Tokyo, July 1, 2016 - NEC Corporation ("NEC") will transfer a portion of its shares in Lenovo NEC Holdings B.V. ("LNH"), a joint venture with Lenovo Group Limited ("Lenovo") that operates in the domestic personal computer business in Japan, thereby generating gain from the transfer.

1. About the transfer of shares
   On July 1, 2011, Lenovo and NEC created a strategic alliance in the personal computer business with the establishment of LNH as a joint venture company (investment ratio: Lenovo 51%, NEC 49%), which holds NEC Personal Computers, Ltd. and Lenovo (Japan) Ltd. as wholly-owned subsidiaries.
   
   In accordance with discussions between Lenovo and NEC and pursuant to the joint venture agreement between the parties, Lenovo exercised a call option today requiring NEC to sell to Lenovo a certain portion of LNH's ordinary shares held by NEC (as described below and hereinafter referred to as the "Transferred Shares").
   
   By consummating a series of transactions comprising of NEC's sale of the Transferred Shares and subscription to LNH's newly issued deferred shares (*), NEC will maintain a 33.4% voting ratio in LNH with the right to veto material corporate actions, and LNH will continue to be an NEC affiliated company accounted for by the equity-method.
   
   NEC capitalizes on ICT to advance social infrastructure through its "Social Solutions Business" and regards the personal computer as an important tool for the provision of solutions via IoT platforms. Going forward, NEC will continue to provide high-quality, high-performance products and services developed from the customer's point of view.
   
   

   *Deferred shares: Shares that have voting rights but are entitled to participate neither in the profits nor in the liquidation surplus of LNH.



2. Share transfer summary
   (1)Transferred Shares:
   44,100 ordinary shares of LNH
   (90% of the ordinary shares that NEC holds in LNH)
   
   (2)Scheduled Transfer Date:
   July 28, 2016
   
   Reference: NEC's shareholding in LNH
   

   	Before Share Transfer	After Share Transfer
   Ordinary Shares	49,000	4,900
   Deferred Shares	－	42,700
   No. of Voting Rights （Voting Right %）	49,000 （49%）	47,600 （33.4%）

3. Future outlook
   This share transfer will result in approximately 20.0 billion yen in non-operating income in the consolidated financial statement for the fiscal year ending March 31, 2017. The financial forecasts for the fiscal year ending March 31, 2017 are currently under review. If any changes are required, NEC will make an announcement as soon as they are determined.

Cautionary Statement with Respect to Forward-Looking Statements

This material contains forward-looking statements regarding estimations, forecasts, targets and plans in relation to the results of operations, financial conditions and other overall management of the NEC Group (the "forward-looking statements"). The forward-looking statements are made based on information currently available to NEC and certain assumptions considered reasonable as of the date of this material. These determinations and assumptions are inherently subjective and uncertain. These forward-looking statements are not guarantees of future performance, and actual operating results may differ substantially due to a number of factors.

The factors that may influence the operating results include, but are not limited to, the following:

• Effects of economic conditions, volatility in the markets generally, and fluctuations in foreign currency exchange and interest rate
• Trends and factors beyond the NEC Group's control and fluctuations in financial conditions and profits of the NEC Group that are caused by external factors
• Risks arising from acquisitions, business combinations and reorganizations, including the possibility that the expected benefits cannot be realized or that the transactions may result in unanticipated adverse consequences
• Developments in the NEC Group's alliances with strategic partners
• Effects of expanding the NEC Group's global business
• Risk that the NEC Group may fail to keep pace with rapid technological developments and changes in customer preferences
• Risk that the NEC Group may lose sales due to problems with the production process or due to its failure to adapt to demand fluctuations
• Defects in products and services
• Shortcomings in material procurement and increases in delivery cost
• Acquisition and protection of intellectual property rights necessary for the operation of business
• Risk that intellectual property licenses owned by third parties cannot be obtained and/or are discontinued
• Risk that the NEC Group may be exposed to unfavorable pricing environment due to intensified competition
• Risk that a major customer changes investment targets, reduces capital investment and/or reduces the value of transactions with the NEC Group
• Risk that the NEC Group may be unable to provide or facilitate payment arrangements (such as vendor financing) to its customers on terms acceptable to them or at all, or risk that the NEC Group's customers are unable to make payments on time, due to the customers' financial difficulties or otherwise
• Risk that the NEC Group may experience a substantial loss of, or an inability to attract, talented personnel
• Risk that the NEC Group's ability to access the commercial paper market or other debt markets are adversely affected due to a downgrade in its credit rating
• Risk that the NEC Group may incur large costs and/or liabilities in relation to internal control, legal proceedings, laws and governmental policies, environmental laws and regulations, tax practice, information management, and human rights and working environment
• Consequences of natural and fire disasters
• Changes in methods, estimates and judgments that the NEC Group uses in applying its accounting policies
• Risk that the NEC Group may incur liabilities and losses in relation to its retirement benefit obligations

The forward-looking statements contained in this material are based on information that NEC possesses as of the date hereof. New risks and uncertainties come up from time to time, and it is impossible for NEC to predict these events or how they may affect the NEC Group. NEC does not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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