Canon : Notice Regarding Commencement of Tender Offer by Subsidiary

August 10, 2023

Canon Inc.

Chairman & CEO: Fujio Mitarai

Securities code: 7751

Tokyo (Prime Market) and other Stock Exchanges

Inquiries: Sachiho Tanino General Manager Consolidated Accounting Div. Finance & Accounting Headquarters [phone]

Notice Regarding Commencement of Tender Offer by Subsidiary

Canon Inc.'s subsidiary, Canon Marketing Japan Inc. (Securities code: 8060, listed on the Prime Market of the Tokyo Securities Exchange), decided at its Board of Directors meeting held on August 9, 2023, to acquire common shares in TOKYO NISSAN COMPUTER SYSTEM CO., LTD. (Securities code: 3316, listed on the Standard Market of the Tokyo Securities Exchange) and share subscription rights (shinkabu yoyaku-ken)through tender offer as described in the attached document.

This notice contains forward-looking statements with respect to future results, performance and achievements that are subject to risk and uncertainties and reflect management's views and assumptions formed by available information. All statements other than statements of historical fact are statements that could be considered forward-looking statements. When used in this document, words such as "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "project" or "should" and similar expressions, as they relate to Canon, are intended to identify forward-looking statements. Many factors could cause the actual results, performance or achievements of Canon to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in general economic and business conditions, changes in currency exchange rates and interest rates, introduction of competing products by other companies, lack of acceptance of new products or services by Canon's targeted customers, inability to meet efficiency and cost-reduction objectives, changes in business strategy and various other factors, both referenced and not referenced in this notice. A detailed description of these and other risk factors is included in Canon's annual report on Form 20-F, which is on file with the United States Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein. Canon does not intend or assume any obligation to update these forward-looking statements.

This document is an English translation of a statement written originally in Japanese. The Japanese original should be considered as the primary version.

August 9, 2023

To whom it may concern:

Company: Canon Marketing Japan Inc.

Representative: Masachika Adachi, Representative

Director and President

(Code Number:8060, Prime Market of the Tokyo Stock

Exchange)

Contact: Akihiro Shirone, General Manager, Accounting

Division

TEL: [phone]

Notice Concerning Commencement of Tender Offer for the Shares of Tokyo Nissan

Computer System Co., Ltd. (Securities Code: 3316)

Canon Marketing Japan Inc. ("Tender Offeror") hereby announces that, at a meeting of its board of directors held today, the Tender Offeror resolved to acquire common shares ("Target Company Shares") of Tokyo Nissan Computer System Co., Ltd. (Tokyo Stock Exchange, Inc. ("Tokyo Stock Exchange"); Standard Market, Securities Code 3316; hereinafter, "Target Company") through a tender offer ("Tender Offer") under the Financial Instruments and Exchange Act (Act No. 25 of 1948, as amended; hereinafter, "FIEA") as detailed below.

1. Purpose of the Purchase etc.

(1) Overview of Tender Offer

The Tender Offeror has resolved to implement the Tender Offer as part of a transaction to acquire all of the Target Company Shares listed on the Standard Market of the Tokyo Stock Exchange (excluding 1 Target Company Share held by the Tender Offeror as of today and treasury shares held by the Target Company) and make the Target Company a wholly-owned subsidiary of the Tender Offeror ("the Transaction"). As of today, the Tender Offeror owns 1 Target Company Share (Shareholding Ratio (Note) 0.00%).

(Note) "Shareholding Ratio" means the percentage (rounded to the second decimal place; hereinafter the same in reference to calculation of Shareholding Ratios) of Target Company Shares relative to 6,289,785 shares, i.e., (i) the total number of issued shares as of June 30, 2023 (6,300,000) listed in the "First Quarter Results for FY Ending March 2024 [Japanese Accounting Standards] (Non-Consolidated)" announced today by the Target Company ("Target First Quarter Results"), less the number of treasury shares held by the Target Company as of June 30, 2023 (10,215) as listed in the Target Company First Quarter Results.

For the Tender Offer, the Tender Offeror has executed with Nissan Tokyo Sales Holdings

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Co., Ltd. ("NTH"), which is the Target Company's parent company and principal shareholder, a tender offer agreement ("Tender Offer Agreement") as of today under which it is agreed that all Target Company Shares owned by NTH (3,390,000 shares, Shareholding Ratio 53.90%; "Shares to be Tendered") will be tendered in the Tender Offer. For the details of the Tender Offer Agreement, please refer to "(6) Matters Relating to Important Agreements Regarding the Tender Offer" below.

