Vale S.A. (BOVESPA:VALE3) agreed to acquire Valepar S.A. from Mitsui & Co., Ltd. (TSE:8031), BNDES Participações S/A - BNDESPAR, Litel Participações S.A., Bradespar S.A. (BOVESPA:BRAP3) and Litela Participações S.A. and others for BRL 65 billion on February 19, 2017. The transaction envisaged by the proposal is composed of a series of indivisible and interdependent steps, whose effectiveness is subject to the successful performance of the other steps. The proposal comprises voluntary conversion of Vale class A preferred shares into common shares, based on the conversion rate of 0.9342 common shares for each Vale class A preferred share, amendment of Vale's bylaws, in accordance with the draft attached to the Valepar Agreement, so as to adjust it, as much as possible, to Novo Mercado rules so Vale may be effectively listed on such special segment and the merger of Valepar into Vale at an exchange ratio that contemplates a 10% increase in the number of shares held by the shareholders of Valepar compared to Valepar's current shareholding interest, and represents a dilution of approximately 3% of the shareholding interest held by the other shareholders in Vale. Valepar's shareholders will receive 1.2065 Vale common shares for each Valepar share held by them. Consequently, Valepar's shareholders will own a total of 1.9 billion Vale common shares after the merger of Valepar.

The transaction is subject to approval of shareholders of Vale in a meeting to be held on June 27, 2017. As of May 11, 2017, Board of Directors of Vale approved the transaction. As of June 27, 2017, the transaction was approved by the shareholders of Vale S.A. As of August 11, 2017, 84.4% of the total outstanding preferred shares of Vale were tendered for conversion or exchange by holders which exceed the minimum threshold for the voluntary conversion of 54.09%. Morgan Stanley and Bradesco BBI acted as financial advisors to two of Vale's main shareholders. KPMG Auditores Independentes acted as accountant for Vale and Valepar. Morgan Stanley acted as financial advisor to Litel. Thiago Giantomassi, Crisleine Yamaji, João Paulo Minetto and Julia Vazquez Tourinho from Demarest Advogados acted as legal advisor to Mitsui & Co., Ltd.