2016-11-07 07:30:02 CET
2016-11-07 07:30:02 CET
REGULATED INFORMATION
Munksjö Oyj - Company Announcement
Munksjö and Ahlstrom to combine, creating a global leader in sustainable and innovative fiber-based solutions
Helsinki, Finland, 2016-11-07 07:30 CET (GLOBE NEWSWIRE) --
MUNKSJÖ OYJ, STOCK EXCHANGE RELEASE 7 November 2016 at 8:30 a.m. EET
This stock exchange release may not be published or distributed, in whole or in
part, directly or indirectly, in or into Canada, Australia, Hong Kong, South
Africa, Japan or any other country where such publication or distribution would
violate applicable laws or rules or would require additional documents to be
completed or registered or require any measure to be undertaken, in addition to
the requirements under Finnish law. For further information, see “Important
notice” below.
Munksjö and Ahlstrom to combine, creating a global leader in sustainable and
innovative fiber-based solutions
The Boards of Directors of Munksjö Oyj (“Munksjö”) and Ahlstrom Corporation
(“Ahlstrom”) announce the combination of the two companies through a merger.
The combination will create a global leader in sustainable and innovative
fiber-based solutions with preliminary combined annual net sales of
approximately EUR 2.2 billion and adjusted EBITDA of EUR 249 millioni. The
combined company will have approximately 6,200 employees as well as production
in 14 countries.
The combination is expected to create significant value for the stakeholders in
the combined company through stronger global growth opportunities and improved
operational efficiency. The combined company’s growth ambitions will be
supported by a strong balance sheet and strong cash flow generation.
Annual cost synergies are estimated to be approximately EUR 35 million. The
cost synergies are expected to be gradually realised over two years following
completion of the combination with a more pronounced impact expected from the
fourth quarter of 2017.
The combination will be implemented as a statutory absorption merger whereby
Ahlstrom will be merged into Munksjö.
Ahlstrom’s shareholders will receive as merger consideration 0.9738 new shares
in Munksjö for each share in Ahlstrom owned by them, corresponding to an
ownership in the combined company following the completion of the combination
of approximately 52.8% for Munksjö shareholders and approximately 47.2% for
Ahlstrom shareholders.
Based on the one-month volume-weighted average share prices of both Munksjö and
Ahlstrom, the corresponding ownership of Munksjö and Ahlstrom shareholders
would have been approximately 52.1% / 47.9%, respectivelyii
Based on the three-month volume-weighted average share prices of both Munksjö
and Ahlstrom, the corresponding ownership of Munksjö and Ahlstrom shareholders
would have been approximately 54.0% / 46.0%, respectivelyiii
Munksjö and Ahlstrom propose to distribute funds in the total amount of
approximately EUR 23 million each, corresponding to EUR 0.45 per share in
Munksjö and EUR 0.49 per share in Ahlstrom, to their respective shareholders
before the combination is completed in lieu of the companies’ ordinary annual
distribution.
The completion of the combination is subject to, inter alia, approval by the
Extraordinary General Meetings (each, an “EGM”) of Munksjö and Ahlstrom, which
are currently expected to be held on 11 January 2017, as well as merger control
approvals from relevant competition authorities.
The combined entity has obtained underwritten financing for the merger from
Nordea and SEB.
Shareholders holding in aggregate approximately 32.9% of the shares and votes
in Ahlstrom and approximately 39.6% of the shares and votes in Munksjö, have
irrevocably undertaken to attend the companies’ respective EGMs and to vote in
favour of the combination.
The combination is expected to be completed in the beginning of the second
quarter of 2017.
Financial targets for the combined company are expected to include an EBITDA
margin above 14% over a business cycle, net gearing below 100%, as well as a
stable and annually increasing dividend.
Peter Seligson, Chairman of the Board of Munksjö, commented:
“After the very successful integration of our acquired businesses during the
past years and strong operating performance, the combination with Ahlstrom is a
natural first step in the execution of our growth strategy, combining two
leading businesses into one strong engine for performance and growth. The
combined company will be positioned for strong long term-financial returns
partly through the significant communicated cost synergies but mainly through
enhanced future competitiveness and growth opportunities.”
Hans Sohlström, Chairman of the Board of Ahlstrom, continued:
“During the past two years the Ahlstrom management has executed a very focused
and successful business turn-around by shedding costs and by focusing on
commercial excellence with new products and value adding solutions for our
customers. The financial results speak for themselves. The combination now
enables us to directly jump into a growth mode with a much stronger balance
sheet and greater earnings potential which will benefit our shareholders and
our customers as well as other stakeholders. We will together be able to
leverage several strategic advantages and we will focus on shareholder returns
through increased profits as well as profitable global growth initiatives in
the area of sustainable and innovative fiber-based solutions.”
Jan Åström, President and CEO of Munksjö, commented:
“Munksjö and Ahlstrom are two solid and profitable companies with strong cash
flows that already today have attractive positions within their respective
businesses. Together we will form an even stronger growth platform supported by
the cost synergies identified but also by the added top line opportunities. The
offerings and market presences are complementary, enabling us to offer our
customers a broader range of solutions with a truly global reach. Our
collective quality leadership, know-how and innovation capacity will add
further value to all customers. About 90 per cent of the combined company’s
products are made from renewable fibers, which will be increasingly important
for our sustainability ambitions and footprint going forward.”
Press and analyst conference
A joint press conference and conference call will be held today, 7 November
2016, at 11:00 a.m. EET (10:00 a.m. CET), at Restaurant Savoy (Eteläesplanadi
14, 7th floor) in Helsinki, Finland. Please see below for additional details.
BACKGROUND TO THE COMBINATION
Munksjö and Ahlstrom are both focused on sustainable and innovative fiber-based
solutions. The companies have also had a jointly operated site in Turin, Italy
since the business combination of Munksjö AB and Ahlstrom’s Label and
Processing business in 2013. For the past years, both companies have focused on
streamlining operations and improving operational efficiency with clear
results.
The combination is a natural next step in the development of the two companies
as it has a strong strategic logic and is expected to improve competitiveness.
The combination is also expected to increase and create new growth
opportunities through the complementary customer bases, product portfolios and
geographical footprints of the two companies. The companies also believe that
by combining their operations they can achieve further efficiency improvements
as well as benefits of scale in the capital markets in the form of increased
liquidity, investor interest and analyst coverage. As a result of their
history, both companies know each other well and strongly believe the companies
will have a good operational fit. Therefore, the Boards of Directors of Munksjö
and Ahlstrom have, on 7 November 2016, entered into a combination agreement
(the “Combination Agreement”) and executed a merger plan, pursuant to which the
companies will combine. The merger plan and a summary of the Combination
Agreement are included as annexes to this stock exchange release.
RATIONALE FOR THE COMBINATION
The combination will create a global leader in sustainable and innovative
fiber-based solutions (more than 90% produced from renewable fibers), with
leading global positions in the main product areas decor, filtration and
release liners. The combined company will be better positioned to serve
customers and will have a strengthened position in the value chain through
increased size.
Through the combination, a strong and well-established platform will be created
with multiple growth opportunities through a broadened customer base, a widened
geographical footprint and expanded product and service offerings. Together,
the companies will be able to serve a broad range of end-market segments with
complementary product and service offerings (e.g., filtration and abrasives to
the automotive industry as well as food and beverage packaging and release
liners to the food and beverage industry), which creates potential for
innovation within new customer-focused solutions. The two companies have
complementary geographical footprints, as Munksjö has strong market positions
in Europe and South America and Ahlstrom has strong market positions in Europe,
North America and Asia, which opens up new geographical growth opportunities
through coordination of the product portfolios and distribution and logistics
networks. The combined company will have a more diversified revenue and
earnings base through this wider geographic footprint and broader product
offering and is expected to have a strong financial position and cash flow to
support the combined company’s strategic growth ambitions. The increased size
and strengthened capital base also gives potential for increased financing
options and lower cost of debt. Furthermore, the combination offers employees
enhanced career opportunities, supporting the combined company’s ability to
attract and retain top talent.
Synergies
The combination is expected to create significant value for the stakeholders in
the combined company through synergies resulting from the coordination of the
operations of the two companies. Short to mid-term, the annual cost synergies
are estimated to be approximately EUR 35 million.
The majority of the planned cost synergies are expected to be achieved through
organisational streamlining, mainly within general, administrative and sales
expenses (SG&A) as well as through a focusing of central administration and a
combination of administration for closely located sales offices and mills. The
remaining planned cost synergies are mainly expected to be reached through
coordination of purchasing and production.
The annual cost synergies are expected to be gradually realised over two years
following completion of the combination. A more pronounced impact on the
combined company’s profitability is expected from the fourth quarter of 2017
and the cost synergies are expected to be fully realised as from the second
quarter of 2019. Integration costs of approximately EUR 30 million are expected
to have nonrecurring cash flow impacts from the third quarter of 2017 to the
second quarter of 2018, with the majority of nonrecurring costs impacting the
second and third quarters of 2017. Munksjö and Ahlstrom will inform, consult
and negotiate with relevant employee organisations regarding the social,
economic and legal consequences of the proposed combination in accordance with
the applicable legal requirements.
The combined company will continue to evaluate additional revenue and cost
synergies beyond the current plan through leveraging the combined R&D platform,
cross selling through the combined customer base and further coordination of
production, sales and procurement.
