step Acquisition)

As described in “(1) Outline of the Tender Offer” above, Hitachi aims to make Hitachi Software Engineering a wholly owned subsidiary and intends to acquire all the issued shares of Hitachi Software Engineering (exclusive of its treasury stock) through the Tender Offer and a series of subsequent procedures.

If Hitachi cannot acquire all the issued shares of Hitachi Software Engineering (exclusive of its treasury stock) through the Tender Offer, Hitachi intends to acquire all the issued shares of Hitachi Software Engineering (exclusive of its treasury stock) by providing all the shareholders of Hitachi Software Engineering other than Hitachi with the opportunity of selling Hitachi Software Engineering shares held thereby by the following measures.

Specifically, after the Tender Offer comes into effect, Hitachi intends to request that Hitachi Software Engineering hold an extraordinary general meeting of shareholders (the “Extraordinary Shareholders’ Meeting”), which would include in the agenda Items 1) through 3) as follows: 1) The Articles of Incorporation of Hitachi Software Engineering shall be partly amended to make Hitachi Software Engineering a corporation issuing class shares (shurui kabushiki hakkou kaisha) under the Companies Act; 2) The Articles of Incorporation of Hitachi Software Engineering shall be partly amended to the effect that all issued shares of common stock of Hitachi Software Engineering shall be appended with a call provision (zenbu-shutoku-joko) (a provision regarding the redeemable right of Hitachi Software Engineering for all the shares as stipulated in Article 108, Paragraph 1, Item 7 of the Companies Act; hereinafter the same shall apply); and 3) a different class of Hitachi Software Engineering shares shall be issued in exchange for acquiring all the stocks with the call provision of Hitachi Software Engineering (exclusive of its treasury stock).

Furthermore, as Hitachi Software Engineering will become a corporation issuing class shares under the Companies Act on the condition that agenda Item 1) above is approved by the Extraordinary Shareholders’ Meeting, with respect to agenda Item 2), pursuant to Article 111, Paragraph 2, Item 1 of the Companies Act, it will be necessary, in addition to the resolution adopted by the Extraordinary Shareholders’ Meeting, to have a resolution at a meeting of shareholders with class shares (the “Class Shareholders’ Meeting”), at which the participants will be shareholders who hold all the stocks with the call provision of Hitachi Software Engineering. For this purpose, Hitachi will also request that Hitachi Software Engineering hold the Class Shareholders’ Meeting to include agenda Item 2) above for partial amendment to the Articles of Incorporation. Meanwhile, Hitachi will vote for the respective agenda items above at the Extraordinary Shareholders’ Meeting and the Class Shareholders’ Meeting.

- 11 -

If all of the above procedures are completed, all shares issued by Hitachi Software Engineering will be subject to the call provision and shall be acquired by Hitachi Software Engineering (exclusive of its treasury stock) and a different class of Hitachi Software Engineering shares shall be delivered to such shareholders of Hitachi Software Engineering as consideration for such acquisition by Hitachi Software Engineering. Shareholders who are to receive fractions of the different class of Hitachi Software Engineering shares will receive cash as consideration, which will be obtained through a sale of the different class of Hitachi Software Engineering shares that correspond to the sum of all such fractions (including the purchase of a whole or a part of the sum of such fractions by Hitachi Software Engineering) (fractions of the aggregate number to be rounded down) through the procedures pursuant to Article 234 of the Companies Act and other applicable laws and regulations. The selling price of the different class of Hitachi Software Engineering shares corresponding to the sum of all such fractions (and the cash amount to be delivered to each of the relevant shareholders, resulting from the sale of the aggregate number of fractions) is expected to be calculated on the basis of the Tender Offer Price. Although the class and number of shares of Hitachi Software Engineering to be delivered as consideration for the acquisition of the stocks with the call provision of Hitachi Software Engineering have not been determined as of the date hereof, Hitachi intends to request Hitachi Software Engineering to determine that the shares that must be delivered to shareholders who have not tendered the Tender Offer other than Hitachi shall be limited to such fractions of the different class of Hitachi Software Engineering for the purpose of enabling Hitachi to acquire all the issued shares of Hitachi Software Engineering (exclusive of its treasury stock).

As provisions to protect the rights of minority shareholders in connection with the above respective procedures, the Companies Act provides that (i) in the event that the Articles of Incorporation are partly amended to the effect that all the common stock issued by Hitachi Software Engineering shall be subject to the call provision as stated in agenda Item 2) above, any shareholder may request that Hitachi Software Engineering purchase his/her shares in accordance with Articles 116 and 117 of the Companies Act and other applicable laws and regulations, and that (ii) in the case where acquisition of all the stock with the call provision, as described in agenda Item 3) above, has been resolved by the General Meeting of Shareholders, any shareholder may file a petition for determination of a fair price for the acquisition in accordance with Article 172 of the Companies Act and other applicable laws and regulations. In addition, the purchase price and the acquisition price per share under (i) and (ii) above would be determined in the last instance by a competent court.

- 12 -

With regard to the above procedures, there is a possibility that Hitachi may request Hitachi Software Engineering to conduct another method that would have similar effects depending on such factors as Hitachi’s holding status of Hitachi Software Engineering shares after the Tender Offer, the holding status of Hitachi Software Engineering shares by shareholders other than Hitachi, or the interpretation of the competent authorities on the applicable laws and regulations or the like and such steps might require some time to be successfully completed. Even in such a case, however, Hitachi intends to make Hitachi Software Engineering a wholly owned subsidiary by adopting the method of finally delivering cash to shareholders of Hitachi Software Engineering other than Hitachi. In such cases, the resulting cash amount to be delivered to the relevant shareholders is also expected to be calculated on the basis of the Tender Offer Price.

The Tender Offer is not intended to solicit shareholders of Hitachi Software Engineering to vote in favor of the proposals to be put to the Extraordinary Shareholders’ Meeting and the Class Shareholders’ Meeting.

(5)

Likelihood of the Delisting of the Shares and the Reasons thereof

As of the date hereof, the common stock of Hitachi Software Engineering is listed on the First Section of the Tokyo Stock Exchange. As Hitachi has not set the maximum limit to the number of shares to be purchased through the Tender Offer, Hitachi Software Engineering shares may be subject to delisting upon the fulfillment of certain predetermined procedures if the result of the Tender Offer falls under the delisting standards of the Tokyo Stock Exchange. In addition, even if the delisting standards are not met upon completion of the Tender Offer, the shares of Hitachi Software Engineering will be delisted in accordance with the delisting standards because Hitachi intends to hold all the issued shares of Hitachi Software Engineering (exclusive of its treasury stock) in accordance with the procedures set forth in Item (4) Policy on Matters including Organizational Restructuring after the Tender Offer (Matters concerning the so-called Two-Step Acquisition). Trading of common stock of Hitachi Software Engineering will become unavailable on the Tokyo Stock Exchange after the delisting.

(6)

Matters concerning Material Agreement regarding the Application to the Tender Offer between the Tender Offeror and Shareholders of the Target Company

Not applicable

- 13 -

2. Outline of the Tender Offer and Other Information

(1)

Outline of the Target Company


Corporate Name	Hitachi Software Engineering Co., Ltd.

Description of Businesses	• Development and sales of computer software • Sales of information processing equipment

Date Established	September 21, 1970

Head Office	12-7, Higashishinagawa 4-chome, Shinagawa-ku, Tokyo, Japan

Name and Title of Representative	Isao Ono, President, Chief Executive Officer

Paid-in Capital	¥34,182 million (As of March 31, 2009)

Major Shareholders and Shareholdings	Hitachi, Ltd.		51.34	%
	Japan Trustee Services Bank, Ltd. (Trust Account)		3.62	%
	Japan Trustee Services Bank, Ltd. (Trust Account 4G)		3.28	%
	The Master Trust Bank of Japan, Ltd. (Trust Account)		2.81	%
	Hitachi Software Engineering Group Employees’ Shareholding Association		2.03	%
	TAM TWO (Standing proxy: The Bank of Tokyo-Mitsubishi UFJ, Ltd.)		1.40	%
	Trust & Custody Services Bank, Ltd. (Securities Investment Trust Account)		1.12	%
	State Street Bank and Trust Company 505227 (Standing proxy: Mizuho Corporate Bank, Ltd., Kabuto-cho Securities Settlement Operation Center)		0.83	%
	Mellon Bank, N.A. as Agent for its Client Mellon Omnibus US Pension (Standing proxy: Mizuho Corporate Bank, Ltd., Kabuto-cho Securities Settlement Operation Center)		0.75	%
	State Street Bank and Trust Company 505019 (Standing proxy: Mizuho Corporate Bank, Ltd., Kabuto-cho Securities Settlement Operation Center)		0.72	%

	(As of March 31, 2009)

Relationships between the Tender Offeror and the Target Company	Capital Relationships	Hitachi holds 33,238,836 shares of Hitachi Software Engineering, equivalent to a shareholding of 51.55% of the total number of issued shares, including indirect holdings of 0.20%. (As of March 31, 2009)

	Personnel Relationships	One Hitachi executive officer and one advisor sit on Hitachi Software Engineering’s Board of Directors.

	Transaction Relationships	Hitachi conducts sales of electronic computers for sale, etc., to Hitachi Software Engineering and purchases software and information processing equipment from them also. Hitachi receives funds from Hitachi Software Engineering under the Hitachi Group’s cash pooling system.

	Status as a Related Party	Hitachi Software Engineering is a consolidated subsidiary of Hitachi, and therefore a Related Party of Hitachi.

- 14 -

(2)

Tender Offer Period

1)	Initial Period of the Tender Offer in the Registration

From Thursday, August 20, 2009 to Thursday, October 8, 2009 (both inclusive) (33 business days)

2)	Possibility of Extending the Above Period upon Request of the Target Company

None

(3)

Tender Offer Price: ¥2,650 per share of common stock

(4)

Basis of Calculation of the Tender Offer Price

1)	Basis of Calculation

For reference in determining the Tender Offer Price, Hitachi requested that Nomura Securities, a financial adviser as a third-party appraiser independent from Hitachi and Hitachi Software Engineering, calculate the equity value of Hitachi Software Engineering. To calculate the equity value of Hitachi Software Engineering, Nomura Securities used the average market share price method, the comparable company analysis method and the DCF method. Hitachi received the Valuation Report for Hitachi today from Nomura Securities (Hitachi did not obtain an opinion on the fairness of the valuation results of the Tender Offer Price, the so-called Fairness Opinion, from Nomura Securities.) The range of valuations per share of common stock of Hitachi Software Engineering calculated according to each method is as follows.


Average market share price method		¥1,364 to ¥1,712

Comparable company analysis method		¥1,417 to ¥1,872

DCF method		¥2,044 to ¥2,932

- 15 -

Finally, under the DCF method, Nomura Securities judged the range per share of common stock to be ¥2,044 to ¥2,932 after analyzing enterprise value and equity value by discounting free cash flows Hitachi Software Engineering is expected to generate in the future by a certain discount rate to arrive at a net present value. This analysis was based on Hitachi Software Engineering’s estimated future profits from the fiscal year ending March 31, 2010 and later, taking into consideration Hitachi Software Engineering’s business plans, an interview to the management of Hitachi Software Engineering, recent business performance, public information disclosures and other contributing factors.

