ITOCHU Corporation (the Company) and ITOCHU (China) Holding Co., Ltd. (ICN) have agreed to acquire shares in Shanshan Group Co., Ltd. (Shanshan), a major corporate group located in the eastern coastal area of China. An agreement has been concluded today. The acquisition of shares has made Shanshan an equity method affiliate of ITOCHU (with an investment stake of 28%).

Shanshan initially operated a textiles business, and has emerged as one of the leading corporate groups of China. The Group is expanding its businesses to encompass resources and energy, electronic components, food materials, finance, and real estate.

ITOCHU started OEM production of apparel products in China with Shanshan in 1993, for shipment to Japan and the United States. Since then, the Company has worked together with Shanshan to develop a fashion business in China encompassing such brands as Renoma, Marco Azali and le coq sportif, while expanding the OEM production consignment.

The Chinese market is expected to maintain stable growth, backed by the medium- to long-term expansion of domestic demand and an accompanying increase in personal revenues. On the other hand, the global economic recession triggered by the financial crisis is expected to intensify competition in the Chinese market. These circumstances are making it increasingly important to establish a business organization by cooperating with a reliable partner.

In consideration of market trends and based on a partnership built with a demonstrated business track record, the Company decided to invest in Shanshan and make it an equity method affiliate. The investment will give ITOCHU the opportunity to participate directly in the operations of Shanshan and accelerate strategic development.

The initial focus following the investment will be strengthening operations in the textile area, including the fashion business and collaboration with apparel material subsidiary Sankei Co., Ltd. Efforts will then expand to include other areas of business. By building a group operation system jointly with Shanshan, the know-how that ITOCHU has in business administration and fashion brands, as well as its cutting-edge technologies and global networks, can be brought to bear in the Chinese market. This should in turn enable ITOCHU to achieve further differentiation, with an eye to developing its global business, including operations in Europe and North America, and enhancing its corporate value.

On February 16, 2009, a ceremony will be held in the Chinese city of Ningbo to celebrate the partnership.