THE COMBINED COMPANY
Overview
The combined company will become a global leader in sustainable and innovative
fiber-based solutions with preliminary combined annual net sales of
approximately EUR 2.2 billion and EBITDA of EUR 249 million for the twelve
months ended 30 September 2016, and approximately 6,200 employees. The combined
company will have 41 production and converting facilities in 14 countries and
will have leading global positions in its main product areas:
Decor: Surface cover for wood-based panels, used in the production of
furniture, flooring and other interior and exterior architectural panels.
Filtration: Products used for automotive applications (oil, fuel, and air
filters), gas turbines, and indoor air quality filters. Advanced filter
applications for, among others, laboratory use and life science applications.
Industrial Solutions: Release liners and other products used for, among others,
labelling, specialty tapes, abrasive backings, electrotechnical insulation and
other industrial applications.
Specialties: Specialty products used for, among others, building and wind
applications, medical care, hygiene and food packaging.
Board of Directors and Management
Following consultation with the shareholders’ nomination board of each of
Munksjö and Ahlstrom, the Board of Directors of Munksjö will make a proposal to
the EGM of Munksjö resolving on the combination that Peter Seligson, Elisabet
Salander Björklund, Sebastian Bondestam, Alexander Ehrnrooth, Hannele
Jakosuo-Jansson, Mats Lindstrand and Anna Ohlsson-Leijon, current members of
the Board of Directors of Munksjö, be conditionally elected to continue to
serve on the Board of Directors of Munksjö following the completion of the
combination and that Hans Sohlström, Jan Inborr, Johannes Gullichsen and
Harri-Pekka Kaukonen, current members of the Board of Directors of Ahlstrom, be
conditionally elected as members of the Board of Directors of Munksjö following
the completion of the combination. The nominees have indicated that if elected
they will elect Hans Sohlström as Chairman of the Board of Directors of
Munksjö, and Peter Seligson and Elisabet Salander Björklund as Vice-Chairmen of
the Board of Directors of Munksjö.
Munksjö’s current CEO, Jan Åström, will continue to serve as the CEO of the
combined company. The management team of the combined company will also include
the current CFO of Munksjö, Pia Aaltonen-Forsell, and the current CFO of
Ahlstrom, Sakari Ahdekivi.
Ownership Structure and Corporate Governance
Pursuant to the merger plan, Ahlstrom shareholders will receive as merger
consideration 0.9738 new shares in Munksjö for each share in Ahlstrom owned by
them, corresponding to an ownership in the combined company following the
completion of the combination of approximately 52.8% for Munksjö shareholders
and approximately 47.2% for Ahlstrom shareholders. The table below illustrates
the largest owners of the combined company, assuming all current Ahlstrom
shareholders are also shareholders at the completion of the combination.
Owner % of shares and votes
-----------------------------------------------------------------
-----------------------------------------------------------------
Ahlström Capitaliv 13.4%
Virala group of companiesv 12.6%
Ilmarinen Mutual Pension Insurance Company 4.7%
Varma Mutual Pension Insurance Company 2.4%
OP Mutual Funds 2.3%
-----------------------------------------------------------------
Top 5 shareholders 35.4%
Other shareholders 64.6%
-----------------------------------------------------------------
-----------------------------------------------------------------
Total 100.0%
Ahlstrom shareholders 47.2%
Munksjö shareholders 52.8%
-----------------------------------------------------------------
The combined company will have a primary listing on Nasdaq Helsinki Ltd and a
secondary listing on Nasdaq Stockholm Ltd. The combined company will be
domiciled in Finland.
The combined company will provisionally be called Ahlstrom-Munksjö Oyj, with
the intention to propose a new name by the time of completion of the
combination for approval by the annual general meeting of Munksjö following the
completion of the combination.
Divestment of Osnabrück plant
As announced by Ahlstrom on 7 November 2016, Ahlstrom has signed an agreement
to divest its German subsidiary with operations in Osnabrück to Kämmerer GmbH.
The transaction will also include Ahlstrom’s 50% stake in AK Energie (a joint
venture with Kämmerer). The transaction is expected to be completed in January
2017. For more information, please see the release at
http://www.ahlstrom.com/en/Investors/.
Preliminary Combined Financial Information
Basis for Preparation
The unaudited financial information for the combined company presented below is
based on Munksjö’s and Ahlstrom’s audited consolidated financial statements for
the year ended 31 December 2015 and unaudited consolidated interim information
for the nine months ended 30 September 2016 and unaudited financial statements
bulletins for the year ended 31 December 2015.
The combined financial information is presented for illustrative purposes only.
The combined income statement information, the combined operating cash flow and
capital expenditure information have been calculated assuming the activities
had been included in one entity from the beginning of each period. The
preliminary annual net sales, adjusted EBITDA and EBITDA of the combined
company have been calculated as a sum of combined financial information for the
twelve months ended 30 September 2016. The combined statement of financial
position and interest-bearing net debt illustrates the impacts of the
combination as if it had occurred on 30 September 2016.
The combined financial information is based on a hypothetical situation and
should not be viewed as pro forma financial information inasmuch as any
purchase price allocation, differences in accounting principles, adjustments
related to transaction costs and impacts of the refinancing have not been taken
into account. The difference between the preliminary merger consideration,
which has been calculated based on the closing price of the shares in Munksjö
on 2 November 2016 and Ahlstrom’s net assets as at 30 September 2016 has been
allocated to non-current assets. The expected cost synergies have not been
included.
For the purposes of financial reporting, the actual combined financial
information will, however, be calculated based on the final merger
consideration and the fair values of Ahlstrom’s identifiable assets and
liabilities as at the date of completion of the combination, including the
impacts of the refinancing that is contingent on the completion of the
combination. The combined company’s financial information that will be
published in the future following the completion of the combination could
therefore differ significantly from the illustrative combined financial
information presented below. Accordingly, this information is not indicative of
what the combined company’s actual financial position, results of operations or
key figures would have been had the combination been completed on the dates
indicated.
Combined Income Statement Information
January - September January - December 2015 October 2015 –
September
2016 2016
--------------------------------------------------------------------------------
-----
EUR Combine Munksj Ahlstr Combine Munksjö Ahlstro Combine Munksjö
Ahlstro
millio d ö om d m d m
n compan compan compan
y y y
--------------------------------------------------------------------------------
-----
Net 1,680.3 860.5 819.8 2,205.4 1,130.7 1,074.7 2,225.3 1,150.5
1,074.8
Sales
--------------------------------------------------------------------------------
-----
EBITDA 205.3 100.6 104.7 198.6 93.6 105.0 249.1 122.7
126.4
(Adj.
)*
--------------------------------------------------------------------------------
-----
EBITDA 12.2 11.7 12.8 9.0 8.3 9.8 11.2 10.7
11.8
-%
(Adj.
)*
--------------------------------------------------------------------------------
-----
EBITDA 201.9 100.6 101.3 182.9 86.3 96.6 239.0 122.7
116.3
*
--------------------------------------------------------------------------------
-----
EBITDA 12.0 11.7 12.4 8.3 7.6 9.0 10.7 10.7
10.8
-%*
--------------------------------------------------------------------------------
-----
* The adjusted EBITDA and EBITDA of Ahlstrom have been adjusted by including
share of profit / loss of equity accounted investments into these line items to
align with Munksjö’s reporting format. The adjusted EBITDA of Munksjö and
Ahlstrom exclude items affecting comparability.
The transactions between Munksjö and Ahlstrom have not been eliminated from the
combined income statement information. The combined net sales include
transactions between Munksjö and Ahlstrom that amounted to EUR 18.1 million for
the nine months ended 30 September 2016 and to EUR 30.7 million for the year
ended 31 December 2015. The transactions between Munksjö and Ahlstrom did not
have any impact on the combined EBITDA or adjusted EBITDA.
The income statement information of Ahlstrom has not been adjusted for the sale
of Osnabrück. The net sales of Osnabrück amounted to EUR 60.4 million for the
nine months ended 30 September 2016 and EUR 80.9 million for the year ended 31
December 2015. The EBITDA of Osnabrück amounted to EUR -1.2 million for the
nine months ended 30 September 2016 and EUR -10.7 million for the year ended 31
December 2015. The adjusted EBITDA of Osnabrück amounted to EUR -1.2 million
for the nine months ended 30 September 2016 and EUR -9.1 million for the year
ended 31 December 2015.
Combined Statement of Financial Position Information
30 September 2016
-----------------------------------------------------------------
EUR million Combined company Munksjö Ahlstrom
-----------------------------------------------------------------
Non-current assets 1,600.8 738.8 486.0
-----------------------------------------------------------------
Current assets excl. cash 571.4 303.5 267.9
-----------------------------------------------------------------
Cash and cash equivalents 170.7 116.2 54.5
-----------------------------------------------------------------
Total assets 2,342.9 1,158.5 808.4
-----------------------------------------------------------------
-----------------------------------------------------------------
Total equity 1,008.5 424.9 307.6
-----------------------------------------------------------------
Non-current liabilities 642.9 440.5 202.4
-----------------------------------------------------------------
Current liabilities 691.5 293.1 298.4
-----------------------------------------------------------------
Total equity and liabilities 2,342.9 1,158.5 808.4
-----------------------------------------------------------------
-----------------------------------------------------------------
Interest bearing net debt 430.3 199.8 130.5
-----------------------------------------------------------------
The statement of financial position of Ahlstrom has not been adjusted for the
sale of Osnabrück. The financial line items of Osnabrück included in the
statement of financial position of Ahlstrom as at 30 September 2016 are
non-current assets of EUR 3.8 million, current assets excluding cash of EUR
49.3 million, cash and cash equivalents of EUR 2.6 million, total equity of EUR
5.7 million, non-current liabilities of EUR 33.3 million and current
liabilities of EUR 16.7 million. In addition to the cash and cash equivalents
of Osnabrück as at 30 September 2016, Ahlstrom will settle Osnabrück’s internal
receivable from Ahlstrom amounting to EUR 26.5 million in connection with the
sale of Osnabrück.