Hitachi took into account the valuation results received from Nomura Securities using each method in the Valuation Report for Hitachi as a reference and comprehensively considered examples of premiums added as of determining tender offer prices in past examples of tender offers for shares by entities other than issuers; whether the Board of Directors of Hitachi Software Engineering would accept the Tender Offer; the market share price trend of Hitachi Software Engineering’s common stock; the expected number of subscriptions to the Tender Offer; and other factors. Furthermore, taking into account the results of consultations and negotiations with Hitachi Software Engineering, the final Tender Offer Price was determined at ¥2,650 per share of common stock by Hitachi’s President and Chief Executive Officer on July 28, 2009.

The Tender Offer Price per share of ¥2,650 represents a premium of 54.8% (rounded to the first decimal place) on the closing price of ¥1,712 of common stock of Hitachi Software Engineering on the First Section of the Tokyo Stock Exchange on July 24, 2009 (*). It also represents a premium of 56.9% (rounded to the first decimal place) on the simple average of ¥1,689 (rounded to the nearest yen) of the closing share prices of common stock of Hitachi Software Engineering for the past month (from June 25 to July 24, 2009), a premium of 72.4% (rounded to the first decimal place) on the simple average of ¥1,537 (rounded to the nearest yen) of the closing share prices of common stock of Hitachi Software Engineering for the past three months (from April 27 to July 24, 2009) and a premium of 94.3% (rounded to the first decimal place) on the simple average of ¥1,364 (rounded to the nearest yen) of the closing share prices of common stock of Hitachi Software Engineering for the past six months (from January 26 to July 24, 2009).

(*)

- 16 -

2)	Background of the Valuation

(Background to the decision regarding the Tender Offer Price)

Hitachi Software Engineering, a consolidated subsidiary of Hitachi, currently engages in software service businesses, including systems development, services and package products, and information processing equipment business. The Hitachi Group, including Hitachi, has launched measures earlier than its competitors to address changing user needs in its information & telecommunication systems business, with a certain level of successful results.

The Hitachi Group intends to utilize its experience, expertise and technological capability to concentrate on the “social innovation business” that fuses the social infrastructure business with the information & telecommunication systems business in countries and regions that have already built a certain degree of social infrastructure which includes power systems, transportation systems, roads and water and other public systems.

However, the domestic information service market is currently at a critical turning point.

Reflecting a change in the type of interests in system investments, users’ demand for hardware and software is being replaced by that for information system services, including the use of packaged software products and systems for shared use, which is expected to be a driving force in the market. At this turning point, Hitachi believe it essential that the Hitachi Group quickly make large-scale investments in R&D in advanced technologies and infrastructure such as data center networks and put in place foundations that will allow Hitachi to further enhance the global business so that the Hitachi Group can appropriately cope with market changes and further expand businesses in the information service market.

- 17 -

Under these circumstances, since early April 2009, Hitachi and Hitachi Software Engineering have worked together and continued to discuss and consider various measures for business structural reform with a goal of raising their respective enterprise values. As a result, Hitachi and Hitachi Software Engineering have determined that strengthening the collaboration between Hitachi Software Engineering and the Hitachi Group and promoting the integration of the information telecommunication systems businesses in the Hitachi Group could be reinforced by establishing a closer capital relationship between both corporations, and thereby:

Hitachi Software Engineering, as a core company in the Hitachi Group, will be able to reinforce its response capabilities to big accounts, expand businesses for leading medium-sized enterprises, and enhance the development of products & packages of market needs, and strengthen its abilities to develop business foundations for products & packages and the development of high-quality basic software and embedded software;

Hitachi Software Engineering will be able to strengthen its earning power by utilizing the Hitachi Group’s human resources, sales and marketing and technological capabilities;

Hitachi Software Engineering will be able to further expand its global businesses through the active utilization of the Hitachi Group’s overseas sales and marketing strengths; and

The social innovation business on which the Hitachi Group focus its efforts will create and expand new business opportunities by swiftly conducting various developments required for the business expansion.

- 18 -

Hitachi and Hitachi Software Engineering have reached a conclusion that these effects will enhance the enterprise value of both companies, and to achieve the intended effects it is essential to make Hitachi Software Engineering a wholly owned subsidiary of Hitachi. Therefore, it was decided that Hitachi would conduct the Tender Offer, and the Tender Offer Price was determined in the following manner.

(i) Name of the Third Party from Which Hitachi Obtained Valuations

In determining the Tender Offer Price, Hitachi around May 2009 requested that Nomura Securities, a financial adviser as a third-party appraiser independent from Hitachi and Hitachi Software Engineering, calculate the equity value of Hitachi Software Engineering. Hitachi received the Valuation Report for Hitachi on the equity value of Hitachi Software Engineering on July 28, 2009, from Nomura Securities. (Hitachi did not obtain an opinion on the fairness of its valuations of the Tender Offer Price, the so-called Fairness Opinion, from Nomura Securities.)

(ii) Outline of the Valuation Report for Hitachi

To calculate the equity value of Hitachi Software Engineering, Nomura Securities used the average market share price method, the comparable company analysis method and the DCF method. The range of valuations per share of common stock of Hitachi Software Engineering calculated according to each method is as follows.


Average market share price method		¥1,364 to ¥1,712

Comparable company analysis method		¥1,417 to ¥1,872

DCF method		¥2,044 to ¥2,932

(iii) Process for Determining the Tender Offer Price Based on the Valuation Report for Hitachi

Hitachi took into account the valuation results using each method in the Valuation Report for Hitachi received from Nomura Securities as reference and comprehensively considered examples of premiums added as of determining tender offer prices in past examples of tender offers for shares by entities other than issuers; whether the Board of Directors of Hitachi Software Engineering would accept the Tender Offer; the market share price trend of Hitachi Software Engineering’s common stock; the expected number of subscriptions to the Tender Offer; and other factors. Furthermore, taking into account the results of consultations and negotiations with Hitachi Software Engineering, the final Tender Offer Price was determined at ¥2,650 per share of common stock by Hitachi’s President and Chief Executive Officer today.

- 19 -

(Measures to Ensure the Fairness of the Tender Offer including Measures to Ensure the Fairness of the Tender Offer Price and to Avoid Conflicts of Interest)

Hitachi principally took into consideration the following matters to ensure the fairness of the Tender Offer.

(i) Acquisition of the valuation report on the equity value from the Independent Third-Party Appraiser

In determining the Tender Offer Price, Hitachi requested that Nomura Securities, a financial adviser and third-party appraiser independent from Hitachi and Hitachi Software Engineering, calculate the equity value of Hitachi Software Engineering shares as one of the measures to ensure the fairness of the Tender Offer Price.

To calculate the equity value of Hitachi Software Engineering shares, Nomura Securities used the average market share price method, the comparable company analysis method and the DCF method. Hitachi received the Valuation Report for Hitachi from Nomura Securities today. (Hitachi did not obtain an opinion on the fairness of the valuation results of the Tender Offer Price, the so-called Fairness Opinion, from Nomura Securities.)

Hitachi took into account the valuation results using each method in the Valuation Report for Hitachi received from Nomura Securities as a reference and comprehensively considered examples of premiums added as of determining tender offer prices in past examples of tender offers for shares by entities other than issuers; whether the Board of Directors of Hitachi Software Engineering would accept the Tender Offer; the market share price trend of Hitachi Software Engineering’s common stock; the expected number of subscriptions to the Tender Offer; and other factors. Furthermore, taking into account the results of consultations and negotiations with Hitachi Software Engineering, the final Tender Offer Price was determined at ¥2,650 per share of common stock by Hitachi’s President and Chief Executive Officer today.

On the other hand, according to Hitachi Software Engineering, in determining an opinion on the Tender Offer Price, Hitachi Software Engineering had Mizuho Securities Co., Ltd. (“Mizuho Securities”) calculate its equity value as a measure to ensure the fairness of the evaluation of the Tender Offer Price. Mizuho Securities is a financial advisor as a third-party appraiser independent of Hitachi and Hitachi Software Engineering, and also does not hold the status as a Related Party. On this basis, Mizuho Securities calculated the equity value of Hitachi Software Engineering and Hitachi Software Engineering received the Valuation Report for Hitachi Software Engineering as of July 27, 2009 from Mizuho Securities. Mizuho Securities used the market share price method, the comparable company analysis method and the DCF method. Per-equity value of common stock of Hitachi Software Engineering computed using each method was as follows. Hitachi Software Engineering did not obtain an opinion on the fairness of the Tender Offer Price, the so-called Fairness Opinion, from Mizuho Securities, according to Hitachi Software Engineering.

- 20 -

(i)

Average Market Price method: ¥1,364 to ¥1,712

According to Hitachi Software Engineering, the Average Market Price method is a method to compute the equity value of Hitachi Software Engineering based on the share prices of Hitachi Software Engineering in the stock market. The share prices are determined through the principle of market competition with many entrants, widely disclosed and objective. They are certainly taken into account in valuation of share prices of listed companies. For these reasons, this method was employed. With the Average Market Price method, based on the closing price of the common stock of Hitachi Software Engineering on the First Section of the Tokyo Stock Exchange on the record date of July 24, 2009 and the simple average of closing prices for the past six months until the record date, the per share price of the shares of Hitachi Software Engineering was calculated to be ¥1,364 to ¥1,712.

(ii)

Comparable Company Analysis method: ¥1,813 to ¥2,502

According to Hitachi Software Engineering, the Comparable Company Analysis method is a method to calculate Hitachi Software Engineering’s share price using multipliers of financial indicators relative to aggregate stock prices of listed companies operating in the same business as that of Hitachi Software Engineering. Taking into account the situation of major markets and business scale, Hitachi Software Engineering judged that this method would produce probable results and employed this method. Using the Comparable Company Analysis method, the per share price of the shares of Hitachi Software Engineering was calculated to be ¥1,813 to 2,502.

(iii)

DCF method: ¥2,107 to 3,081

According to Hitachi Software Engineering, in view of the above recognition and discussions as well as the analyses of the appropriateness of the Tender Offer Price and other matters, Hitachi Software Engineering has concluded that the Tender Offer will contribute to reinforcement of Hitachi Software Engineering’s operating base, accelerating business strategies and future development, and that the conditions of the Tender Offer are reasonable, providing Hitachi Software Engineering’s shareholders with an opportunity to sell their shares at a reasonable price. Therefore, Hitachi Software Engineering has agreed that Hitachi would execute the Tender Offer with the aim of making Hitachi Software Engineering its wholly owned subsidiary and further decided to recommend that Hitachi Software Engineering’s shareholders subscribe to the Tender Offer.