The Tender Offeror has set the minimum number of shares to be purchased in the Tender Offer at 4,193,200 (Shareholding Ratio 66.67%), and if the total number of shares etc. tendered in the Tender Offer ("Tendered Share Certificates") is less than said minimum number of shares to be purchased (4,193,200), the Tender Offeror will not purchase etc. any of the Tendered Share Certificates. However, as described above, the Tender Offeror's intention is to make the Target Company a wholly-owned subsidiary of the Tender Offeror by acquiring all of the Target Company Shares (excluding 1 Target Company Share held by the Tender Offeror as of today and treasury shares held by the Target Company); thus, no maximum number of shares to be purchased has been set, and if the total number of Tendered Share Certificates is equal to or greater than the minimum number of shares to be purchased (4,193,200), the Tender Offeror will purchase etc. all of the Tendered Share Certificates. It bears noting that the minimum number of shares to be purchased (4,193,200) has been set at the product of the Target Company's share unit number (100 shares) and 41,932, i.e., two-thirds (rounded up to the nearest whole number) of the number of voting rights (62,897) corresponding to 6,289,785 shares (the Tender Offeror owns 1 Target Company Share, but has no voting rights over such share because its total ownership is less than 1 share unit (100 shares)). The Tender Offeror intends to make the Target Company a wholly-owned subsidiary of the Tender Offeror through the Transaction, but if the Tender Offeror is unable to acquire all Target Company Shares (excluding 1 Target Company Share held by the Tender Offeror as of today and treasury shares held by the Target Company) through the Tender Offer despite the formation of said Tender Offer and the Share Consolidation procedures described in "(4) Post-Tender Offer Reorganization etc. Policy (Matters relating to Two-Step Acquisition)" below are implemented, a special resolution at a general shareholders meeting, as specified in Article 309, Paragraph 2 of the Companies Act (Act No. 86 of 2005, as amended; hereinafter, the "Companies Act"), will be a requirement; for this reason, the minimum number of shares to be purchased has been set so that the Tender Offeror will hold at least two-thirds of the total voting rights among the Target Company's general shareholders after the Tender Offer, thus ensuring the satisfaction of such requirement and, by extension, the completion of the Transaction.

If the Tender Offeror does not acquire all of the Target Company Shares (excluding 1 Target Company Share held by the Tender Offeror as of today and treasury shares held by the Target Company) through the Tender Offer, it is planned that, after the formation of the Tender Offer, a series of procedures ("Squeeze-Out Procedures") will be carried out to make the Tender Offeror the Target Company's only shareholder and make the Target Company a wholly-owned subsidiary of the Tender Offeror, as described in "(4) Post-Tender Offer Reorganization etc. Policy (Matters relating to Two-Step Acquisition)" below.

According to the "Notice of Issuance of Opinion Concerning Tender Offer by Canon Marketing Japan Inc. for Company Shares" ("Target Company Press Release") published today by the Target Company, the Target Company, at a meeting of its board of directors held today, resolved to issue an opinion supporting the Tender Offer, and to recommend that all the Target Company's shareholders tender their shares in the Tender Offer. For details of the decision- making process of the Target Company's board of directors meeting, please refer to the Target Company Press Release, as well as "⑤ Approval of All Directors Without Interests in Target and Opinion of No Objection from All Auditors Without Interests in Target" in "(3) Measures

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for Ensuring the Fairness of the Tender Offer Price, Measures for Avoiding Conflicts of Interest, and Other Measures for Ensuring the Fairness of the Tender Offer" below.

1. Background to Decision to Implement the Tender Offer, Objective, Process behind Decision- Making, and Post-Tender Offer Management Policy

• Background Leading to Decision to Implement the Tender Offer, Objective, and Course of Events Behind Decision-Making

The Tender Offeror was incorporated in February 1968 under the trade name of Canon Business Machine Sales, Inc., with the business machine division of Canon Inc. ("Canon") as the parent, for the purpose of domestically selling Canon's business machine products. In November 1971, Canon Camera Sales Co., Ltd. and Canon Business Machine Services Inc. were merged into the Tender Offeror by way of an absorption-typemerger and the trade name of the Tender Offeror was changed to Canon Sales Co., Inc.; then, in April 2006, the trade name of the Tender Offeror was changed to the current name of Canon Marketing Japan Inc.

The Tender Offeror's shares were listed on the Second Section of the Tokyo Stock Exchange beginning in August 1981, were subsequently listed on the First Section of the Tokyo Stock Exchange beginning in June 1983, and, because of the review of the market segments at the Tokyo Stock Exchange in April 2022, are listed on the Prime Market of the Tokyo Stock Exchange as of today.

The Tender Offeror group as of today comprises the Tender Offeror and its 14 consolidated subsidiaries (hereinafter, the Tender Offeror and its subsidiaries are collectively the "Tender Offeror Group"), and in addition to sales, services, and marketing for Canon products in the Japanese market as part of the globally active Canon Group, it is engaged independently in businesses including IT solutions, industrial equipment, and healthcare.