The receivable balance as at 30 September 2016 between Munksjö and Ahlstrom
amounting to EUR 2.5 million is not eliminated from the combined current assets
and liabilities balances.
The hybrid bond of EUR 100.0 million recorded in Ahlstrom’s equity is included
in current liabilities and interest-bearing net debt in the combined statement
of financial position information.
Combined statement of financial position information has not been adjusted for
the proposals of Munksjö and Ahlstrom to distribute funds in the total amount
of approximately EUR 23 million each to their respective shareholders before
the combination is completed.
Combined Key Figures
January - September January - December October 2015 -
2016 2015 September 2016
--------------------------------------------------------------------------------
EUR Combine Munksj Ahlstr Combin Munksj Ahlstr Combin Munksj Ahlstr
millio d ö om ed ö om ed ö om
n compan compa compa
y ny ny
--------------------------------------------------------------------------------
Operati 171.9 73.0 98.9 115.5 55.5 60.0 239.7 117.5 122.2
ng cash
flow
--------------------------------------------------------------------------------
Capital 46.5 28.5 18.0 67.1 39.8 27.3 69.0 37.4 31.6
expend
iture
--------------------------------------------------------------------------------
Financial Targets
The Boards of the Directors of Munksjö and Ahlstrom have together with the
management of the companies considered appropriate financial targets for the
combined company and agreed on the following framework. Subsequent to the
completion of the combination, the new management team of the combined company
will together with the Board of Directors of the combined company refine and
possibly adapt these targets.
EBITDA margin target: EBITDA margin above 14% over a business cycle
Net gearing target: Net gearing below 100%
Dividend target: The combined company aims for a stable and annually increasing
dividend
THE MERGER
The Statutory Merger in Brief
The proposed combination of Munksjö and Ahlstrom will be executed through a
statutory absorption merger pursuant to the Finnish Companies Act in such a
manner that all assets and liabilities of Ahlstrom are transferred without a
liquidation procedure to Munksjö.
Ahlstrom’s shareholders will receive as merger consideration 0.9738 new shares
in Munksjö to be issued for each share in Ahlstrom (i.e., new shares in Munksjö
will be issued to Ahlstrom’s shareholders in proportion to their existing
shareholdings in Ahlstrom in the ratio of 0.9738:1). The aggregate number of
the new shares in Munksjö to be issued is expected to be 45,376,992 shares
(excluding treasury shares held by Ahlstrom and assuming that none of
Ahlstrom’s shareholders demand at the EGM of Ahlstrom to decide on the merger
that their shares be redeemed).
Ahlstrom has received an advance tax ruling from the Finnish Tax Office for
Major Corporations (Konserniverokeskus) according to which the statutory merger
will be treated as a tax neutral merger as defined in Section 52 a of the
Finnish Business Income Tax Act.
The completion of the statutory merger is subject to, inter alia, approval by
the EGMs of Munksjö and Ahlstrom currently expected to be held on 11 January
2017, as well as merger control approvals from relevant competition
authorities. The companies will publish the invitations to their respective
EGMs through separate stock exchange releases.
The Board of Directors of Munksjö and Ahlstrom have also agreed to propose to
their respective EGMs the authorisation of the respective Board of Directors to
resolve upon the distribution of funds in the total amount of approximately EUR
23 million each, corresponding to EUR 0.45 per share in Munksjö and EUR 0.49
per share in Ahlstrom, to their respective shareholders before the completion
of the combination in lieu of the companies’ ordinary annual distribution.
Munksjö would implement such distribution as a return of equity from the
reserve for invested unrestricted equity and Ahlstrom would implement such
distribution as a dividend payment. The completion of the combination is
expected to take place in the beginning of the second quarter of 2017, provided
that the conditions for the statutory merger have been fulfilled. Therefore, no
annual general meeting of Ahlstrom is expected to be held in 2017. The 2017
annual general meeting of Munksjö is expected to be held following the
completion of the combination.
The merger plan is included as an annex to this stock exchange release and
contains information, inter alia, on the merger consideration to Ahlstrom’s
shareholders, the planned time for completion of the statutory merger, the
division of Ahlstrom’s assets and liabilities to Munksjö and the conditions for
the completion of the statutory merger.
Further information about the combination, the merger and the combined company
will also be available in a prospectus to be published by Munksjö prior to the
EGMs of Munksjö and Ahlstrom.
Preliminary Timetable
December 2016: Publication of merger prospectus
11 January 2017: EGMs of Munksjö and Ahlstrom
Beginning of the second quarter of 2017: Expected completion of the combination
On or about first trading date following the completion: Expected first trading
day of the new shares in Munksjö issued to Ahlstrom’s shareholders
Fairness Opinions
With support in their assessments in the form of a fairness opinion from the
respective financial advisors of Munksjö and Ahlstrom, the Boards of Directors
of Munksjö and Ahlstrom have concluded that the merger and the merger
consideration are in the best interest of the respective companies and their
respective shareholders.
Financing
The combined entity has obtained underwritten financing for the merger from
Nordea and SEB, as the joint underwriters. The new financing arranged in
connection with the combination consists of the following credit facilities:
In the aggregate, approximately EUR 560 million multicurrency term and
revolving credit facilities for Munksjö with maturities ranging between three
and five years; and
EUR 200 million bridge facility for Ahlstrom, which will be assumed by Munksjö
as from the date of completion of the merger with amended terms and commitments
reduced to EUR 100 million. The bridge facility has a maturity of 18 months
from the planned combination date.
The facilities are to be used, inter alia, for the refinancing of existing
indebtedness, for transaction costs and for general corporate purposes.
Ahlstrom intends to obtain relevant waivers and consents for certain existing
financing arrangements. The financing secured for the combined company is
expected to lower its total cost of financing.
Shareholder Support
Shareholders holding in aggregate approximately 32.9% of the shares and votes
in Ahlstrom and approximately 39.6% of the shares and votes in Munksjö,
including Ahlström Capitalvi, Virala group of companiesvii, Ilmarinen Mutual
Pension Insurance Company, Varma Mutual Pension Insurance Company, Peter
Seligsonviii, Johan Erik Gullichsen, Robin Ahlström, Johannes Gullichsen,
Thomas Ahlström and Martti Saikku, have irrevocably undertaken to attend the
respective EGMs of Munksjö and Ahlstrom and to vote in favour of the
combination.
Advisors
Munksjö is being advised by Access Partners and SEB as financial advisors, and
White & Case LLP as legal advisor. Ahlstrom is being advised by Nordea as
financial advisor, and Hannes Snellman as legal advisor.
Stockholm, Sweden, 7 November 2016 Helsinki, Finland, 7 November 2016
Board of Directors Board of Directors
Munksjö Oyj Ahlstrom Corporation
PRESS AND ANALYST CONFERENCE
A joint press conference and conference call will be held today, 7 November
2016, at 11:00 a.m. EET (10:00 a.m. CET), at Restaurant Savoy (Eteläesplanadi
14, 7th floor) in Helsinki, Finland.
The presentation held at the event will be made available on the corporate
websites of Munksjö and Ahlstrom during today.
The conference call will be sent live and can be followed on the Internet via
the link below. An on-demand version will be available via the same link later
today.
To join the conference call, participants are requested to dial one of the
numbers below 5-10 minutes prior to the start of the event.
Conference call information
Finnish callers: +358 (0)9 7479 0404
Swedish callers: +46 (0)8 5065 3942
US callers: +1 719-457-2086
UK callers: +44 (0)330 336 9436
Conference ID: 9136329
Link to the webcast: http://qsb.webcast.fi/m/munksjo/munksjo_2016_1107_info/
For further information, please contact
Munksjö Oyj Ahlstrom Corporation
Peter Seligson Hans Sohlström
Chairman of the Board Chairman of the Board
Tel. +358 50 1493 Tel. +358 400 547 717
Jan Åström
President and CEO
Tel. +46 10 250 1001
Contact person for Ahlstrom bondholders
Sakari Ahdekivi
CFO
Tel. +358 10 888 4768
Communications contacts
Anna Selberg Satu Perälampi
SVP Communications Vice President, Communications
Tel. +46 703 23 10 32 Tel. +358 10 888 4738
INFORMATION ON MUNKSJÖ AND AHLSTROM IN BRIEF
Munksjö in Brief
Munksjö is a world-leading manufacturer of advanced paper products developed
with intelligent paper technology. Munksjö offers customer-specific innovative
design and functionality in areas ranging from flooring, kitchens and
furnishings to release papers, consumer-friendly packaging and energy
transmission. The transition to a sustainable society is a natural driving
force for Munksjö’s growth as the products can replace non-renewable materials.
This is what “Made by Munksjö” stands for. Given Munksjö’s global presence and
way of integrating with the customers, the company forms a worldwide service
organisation with approximately 2,900 employees and 15 facilities located in
France, Sweden, Germany, Italy, Spain, Brazil and China. Munksjö’s share is
listed on Nasdaq in Helsinki and Stockholm. Read more at www.munksjo.com.
Ahlstrom in Brief
Ahlstrom provides innovative fiber-based materials with a function in everyday
life. Ahlstrom is committed to growing and creating stakeholder value by
proving the best performing sustainable fiber-based materials. Ahlstrom’s
products are used in everyday applications such as filters, medical fabrics,
life science and diagnostics, wallcoverings, tapes, and food and beverage
packaging. In 2015, Ahlstrom’s net sales amounted to EUR 1.1 billion.