- 21 -

(ii)

Legal advice from law office

(iii)

Approval of all the directors attending the Board of Directors’ meeting

Furthermore, according to Hitachi Software Engineering, Hitachi Software Engineering carefully discussed on the Tender Offer at a meeting of its Board of Directors of held today, which was attended by all Directors who have no vested interest with Hitachi, and resolved to approve the Tender Offer by unanimous approval of the attending Directors and to recommend that Hitachi Software Engineering’s shareholders subscribe to the Tender Offer. Among Hitachi Software Engineering’s Directors, Kotaro Muneoka and Koichiro Nishikawa, who concurrently serve as advisor or executive officer of Hitachi, respectively, did not participate in the discussion or the decisions with regard to the Tender Offer to avoid any conflict of interest and refrained from expressing their opinions at the meeting. In addition, neither has participated in the consultations and negotiations with the Hitachi form the standpoint of being director of Hitachi Software Engineering.

(iv)

Setting the Tender Offer Period at a relatively long period

(5)

Number of Shares to Be Purchased

Number of Shares

to Be Purchased

Minimum Number of Shares

to Be Purchased

Maximum Number of Shares

to Be Purchased

29,685,236 shares

— shares


Notes:	1.	As the maximum and minimum limits to the number of shares to be purchased through the Tender Offer are not set, all of the tendered shares will be purchased.

	2.	Less-than-one-unit shares (tangen-miman-kabushiki) are also eligible for the Tender Offer. In addition, Hitachi Software Engineering may purchase its own shares during the Tender Offer Period, pursuant to applicable laws and regulations, if shareholders owning less-than-one-unit shares exercise their right to request purchase of their shares in accordance with the relevant provisions of the Companies Act.

	3.	Hitachi does not intend to acquire treasury stock held by Hitachi Software Engineering through the Tender Offer.

	4.	The maximum number of shares of Hitachi Software Engineering to be acquired by Hitachi through the Tender Offer is stated in the “Number of Shares to Be Purchased.” This number indicates Hitachi Software Engineering shares (29,685,236 shares) (the “Maximum Number of Shares to Be Purchased”) that are to be obtained by deducting the total of the number of shares held by Hitachi as of the date hereof (33,107,000 shares) and the number of shares of treasury stock held by Hitachi Software Engineering as of March 31, 2009 (1,687,145 shares), from the total number of issued shares of Hitachi Software Engineering as of March 31, 2009 (64,479,381 shares), which are stated in the securities report of the 39th term filed by Hitachi Software Engineering on June 26, 2009.

- 22 -

(6)

Changes in the Shareholdings due to the Tender Offer


Number of voting rights represented by shares held by the Tender Offeror immediately before the Tender Offer	331,070 units	(Shareholdings immediately before the Tender Offer: 52.72%)

Number of voting rights represented by shares held by Special Related Parties immediately before the Tender Offer	— units	(Shareholdings immediately before the Tender Offer: —%)

Number of voting rights represented by shares to be purchased by the Tender Offer	296,852 units	(Shareholdings after the Tender Offer: 100.00%)

Total number of voting rights held by all the shareholders in the Target Company	627,412 units


Notes:	1.	The “Shareholdings immediately before the Tender Offer” was calculated using the “Total number of voting rights held by all the shareholders in the Target Company” as the denominator.

	2.	The “Number of voting rights represented by shares held by Special Related Parties immediately before the Tender Offer” represents the total of voting rights relating to shares held by respective Special Related Parties as identified by Hitachi as of the date hereof. Provided, however, that such Special Related Parties shall exclude those to be excluded from the category of Special Related Parties (the “Small-Scale Owners”) in accordance with Article 3, Paragraph 2, Item 1 of the Cabinet Office Ordinance regarding Disclosure of Tender Offers for Shares, etc., by Entities Other than Issuers (Ministry of Finance Ordinance No. 38 of 1990; including amendment thereof; the “Ordinance”) in calculating the shareholdings, as set forth in the respective items of Article 27-2, Paragraph 1 of the Financial Instruments and Exchange Law (Law No. 25 of 1948; including amendment thereof; the “Law”).

	3.	The “Number of voting rights represented by shares to be purchased by the Tender Offer” indicates the number of voting rights relating to the number of shares to be purchased in the Tender Offer (29,685,236 shares).

	4.	Because the shares held by respective Special Related Parties (exclusive of its treasury stock held by Hitachi Software Engineering being a Special Related Party) are also subject to the Tender Offer, the “Number of voting rights represented by shares held by Special Related Parties immediately before the Tender Offer” is not included in the numerator in the calculation of “Shareholdings after the Tender Offer.”

	5.	The “Total number of voting rights held by all the shareholders in the Target Company” (100 shares represent the number of shares per unit (tangen)) indicates the number of voting rights of all the shareholders of Hitachi Software Engineering as of March 31, 2009, which is stated in the securities report of the 39th term filed by Hitachi Software Engineering on June 26, 2009. Because all the shares issued by Hitachi Software Engineering (exclusive of treasury stock held by Hitachi Software Engineering) are subject to the Tender Offer, the “Shareholdings after the Tender Offer” were calculated using the number of voting rights (627,922 units) relating to the number of shares of Hitachi Software Engineering (62,792,236 shares)—which corresponds to the number derived by deducting the number of its treasury stock as of March 31, 2009 (1,687,145 shares) from the total number of issued shares of Hitachi Software Engineering as of March 31, 2009 (64,479,381 shares) stated in said securities report—as the denominator.

	6.	The figures in the “Shareholdings immediately before the Tender Offer” and the “Shareholdings after the Tender Offer” were rounded to two decimal places.

- 23 -

(7)

Tender Offer Cost: ¥78,666 million

Note: The Tender Offer Cost is calculated by multiplying 29,685,236 shares (Number of Shares to Be Purchased) by the Tender Offer Price for each share of ¥2,650.

(8)

Method of Settlement

1)	Name and Location of Head Office of Securities Companies/Banks, etc., in Charge of Settlement

Nomura Securities Co., Ltd.

9-1, Nihonbashi 1-chome, Chuo-ku, Tokyo

JOINVEST Securities Co., Ltd. (Sub-Agent)

15-1, Konan 2-chome, Minato-ku, Tokyo

2)	Commencement Date of Settlement

Friday, October 16, 2009

3)	Method of Settlement

With respect to tendering shareholders through the Tender Offer Agent, upon expiration of the Tender Offer Period, Hitachi will, without delay, send notice of the Tender Offer purchases to the addresses of tendering shareholders (in the case of a foreign resident who does not hold a working account with the Tender Offer Agent including the case of an institutional shareholder, to its standing proxy). With respect to tendering shareholders through JOINVEST Securities Co., Ltd., the Sub-Agent, the notice will be delivered in

accordance with the method described on the Sub-Agent’s website (https://www.joinvest.jp/).

- 24 -

4)	Method of Returning Shares

(9)

Other Conditions and Methods of the Tender Offer

1)	Conditions and Details in Each Item of Article 27-13, Paragraph 4 of the Law

As the maximum and minimum limits to the number of shares to be purchased through the Tender Offer are not set, Hitachi will purchase all of the tendered shares.

2)	Conditions of Withdrawal of the Tender Offer, Details thereof and Method of Disclosing the Withdrawal

Upon the occurrence of any event falling under the provisions of Article 14, Paragraph 1, Items 1.1 or 1.9 and 1.12 or 1.18, Item 2, Items 3.1 or 3.8, Item 4, Item 5 and Article 14, Paragraph 2, Items 3 or 6 of the Enforcement Regulations of the Financial Instruments and Exchange Law (Regulation No. 321 of 1965; including amendment thereof; the “Enforcement Regulations”), Hitachi may withdraw the Tender Offer. If Hitachi decides to withdraw the Tender Offer, Hitachi will make a public notice electronically, and publish a notice in the Nihon Keizai Shimbun. Provided, however, that if it is difficult to make such a public notice by the end of the Tender Offer Period, Hitachi will make an announcement as provided for in Article 20 of the Ordinance and thereafter give notice without delay.

- 25 -

3)	Conditions for Reducing the Tender Offer Price, Details thereof and Method of Disclosing the Reduction

If Hitachi Software Engineering takes any actions provided for in Article 13, Paragraph 1 of the Enforcement Regulations during the Tender Offer Period in accordance with the provisions of Article 27-6, Paragraph 1, Item 1 of the Law, the Tender Offer Price may be reduced in accordance with the provisions of Article 19, Paragraph 1 of the Ordinance. If Hitachi decides to reduce the Tender Offer Price, Hitachi will make a public notice electronically, and publish a notice in the Nihon Keizai Shimbun. Provided, however, that if it is difficult to make such a public notice by the end of the Tender Offer Period, Hitachi will make an announcement as provided for in Article 20 of the Ordinance and thereafter give notice without delay. If the Tender Offer Price is reduced, the shares tendered before the public notice, will also be purchased at the reduced Tender Offer Price.

4)	Matters concerning Tendering Shareholders’ Rights to Cancel Agreements

Any tendering shareholder may cancel agreements relating to the Tender Offer at any time during the Tender Offer Period. If tendering shareholders who tendered for shares through the Tender Offer Agent intend to cancel agreements relating to the Tender Offer, they should deliver or send a Cancellation Statement for Tender Offer Agreement (the “Cancellation Statement”) along with the tender offer application acceptance receipt to the head office or nationwide branch offices of the Tender Offer Agent who accepted the application, by 3:30 p.m. on the last day of the Tender Offer Period. Provided, however, that cancellations sent by tendering shareholders, must reach the said offices by no later than 3:30 p.m. on the last day of the Tender Offer Period. If tendering shareholders who tendered for share through JOINVEST Securities Co., Ltd., the Sub-Agent, intend to cancel agreements relating the Tender Offer, they must complete the cancellation procedures by 3:30 p.m. on the last day of the Tender Offer Period in accordance with the instructions on the Sub-Agent’s website (https://www.joinvest.jp/).

The agents with the authority to receive a Cancellation Statement:

Nomura Securities Co., Ltd.

9-1, Nihonbashi 1-chome, Chuo-ku, Tokyo

(other nationwide branch offices in Japan)

JOINVEST Securities Co., Ltd. (Sub-Agent)

15-1, Konan 2-chome, Minato-ku, Tokyo

- 26 -

5)	Method of Disclosure if Conditions, etc., of the Tender Offer are Changed

If Hitachi decides to change the Tender Offer conditions, etc., the Hitachi will make a public notice electronically, and publish a notice in the Nihon Keizai Shimbun detailing the changes. Provided, however, that it is difficult to make such a public notice by the end of the Tender Offer Period, Hitachi will make an announcement as provided for in Article 20 of the Ordinance and thereafter give notice without delay. If Tender Offer conditions, etc., are changed, shares tendered before the public notice will also be purchased under the amended conditions.

6)	Method of Disclosure When Submitting an Amendment Statement

If an Amendment Statement is filed with the Director of the Kanto Local Finance Bureau in Japan, Hitachi will immediately announce details from the Amendment Statement that relate to the contents of the public notice of the commencement of the Tender Offer, in accordance with the manner prescribed by Article 20 of the Ordinance. Hitachi will also immediately change the Tender Offer Explanatory Statement and deliver the amended document to tendering shareholders who have already received the Tender Offer Explanatory Statement. However, if the changes are only minor in nature, Hitachi will prepare a document stating the reasons for such amendments, the items that have been amended and the details, and deliver said document to tendering shareholders.