The Tender Offeror Group formulated the five-year"2021-2025Long-Term Management Objectives" in April 2021, announcing the vision of being "a professional corporate group that solves social and customer issues using ICT and the power of humans", and embarking on company reforms centered around the IT solutions business. Drawing on strengths including its expansive, secure customer base and distinctive solutions that mobilize the imaging technologies, system-building strengths, and mathematical technologies (technologies that use mathematical formulas to model problems in need of solutions and calculate optimal solutions) developed by Canon over many years, the Tender Offeror provides high-added-value solutions to support digital transformation for its customers.

Further, with the aim of realizing "a professional corporate group that solves social and customer issues using ICT and the power of humans", the Tender Offeror formulated the "Medium-Term Management Plan (2022-2025)" in January 2022. Through the execution of the four basic policies of (i) expand IT solutions business with profit, (ii) increase earnings capacity of existing businesses, (iii) strengthen specialized areas and create new businesses, and (iv) group management aimed at continuous growth, the Tender Offeror is striving to expand its business operations and improve its business performance.

On the basis of this management strategy, in the IT solutions business, the Tender Offeror is pursuing the enhancement of its solutions lineup and of its solution-providing systems, with the aim of providing optimal solutions to its customers' problems in all customer segments. This plan will strengthen and expand the service-based business model, with a particular focus on the highly profitable and sustainable "maintenance/operation services and outsourcing" area.

According to the Target Company Press Release, the Target Company began business operations in March 1982 as a computer business department of automobile dealer Tokyo

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Nissan Auto Sales Co., Ltd. and a type-1 certified agent of IBM Japan, Ltd., and was incorporated when said business division split off and went independent in March 1989. Thereafter, the Target Company was listed on JASDAQ Securities Exchange, Inc. in March and December 2004, was listed on the JASDAQ Market of the Osaka Stock Exchange in conjunction with a merger of JASDAQ Securities Exchange, Inc. and Osaka Exchange, Inc. in April 2010, was listed on the JASDAQ (Standard) Market of the Osaka Stock Exchange in conjunction with the integration of the Hercules Market, the JASDAQ Market, and the NEO Market of the Osaka Stock Exchange in October 2010, was listed on the JASDAQ (Standard) Market of the Tokyo Stock Exchange in conjunction with the integration of spot markets with the Tokyo Stock Exchange in July 2013, was transferred to a new market segment at the Tokyo Stock Exchange in April 2022, and today is listed on the Standard Market of the Tokyo Stock Exchange. The Target Company's first principle is providing "maximum satisfaction to our customers", and toward that end, under the new corporate vision of "an ICT solutions company that thinks of our customers' futures to co-create businesses", the Target Company is expanding information systems-related businesses centered on the solutions provider business.

In the IT industry to which the Target Company belongs, infrastructure businesses centered on hardware have been trending downward, while investment in solutions to support digital transformation at client companies has been accelerating and cloud markets are showing continued growth. As these trends have become more prominent during and after the Covid- 19 pandemic and customer needs have become ever more diverse to solve company problems and fulfill social responsibilities, the expectation for solutions that are likely to be effective at simply and quickly solving company problems has continued to strengthen. In addition, IT investment in digital transformation, which promotes enhanced corporate competitiveness, operation process reconstruction, and other business model reforms, is making its presence ever more prominently felt. Meanwhile, with the dramatic rise in cyberattacks, there also has been a rising demand for security measures and other such measures against unforeseeable crises.

The Target Company has been involved in building customer IT infrastructures for over

34 years since its establishment. Its strengths lie in ensuring that infrastructure engineers with deep knowledge of customer IT environments are engaged in data center operations, help desk operations, and SE support services, including monitoring and operation of managed service businesses. Yet despite these strengths, the accelerating development of IT technology means there may be limits to the businesses that will be developed through the Target Company's know-how alone. The Target Company thus recognizes the importance of tackling customer problems collaboratively, by consolidating the unique resources, core technologies, and solutions of other companies in the same industry to offer new added value.

In order to realize the above management philosophy and corporate vision under the banner of its own strengths and its recognition of the challenges ahead, the Target Company has set an action agenda of "deepening understanding by putting ourselves in the customer's position", "securing customer trust with the aim of being the most sought-after company", "providing customers with safe and optimal ICT platforms", and "striving to be an attractive company for employees and partners"; is aiming to be a best partner supporting the continuous growth of customers as a managed service company; and is endeavoring to strengthen its relationships with customers by improving business quality. In addition, the Target Company is committed to talent development, is working to strengthen collaboration with new partners, and is engaged in business activities rooted in the basic strategies of "Providing TCS Managed Platform Service" and "Digital Marketing" described below.

• Providing TCS Managed Platform Service (Note)
  The Target Company expands conventional TCS Managed Services and increases

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