Ahlstrom’s 3,300 employees serve customers in 22 countries. Ahlstrom’s share is
listed on Nasdaq Helsinki. More information is available at www.ahlstrom.com.
IMPORTANT NOTICE
The distribution of this release may be restricted by law and persons into
whose possession any document or other information referred to herein comes
should inform themselves about and observe any such restrictions. The
information contained herein is not for publication or distribution, directly
or indirectly, in or into Canada, Australia, Hong Kong, South Africa or Japan.
Any failure to comply with these restrictions may constitute a violation of the
securities laws of any such jurisdiction. This release is not directed to, and
is not intended for distribution to or use by, any person or entity that is a
citizen or resident or located in any locality, state, country or other
jurisdiction where such distribution, publication, availability or use would be
contrary to law or regulation or which would require any registration or
licensing within such jurisdiction.
This release does not constitute a notice to an EGM or a merger prospectus and
as such, does not constitute or form part of and should not be construed as, an
offer to sell, or the solicitation or invitation of any offer to buy, acquire
or subscribe for, any securities or an inducement to enter into investment
activity. Any decision with respect to the proposed statutory absorption merger
of Ahlstrom into Munksjö should be made solely on the basis of information to
be contained in the actual notices to the EGM of Munksjö and Ahlstrom, as
applicable, and the merger prospectus related to the merger as well as on an
independent analysis of the information contained therein. You should consult
the merger prospectus for more complete information about Munksjö, Ahlstrom,
their respective subsidiaries, their respective securities and the merger.
No part of this release, nor the fact of its distribution, should form the
basis of, or be relied on in connection with, any contract or commitment or
investment decision whatsoever. The information contained in this release has
not been independently verified. No representation, warranty or undertaking,
expressed or implied, is made as to, and no reliance should be placed on, the
fairness, accuracy, completeness or correctness of the information or the
opinions contained herein. Neither Munksjö nor Ahlstrom, nor any of their
respective affiliates, advisors or representatives or any other person, shall
have any liability whatsoever (in negligence or otherwise) for any loss however
arising from any use of this release or its contents or otherwise arising in
connection with this release. Each person must rely on their own examination
and analysis of Munksjö, Ahlstrom, their respective subsidiaries, their
respective securities and the merger, including the merits and risks involved.
This release includes “forward-looking statements.” These statements may not be
based on historical facts, but are statements about future expectations. When
used in this release, the words “aims,” “anticipates,” “assumes,” “believes,”
“could,” “estimates,” “expects,” “intends,” “may,” “plans,” “should,” “will,”
“would” and similar expressions as they relate to Munksjö, Ahlstrom, the merger
or the combination of the business operations of Munksjö and Ahlstrom identify
certain of these forward-looking statements. Other forward-looking statements
can be identified in the context in which the statements are made.
Forward-looking statements are set forth in a number of places in this release,
including wherever this release include information on the future results,
plans and expectations with regard to the combined company’s business,
including its strategic plans and plans on growth and profitability, and the
general economic conditions. These forward-looking statements are based on
present plans, estimates, projections and expectations and are not guarantees
of future performance. They are based on certain expectations, which, even
though they seem to be reasonable at present, may turn out to be incorrect.
Such forward-looking statements are based on assumptions and are subject to
various risks and uncertainties. Shareholders should not rely on these
forward-looking statements. Numerous factors may cause the actual results of
operations or financial condition of the combined company to differ materially
from those expressed or implied in the forward-looking statements. Neither
Munksjö nor Ahlstrom, nor any of their respective affiliates, advisors or
representatives or any other person undertakes any obligation to review or
confirm or to release publicly any revisions to any forward-looking statements
to reflect events that occur or circumstances that arise after the date of this
release.
This release includes estimates relating to the cost synergy benefits expected
to arise from the merger and the combination of the business operations of
Munksjö and Ahlstrom as well as the related integration costs, which have been
prepared by Munksjö and Ahlstrom and are based on a number of assumptions and
judgments. Such estimates present the expected future impact of the merger and
the combination of the business operations of Munksjö and Ahlstrom on the
combined company’s business, financial condition and results of operations. The
assumptions relating to the estimated cost synergy benefits and related
integration costs are inherently uncertain and are subject to a wide variety of
significant business, economic, and competitive risks and uncertainties that
could cause the actual cost synergy benefits from the merger and the
combination of the business operations of Munksjö and Ahlstrom, if any, and
related integration costs to differ materially from the estimates in this
release. Further, there can be no certainty that the merger will be completed
in the manner and timeframe described in this release, or at all.
Notice to Shareholders in the United States
The new shares in Munksjö have not been and will not be registered under the
U.S. Securities Act of 1933, as amended (the “Securities Act”) or under any of
the applicable securities laws of any state or other jurisdiction of the United
States. The new shares in Munksjö may not be offered or sold, directly or
indirectly, in or into the United States (as defined in Regulation S under the
Securities Act), unless registered under the Securities Act or pursuant to an
exemption from the registration requirements of the Securities Act and in
compliance with any applicable state securities laws of the United States. The
new shares in Munksjö will be offered in the United States in reliance upon the
exemption from the registration requirements of the Securities Act provided by
Rule 802 thereunder.
Munksjö and Ahlstrom are Finnish companies. Information distributed in
connection with the merger and the related shareholder votes is subject to
disclosure requirements of Finland, which are different from those of the
United States. The financial information included in this release has been
prepared in accordance with accounting standards in Finland, which may not be
comparable to the financial statements or financial information of United
States companies.
It may be difficult for Ahlstrom’s shareholders to enforce their rights and any
claim they may have arising under the federal securities laws, since Munksjö
and Ahlstrom are located in non-U.S. jurisdictions, and all of their officers
and directors are residents of non-U.S. jurisdictions. Ahlstrom’s shareholders
may not be able to sue Munksjö or Ahlstrom or their officers or directors in a
court in Finland for violations of the U.S. securities laws. It may be
difficult to compel Munksjö and Ahlstrom and their affiliates to subject
themselves to a U.S. court’s judgment.
Ahlstrom’s shareholders should be aware that Munksjö may purchase Ahlstrom’s
securities otherwise than under the merger, such as in open market or privately
negotiated purchases at any time during the pendency of the proposed offer.
i Based on the twelve months ended 30 September 2016. Excluding merger effects
and Ahlstrom’s divestment of Osnabrück.
ii Based on the volume-weighted average share prices of Munksjö (EUR 12.71) and
Ahlstrom (EUR 12.70) on Nasdaq Helsinki Ltd during the last month up to and
including 4 November 2016.
iii Based on the volume-weighted average share prices of Munksjö (EUR 11.86)
and Ahlstrom (EUR 10.99) on Nasdaq Helsinki Ltd during the last three months up
to and including 4 November 2016.
iv Through AC Invest Five B.V. and AC Invest Six B.V.
v Through Vimpu Intressenter Ab and Viknum AB. Includes also the shares held by
Belgrano Inversiones Oy, a company controlled by Alexander Ehrnrooth (and not a
part of the Virala group of companies).
vi Through AC Invest Five B.V. and AC Invest Six B.V.
vii Through Vimpu Intressenter Ab and Viknum AB. Includes also the shares held
by Belgrano Inversiones Oy, a company controlled by Alexander Ehrnrooth (and
not a part of the Virala group of companies).
viii Including holdings of Baltiska Handels A.B.
ANNEX 1
MERGER PLAN
The Boards of Directors of Ahlstrom Corporation and Munksjö Oyj propose that
Ahlstrom Corporation shall be merged into Munksjö Oyj through an absorption
merger, so that all assets and liabilities of Ahlstrom Corporation shall be
transferred without a liquidation procedure to Munksjö Oyj, as set forth in
this merger plan (the “Merger Plan”) (the “Merger”).
As merger consideration, the shareholders of Ahlstrom Corporation shall receive
new shares of Munksjö Oyj, in proportion to their existing shareholdings.
Ahlstrom Corporation shall automatically dissolve as a result of the Merger.
The Merger shall be carried out in accordance with Chapter 16 of the Finnish
Companies Act (624/2006, as amended) (the “Finnish Companies Act”) and Section
52 a of the Finnish Business Income Tax Act (360/1968, as amended).
1. Companies Involved in the Merger
1.1 Merging Company
Corporate name: Ahlstrom Corporation (the “Merging Company”)
Business ID: 1670043-1
Address: Alvar Aallon katu 3 C, FI-00100 Helsinki, Finland
Domicile: Helsinki, Finland
The Merging Company is a public limited liability company, the shares of which
are publicly traded on the official list of Nasdaq Helsinki Ltd (the “Helsinki
Stock Exchange”).
1.2 Recipient Company
Corporate name: Munksjö Oyj (the “Recipient Company”)
Business ID: 2480661-5
Address: Eteläesplanadi 14, FI-00130 Helsinki, Finland
Domicile: Helsinki, Finland
The Recipient Company is a public limited liability company, the shares of
which are publicly traded on the official lists of the Helsinki Stock Exchange
and Nasdaq Stockholm AB (the “Stockholm Stock Exchange”).
The Merging Company and the Recipient Company are hereinafter jointly referred
to as the “Parties” or the “Companies Involved in the Merger”.