7)	Method of Disclosing Tender Offer Results

(10)

Date of Public Notice of Commencement of the Tender Offer

Thursday, August 20, 2009

(11)

Tender Offer Agent

Nomura Securities Co., Ltd.

9-1, Nihonbashi 1-chome, Chuo-ku, Tokyo

To delegate a part of its duties, the Tender Offer Agent has appointed the following company as a Sub-Agent:

JOINVEST Securities Co., Ltd. (Sub-Agent)

15-1, Konan 2-chome, Minato-ku, Tokyo

- 27 -

3. Management Policy and Outlook after the Tender Offer

(1)

Management Policy after the Tender Offer

Refer to “1. Purpose of the Tender Offer” with regard to the management policy after the Tender Offer.

(2)

Outlook for Future Business Performance after the Tender Offer

The expected impact of the Tender Offer on the Hitachi Group’s business results will be announced as soon as it is determined.

4. Other Information

(1)

Agreement between the Tender Offeror and the Target Company and/or Its Directors

According to Hitachi Software Engineering, Hitachi Software Engineering resolved to approve the Tender Offer and to recommend that Hitachi Software Engineering’s shareholders subscribe to the Tender Offer by unanimous approval at a meeting of its Board of Directors held on July 28, 2009 where all of the Directors of Hitachi Software Engineering except Kotaro Muneoka and Koichiro Nishikawa, who concurrently serve as advisor or executive officer of Hitachi, respectively, participated in the discussions and the resolution.

(2)

Other Information Considered Necessary for Helping Investors Decide Whether to Subscribe to the Tender Offer

Hitachi Software Engineering publicly announced its closing of accounts information for the first quarter of the 40th fiscal term on July 23, 2009, at the Tokyo Stock Exchange. A summary of Hitachi Software Engineering’s consolidated operating results and other financial information based on this release is provided below. The summary of this disclosed information is an excerpt of the announcement released by Hitachi Software Engineering, and Hitachi is not in a position to independently verify the precision and truthfulness thereof and has not verified it, in effect.

- 28 -

1)	Operating Results (millions of yen)


Accounting Period		First Quarter of 40th Business Period (From April 1, 2009 to June 30, 2009)
Revenue		31,372
Cost of sales		24,764
Selling, general and administrative expenses		5,897
Non-operating income		299
Non-operating expenses		55
Net income		689

Note: Revenue exclude consumption tax, etc.

2)	Data per Share (yen)


Accounting Period		First Quarter of 40th Business Period (From April 1, 2009 to June 30, 2009)
Net income per share		10.97
Dividend per share		—
Net assets per share		1819.11

- 29 -

Cautionary Statement

Factors that could cause actual results to differ materially from those projected or implied in any “forward-looking statement” and from historical trends include, but are not limited to:

-	fluctuations in product demand and industry capacity, particularly in the Information & Telecommunication Systems segment, the Electronic Devices segment and the Digital Media & Consumer Products segment;

increased commoditization of information technology products and digital media related products and intensifying price competition for such products, particularly in the Information & Telecommunication Systems segment, the Electronic Devices segment and the Digital Media & Consumer Products segment;

-	uncertainty as to Hitachi’s ability to continue to develop and market products that incorporate new technology on a timely and cost-effective basis and to achieve market acceptance for such products;

-	rapid technological innovation, particularly in the Information & Telecommunication Systems segment, the Electronic Devices segment and the Digital Media & Consumer Products segment;

-	exchange rate fluctuation for the yen and other currencies in which Hitachi makes significant sales or in which Hitachi’s assets and liabilities are denominated, particularly against the U.S. dollar and the euro;

-	fluctuations in the price of raw materials including, without limitation, petroleum and other materials, such as copper, steel, aluminum and synthetic resins;

-	uncertainty as to Hitachi’s ability to implement measures to reduce the potential negative impact of fluctuations in product demand, exchange rate and/or price of raw materials;

-	uncertainty as to Hitachi’s access to, or ability to protect, certain intellectual property rights, particularly those related to electronics and data processing technologies;

-	uncertainty as to the outcome of litigation, regulatory investigations and other legal proceedings of which the Company, its subsidiaries or its equity method affiliates have become or may become parties;

-	the possibility of incurring expenses resulting from any defects in products or services of Hitachi;

-	uncertainty as to the success of restructuring efforts to improve management efficiency and to strengthen competitiveness;

-	uncertainty as to the success of alliances upon which Hitachi depends, some of which Hitachi may not control, with other corporations in the design and development of certain key products;

-	uncertainty as to Hitachi’s ability to access, or access on favorable terms, liquidity or long-term financing; and

-	uncertainty as to general market price levels for equity securities in Japan, declines in which may require Hitachi to write down equity securities it holds.

- 30 -

Other Cautionary Matters

In accordance with the provisions of Article 167, Paragraph 3 of the Financial Instruments and Exchange Law and Article 30 of its Enforcement Regulations, anyone having read this news release is considered a primary recipient of information from the viewpoint of insider trading regulations. Hitachi accordingly urges you to exercise due care as you may be prohibited from purchasing the shares of Hitachi Software Engineering before 12 hours have passed from the time of this announcement. If you are held liable under criminal, civil, or administrative laws for making such a prohibited purchase, Hitachi notes that it will assume no responsibility whatsoever.

The Tender Offer is targeted at the common stock of Hitachi Software Engineering, a company incorporated in Japan. The Tender Offer is to be conducted in compliance with the procedures and information disclosure standards prescribed in the Financial Instruments and Exchange Law of Japan. These procedures and standards are not necessarily the same as the procedures and information disclosure standards in the United States. In particular, Section 13(e) and Section 14(d) of the U.S. Securities and Exchange Act of 1934 and the regulations stipulated there under are not applicable to the Tender Offer and the Tender Offer does not conform to those procedures and standards. Not all financial information included in this news release is in conformity with the U.S. GAAP. Further, as the Tender Offeror is a company incorporated outside the U.S. and most officers of the Tender Offeror are residents outside the U.S., it may be impossible to exercise rights and claims that may be asserted under the securities-related laws of the U.S. There is also a chance that it may be difficult to institute proceedings in a court outside the U.S. against a company outside the U.S. or its officers based on a violation of the securities-related laws of the U.S. Additionally, there is no guarantee that it would be possible to make a company outside the U.S. and its subsidiary or affiliate subject to the jurisdiction of a U.S. court.

# # #

Hitachi to Commence Tender Offer for the Shares of its Subsidiary,

Hitachi Systems & Services

Tokyo, July 28, 2009 — Hitachi, Ltd. (NYSE: HIT/TSE: 6501) today announced that it has decided to acquire the common stock of Hitachi Systems & Services, Ltd. (Masahiro Hayashi, President and Chief Executive Officer/TSE:3735), by way of a tender offer (the “Tender Offer”).

1. Purpose of the Tender Offer

(1)

Outline of the Tender Offer

Hitachi currently holds 51.20% of Hitachi Systems & Services’ issued shares, and thus accounts for Hitachi Systems & Services as a consolidated subsidiary. Hitachi intends to acquire all the issued shares of Hitachi Systems & Services (exclusive of its treasury stock) in order to make Hitachi Systems & Services a wholly owned subsidiary through the Tender Offer. The Tender Offer does not set maximum and minimum limits to the number of shares to be purchased.

According to Hitachi Systems & Services, Hitachi Systems & Services resolved to approve the Tender Offer and to recommend that the shareholders of Hitachi Systems & Services subscribe to the Tender Offer at a meeting of its Board of Directors held today.

(2)

Decision-Making Process of the Tender Offer, and Management Policy after the Tender Offer

In the information & telecommunication systems business, the Hitachi Group was quick in initiating, as part of its effort to meet changing users’ needs, the development of various information and telecommunication systems that correspond to various types and lines of business (system integration). The Hitachi Group has also expanded its outsourcing business and has been a pioneer in the SasS (Software as a Service) business, which grants customers the use of software for their needs. These initiatives have progressed well.

- 2 -

Hitachi Systems & Services was established in 1978 and currently engages in their mainstay business of system integration, as well as the software package business, information processing equipment sales business and the system services business, and is therefore positioned as one of the core entities in the Hitachi Group’s information & telecommunication systems business.

Specifically, the system integration business offers systems design and system building services for financial and public institutions—Hitachi’s major clients—as well as various industries, including manufacturing, distribution and social infrastructure.

The software package business offers distinctive solutions, including the employee front solutions, the “LYSITHEA Series,” based on its proprietary know-how. In addition, Hitachi Systems & Services sells information processing equipment associated with its offered solutions, as a part of the system integration business, and offers system-related services, including system maintenance and technical education.

However, the domestic information service market is currently at a critical turning point. In the conventional information service market, users’ demand for hardware and software to establish, operate and maintain their own information and telecommunication systems led to the expansion and growth of the market. However, interest in system investments has been shifting recently from the maintenance of information systems (system integration) to the more efficient use and operation of information and telecommunication systems (e.g., outsourcing and SaaS). Combined with the severe business environment caused by the global and structural recession continuing from the second half of the previous fiscal year, the system integration industry is expected to experience intensifying competition for customers. To achieve continued expansion of its system integration business throughout this transition stage, the Hitachi Group believes it necessary to quickly attract new customers and expand and upgrade its solutions.

- 3 -

Under these circumstances, since early April 2009, Hitachi and Hitachi Systems & Services have worked together and continued to discuss and consider various measures for business structural reform with a goal of raising their respective enterprise values. As a result, Hitachi and Hitachi Systems & Services have determined that strengthening the collaboration between Hitachi Systems & Services and the Hitachi Group and promoting the integration of the information telecommunication systems businesses in the Hitachi Group by establishing a closer capital relationship between Hitachi and Hitachi Systems & Services will enable Hitachi Systems & Services to increase the number and quality of new solutions for its system integration business and to acquire new customers by using the sales network shared by the members of the Hitachi Group, thereby increasing the enterprise value of Hitachi Systems & Services and then the overall Hitachi Group, and that to achieve the intended effects it is essential to make Hitachi Systems & Services a wholly owned subsidiary of Hitachi. Hitachi believes that the full ownership will enable the concentration and organic combination of the Hitachi Group’s management resources for the information and telecommunication systems business, including intellectual properties associated with system development, software development and system operations, as well as human resources and technological expertise, thereby facilitating various development efforts to enlarge the social innovation business on which the Hitachi Group places a significant focus.

In an attempt to establish the business structure described above, concurrently with the commencement of the Tender Offer, Hitachi has initiated tender offers for the issued shares of Hitachi Software Engineering and Hitachi Information Systems, both of which will assume their respective businesses in the information & telecommunication systems business in the Hitachi Group, with the aim of making them wholly owned subsidiaries.

