Commencement of the Tender Offer for the Shares of Yusen Logistics Co., Ltd.（PDF:373 KB）

[Translation]

To whom it may concern:

October 31, 2017

Company Name: Nippon Yusen Kabushiki Kaisha Representative: Tadaaki Naito, President

(Stock Code: 9101, First Sections of the Tokyo Stock Exchange and the Nagoya Stock Exchange)

Inquiries: Shohei Yamamoto, Corporate

Officer and General Manager of Corporate Planning Group of Management Planning Headquarters (TEL. 03-3284-5151)

Nippon Yusen Kabushiki Kaisha (the "Tender Offeror") hereby announces that it decided as of today to acquire the common stock of Yusen Logistics Co., Ltd. (the "Target Company") (Stock Code: 9370, the First Section of the Tokyo Stock Exchange Inc. (the "TSE")) (the "Target Company Shares") through a tender offer (the "Tender Offer") under the Financial Instruments and Exchange Act (Act No. 25 of 1948, as amended) (the "Act").

1. Purpose of Tender Offer

1. Overview of the Tender Offer

   As of the date hereof, the Tender Offeror holds 25,135,084 shares (Share Holding Ratio (Note 1): 59.61%) of the Target Company Shares that are listed on the First Section of the TSE, and the Target Company is a consolidated subsidiary of the Tender Offeror.

   The Tender Offeror sets the minimum number of shares to be purchased in the Tender Offer at 2,977,700 shares (Note 3) so that the Tender Offeror will hold two-thirds or more of the total number of voting rights in the Target Company (Note 2) upon the completion of the Tender Offer. The Tender Offeror intends not to purchase any of the shares, etc., tendered through the Tender Offer (the "Tendered Shares, Etc.") if the aggregate number of the Tendered Shares, Etc. is less than the minimum number of shares to be purchased (i.e., 2,977,700 shares). On the other hand, the Tender Offeror contemplates acquiring all of the Target Company Shares (except the Target Company Shares held by the Tender Offeror and the treasury shares held by the Target Company; hereinafter the same). Therefore, the maximum number of shares to be purchased is not set, and if the aggregate number of the Tendered Shares, Etc. is equal to or greater than the minimum number of shares to be purchased (i.e., 2,977,700 shares), the Tender Offeror will purchase all of the Tendered Shares, Etc.

   (Note 1) "Share Holding Ratio" means the holding ratio with respect to the number of shares (i.e., 42,169,002 shares) that is obtained by deducting (i) the number of treasury shares held by the Target Company as of September 30, 2017 (i.e., 51,798 shares), as set forth in the "Consolidated Financial Results for Six Months Ended September 30, 2017 (Japanese GAAP)" disclosed by the Target Company as of today (the "Target Company's Quarterly

   Financial Results") from (ii) the total issued shares of the Target Company as of September 30, 2017 (i.e., 42,220,800 shares), as set forth in the Target Company's Quarterly Financial Results (with the resulting percentage rounded to the nearest hundredth); hereinafter the same.

   (Note 2) The "total number of voting rights in the Target Company" means the voting rights (i.e., 421,690) represented by the number of shares (i.e., 42,169,002 shares) that is obtained by deducting (i) the number of treasury shares held by the Target Company as of September 30, 2017 (i.e., 51,798 shares), as set forth in the Target Company's Quarterly Financial Results from (ii) the total issued shares of the Target Company as of September 30, 2017 (i.e., 42,220,800 shares), as set forth in the Target Company's Quarterly Financial Results; hereinafter the same.

   (Note 3) The minimum number of shares to be purchased is the number of shares (i.e., 2,977,700 shares) that is obtained by (i) multiplying the total number of voting rights in the Target Company stated in (Note 2) above (i.e., 421,690) by two-thirds and (ii) deducting from the result thereof (i.e., 281,127; rounding up to the nearest whole number) the number of voting rights held by the Tender Offeror (i.e., 251,350) and (iii) multiplying the result (i.e., 29,777) by 100 shares.

   The Tender Offeror resolved at its board of directors' meeting held today, to implement the Tender Offer as a part of a series of transactions for the purpose of making the Target Company the Tender Offeror's wholly-owned subsidiary through the acquisition of all of the Target Company Shares (the "Transaction").

   It is planned that, if the Tender Offeror cannot acquire all of the Target Company Shares through the Tender Offer, the Tender Offeror will request the Target Company to carry out the respective proceedings stated in "(4) Policy on Reorganization, etc. after the Tender Offer (Matters Relating to the So-Called Two-Stage Takeover)" below in order to make the Target Company the Tender Offeror's wholly-owned subsidiary.

   According to the Target Company's press release, "Announcement Concerning Opinion to Support the Tender Offer of Our Shares by Nippon Yusen Kabushiki Kaisha which is Our Controlling Shareholder and the Recommendation of the Tender thereto" released as of today, (the "Notice by the Target Company"), the Target Company determined that the Tender Offer provides the Target Company's shareholders with an opportunity to sell the Target Company Shares at a reasonable price and resolved at its board of directors' meeting held today, that the Target Company would issue an opinion in support of the Tender Offer and recommend that the shareholders of the Target Company tender their shares in the Tender Offer.

   As to the details of the Target Company's decision-making process, please refer to the Notice by the Target Company and "2. Outline of the Tender Offer," "(4) Basis for the calculation of the Tender Offer Price," "b. Background of Calculation," "(Measures to Ensure the Fairness of the Tender Offer Such as Measures to Ensure the Fairness of the Tender Offer Price and to Avoid a Conflict of Interest)," "(e) Unanimous Approval by all of the Non-Interested Directors of the Target Company and Opinion of No Objection by all of the Non-Interested Corporate Auditors of the Target Company" below.

