Hitachi Construction Machinery

Southern Africa

Announcement on Termination of Joint Venture Relationship with Deere

Hitachi Construction Machinery Co., Ltd. ( “Hitachi Construction Machinery”) announces that its Board of Directors has resolved on August 19, 2021 to terminate and dissolve the joint venture relationship with Deere & Company (“Deere”) in North, Central and South America.

1. Reason for the Dissolution

Since 1988, Hitachi Construction Machinery and Deere have collaborated through a joint venture alliance in construction machinery business throughout North, Central and South America. In 1988, the two companies established Deere-Hitachi Construction Machinery Corporation (“DHK”) for the manufacture, import and distribution of hydraulic excavators. The distribution business of hydraulic excavators was later consolidated with distribution of mining machinery in 2001, in an unincorporated partnership under John Deere Construction and Forestry Company (“JDCFC”), a subsidiary of Deere. In 2011, the two companies reorganized Deere-Hitachi Máquinas de Construção do Brasil S.A. (“DHB”) (established in 2000) as a manufacturing joint venture in Brazil, and have expanded the joint venture business throughout North, Central and South America. However, in response to recent changes in the business environment surrounding the joint venture, Hitachi Construction Machinery and Deere have discussed future prospects of the joint venture partnership, which has led to a decision to terminate the relationship in a future-oriented perspective to allow each to pursue its growth strategy independently.

2. Substance of the Dissolution
(1) Business to be Dissolved

The comprehensive joint venture agreements pertaining to the manufacture and distribution of hydraulic excavators and distribution of rigid dump trucks in North, Central and South America will be terminated. Concurrently with the termination, Hitachi Construction Machinery will transfer the shares it holds in DHK and DHB, both of which are Hitachi Construction Machinery’s affiliates subject to equity-method accounting, to Deere and its wholly owned subsidiary, John Deere Brasil Ltda. (“JDB”), respectively. The distribution business consolidated under JDCFC will be transferred back to each of Hitachi Construction Machinery and Deere, and each company will manage its own brand independently.

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