As a specific method to establish a new business structure, establishment of an information and telecommunication company as a virtual entity within the Hitachi Group is being considered. Five major existing companies—Hitachi (Information & Telecommunication Group), Hitachi Systems & Services, Hitachi Software Engineering, Hitachi Information Systems and Hitachi Electronics Services Co., Ltd., a wholly owned subsidiary of Hitachi—would be equal partners in this virtual company. The most appropriate strategies and business structure for the future information and telecommunication company as a whole, as well as the strategies to reinforce the social innovation business will be decided and implemented.

- 4 -

Development of the data center operation business optimizing green IT technologies;

Offer of highly reliable cloud computing environment;

Expansion of global businesses utilizing collaborations with local business partners and localized operations;

Strengthen our readiness for projects of large-scale accounts, such as backbone systems for financial institutions including megabanks and optimization systems in the public sector;

Unify the information system businesses for the SMB (small to medium business) markets, mainly in the industrial and distribution fields;

Expand the development system for middleware and embedded software for products; and

Strengthen and expand the network service business and the outsourcing business.

Although the optimal solution for the basic strategies and future orientation of the information and telecommunication company after making Hitachi Systems & Services a wholly owned subsidiary, will be determined in consultation with Hitachi Systems & Services, Hitachi intends to reinforce Hitachi Systems & Services’ businesses, even after making it a wholly owned subsidiary, by not only respecting its self-initiatives and independence but also paying attention to its business features and the management which fully utilizes the operational and structural strength.

(3)

Measures to Ensure the Fairness of the Tender Offer including Measures to Ensure the Fairness of the Tender Offer Price and to Avoid Conflicts of Interest

Hitachi principally took into consideration the following matters to ensure the fairness of the Tender Offer.

1)	Acquisition of the valuation report on the equity value from an independent third-party appraiser

In determining the purchase price for the Tender Offer (the “Tender Offer Price”), Hitachi requested that Nomura Securities Co., Ltd., a financial adviser and a third-party appraiser independent from Hitachi and Hitachi Systems & Services, calculate the equity value of Hitachi Systems & Services as one of the measures to ensure the fairness of the Tender Offer Price.

- 5 -

To calculate the equity value of Hitachi Systems & Services , Nomura Securities used the average market share price method, the comparable company analysis method and the discounted cash flow method (the “DCF” method). Hitachi received the valuation report on the equity value of Hitachi Systems & Services (the “Valuation Report for Hitachi”) today, from Nomura Securities. (Hitachi did not obtain an opinion on the fairness of the valuation results of the Tender Offer Price, the so-called Fairness Opinion, from Nomura Securities.)

The range of valuations per share of common stock of Hitachi Systems & Services calculated according to each method is as follows.


Average market share price method	¥	1,053 to	¥1,329

Comparable company analysis method	¥	1,350 to	¥2,297

DCF method	¥	1,993 to	¥3,601

First, under the average market share price method, Nomura Securities judged the range per share of common stock to be ¥1,053 to ¥1,329 based on the closing price of Hitachi Systems & Services’ common stock on the Second Section of the Tokyo Stock Exchange on the record date of July 24, 2009, the average closing price for the most recent one week, the average closing price for the most recent one month and the average closing prices for the most recent three months and six months.

Secondly, under the comparable company analysis method, Nomura Securities judged the range per share of common stock to be ¥1,350 to ¥2,297, evaluating Hitachi Systems & Services’ equity value by comparing share prices and financial indicators such as the profitability of listed companies engaged in relatively similar businesses to those of Hitachi Systems & Services.

Finally, under the DCF method, Nomura Securities judged the range per share of common stock to be ¥1,993 to ¥3,601 after analyzing enterprise value and equity value by discounting free cash flows Hitachi Systems & Services is expected to generate in the future by a certain discount rate to arrive at a net present value. This analysis was based on Hitachi Systems & Services’ estimated future profits from the fiscal year ending March 31, 2010 and later, taking into consideration Hitachi Systems & Services’ business plans, an interview with the management of Hitachi Systems & Services, recent business performance, public information disclosures and other contributing factors.

- 6 -

Hitachi took into account the valuation results received from Nomura Securities using each method in its Valuation Report for Hitachi as reference and comprehensively considered examples of premiums added as of determining tender offer prices in past examples of tender offers for shares by entities other than issuers; whether the Board of Directors of Hitachi Systems & Services would accept the Tender Offer; the market share price trend of Hitachi Systems & Services’ common stock; the expected number of subscriptions to the Tender Offer; and other factors. Furthermore, taking into account the results of consultations and negotiations with Hitachi Systems & Services, the final Tender Offer Price was determined at ¥2,150 per share of common stock by Hitachi’s President and Chief Executive Officer today.

The Tender Offer Price per share of ¥2,150 represents a premium of 64.1% (rounded to the first decimal place) on the closing price of ¥1,310 of common stock of Hitachi Systems & Services on the Second Section of the Tokyo Stock Exchange on July 24, 2009(*). It also represents a premium of 61.8% (rounded to the first decimal place) on the simple average of ¥1,329 (rounded to the nearest yen) of the closing share prices of common stock of Hitachi Systems & Services for the past month (from June 25 to July 24, 2009), a premium of 75.2% (rounded to the first decimal place) on the simple average of ¥1,227 (rounded to the nearest yen) of the closing share prices of common stock of Hitachi Systems & Services for the past three months (from April 27 to July 24, 2009), and a premium of 104.2% (rounded to the first decimal place) on the simple average of ¥1,053 (rounded to the nearest yen) of the closing share prices of common stock of Hitachi Systems & Services for the past six months (from January 26 to July 24, 2009).

(*)

The stock price of Hitachi Systems & Services rose following a news report regarding the business restructuring of the Hitachi Group on July 27, 2009, which is the day before the day when the aforementioned decision was made by Hitachi’s President and Chief Executive Officer. Considering this rise in the stock price, the premium was calculated using the stock price on July 24, 2009, a business day before July 27, 2009. The calculations of the respective premiums on the simple average of the closing share prices of common stock for the past one month, for the past three months and for the past six months were made in the same manner.

- 7 -

On the other hand, according to Hitachi Systems & Services, in determining a opinion on the Tender Offer Price, Hitachi Systems & Services had Mizuho Securities Co., Ltd. calculate its quity value to ensure the fairness of the Tender Offer. Mizuho Securities is a third-party appraiser independent of Hitachi and Hitachi Systems & Services, and also do not hold the status as a related party. Hitachi Systems & Services received a valuation report on its equity value (the “Valuation Report for Hitachi Systems & Services”) as of July 27, 2009 from Mizuho Securities. Mizuho Securities used the DCF method, the comparable company analysis method and the market share price method. Valuation results on the value per share of common stock of Hitachi Systems & Services computed using each method were as follows. According to Hitachi Systems & Services, Hitachi Systems & Services carefully inspected the Tender Offer Price based on these valuation results and judged the Tender Offer Price to be at an appropriate level and reasonable. Hitachi Systems & Services did not obtain an opinion on the fairness of the Tender Offer Price, the so-called Fairness Opinion, from Mizuho Securities, according to Hitachi Systems & Services.

(i)	DCF method: ¥1,991—¥2,848

According to Hitachi Systems & Services, the DCF method is a method to calculate the value of Hitachi Systems & Services’ business and share price by estimating and discounting future free cash flows that Hitachi Systems & Services will produce through business activities by a certain discount rate to give their present values. Adding value of non-operating assets to the resulting Hitachi Systems & Services’ business value and deducting net liabilities, the share price is derived. Regarding this method as an effective and general theory, Hitachi Systems & Services adopted this method. Using the DCF method, the range per share price of the shares of Hitachi Systems & Services was calculated to be ¥1,991—¥2,848.

(ii)	Comparable company analysis method: ¥1,691—¥2,311

According to Hitachi Systems & Services, the comparable company analysis method is a method to calculate Hitachi Systems & Services’ share price using multipliers of financial indicators relative to aggregate stock prices of listed companies operating in the same business as that of Hitachi Systems & Services. Taking into account the situation of major markets and business scale, Hitachi Systems & Services determined that this method would produce probable results, thereby adopted this method. Using the comparable company analysis method, the range per share price of the shares of Hitachi Systems & Services was calculated to be ¥1,691—¥2,311.

(iii)

Market share price method: ¥1,053—¥1,329

According to Hitachi Systems & Services, the market share price method is a method to compute the equity values of Hitachi Systems & Services based on the share prices of Hitachi Systems & Services in the stock market. The share prices are determined through the principle of market competition with many entrants, widely disclosed and objective. They are certainly taken into account in the valuation of share prices of listed companies. For these reasons, this method was adopted. Under this method, the ranges per share of common stock of Hitachi Systems & Services were average prices based on the closing prices over the past six, three and one month(s), respectively, from the record date of July 24, 2009, on the Second Section of the Tokyo Stock Exchange. Based on these results, the range per share price of the shares of Hitachi Systems & Services was calculated to be ¥1,053—¥1,329.

According to Hitachi Systems & Services, in view of the above recognition and discussions as well as the analyses of the appropriateness of the Tender Offer Price and other matters, Hitachi Systems & Services carefully deliberated on the conditions of the Tender Offer. As a result, Hitachi Systems & Services has concluded that strengthening the collaboration between Hitachi Systems & Services and the information and telecommunication systems business of the Hitachi Group by way of the Tender Offer will facilitate the acquisition of new customers through Hitachi Group’s sales networks and the enlargement of solutions for Hitachi Systems & Services’ system integration business, thereby maximizing its medium- and long-term enterprise value, and that the conditions of the Tender Offer are reasonable, providing Hitachi Systems & Services’ shareholders with an opportunity to sell their shares at a reasonable price. Therefore, Hitachi Systems & Services has approved that Hitachi would conduct the Tender Offer with the aim of making Hitachi Systems & Services its wholly owned subsidiary and further decided to recommend that Hitachi Systems & Services’ shareholders subscribe to the Tender Offer.

- 8 -

2)	Legal advice from law office

According to Hitachi Systems & Services, Hitachi Systems & Services received necessary legal advice from its legal advisor the MIYAKEZAKA SOGO LAW OFFICES, to ensure the fairness of decision making concerning the Tender Offer.

3)	Approval of all the directors attending the Board of Directors’ meeting

Furthermore, according to Hitachi Systems & Services, Hitachi Systems & Services carefully discussed on the Tender Offer at a meeting of its Board of Directors held today, which was attended by all Directors who have no vested interest with Hitachi, and resolved to approve the Tender Offer by unanimous approval of the attending Directors (including outside Directors) and to recommend that Hitachi Systems & Services’ shareholders subscribe to the Tender Offer. Specifically, among Hitachi Systems & Services’ Directors, Shozo Saito concurrently serves as Executive Officer of Hitachi and therefore did not participate in the discussions and the resolution of the proposals concerning the resolutions at said meeting to avoid any conflict of interest. He refrained from expressing his opinions and was not involved in negotiations with Hitachi representing Hitachi Systems & Services as Director.

4)	Setting the Tender Offer Period at a relatively long period

By setting the Tender Offer Period at 33 business days, which is a relatively long period, Hitachi provides the shareholders of Hitachi Systems & Services with the opportunity to fully reflect on the application for the Tender Offer and ensures the fairness of the Tender Offer Price.