2. Background, Purpose, and Decision-making ProcessfortheTender Offer, and Management PolicyaftertheTender Offer

3. Background, Purpose, and Decision-making Process for the Tender Offer

4. Background and Reason for the Tender Offer

The Tender Offeror was established in 1885 through a merger of Yubin Kisen Mitsubishi Kaisha and Kyodo Unyu Kaisha and inaugurated operations. After World War II, along with the increase in the demand for energy and marine transportation services that accompanied the economic growth, the Tender Offeror has been broadly expanding its business centered around marine transportation, from the global logistics business that consists of liner trade, air cargo transportation, and logistics business, to the bulk shipping business that consists of dry bulk carrier transportation, fuel transportation and car transportation, and has been meeting various transportation needs as a comprehensive global-logistics enterprise through a global transportation network of marine, land, and air. In addition, the Tender Offeror was listed on the TSE and the Nagoya Stock Exchange Inc. (the "NSE") in 1949, and also on other domestic Stock Exchanges and the Frankfurt Stock Exchange (due to delisting, the Tender Offeror is currently listed on the TSE and the NSE only). The Tender Offeror acquired the Target Company Shares from Osaka Shosen Kabushiki Kaisha ("Osaka Shosen") in October 1959, made the Target Company its subsidiary (shareholding ratio: 55.81%), changed the Target Company's trade name to Yusen Air Services Co., Ltd., and made the Target Company's logistics business part of its logistics business. Since 2005, the Target Company has been listed on the TSE. The Tender Offeror consists of 552 consolidated subsidiaries and 200 equity-method affiliates (together with the Tender Offeror, the "Tender Offeror Group"), and, based on the basic philosophy of "through safe and dependable monohakobi (transport), we contribute to the betterment of societies throughout the world as a comprehensive global-logistics enterprise offering ocean, land, and air transportation," aims to create a prosperous society.

The details of the major businesses of the Tender Offeror Group are as follows:

Business unit	Details of business
Global logistics business	•Liner trade (container shipping division and terminal-related division) •Air cargo transportation business •Logistics business
Bulk shipping business	•Dry bulk carrier transportation business (transportation business concerning bulk cargo, such as iron ore, coal, and wood chips) •Fuel transportation business (transport of crude oil, petroleum products, LPG and LNG; offshore business) •Car transportation business
Other business	•Property business •Other business (cruise ship business, etc.)

The shipping industry that the Tender Offeror belongs to is facing significant changes in its operating environment due to the recent structural changes in the demand for energy, the increase in geopolitical risk, and other such changes.

In the container shipping industry, freight rates have been experiencing sharp fluctuations; especially in recent years, as a result of the increase in shipping capacity due to the deliveries of newly-built ships and substantial fluctuation in the supply-demand balance, the market has continuously been sluggish and it has been difficult to ensure stable earnings. In the industry, the move toward improving competitiveness by increasing the scale of transportation through mergers and acquisitions has accelerated around major shipping companies, and it seems that the competitive environment will intensify more than ever; therefore, in October 2016, the Tender Offeror decided to integrate its container shipping business with Kawasaki Kisen Kaisha, Ltd. and Mitsui O.S.K. Lines, Ltd. in order to operate the container shipping business stably and sustainably, and, as part of such integration, established a new company in July 2017, which will start providing services from April 2018.

Also, in the dry bulk carrier industry, the market has been significantly sluggish due to the over-supply of vessels and the deceleration in the Chinese economy; the BDI (Baltic Dry Index; freight rate index of outbound bulk shipping published by the Baltic Exchange in England) recorded the lowest rates in its history in February 2016.

Although both the container shipping market and the dry bulk carrier market are emerging from their worst periods and have been in a moderate recovery trend, the markets have not yet significantly improved.

Amidst such a harsh operating environment, the Tender Offeror has been, in accordance with the basic policy in the medium-term management plan, i.e., "More than Shipping 2018 - Stage 2: Leveraged by Creative Solutions" (fiscal year 2014 - fiscal year 2018) (Note) launched in April 2014, engaged in strengthening competitiveness through differentiation from other companies as well as strengthening resilience to the unstable shipping market .

(Note) Although the Tender Offeror withdrew its earnings/financial plan for fiscal year 2018 in October 2016 due to significant changes in the operating environment, the basic strategy in the medium-term management plan is still feasible, and therefore, the Tender Offeror continues to promote the measures based on such strategy.

From the perspective of strengthening resilience to the unstable market, based on the policies of "shifting to a light-asset model for the business that operates under highly volatile conditions" (enabling the Tender Offeror to flexibly respond to fluctuations in cargo movement by using short-term chartered vessels, etc.) and "accumulating earnings from the business with stable freight rates" through reconfiguration of the business portfolio, the Tender Offeror has been focused on lowering the core asset ratio in containerships and dry bulk carriers and increasing the ratio of the light-asset business, such as forwarding (Note), and the stable freight rate business, such as logistics, car transport vessels and offshore business, and has been striving to develop a business portfolio that generates profits under any market condition.

(Note) "Forwarding" is the business for situations where an air transportation medium and marine transportation medium to an overseas or domestic destination is used, taking charge of the freight of a shipper company, ensuring space in carriers (vessels, airplanes, railroads, trucks, etc.), and entrusting the transportation of the freight therewith, including conducting the customs clearance for the freight transport, export and import.

In contrast, from the perspective of strengthening competitiveness, the Tender Offeror has been promoting the policy of "differentiating our business by offering value-added shipping services" and has worked to diversify and add higher value to the transportation services through the development of a