2. Reasons for the Merger
The Companies Involved in the Merger have on 7 November 2016 entered into a
business combination agreement concerning the combination of the business
operations of the Companies Involved in the Merger through a statutory
absorption merger of the Merging Company into the Recipient Company in
accordance with the Finnish Companies Act (the “Combination Agreement”). The
purpose of the Merger is to create a global leader in sustainable and
innovative fiber-based solutions, with leading global positions in the main
product areas decor, filtration and release liners. The combined company will
be better positioned to serve customers and will have a strengthened position
in the value chain through increased size. Through the Merger, a strong and
well-established platform will be created with multiple growth opportunities
through a broadened customer base, a widened geographical footprint and
expanded product and service offerings. Together, the Companies Involved in the
Merger will be able to serve a broad range of end-market segments with
complementary product and service offerings, which creates potential for
innovation within new customer-focused solutions. The Companies Involved in the
Merger have complementary geographical footprints inasmuch as the Recipient
Company has strong market positions in Europe and South America and the Merging
Company has strong market positions in Europe, North America and Asia, which
opens up new geographical growth opportunities through coordination of the
product portfolios and distribution and logistics networks. The combined
company will have a more diversified revenue and earnings base through this
wider geographic footprint and broader product offering and is expected to have
a strong financial position and cash flow to support the combined company’s
strategic growth ambitions. The increased size and strengthened capital base
also gives potential for increased financing options and lower cost of debt.
Furthermore, the Merger offers employees enhanced career opportunities,
supporting the combined company’s ability to attract and retain top talent. The
Merger is expected to create significant value for the stakeholders in the
combined company through synergies resulting from the coordination of the
operations of the Companies Involved in the Merger.
3. Amendments to the Recipient Company’s Articles of Association
Section 1, the first sentence of Section 2, Section 4 and Section 6 of the
Articles of Association of the Recipient Company are proposed to be amended in
connection with the registration of the execution of the Merger to read as
follows:
“1 § The name of the Company is Ahlstrom-Munksjö Oyj. The domicile of the
Company is Helsinki.”;
“2 § The Company’s field of business is to engage in the manufacture,
converting and sale of fiber-based solutions and products and in other related
or supporting activities.”;
“4 § The Board of Directors of the Company shall comprise a minimum of four (4)
and a maximum of twelve (12) ordinary members.”; and
“6 § The Company shall have one (1) auditor, which shall be an audit firm
authorised by the Finnish Patent and Registration Office.”
The Articles of Association, including the above proposals, are attached to
this Merger Plan in its entirety as Appendix 1.
4. Board of Directors of the Recipient Company
According to the proposed Articles of Association of the Recipient Company, the
Recipient Company shall have a Board of Directors consisting of a minimum of
four (4) and a maximum of twelve (12) members. The number of the members of the
Board of Directors of the Recipient Company shall be conditionally confirmed
and the members of the Board of Directors shall be conditionally elected by the
Extraordinary General Meeting of the Recipient Company resolving on the Merger.
The term of such members of the Board of Directors shall commence on the date
of registration of the execution of the Merger (the “Effective Date”) and shall
expire at the end of the next annual general meeting of the Recipient Company
following the Effective Date.
The Board of Directors of the Recipient Company, after consultation with the
Shareholders’ Nomination Board of each of the Recipient Company and the Merging
Company, proposes to the Extraordinary General Meeting of the Recipient Company
resolving on the Merger that Peter Seligson, Elisabet Salander Björklund,
Sebastian Bondestam, Alexander Ehrnrooth, Hannele Jakosuo-Jansson, Mats
Lindstrand and Anna Ohlsson-Leijon, each a current member of the Board of
Directors of the Recipient Company, be conditionally elected to continue to
serve on the Board of Directors of the Recipient Company and that Hans
Sohlström, Jan Inborr, Johannes Gullichsen and Harri-Pekka Kaukonen, each a
current member of the Board of Directors of the Merging Company, be
conditionally elected as members of the Board of Directors of the Recipient
Company for the term commencing on the Effective Date and expiring on the end
of the next annual general meeting of the Recipient Company following the
Effective Date.
The Board of Directors of the Recipient Company, after consultation with the
Shareholders’ Nomination Boards of each of the Recipient Company and the
Merging Company, may amend the above-mentioned proposal concerning the election
of members of the Board of Directors of the Recipient Company, in case one or
more of the above-mentioned persons would not be available for election at the
Extraordinary General Meeting of the Recipient Company resolving on the Merger.
The Board of Directors of the Recipient Company, after consultation with the
Shareholders’ Nomination Boards of each of the Recipient Company and the
Merging Company, may as necessary convene a General Meeting of Shareholders
after the Extraordinary General Meeting of the Recipient Company resolving on
the Merger to resolve to supplement or amend the composition of the Board of
Directors of the Recipient Company prior to the Effective Date, for example in
case an elected member of the Board of Directors of the Recipient Company dies,
resigns or has to be replaced by another person for some other reason.
5. Merger Consideration in shares
The shareholders of the Merging Company shall receive as merger consideration
0.9738 new shares of the Recipient Company for each share owned in the Merging
Company (the “Merger Consideration”), that is, the Merger Consideration shall
be issued to the shareholders of the Merging Company in proportion to their
existing shareholding with a ratio of 0.9738:1. There is only one share class
in the Recipient Company, and the shares of the Recipient Company do not have a
nominal value.
In case the number of shares received by a shareholder of the Merging Company
as Merger Consideration would be a fractional number, the fractions shall be
rounded down to the nearest whole number. Fractional entitlements to new shares
of the Recipient Company shall be aggregated and sold in the market and the
proceeds shall be distributed pro rata to the Merging Company’s shareholders
entitled to receive such fractional entitlements. Any costs related to the sale
and distribution of fractional entitlements shall be borne by the Recipient
Company.
The allocation of the Merger Consideration is based on the shareholding in the
Merging Company at the end of the last trading day preceding the Effective
Date. The final total number of shares in the Recipient Company issued as
Merger Consideration shall be determined on the basis of the number of shares
in the Merging Company held by shareholders, other than the Merging Company
itself, on the Effective Date. On the date of this Merger Plan, the Merging
Company holds 72,752 treasury shares. Based on the situation on the date of
this Merger Plan, the total number of shares in the Recipient Company to be
issued as Merger Consideration would therefore be 45,376,992 shares.
6. Other consideration
Apart from the Merger Consideration to be issued in the form of new shares of
the Recipient Company and proceeds from the sale of fractional entitlements,
all as set forth in Section 5above, no other consideration shall be distributed
to the shareholders of the Merging Company.
7. Distribution of the Merger Consideration, other terms and conditions
concerning the Merger Consideration and the grounds for the determination of
the Merger Consideration
The Merger Consideration shall be distributed to the shareholders of the
Merging Company on the Effective Date or as soon as reasonably possible
thereafter.
The Merger Consideration shall be distributed in the book-entry securities
system maintained by Euroclear Finland Ltd. The Merger Consideration payable to
each shareholder of the Merging Company shall be calculated, using the exchange
ratio set forth in Section 5above, based on the number of shares in the Merging
Company registered in the book-entry accounts of each such shareholder at the
end of the last trading day preceding the Effective Date. The Merger
Consideration shall be distributed automatically, and no actions are required
from the shareholders of the Merging Company in relation thereto. The new
shares of the Recipient Company distributed as Merger Consideration shall carry
full shareholder rights as from the date of their registration.
The Merger Consideration has been determined based on the relative valuations
of the Merging Company and the Recipient Company. The value determination has
been made by applying generally used valuation methods. The value determination
has primarily been based on the market value of the Companies Involved in the
Merger on the Helsinki Stock Exchange.
Based on their respective relative value determination, which is supported by a
fairness opinion received by each of the Merging Company and the Recipient
Company from their respective financial advisors, the Board of Directors of the
Merging Company and the Board of Directors of the Recipient Company have each
concluded that the Merger and the Merger Consideration are in the best interest
of the Merging Company and the Recipient Company, respectively, and in the best
interest of their respective shareholders.
8. Option rights and other special rights entitling to shares
The Merging Company has not issued any option rights or other special rights
entitling to shares referred to in Chapter 10, Section 1 of the Finnish
Companies Act.
9. Share capital of the Recipient Company
The share capital of the Recipient Company shall be increased by EUR
70,000,000.00, in connection with the registration of the execution of the
Merger in accordance with the preferred accounting treatment first described in
Section 10.
10. Description of assets, liabilities and shareholders’ equity of the Merging
Company and of the circumstances relevant to their valuation, of the effect of
the Merger on the balance sheet of the Recipient Company and of the accounting
treatment to be applied in the Merger
In the Merger, all (including known, unknown and conditional) assets,
liabilities and responsibilities as well as agreements and commitments and the
rights and obligations relating thereto of the Merging Company, and any items
that replace or substitute any such item, shall be transferred to the Recipient
Company.
The assets and liabilities of the Merging Company have been booked and valued
in accordance with the Finnish Accounting Act (1336/1997, as amended). In the
Merger, the Recipient Company shall enter the transferring assets and
liabilities to its balance sheet at the book values of the Merging Company at
the Effective Date in accordance with the provisions of the Finnish Accounting
Act and the Finnish Accounting Standards Board Statement 1253/17.1.1994. The
equity of the Recipient Company shall be formed in the Merger applying merger
accounting so that the amount recorded to the share capital of the Recipient
Company in accordance with Section 9 above shall equal the amount of share
capital of the Merging Company, the amount entered to the retained earnings
shall equal the amount of the retained earnings of the Merging Company and the
amount entered to the reserve for invested unrestricted equity of the Recipient
Company shall equal the reserve for invested unrestricted equity of the Merging
Company and the merger result shall be recorded to the unrestricted equity of
the Recipient Company or, alternatively, by using the acquisition method under
which the amount of the Merger Consideration exceeding the share capital
increase shall be recorded to the reserve for invested unrestricted equity of
the Recipient Company and the difference between the Merger Consideration and
the net assets transferred will be capitalized.