- 9 -

(4)

Policy on Matters including Organizational Restructuring after the Tender Offer

(Matters concerning the so-called Two-Step Acquisition)

As described in “(1) Outline of the Tender Offer” above, Hitachi aims to make Hitachi Systems & Services a wholly owned subsidiary and intends to acquire all the issued shares of Hitachi Systems & Services (exclusive of its treasury stock) through the Tender Offer and a series of subsequent procedures.

If Hitachi cannot acquire all the issued shares of Hitachi Systems & Services (exclusive of its treasury stock) through the Tender Offer, Hitachi intends to acquire all the issued shares of Hitachi Systems & Services (exclusive of its treasury stock) by the following measures.

Specifically, after the Tender Offer comes into effect, Hitachi intends to request that Hitachi Systems & Services hold an extraordinary general meeting of shareholders (the “Extraordinary Shareholders’ Meeting”), which would include in the agenda Items 1) through 3) as follows: 1) The Articles of Incorporation of Hitachi Systems & Services shall be partly amended to make Hitachi Systems & Services a corporation issuing class shares (shurui kabushiki hakkou kaisha) under the Companies Act; 2) The Articles of Incorporation of Hitachi Systems & Services shall be partly amended to the effect that all issued shares of common stock of Hitachi Systems & Services shall be appended with a call provision (zenbu-shutoku-joko) (a provision regarding the redeemable right of Hitachi Systems & Services for all the shares as stipulated in Article 108, Paragraph 1, Item 7 of the Companies Act; hereinafter the same shall apply); and 3) a different class of Hitachi Systems & Services shares shall be issued in exchange for acquiring all the stocks with the call provision of Hitachi Systems & Services (exclusive of its treasury stock).

Furthermore, as Hitachi Systems & Services will become a corporation issuing class shares under the Companies Act on the condition that agenda Item 1) above is approved by the Extraordinary Shareholders’ Meeting, with respect to agenda Item 2), pursuant to Article 111, Paragraph 2, Item 1 of the Companies Act, it will be necessary, in addition to the resolution adopted by the Extraordinary Shareholders’ Meeting, to have a resolution at a meeting of shareholders with class shares (the “Class Shareholders’ Meeting”), at which the participants will be shareholders who hold all the stocks with the call provision of Hitachi Systems & Services. For this purpose, Hitachi will also request that Hitachi Systems & Services hold the Class Shareholders’ Meeting to include agenda Item 2) above for partial amendment to the Articles of Incorporation. Meanwhile, Hitachi will vote for the respective agenda items above at the Extraordinary Shareholders’ Meeting and the Class Shareholders’ Meeting.

- 10 -

If all of the above procedures are completed, all shares issued by Hitachi Systems & Services will be subject to the call provision and shall be acquired by Hitachi Systems & Services (exclusive of its treasury stock) and a different class of Hitachi Systems & Services shares shall be delivered to such shareholders of Hitachi Systems & Services as consideration for such acquisition by Hitachi Systems & Services. Shareholders who are to receive fractions of the different class of Hitachi Systems & Services shares will receive cash as consideration, which will be obtained through a sale of the different class of Hitachi Systems & Services shares that correspond to the sum of all such fractions (including the purchase of a whole or a part of the sum of such fractions by Hitachi Systems & Services) (fractions of the aggregate number to be rounded down) through the procedures pursuant to Article 234 of the Companies Act and other applicable laws and regulations. The selling price of the different class of Hitachi Systems & Services shares corresponding to the sum of all such fractions (and the cash amount to be delivered to each of the relevant shareholders, resulting from the sale of the aggregate number of fractions) is expected to be calculated on the basis of the Tender Offer Price. Although the class and number of shares of Hitachi Systems & Services to be delivered as consideration for the acquisition of the stocks with the call provision of Hitachi Systems & Services have not been determined as of the date hereof, Hitachi intends to request Hitachi Systems & Services to determine that the shares that must be delivered to shareholders who have not tendered the Tender Offer other than Hitachi shall be limited to such fractions of the different class of Hitachi Systems & Services for the purpose of enabling Hitachi to acquire all the issued shares of Hitachi Systems & Services (exclusive of its treasury stock).

As provisions to protect the rights of minority shareholders in connection with the above respective procedures, the Companies Act provides that (i) in the event that the Articles of Incorporation are partly amended to the effect that all the common stock issued by Hitachi Systems & Services shall be subject to the call provision as stated in agenda Item 2) above, any shareholder may request that Hitachi Systems & Services purchase his/her shares in accordance with Articles 116 and 117 of the Companies Act and other applicable laws and regulations, and that (ii) in the case where acquisition of all the stocks with the call provision, as described in agenda Item 3) above, has been resolved by the General Meeting of Shareholders, any shareholder may file a petition for determination of a fair price for the acquisition in accordance with Article 172 of the Companies Act and other applicable laws and regulations. In addition, the purchase price and the acquisition price per share under (i) and (ii) above would be determined in the last instance by a competent court.

- 11 -

With regard to the above procedures, there is a possibility that Hitachi may request Hitachi Systems & Services to conduct another method that would have similar effects depending on such factors as Hitachi’s holding status of Hitachi Systems & Services shares after the Tender Offer, the holding status of Hitachi Systems & Services shares by shareholders other than Hitachi, or the interpretation of the competent authorities on the applicable laws and regulations or the like and such steps might require some time to be successfully completed. Even in such a case, however, Hitachi intends to make Hitachi Systems & Services a wholly owned subsidiary by adopting the method of finally delivering cash to shareholders of Hitachi Systems & Services other than Hitachi. In such cases, the resulting cash amount to be delivered to the relevant shareholders is also expected to be calculated on the basis of the Tender Offer Price.

The Tender Offer is not intended to solicit shareholders of Hitachi Systems & Services to vote in favor of the proposals to be put to the Extraordinary Shareholders’ Meeting and the Class Shareholders’ Meeting.

(5)

Likelihood of the Delisting of the Shares and the Reasons thereof

As of the date hereof, the common stock of Hitachi Systems & Services is listed on the Second Section of the Tokyo Stock Exchange. As Hitachi has not set the maximum limit to the number of shares to be purchased through the Tender Offer, Hitachi Systems & Services shares may be subject to delisting upon the fulfillment of certain predetermined procedures if the result of the Tender Offer falls under the delisting standards of the Tokyo Stock Exchange. In addition, even if the delisting standards are not met upon completion of the Tender Offer, the common stock of Hitachi Systems & Services will be delisted in accordance with the delisting standards because Hitachi intends to hold all the issued shares of Hitachi Systems & Services (exclusive of its treasury stock) in accordance with the procedures set forth in Item “(4) Policy on Matters including Organizational Restructuring after the Tender Offer (Matters concerning the so-called Two-Step Acquisition).” Trading of common stock of Hitachi Systems & Services will become unavailable on the Tokyo Stock Exchange after the delisting.

- 12 -

(6)

Matters concerning Material Agreement regarding the Application to the Tender Offer between Hitachi and Shareholders of Hitachi Systems & Services

Not applicable

- 13 -

2. Outline of the Tender Offer and Other Information

(1)

Outline of Hitachi Systems & Services


Corporate Name	Hitachi Systems & Services, Ltd.
Description of Businesses	• System integration and system services business • Software package business • Information processing equipment sales business

Date Established	September 21, 1978

Head Office	18-1, Konan 2-chome, Minato-ku, Tokyo, Japan

Name and Title of Representative	Masahiro Hayashi, President and Chief Executive Officer

Paid-in Capital	¥4,190 million (As of March 31, 2009)

Major Shareholders and Shareholdings	Hitachi, Ltd.	51.20	%
	Japan Trustee Services Bank, Ltd. (Trust Account)	8.41	%
	The Master Trust Bank of Japan, Ltd. (Trust Account)	3.18	%
	The Dai-Ichi Mutual Life Insurance Company Separate Account Pension (Standing proxy: Trust & Custody Services Bank, Ltd.)	2.59	%
	BBH for Fidelity Low Price Stock Fund (Standing proxy: The Bank of Tokyo-Mitsubishi UFJ, Ltd.)	1.98	%
	Hitachi Systems & Services’ Group Employees’ Shareholding Association	1.90	%
	CBLDN Legal and General Assurance Pensions Management Limited (Standing proxy: Citibank Japan Ltd.)	1.50	%
	BNY GCM Account Client Accounts JP REC ITIC (Standing proxy: The Bank of Tokyo-Mitsubishi UFJ, Ltd.)	0.90	%
	Credit Suisse Securities Europe Limited PB Sec Int Non-Treaty Client (Standing proxy: Citibank Japan Ltd.)	0.86	%
	Mellon Bank, N.A. as Agent for its Client Mellon Omnibus US Pension (Standing proxy: Mizuho Corporate Bank, Ltd.)	0.77	%


	(As of March 31, 2009)

Relationships between the Tender Offeror and the Target Company	Capital Relationships	Hitachi holds 12,800,000 shares of Hitachi Systems & Services, equivalent to a shareholding of 51.20% of the total number of issued shares. (As of March 31, 2009)
	Personnel Relationships	One Hitachi Senior Vice President and Executive Officer sits on Hitachi Systems & Services’ Board of Directors.

	Transaction Relationships	Hitachi conducts fund transactions with Hitachi Systems & Services under the Hitachi Group’s cash pooling system; outsources system integration and system services, etc.; sells information processing equipment; has license agreements on the use of Hitachi’s corporate logo (corporate logo, corporate emblem, and corporate name) by Hitachi’s affiliated companies; and has agreements to offer research achievements of cutting-edge and fundamental technologies as well as services on business operations.
	Status as a Related Party	Hitachi Systems & Services is a consolidated subsidiary of Hitachi, and therefore a Related Party of Hitachi.

- 14 -

(2)

Tender Offer Period

1)	Initial Period of the Tender Offer in the Registration

From Thursday, August 20, 2009 to Thursday, October 8, 2009 (both inclusive) (33 business days)

2)	Possibility of Extending the Above Period upon Request of the Target Company

None

(3)

Tender Offer Price: ¥2,150 per share of common stock

(4)

Basis of Calculation of the Tender Offer Price

1)	Basis of Calculation

For reference in determining the Tender Offer Price, Hitachi requested that Nomura Securities, a financial adviser and a third-party appraiser independent from Hitachi and Hitachi Systems & Services, calculate the equity value of Hitachi Systems & Services. To calculate the equity value of Hitachi Systems & Services, Nomura Securities used the average market share price method, the comparable company analysis method and the DCF method. Hitachi received the Valuation Report for Hitachi today, from Nomura Securities. (Hitachi did not obtain an opinion on the fairness of the Tender Offer Price, the so-called Fairness Opinion, from Nomura Securities.) The range of valuations per share of common stock of Hitachi Systems & Services calculated according to each method is as follows.


Average market share price method		¥1,053 to ¥1,329

Comparable company analysis method		¥1,350 to ¥2,297

DCF method		¥1,993 to ¥3,601

- 15 -

First, under the average market share price method, Nomura Securities judged the range per share of common stock to be ¥1,053 to ¥1,329 based on the closing price of Hitachi Systems & Services’ common stock on the Second Section of the Tokyo Stock Exchange on the record date of July 24, 2009, the average closing price for the most recent one week, for the most recent one month, for the most recent three months and for the most recent six months.