An account of the assets, liabilities and shareholders’ equity of the Merging
Company and the factors relevant to their valuation is attached to this Merger
Plan as Appendix 2.
A proposal on (i) the planned effect of the Merger on the balance sheet of the
Recipient Company and (ii) the accounting treatments applied in the Merger has
been described in the preliminary presentation of the balance sheet of the
Recipient Company attached to this Merger Plan as Appendix 2.
The final effects of the Merger on the balance sheet of the Recipient Company
will, however, be determined according to the situation and the Finnish
Accounting Standards in force as per the Effective Date.
11. Matters outside ordinary business operations
From the date of this Merger Plan, each of the Parties shall continue to
conduct their operations in the ordinary course of business and in a manner
consistent with past practice of the relevant Party.
The Board of Directors of the Merging Company proposes to the Extraordinary
General Meeting of the Merging Company resolving on the Merger that the Board
of Directors of the Merging Company be authorized to resolve on the payment of
a dividend in the maximum total amount of EUR 0.49 per each outstanding share
in the Merging Company (representing a maximum total amount of approximately
EUR 22,832,949 after excluding the treasury shares held by the Merging
Company) to the shareholders of the Merging Company prior to the Effective
Date. Further, the Board of Directors of the Merging Company proposes to the
Extraordinary General Meeting of the Merging Company resolving on the Merger
that the Board of Directors of the Merging Company would be authorized to
resolve on the issuance of new shares to the Merging Company free of charge for
the purpose that the Merging Company may dispose of such treasury shares
pursuant to its Long Term Incentive Plan 2014-2018 (the “LTIP Treasury
Shares”). Such LTIP Treasury Shares shall, however, not be disposed of in the
event the Merger is executed in accordance with this Merger Plan.
The Board of Directors of the Recipient Company proposes to the Extraordinary
General Meeting of the Recipient Company resolving on the Merger that the Board
of Directors of the Recipient Company be authorized to resolve on the payment
of funds from the reserve for invested unrestricted equity as return of equity
in the total amount of maximum EUR 0.45 per each outstanding share in the
Recipient Company (representing a maximum total amount of approximately EUR
22,842,711 after excluding the treasury shares held by the Recipient Company)
to the shareholders of the Recipient Company prior to the Effective Date.
Except as set forth above and in the Combination Agreement, the Merging Company
and the Recipient Company shall during the Merger process not resolve on any
matters (regardless of whether such matters are ordinary or extraordinary)
which would affect the shareholders’ equity or number of outstanding shares in
the relevant company, including but not limited to corporate acquisitions and
divestments, share issues, acquisition or disposal of treasury shares, changes
in share capital, or any comparable actions, or take or commit to take any such
actions.
12. Capital loans
Neither the Merging Company nor the Recipient Company has issued any capital
loans, as defined in Chapter 12, Section 1 of the Finnish Companies Act.
13. Shareholdings between the Merging Company and the Recipient Company
On the date of this Merger Plan, the Merging Company or its subsidiaries do not
hold and the Merging Company agrees not to acquire (and to cause its
subsidiaries not to acquire) any shares in the Recipient Company and the
Recipient Company does not hold and agrees not to acquire any shares in the
Merging Company.
On the date of this Merger Plan, the Merging Company holds 72,752 treasury
shares.
14. Business mortgages
On the date of this Merger Plan, there are no business mortgages as defined in
the Finnish Act on Business Mortgages (634/1984, as amended) pertaining to the
assets of either the Merging Company or the Recipient Company.
15. Special benefits or rights in connection with the Merger
Except as set forth below, no special benefits or rights, each within the
meaning of the Finnish Companies Act, shall be granted in connection with the
Merger to any members of the Board of Directors, the Managing Director or the
auditors of either the Merging Company or the Recipient Company, or to the
auditors issuing statements on this Merger Plan to the Merging Company and the
Recipient Company.
The CEO of the Merging Company is entitled to a success bonus in the amount
equaling his six months’ base salary and payable upon the execution of the
Merger. The remuneration of the auditors issuing their statement on this Merger
Plan is proposed to be paid in accordance with an invoice approved by the Board
of Directors of the Recipient Company.
16. Planned registration of the execution of the Merger
The planned Effective Date, meaning the planned date of registration of the
execution of the Merger, shall be 1 April 2017 (effective registration time
approximately at 00:01), however, subject to the fulfilment of the
preconditions in accordance with the Finnish Companies Act and the conditions
for executing the Merger set forth below in Section 18. The Effective Date may
change if, among other things, the execution of measures described in this
Merger Plan takes longer than what is currently estimated, or if circumstances
related to the Merger otherwise necessitate a change in the time schedule or if
the Boards of Directors of the Companies Involved in the Merger jointly resolve
to file the Merger to be registered prior to, or after, the planned
registration date.
17. Listing of the new shares of the Recipient Company and delisting of the
shares of the Merging Company
The Recipient Company shall apply for the listing of the new shares to be
issued by the Recipient Company as Merger Consideration to public trading on
the Helsinki Stock Exchange and the Stockholm Stock Exchange. The trading in
the new shares shall begin on or about the first trading day following the
Effective Date or as soon as reasonably possible thereafter.
The trading in the shares of the Merging Company on the Helsinki Stock Exchange
is expected to end on the Effective Date, at the latest, and the shares in the
Merging Company are expected to cease to be listed on the Helsinki Stock
Exchange as of the Effective Date, at the latest.
18. Conditions for executing the Merger
The execution of the Merger is conditional upon the satisfaction or, to the
extent permitted by applicable law, waiver of each of the conditions set forth
below:
(i) the Merger having been duly approved by the Extraordinary General Meeting
of shareholders of the Merging Company provided, however, that shareholders of
the Merging Company representing no more than twenty (20) per cent of all
shares and votes in the Merging Company having demanded the redemption of
his/her/its shares in the Merging Company pursuant to Chapter 16, Section 13 of
the Finnish Companies Act;
(ii) the Merger, the proposed amendments to the Articles of Association and the
election of the members of the Board of Directors as set forth in Sections 3and
4above, respectively, having been duly approved by the Extraordinary General
Meeting of shareholders of the Recipient Company;
(iii) the Extraordinary General Meeting of the Merging Company and the
Recipient Company having resolved on the authorization regarding the
distribution of funds as described in Section 11and such distribution having
been executed;
(iv) the necessary competition clearances having been obtained for the Merger;
(v) the Recipient Company having obtained from both the Helsinki Stock Exchange
and the Stockholm Stock Exchange written confirmations that the listing of the
Merger Consideration on the official lists of said stock exchanges will take
place promptly upon the Effective Date;
(vi) the sale by the Merging Company of its entire interest in the plant
located at Osnabrück, Germany, having been completed in the manner consistent
with the terms and conditions of the related share purchase agreement;
(vii) the financing required in connection with the Merger being available
materially in accordance with the new facilities agreements of the Recipient
Company and the Merging Company;
(viii) no default under any of the material finance arrangements of the Merging
Company, as defined in the Combination Agreement, having occurred and being
continuing if, in the opinion of either Company Involved in the Merger (in each
case, acting reasonably and based on advice of legal counsel), such default
would have a material adverse effect on the Merger or the combined company;
(ix) no default under the material finance arrangements of the Recipient
Company, as defined in the Combination Agreement, having occurred and being
continuing if, in the opinion of either Company Involved in the Merger (in each
case, acting reasonably and based on advice of legal counsel), such default
would have a material adverse effect on the Merger or the combined company;
(x) the repayment or securing by collateral of the total aggregate amount of
the receivables required by creditors objecting to the Merger in accordance
with Chapter 16, Section 15 of the Finnish Companies Act, if any, not resulting
in a default by the Merging Company under any of the material finance
arrangements of the Merging Company, as defined in the Combination Agreement,
or, in the event of any such default, the necessary waivers and consents having
been granted;
(xi) the Combination Agreement not having been terminated in accordance with
its provisions; and
(xii) no event, circumstance or change having occurred on or after the date of
the Combination Agreement that would have a material adverse effect as defined
in the Combination Agreement in respect of the Merging Company or the Recipient
Company.
This Merger Plan has been executed in two (2) identical counterparts, one for
the Merging Company and one for the Recipient Company.
______________________________
(Signatures to follow)
In Helsinki, 7 November 2016
AHLSTROM CORPORATION
/s/ HANS SOHLSTRÖM
Hans Sohlström
Chairman of the Board of Directors
In Helsinki, 7 November 2016
Munksjö Oyj
/s/ ELISABET SALANDER BJÖRKLUND /s/ JAN ÅSTRÖM
Elisabet Salander Björklund Jan Åström
Deputy Chairman of the Board President and CEO
APPENDICES TO THE MERGER PLAN
Appendix 1 Amended Articles of Association of the Recipient Company
Appendix 2 Description of assets, liabilities and shareholders’ equity and
valuation of the Merging Company and the preliminary presentation of the
balance sheet of the Recipient Company
Appendix 3 Auditors’ statement in accordance with Chapter 16, Section 4 of
the Finnish Companies Act
Appendix 1
Amended Articles of Association of the Recipient Company
MUNKSJÖ OYJ
ARTICLES OF ASSOCIATION
1 § The name of the Company is Ahlstrom-Munksjö Oyj. The
domicile of the Company is
Helsinki.
2 § The Company’s field of business is to engage in the
manufacture, converting and sale of fiber-based solutions and products and in
other related or supporting activities. The Company may operate either directly
or through subsidiaries and associated companies. The Company may also as the
parent company take case of the Group companies’ common tasks such as
administrative services and financing, and own real estate, shares and other
securities.
3 § The shares of the Company belong to the book-entry
securities system.
4 § The Board of Directors of the Company shall comprise a
minimum of four (4) and a maximum of twelve (12) ordinary members.
5 § The Company is represented by the chairman of the Board of
Directors and the President and CEO, each alone, as well as by two members of
the Board of Directors together.
The Board of Directors may grant the right to represent the Company to a named
person.
6 § The Company shall have one (1) auditor, which shall be an
audit firm authorised by the Finnish Patent and Registration Office.
7 § The Company’s financial period shall be the calendar year.
8 § General meetings shall be convened by a notice published on
the website of the Company, no earlier than three (3) months and no later than
three (3) weeks prior to the General Meeting. The notice shall in any event be
published no later than nine (9) days before the record date of the General
Meeting. In addition, the Board of Directors may decide to publish the notice
of meeting, in whole or in part, in a manner it considers appropriate.
9 § In order to attend a General Meeting, a shareholder must
notify the Company by the date stated in the notice of meeting, which date may
be no earlier than ten (10) days prior to the meeting.
Appendix 2
Description of assets, liabilities and shareholders’ equity and valuation of
the Merging Company and the preliminary presentation of the balance sheet of
the Recipient Company
The balance sheets of the Recipient Company and Merging Company before the
Merger as at 30 September 2016 and the illustrative Merger Balance Sheet of the
Recipient Company after the Merger at that date calculated under the merger
accounting method are presented below. The final effects of the Merger on the
balance sheet of the Recipient Company will be determined according to the
situation and the Finnish Accounting Standards in force as per the Effective
Date.
EUR in million Recipient Merging Company Merger Recipient
Company before before Merger¹ accountin Company
Merger g² Merger
Balance
Sheet³
--------------------------------------------------------------------------------
ASSETS
Intangible assets 16.7 4.2 - 20.9
Tangible assets 0.5 - 0.5
Investments 374.7 724.7 - 1,099.4
Loan receivables 248.0 50.0 - 298.0
from group
companies
Other receivables 0.3 - 0.3
Deferred tax asset 2.0 0.7 - 2.8
--------------------------------------------------------------------------------
Total non-current 641.5 780.5 - 1,422.0
assets
Current assets
Receivables from 33.6 12.8 - 46.3
group companies
Other receivables 0.1 2.2 - 2.3
--------------------------------------------------------------------------------
Total current 33.7 15.0 - 48.7
assets
Cash and cash 98.1 15.2 - 113.3
equivalents
--------------------------------------------------------------------------------
Total assets 773.3 810.6 - 1,584.0
--------------------------------------------------------------------------------
EUR in million Recipient Merging Merger Recipient
Company Company accounti Company
before Merger before ng² Merger
Merger¹ Balance
Sheet³
--------------------------------------------------------------------------------
EQUITY AND LIABILITIES
Equity
Share capital 15.0 70.0 - 85.0
Reserve for invested 286.2 61.1 61.8 409.1
unrestricted equity
Retained earnings (27.7) 335.6 (61.8) 246.1
Total equity 273.5 466.7 - 740.2
--------------------------------------------------------------------------------
Provisions 0.7 3.6 - 4.3
Cumulative accelerated 0.5 - 0.5
depreciation
Non-current liabilities
Borrowings 286.2 199.6 - 485.9
Borrowings from group 13.0 - 13.0
companies
Borrowings from joint 1.8 0.7 - 2.5
ventures and associated
companies
-------------------------- --------------------------------------
Total non-current 301.0 200.3 - 501.4
liabilities
--------------------------------------------------------------------------------
Current liabilities
Borrowings 16.0 35.0 - 51.0
Borrowings from group 179.6 90.4 - 270.0
companies
Accounts payable to group 0.0 0.3 - 0.3
companies
Other short-term 2.5 13.8 - 16.3
liabilities
-----------
Total current liabilities 198.1 139.5 - 337.6
--------------------------------------------------------------------------------
Total liabilities 499.9 343.9 - 843.8
--------------------------------------------------------------------------------
Total equity and 773.3 810.6 - 1,584.0
liabilities
--------------------------------------------------------------------------------
¹ As announced by the Merging Company on 7 November 2016, the Merging Company
has signed an agreement to divest its Osnabrück plant in Germany to Kämmerer
GmbH. The balance sheet of the Merging Company has not been adjusted for the
sale of the Osnabrück plant in Germany in this illustrative Recipient Company
Merger Balance Sheet.
² The equity of the Recipient Company shall be formed in the Merger applying
merger accounting so that the amount recorded to the share capital of the
Recipient Company shall equal the amount of share capital of the Merging
Company, the amount entered to the retained earnings shall equal the amount of
the retained earnings of the Merging Company and the amount entered to the
reserve for invested unrestricted equity of the Recipient Company shall equal
the reserve for invested unrestricted equity of the Merging Company. The
difference between the Merger Consideration and the net assets of the Merging
Company shall be recorded to the unrestricted equity of the Recipient Company.
The Merger Consideration shall be calculated in accordance with the Finnish
Accounting Standards using the share price of the Recipient Company and final
total number of shares to be issued as Merger Consideration on the Effective
Date. For the purpose of the Merger Consideration used for the illustrative
Recipient Company Merger balance sheet, the last trading price of the Recipient
Company’s shares on 2 November 2016 of EUR 12.76 and the number of new shares
of the Recipient Company of 45,376,992 has been used.
³ The Board of Directors of the Merging Company and the Recipient Company
propose to distribute funds in the total amount of approximately EUR 23 million
(as further set out in Section 11 of the Merger Plan) each to their respective
shareholders prior to the Effective Date. The illustrative Recipient Company’s
Merger Balance Sheet presented herein has not been adjusted for the proposed
distributions.
KPMG Oy Ab Telephone +358 20 760 3000
Töölönlahdenkatu 3 A www.kpmg.fi
PO Box 1037
00101 Helsinki, FINLAND
Appendix 3
This documents is a translation from the Finnish original
Auditor’s Statement to the Extraordinary Shareholders Meeting of Munksjö Oyj
We have performed an engagement providing reasonable assurance relating to the
merger plan prepared by the Boards of Directors of Munksjö Oyj and Ahlstrom
Corporation dated 7 November 2016. The Board of Directors of Munksjö Oyj has
decided to propose to the extraordinary shareholders meeting to decide that
Ahlstrom Corporation shall merge into Munksjö Oyj. The Boards of the Directors
of the companies have prepared a merger plan with respect to the proposed
merger. According to the conditions in the merger plan the shareholders of
Ahlstrom Corporation shall receive as merger consideration 0.9738 shares of
Munksjö Oyj for each share owned in Ahlstrom Corporation.
The proposed share exchange ratio is based on the valuation results of using
valuation methods for determining the values of the companies as described in
the merger plan prepared by the Boards of Directors.
The responsibility of the Board of Directors
The Boards of Directors of Munksjö Oyj and Ahlstrom Corporation are responsible
for the preparation of the merger plan and that the merger plan gives a true
and fair view of the basis on which the merger consideration is determined and
the distribution of the merger consideration in accordance with the Finnish
Limited Liability Companies Act.
The Auditor’s independence and quality control
We are independent of Munksjö Oyj according to the ethical requirements in
Finland and we have complied with other ethical requirements, which apply to
the engagement conducted.
The practitioner applies International Standard on Quality Control 1 (ISQC 1)
and accordingly maintains a comprehensive system of quality control including
documented policies and procedures regarding compliance with ethical
requirements, professional standards and applicable legal and regulatory
requirements.
Auditor’s Responsibility
Our responsibility is based on our work to report on the merger plan and
examine and to report whether the merger will compromise the repayment of the
current debts of Munksjö Oyj. We conducted our reasonable assurance engagement
in accordance with ISAE 3000 (International Standard on Assurance Engagements,
Revised). The engagement includes performing procedures to obtain evidence on
whether the merger plan gives a true and fair view in accordance with the
Finnish Limited Liability Companies Act of basis on which the merger
consideration is determined, of the distribution of the merger consideration
and whether the merger compromise the repayment of the current debts of Munksjö
Oyj.
We believe that the evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Opinion
In our opinion, based on chapter 16 section 4 in the Finnish Limited Liability
Companies Act, the merger plan gives in all material respect a true and fair
view in accordance with the Finnish Limited Liability Companies Act of the
basis on which the merger consideration is determined, and of the distribution
of the merger consideration. According to our understanding the merger does not
compromise the repayment of the current debts of Munksjö Oyj.
Helsinki, 7 November 2016
KPMG Oy Ab
Sixten Nyman
Authorised Public Accountant
Auditor’s Statement
(Translation from the Finnish original)
To the Extraordinary General Meeting of Ahlstrom Corporation
We have undertaken a reasonable assurance engagement of the merger plan
prepared by the Board of Directors of Ahlstrom Corporation and Munksjö Oyj
dated 7 November, 2016. The Board of Directors of Ahlstrom Corporation have
decided to propose to the extraordinary general meeting to decide that Ahlstrom
Corporation shall merge into Munksjö Oyj. The Boards of Directors of the
merging companies have prepared a merger plan with respect to the proposed
merger. According to the conditions of the merger the shareholders of Ahlstrom
Corporation shall receive as merger consideration 0,9738 new shares of Munksjö
Oyj for each share owned in Ahlstrom Corporation. The proposed share exchange
ratio is based on the valuation results of applying the valuation methods for
determining the values of the companies as described in the merger plan
prepared by the Boards of Directors.