Under the comparable company analysis method, Nomura Securities judged the range per share of common stock to be ¥1,350 to ¥2,297, evaluating Hitachi Systems & Services’ equity value by comparing share prices and financial indicators such as the profitability of listed companies engaged in relatively similar businesses to those of Hitachi Systems & Services.

Finally, under the DCF method, Nomura Securities judged the range per share of common stock to be ¥1,993 to ¥3,601 after analyzing enterprise value and equity value by discounting free cash flows Hitachi Systems & Services is expected to generate in the future by a certain discount rate to arrive at a net present value. This analysis was based on Hitachi Systems & Services’ estimated future profits from the fiscal year ending March 31, 2010 and later, taking into consideration Hitachi Systems & Services’ business plans, an interview to the management of Hitachi Systems & Services, recent business performance, public information disclosures and other contributing factors.

Hitachi took into account the valuation results using each method in the Valuation Report for Hitachi received from Nomura Securities as reference and comprehensively considered examples of premiums added as of determining tender offer prices in past examples of tender offers for shares by entities other than issuers; whether the Board of Directors of Hitachi Systems & Services would accept the Tender Offer; the market share price trend of Hitachi Systems & Services’ common stock; the expected number of subscriptions to the Tender Offer; and other factors. Furthermore, taking into account the results of consultations and negotiations with Hitachi Systems & Services, the final Tender Offer Price was determined at ¥2,150 per share of common stock by Hitachi’s President and Chief Executive Officer today.

- 16 -

(*)

2)	Background of the Valuation

(Background to the decision regarding the Tender Offer Price)

Hitachi Systems & Services, a consolidated subsidiary of Hitachi, currently engages in their mainstay business of system integration, as well as the software package business, information processing equipment sales business and the system services business, and is therefore positioned as one of the core entities in the Hitachi Group’s information & telecommunication systems business.

However, the domestic information service market is currently at a critical turning point. In the conventional information service market, users’ demand for hardware and software to establish, operate and maintain their own information and telecommunication systems led to the expansion and growth of the market. However, interest in system investments has been shifting recently from the maintenance of information systems (system integration) to the more efficient use and operation of information and telecommunication systems (e.g., outsourcing and SaaS). Combined with the severe business environment caused by the global and structural recession continuing from the second half of the previous fiscal year, the system integration industry is expected to experience intensifying competition for customers. To achieve continued expansion of its system integration business throughout this transition stage, the Hitachi Group believes it necessary to quickly attract new customers and expand and upgrade its solutions.

- 17 -

Under these circumstances, since early April 2009, Hitachi and Hitachi Systems & Services have worked together and continued to discuss and consider various measures for business structural reform with a goal of raising their respective enterprise values. As a result, Hitachi and Hitachi Systems & Services have determined that strengthening the collaboration between Hitachi Systems & Services and the Hitachi Group and promoting the integration of the information telecommunication systems businesses in the Hitachi Group by establishing a closer capital relationship between Hitachi and Hitachi Systems & Services will enable Hitachi Systems & Services to increase the number and quality of new solutions for its system integration business and to acquire new customers through the Hitachi Group’s sales networks, thereby increasing the enterprise value of Hitachi Systems & Services and then the overall Hitachi Group, and that to achieve the intended effects it is essential to , make Hitachi Systems & Services a wholly owned subsidiary of Hitachi. Consequently, Hitachi determined to conduct the Tender Offer and decided on the Tender Offer Price in the following manner.

(i) Name of the Third Party from Which Hitachi Obtained Valuations

In determining the Tender Offer Price, Hitachi around May 2009 requested that Nomura Securities, a financial adviser and a third-party appraiser independent from Hitachi and Hitachi Systems & Services, calculate the equity value of Hitachi Systems & Services. Hitachi received the Valuation Report for Hitachi on the equity value of Hitachi Systems & Services today, from Nomura Securities. (Hitachi did not obtain an opinion on the fairness of its valuations of the Tender Offer Price, the so-called Fairness Opinion, from Nomura Securities.)

- 18 -

(ii) Outline of the Valuation Report for Hitachi

To calculate the equity value of Hitachi Systems & Services, Nomura Securities used the average market share price method, the comparable company analysis method and the DCF method. The range of valuations per share of common stock of Hitachi Systems & Services calculated according to each method is as follows.


Average market share price method	¥	1,053 to	¥1,329

Comparable company analysis method	¥	1,350 to	¥2,297

DCF method	¥	1,993 to	¥3,601

(iii) Process for Determining the Tender Offer Price Based on the Valuation Report for Hitachi

Hitachi took into account the valuation results using each method in the Valuation Report for Hitachi received from Nomura Securities as reference and comprehensively considered examples of premiums added as of determining tender offer prices in past examples of tender offers for shares by entities other than issuers; whether the Board of Directors of Hitachi Systems & Services would accept the Tender Offer; the market share price trend of Hitachi Systems & Services’ common stock; the expected number of subscriptions to the Tender Offer; and other factors. Furthermore, taking into account the results of consultations and negotiations with Hitachi Systems & Services, the final Tender Offer Price was determined at ¥2,150 per share of common stock by Hitachi’s President and Chief Executive Officer today.

(Measures to Ensure the Fairness of the Tender Offer including Measures to Ensure the Fairness of the Tender Offer Price and to Avoid Conflicts of Interest)

Hitachi principally took into consideration the following matters to ensure the fairness of the Tender Offer.

(i) Acquisition of the valuation report on the equity value from the Independent Third-Party Appraiser

In determining the Tender Offer Price, Hitachi requested that Nomura Securities, a financial adviser as a third-party appraiser independent from Hitachi and Hitachi Systems & Services, calculate the equity value of Hitachi Systems & Services as one of the measures to ensure the fairness of the Tender Offer Price.

- 19 -

To calculate the equity value of Hitachi Systems & Services, Nomura Securities used the average market share price method, the comparable company analysis method and the DCF method. Hitachi received the Valuation Report for Hitachi from Nomura Securities today. (Hitachi did not obtain an opinion on the fairness of the valuation results of the Tender Offer Price, the so-called Fairness Opinion, from Nomura Securities.)

Hitachi took into account the valuation results using each method in the Valuation Report for Hitachi received from Nomura Securities as reference and comprehensively considered examples of premiums added as of determining tender offer prices in past examples of tender offers for shares by entities other than issuers; whether the Board of Directors of Hitachi Systems & Services would accept the Tender Offer; the market share price trend of Hitachi Systems & Services’ common stock; the expected number of subscriptions to the Tender Offer; and other factors. Furthermore, taking into account the results of consultations and negotiations with Hitachi Systems & Services, the final Tender Offer Price was determined at ¥2,150 per share of common stock by Hitachi’s President and Chief Executive Officer today.

On the other hand, according to Hitachi Systems & Services, in determining a opinion on the Tender Offer Price, Hitachi Systems & Services had Mizuho Securities calculate its equity value to ensure the fairness of the Tender Offer. Mizuho Securities is a third-party appraiser independent of Hitachi and Hitachi Systems & Services, and also do not hold the status as a Related Party. Hitachi Systems & Services received the Valuation Report for Hitachi Systems & Services as of July 27, 2009 from Mizuho Securities. Mizuho Securities used the DCF method, the comparable company analysis method and the market share price method. Valuation results on the value per share of common stock of Hitachi Systems & Services computed using each method were as follows. According to Hitachi Systems & Services, Hitachi Systems & Services carefully inspected the Tender Offer Price based on these valuation results and judged the Tender Offer Price to be at an appropriate level and reasonable. Hitachi Systems & Services did not obtain an opinion on the fairness of the Tender Offer Price, the so-called Fairness Opinion, from Mizuho Securities, according to Hitachi Systems & Services.

(i)

DCF method: ¥1,991—¥2,848

- 20 -

(ii)

Comparable company analysis method: ¥1,691—¥2,311

(iii)

Average Market Share Price method: ¥1,053—¥1,329

According to Hitachi Systems & Services, the market share price method is a method to compute the equity value of Hitachi Systems & Services based on the share prices of Hitachi Systems & Services in the stock market. The share prices are determined through the principle of market competition with many entrants, widely disclosed and objective. They are certainly taken into account in valuation of share prices of listed companies. For these reasons, this method was adopted. Under this method, the ranges per share of common stock of Hitachi Systems & Services were average prices based on the closing prices over the past six, three and one month(s), respectively, from the record date of July 24, 2009, on the Second Section of the Tokyo Stock Exchange. Based on these results, the range per share price of the shares of Hitachi Systems & Services was calculated to be ¥1,053—¥1,329.

- 21 -

ii)

Legal advice from law office

According to Hitachi Systems & Services, Hitachi Systems & Services received necessary legal advice from its legal advisor the MIYAKEZAKA SOGO LAW OFFICES to ensure the fairness of decision making concerning the Tender Offer.

iii)

Approval of all the directors attending the Board of Directors meeting

iv)

Setting the Tender Offer Period at a relatively long period

3)	Relationship with the Third-Party Appraiser

Nomura Securities is not a Related Party of Hitachi.

(5)

Number of Shares to Be Purchased

Number of Shares

to Be Purchased

Minimum Number of Shares

to Be Purchased

Maximum Number of Shares

to Be Purchased

12,199,822 shares

— shares


Notes:	1.	As the maximum and minimum limits to the number of shares to be purchased through the Tender Offer are not set, all of the tendered shares will be purchased.

	2.	Less-than-one-unit shares (tangen-miman-kabushiki)are also eligible for the Tender Offer. In addition, Hitachi Systems & Services may purchase its own shares during the Tender Offer Period, pursuant to applicable laws and regulations, if shareholders owning less-than-one-unit shares exercise their right to request purchase of their shares in accordance with the relevant provisions of the Companies Act.

	3.	Hitachi does not intend to acquire treasury stock held by Hitachi Systems & Services through the Tender Offer.

	4.	The maximum number of shares of Hitachi Systems & Services to be acquired by Hitachi through the Tender Offer is stated in the “Number of Shares to Be Purchased.” This number indicates Hitachi Systems & Services shares (12,199,822 shares) that are to be obtained by deducting the total of the number of shares held by Hitachi as of the date hereof (12,800,000 shares) and the number of shares of treasury stock held by Hitachi Systems & Services as of March 31, 2009 (178 shares) ,from the total number of issued shares of Hitachi Systems & Services as of March 31, 2009 (25,000,000 shares), which are stated in the securities report of the 31st term filed by Hitachi Systems & Services on June 19, 2009.