Responsibilities of the Board of Directors
The Boards of Directors of Ahlstrom Corporation and Munksjö Oyj are responsible
for the preparation of a merger plan that gives a true and fair view of the
basis on which the merger consideration is determined and of the distribution
of the merger consideration in accordance with the Finnish Limited Liability
Companies Act.
Auditor’s independence and quality control
We are independent of Ahlstrom Corporation in accordance with the ethical
requirements that are relevant to our engagement in Finland, and we have
fulfilled our other ethical responsibilities in accordance with these
requirements.
PricewaterhouseCoopers Oy applies International Standard on Quality Control 1
and accordingly maintains a comprehensive system of quality control including
documented policies and procedures regarding compliance with ethical
requirements, professional standards and applicable legal and regulatory
requirements.
Auditor’s Responsibilities
Our responsibility is to express an opinion on the merger plan. We conducted
our reasonable assurance engagement in accordance with the International
Standard on Assurance Engagements (ISAE) 3000 (Revised). The engagement
involves performing procedures to obtain evidence on whether the merger plan
gives a true and fair view of the basis on which the merger consideration is
determined and of the distribution of the merger consideration in accordance
with the Finnish Limited Liability Companies Act.
We believe that the evidence that we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Opinion
In our opinion, based on Chapter 16 Section 4 of the Finnish Limited Liability
Companies Act, the merger plan gives, in all material respects, a true and fair
view of the basis on which the merger consideration is determined and of the
distribution of the merger consideration in accordance with the Finnish Limited
Liability Companies Act.
Helsinki, 7 November 2016
PricewaterhouseCoopers Oy
Authorised Public Accountants
Markku Katajisto
Authorised Public Accountant (KHT)
PricewaterhouseCoopers Oy, tilintarkastusyhteisö, PL 1015 (Itämerentori 2),
00101 HELSINKI
Puh. 020 787 7000, faksi 020 787 8000, www.pwc.fi
Kotipaikka Helsinki, y-tunnus 0486406-8
ANNEX 2
SUMMARY OF THE COMBINATION AGREEMENT
This summary is not an exhaustive presentation of all the terms and conditions
of the Combination Agreement. The summary aims to describe the terms and
conditions of the Combination Agreement to the extent that such terms and
conditions may materially affect a shareholder’s assessment of the terms and
conditions of the merger. Nothing in the Combination Agreement (or this summary
thereof) confers any rights or obligations on any person other than Munksjö and
Ahlstrom.
General
Pursuant to the Combination Agreement entered into by and between Munksjö and
Ahlstrom on 7 November 2016, Munksjö and Ahlstrom have agreed to combine their
business operations under one management by way of a statutory merger pursuant
to the Finnish Companies Act, whereby all assets and liabilities of Ahlstrom
will be transferred to Munksjö, without a liquidation procedure, through an
absorption merger upon the completion of which Ahlstrom will automatically
dissolve and cease to exist as a separate legal entity.
Representations, Warranties and Undertakings
The Combination Agreement contains certain customary representations and
warranties as well as undertakings, such as, inter alia, each party conducting
its businesses in the ordinary course of business before the completion of the
merger, keeping the other party informed of any and all matters that may be of
material relevance for the purposes of effecting the completion of the merger,
cooperating with the other party in making necessary regulatory filings and
cooperating with the other party in respect of the financing of the combined
company. Munksjö and Ahlstrom have also undertaken to prepare for certain
governance arrangements that will be implemented by Munksjö after the
completion of the merger. In addition, Munksjö and Ahlstrom each undertake not
to solicit competing proposals. Munksjö and Ahlstrom agree to bear their own
fees, costs and expenses incurred in connection with the merger.
Munksjö and Ahlstrom give each other customary reciprocal representations and
warranties related to, inter alia, authority to enter into the Combination
Agreement, due incorporation, status of the shares in the respective company,
compliance with applicable securities laws, preparation of financial
statements, compliance with licenses and laws, ownership of intellectual
property, absence of a breach of contracts, taxes and the completeness of the
due diligence materials provided to the other party. In addition, Munksjö gives
customary representations and warranties regarding the new shares in Munksjö to
be issued as merger consideration to Ahlstrom’s shareholders.
The Board of Directors of Munksjö undertakes to propose to the EGM of Munksjö
that the EGM of Munksjö grants an authorization to the Board of Directors of
Munksjö to resolve upon the payment by Munksjö of funds from the reserve for
invested unrestricted equity as return of equity in the total amount of
approximately EUR 23 million, corresponding to EUR 0.45 per share in Munksjö,
to the shareholders of Munksjö prior to the completion of the merger.
The Board of Directors of Ahlstrom undertakes to propose to the EGM of Ahlstrom
that the EGM of Ahlstrom grants an authorization to the Board of Directors of
Ahlstrom to resolve upon the payment by Ahlstrom of a dividend in the total
amount of approximately EUR 23 million, corresponding to EUR 0.49 per share in
Ahlstrom, to the shareholders of Ahlstrom prior to the completion of the
merger.
Ahlstrom undertakes to use its reasonable best efforts to negotiate with any
creditor of Ahlstrom objecting to the merger in order to reach an agreement
regarding the merger or to commence a process at a relevant district court to
obtain a confirmatory judgment that the underlying receivable of such objecting
creditor has been repaid or such objecting creditor has been provided with
sufficient collateral, if applicable.
Conditions to the Completion of the Merger
The completion of the merger is conditional upon the satisfaction or, to the
extent permitted by applicable law, waiver of each of the following conditions:
● the merger having been duly approved by the EGM of
Ahlstrom provided, however, that shareholders of Ahlstrom representing no more
than 20 per cent of all shares and votes in Ahlstrom having demanded the
redemption of his/her/its shares in Ahlstrom pursuant to Chapter 16, Section 13
of the Finnish Companies Act;
● the merger, the proposed amendments to the articles of
association and the election of the members of the Board of Directors having
been duly approved by the EGM of Munksjö;
● the EGMs of Munksjö and Ahlstrom having resolved on the
authorization regarding the distribution of funds as described under
“—Representations, Warranties and Undertakings” above and such distribution
having been executed;
● the necessary competition clearances having been obtained
for the merger;
● Munksjö having obtained from both Nasdaq Helsinki Ltd and
Nasdaq Stockholm Ltd written confirmations that the listing of the merger
consideration on the official lists of said stock exchanges will take place
promptly upon the registration of the completion of the merger;
● the sale by Ahlstrom of its entire interest in the plant
located at Osnabrück, Germany, having been completed in the manner consistent
with the terms and conditions of the related share purchase agreement;
● the financing required in connection with the merger being
available materially in accordance with the new facilities agreements of
Munksjö and Ahlstrom;
● no default under any of the material finance arrangements
of Ahlstrom, as defined in the Combination Agreement, having occurred and being
continuing if, in the opinion of either Munksjö or Ahlstrom (in each case,
acting reasonably and based on advice of legal counsel), such default would
have a material adverse effect on the merger or the combined company;
● no default under the material finance arrangements of
Munksjö, as defined in the Combination Agreement, having occurred and being
continuing if, in the opinion of either Munksjö or Ahlstrom (in each case,
acting reasonably and based on advice of legal counsel), such default would
have a material adverse effect on the merger or the combined company;
● the repayment or securing by collateral of the total
aggregate amount of the receivables required by creditors objecting to the
merger in accordance with Chapter 16, Section 15 of the Finnish Companies Act,
if any, not resulting in a default by Ahlstrom under any of the material
finance arrangements of Ahlstrom, as defined in the Combination Agreement, or,
in the event of any such default, the necessary waivers and consents having
been granted;
● the Combination Agreement not having been terminated in
accordance with its provisions; and
● no event, circumstance or change having occurred on or
after the date of the Combination Agreement that would have a material adverse
effect as defined in the Combination Agreement in respect of Munksjö or
Ahlstrom.
Munksjö and Ahlstrom have agreed to use reasonable best efforts to cause all
conditions precedent to be satisfied by 1 August 2017 and to take all other
necessary actions set forth in the Combination Agreement.
Termination
The Combination Agreement may be terminated by mutual written consent duly
authorized by the Boards of Directors of Munksjö and Ahlstrom. If the merger
has not been completed by 1 August 2017 or if it becomes evident that the
completion of the merger cannot take place before such date, Munksjö or
Ahlstrom may terminate the Combination Agreement, provided that the party
causing such failure will not have the right to terminate. In addition, each of
Munksjö and Ahlstrom may terminate the Combination Agreement if, among other
things, the resolutions necessary to implement the merger at the EGMs of
Munksjö and Ahlstrom have not been considered by a relevant general meeting by
1 August 2017 or if upon consideration by the relevant general meetings, such
resolutions fail to be duly approved, or if any governmental entity including,
but not limited to, any competition authority, gives an order or takes any
regulatory action that is non-appealable and conclusively prohibits the
completion of the merger. Furthermore, each of Munksjö and Ahlstrom may
terminate the Combination Agreement in case of a breach by the other party of
any of the representations, warranties, covenants, undertakings or agreements
under the Combination Agreement if such breach has resulted, or could
reasonably be expected to result, in a material adverse effect in respect of
the breaching party.
Governing Law
The Combination Agreement is governed by Finnish law.
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