- 22 -

(6)

Changes in the Shareholdings due to the Tender Offer


Number of voting rights represented by shares held by the Tender Offeror immediately before the Tender Offer	128,000 units	(Shareholdings immediately before the Tender Offer: 51.20%)

Number of voting rights represented by shares held by Special Related Parties immediately before the Tender Offer	— units	(Shareholdings immediately before the Tender Offer: — %)

Number of voting rights represented by shares to be purchased by the Tender Offer	121,998 units	(Shareholdings after the Tender Offer: 100.00%)

Total number of voting rights held by all the shareholders in the Target Company	249,981 units


Notes:	1.	The “Shareholdings immediately before the Tender Offer” was calculated using the “Total number of voting rights held by all the shareholders in the Target Company” as the denominator.

	2.	The “Number of voting rights represented by shares held by Special Related Parties immediately before the Tender Offer” represents the total of voting rights relating to shares held by respective Special Related Parties as identified by Hitachi as of the date hereof. Provided, however, that such Special Related Parties shall exclude those to be excluded from the category of Special Related Parties in accordance with Article 3, Paragraph 2, Item 1 of the Cabinet Office Ordinance regarding Disclosure of Tender Offers for Shares, etc., by Entities Other than Issuers (Ministry of Finance Ordinance No. 38 of 1990; including amendment thereof; the “Ordinance”) in calculating the shareholdings, as set forth in the respective items of Article 27-2, Paragraph 1 of the Financial Instruments and Exchange Law (Law No. 25 of 1948; including amendment thereof; the “Law”).

	3.	The “Number of voting rights represented by shares to be purchased by the Tender Offer” indicates the number of voting rights relating to the number of shares to be purchased in the Tender Offer (12,199,822 shares).

	4.	Because the shares held by respective Special Related Parties (exclusive of its treasury stock held by Hitachi Systems & Services being a Special Related Party) are also subject to the Tender Offer, the “Number of voting rights represented by shares held by Special Related Parties immediately before the Tender Offer” is not included in the numerator in the calculation of “Shareholdings after the Tender Offer.”

	5.	The “Total number of voting rights held by all the shareholders in Hitachi Systems & Services” (100 shares represent the number of shares per unit (tangen)) indicates the number of voting rights of all the shareholders of Hitachi Systems & Services as of March 31, 2009, which is stated in the securities report of the 31st term filed by Hitachi Systems & Services on June 19, 2009. Because all the shares issued by Hitachi Systems & Services (exclusive of treasury stock held by Hitachi Systems & Services) are subject to the Tender Offer, the “Shareholdings after the Tender Offer” was calculated using the number of voting rights (249,998 units) relating to the number of shares of Hitachi Systems & Services (24,999,822 shares)—which corresponds to the number derived by deducting the number of shares of treasury stock held by Hitachi Systems & Services (178 shares) stated in said securities report from the total number of issued shares of Hitachi Systems & Services as of March 31, 2009 (25,000,000 shares) stated in said securities report—as the denominator.

	6.	The figures in the “Shareholdings immediately before the Tender Offer” and the “Shareholdings after the Tender Offer” were rounded to two decimal places.

- 23 -

(7)

Tender Offer Cost: ¥26,230 million

Note: The Tender Offer Cost is calculated by multiplying 12,199,822 shares (Number of Shares to Be Purchased) by the Tender Offer Price for each share of ¥2,150.

(8)

Method of Settlement

1)	Name and Location of Head Office of Securities Companies/Banks, etc., in Charge of Settlement

Nomura Securities Co., Ltd.

9-1, Nihonbashi 1-chome, Chuo-ku, Tokyo

JOINVEST Securities Co., Ltd. (Sub-Agent)

15-1, Konan 2-chome, Minato-ku, Tokyo

2)	Commencement Date of Settlement

Friday, October 16, 2009

3)	Method of Settlement

With respect to tendering shareholders through the Tender Offer Agent, upon expiration of the Tender Offer Period, Hitachi will, without delay, send notice of the Tender Offer purchases to the addresses of tendering shareholders (in the case of a foreign resident who does not hold a working account with the Tender Offer Agent including the case of an institutional shareholder, to its standing proxy). With respect to tendering shareholders through JOINVEST Securities Co., Ltd., the Sub-Agent, the notice will be delivered in accordance with the method described on the Sub-Agent’s website (https://www.joinvest.jp/).

- 24 -

4)	Method of Returning Shares

(9)

Other Conditions and Methods of the Tender Offer

1)	Conditions and Details in Each Item of Article 27-13, Paragraph 4 of the Law

As the maximum and minimum limits to the number of shares to be purchased through the Tender Offer are not set, Hitachi will purchase all of the tendered shares.

2)	Conditions of Withdrawal of the Tender Offer, Details thereof and Method of Disclosing the Withdrawal

Upon the occurrence of any event falling under the provisions of Article 14, Paragraph 1, Items 1.1 through 1.9 and 1.12 through 1.18, Item 2, Items 3.1 through 3.8, Item 4, Item 5 and Article 14, Paragraph 2, Items 3 through 6 of the Enforcement Regulations of the Financial Instruments and Exchange Law (Regulation No. 321 of 1965; including amendment thereof; the “Enforcement Regulations”), Hitachi may withdraw the Tender Offer. If Hitachi decides to withdraw the Tender Offer, Hitachi will make a public notice electronically, and publish a notice in the Nihon Keizai Shimbun. Provided, however, that if it is difficult to make such a public notice by the end of the Tender Offer Period, Hitachi will make an announcement as provided for in Article 20 of the Ordinance and thereafter give notice without delay.

3)	Conditions for Reducing the Tender Offer Price, Details thereof and Method of Disclosing the Reduction

If Hitachi Systems & Services takes any actions provided for in Article 13, Paragraph 1 of the Enforcement Regulations during the Tender Offer Period in accordance with the provisions of Article 27-6, Paragraph 1, Item 1 of the Law, the Tender Offer Price may be reduced in accordance with the provisions of Article 19, Paragraph 1 of the Ordinance. If Hitachi decides to reduce the Tender Offer Price, Hitachi will make a public notice electronically, and publish a notice in the Nihon Keizai Shimbun. Provided, however, that if it is difficult to make such a public notice by the end of the Tender Offer Period, Hitachi will make an announcement as provided for in Article 20 of the Ordinance and thereafter give notice without delay. If the Tender Offer Price is reduced, the shares tendered before the public notice, will also be purchased at the reduced Tender Offer Price.

- 25 -

4)	Matters concerning Tendering Shareholders’ Rights to Cancel Agreements

Any tendering shareholder may cancel agreements relating to the Tender Offer at any time during the Tender Offer Period. If tendering shareholders who tendered for shares through the Tender Offer Agent intend to cancel agreements relating to the Tender Offer, they should deliver or send a Cancellation Statement for Tender Offer Agreement (the “Cancellation Statement”) along with the tender offer application acceptance receipt to the head office or nationwide branch offices of the Tender Offer Agent who accepted the application, by 3:30 p.m. on the last day of the Tender Offer Period. Provided, however, that cancellations sent by tendering shareholders, must reach the said offices by no later than 3:30 p.m. on the last day of the Tender Offer Period. If tendering shareholders who tendered for shares through JOINVEST Securities Co., Ltd., the Sub-Agent, intend to cancel agreements relating the Tender Offer, they must complete the cancellation procedures by 3:30 p.m. on the last day of the Tender Offer Period in accordance with the instructions on the Sub-Agent’s website (https://www.joinvest.jp/).

The agents with the authority to receive a Cancellation Statement:

Nomura Securities Co., Ltd.

9-1, Nihonbashi 1-chome, Chuo-ku, Tokyo

(other nationwide branch offices in Japan)

JOINVEST Securities Co., Ltd. (Sub-Agent)

15-1, Konan 2-chome, Minato-ku, Tokyo

5)	Method of Disclosure if Conditions, etc., of the Tender Offer are Changed

If Hitachi decides to change the Tender Offer conditions, etc., Hitachi will make a public notice electronically, and publish a notice in the Nihon Keizai Shimbun detailing the changes. Provided, however, that it is difficult to make such a public notice by the end of the Tender Offer Period, Hitachi will make an announcement as provided for in Article 20 of the Ordinance and thereafter give notice without delay. If Tender Offer conditions, etc., are changed, shares tendered before the public notice will also be purchased under the amended conditions.

- 26 -

6)	Method of Disclosure When Submitting an Amendment Statement

If an Amendment Statement is filed with the Director of the Kanto Local Finance Bureau in Japan, Hitachi will immediately announce details from the Amendment Statement that relate to the contents of the public notice of the commencement of the Tender Offer, in accordance with the manner prescribed by Article 20 of the Ordinance. Hitachi will also immediately change the Tender Offer Explanatory Statement and deliver the amended document to tendering shareholders who have already received the Tender Offer Explanatory Statement. However, if the changes are only minor in nature, Hitachi will prepare a document stating the reasons for such amendments, the items that have been amended and the details, and deliver said document to tendering shareholders.

7)	Method of Disclosing Tender Offer Results

(10)

Date of Public Notice of Commencement of the Tender Offer

Thursday, August 20, 2009

(11)

Tender Offer Agent

Nomura Securities Co., Ltd.

9-1, Nihonbashi 1-chome, Chuo-ku, Tokyo

To delegate a part of its duties, the Tender Offer Agent has appointed the following company as a Sub-Agent:

JOINVEST Securities Co., Ltd. (Sub-Agent)

15-1, Konan 2-chome, Minato-ku, Tokyo

3. Management Policy and Outlook after the Tender Offer

(1)

Management Policy after the Tender Offer

Refer to “1. Purpose of the Tender Offer” with regard to the management policy after the Tender Offer.

(2)

Outlook for Future Business Performance after the Tender Offer

The expected impact of the Tender Offer on the Hitachi Group’s business results will be announced as soon as it is determined.

- 27 -

4. Other Information

(1)

Agreement between Hitachi and Hitachi Systems & Services and/or Its Directors

According to Hitachi Systems & Services, Hitachi Systems & Services carefully discussed on the Tender Offer at a meeting of its Board of Directors held today, which was attended by all Directors who have no vested interest with Hitachi, and resolved to approve the Tender Offer by unanimous approval of the attending Directors (including outside Directors) and to recommend that Hitachi Systems & Services’ shareholders subscribe to the Tender Offer.

- 28 -

(2)

Other Information Considered Necessary for Helping Investors Decide Whether to Subscribe to the Tender Offer

Hitachi Systems & Services publicly announced its closing of accounts information for the first quarter of the 32nd fiscal term today, at the Tokyo Stock Exchange. A summary of Hitachi Systems & Services’ consolidated operating results and other financial information based on this release is provided below. The summary of this disclosed information is an excerpt of the announcement released by Hitachi Systems & Services, and Hitachi is not in a position to independently verify the precision and truthfulness thereof and has not verified it, in effect.

1)	Operating Results (millions of yen)


Accounting Period		First Quarter of 32nd Business Period (From April 1, 2009 to June 30, 2009)
Revenues		22,372
Cost of sales		17,839
Selling, general and administrative expenses		4,530
Non-operating income		56
Non-operating expenses		27
Net income		15

Note: Revenues exclude consumption tax, etc.

2)	Data per Share (yen)


Accounting Period		First Quarter of 32nd Business Period (From April 1, 2009 to June 30, 2009)
Net income per share		0.59
Dividend per share		—
Net assets per share		1,388.66