2016-11-07 07:30:44 CET
2016-11-07 07:30:44 CET
BIRTINGARSKYLDAR UPPLÝSNINGAR
Ahlstrom - Tender offer
Ahlstrom and Munksjö to combine, creating a global leader in sustainable and innovative fiber-based solutions
This stock exchange release may not be published or distributed, in whole or in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.
Ahlstrom Corporation STOCK EXCHANGE RELEASE November 7, 2016 at 08:30
Ahlstrom and Munksjö 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 million(i). 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%,
respectively(ii)
* 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%,
respectively(iii)
* 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 Capital(iv) 13.4%|
| |
|Virala group of companies(v) 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 2016 | January - December 2015 |
+--------------+--------------+-------+--------+--------------+-------+--------+
|EUR | Combined|Munksjö|Ahlstrom| Combined|Munksjö|Ahlstrom|
|million | company| | | company| | |
+--------------+--------------+-------+--------+--------------+-------+--------+
|Net Sales | 1,680.3| 860.5| 819.8| 2,205.4|1,130.7| 1,074.7|
+--------------+--------------+-------+--------+--------------+-------+--------+
|EBITDA (Adj.)*| 205.3| 100.6| 104.7| 198.6| 93.6| 105.0|
+--------------+--------------+-------+--------+--------------+-------+--------+
|EBITDA -% | 12.2| 11.7| 12.8| 9.0| 8.3| 9.8|
|(Adj.)* | | | | | | |
+--------------+--------------+-------+--------+--------------+-------+--------+
|EBITDA* | 201.9| 100.6| 101.3| 182.9| 86.3| 96.6|
+--------------+--------------+-------+--------+--------------+-------+--------+
|EBITDA -%* | 12.0| 11.7| 12.4| 8.3| 7.6| 9.0|
+--------------+--------------+-------+--------+--------------+-------+--------+
+-----------------+---------------------------------+
| | October 2015 - September 2016 |
+-----------------+----------------+-------+--------+
|EUR |Combined company|Munksjö|Ahlstrom|
|million | | | |
+-----------------+----------------+-------+--------+
|Net Sales | 2,225.3|1,150.5| 1,074.8|
+-----------------+----------------+-------+--------+
|EBITDA (Adj.)* | 249.1| 122.7| 126.4|
+-----------------+----------------+-------+--------+
|EBITDA -% (Adj.)*| 11.2| 10.7| 11.8|
+-----------------+----------------+-------+--------+
|EBITDA* | 239.0| 122.7| 116.3|
+-----------------+----------------+-------+--------+
|EBITDA -%* | 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 2016 | January - December 2015 |
+----------------+-------------+-------+--------+-------------+-------+--------+
|EUR million | Combined|Munksjö|Ahlstrom| Combined|Munksjö|Ahlstrom|
| | company| | | company| | |
+----------------+-------------+-------+--------+-------------+-------+--------+
|Operating cash | 171.9| 73.0| 98.9| 115.5| 55.5| 60.0|
|flow | | | | | | |
+----------------+-------------+-------+--------+-------------+-------+--------+
|Capital | 46.5| 28.5| 18.0| 67.1| 39.8| 27.3|
|expenditure | | | | | | |
+----------------+-------------+-------+--------+-------------+-------+--------+
+-------------------+---------------------------------+
| | October 2015 - September 2016 |
+-------------------+----------------+-------+--------+
|EUR million |Combined company|Munksjö|Ahlstrom|
+-------------------+----------------+-------+--------+
|Operating cash flow| 239.7| 117.5| 122.2|
+-------------------+----------------+-------+--------+
|Capital expenditure| 69.0| 37.4| 31.6|
+-------------------+----------------+-------+--------+
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 Capital(vi), Virala group of companies(vii), Ilmarinen Mutual Pension
Insurance Company, Varma Mutual Pension Insurance Company, Peter Seligson(viii),
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 5 above, 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 5 above, 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 3 and 4 above, 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 11 and 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.
Merging Recipient
Recipient Company Company
Company before before Merger Merger Balance
EUR in million Merger Merger¹ accounting² 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
from group
companies 248.0 50.0 - 298.0
Other receivables 0.3 - 0.3
Deferred tax
asset 2.0 0.7 - 2.8
--------------------------------------------------------------------------------
Total non-current
assets 641.5 780.5 - 1,422.0
Current assets
Receivables from
group companies 33.6 12.8 - 46.3
Other receivables 0.1 2.2 - 2.3
--------------------------------------------------------------------------------
Total current
assets 33.7 15.0 - 48.7
Cash and cash
equivalents 98.1 15.2 - 113.3
--------------------------------------------------------------------------------
Total assets 773.3 810.6 - 1,584.0
--------------------------------------------------------------------------------
Merging Recipient
Recipient Company Company
Company before before Merger Merger Balance
EUR in million Merger Merger¹ accounting² Sheet³
--------------------------------------------------------------------------------
EQUITY AND
LIABILITIES
Equity
Share capital 15.0 70.0 - 85.0
Reserve for
invested
unrestricted
equity 286.2 61.1 61.8 409.1
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
depreciation 0.5 - 0.5
Non-current
liabilities
Borrowings 286.2 199.6 - 485.9
Borrowings from
group companies 13.0 - 13.0
Borrowings from
joint ventures and
associated
companies 1.8 0.7 - 2.5
--------------------------------------------------------------------------------
Total non-current
liabilities 301.0 200.3 - 501.4
--------------------------------------------------------------------------------
Current
liabilities
Borrowings 16.0 35.0 - 51.0
Borrowings from
group companies 179.6 90.4 - 270.0
Accounts payable
to group companies 0.0 0.3 - 0.3
Other short-term
liabilities 2.5 13.8 - 16.3
--------------------------------------------------------------------------------
Total current
liabilities 198.1 139.5 - 337.6
--------------------------------------------------------------------------------
Total liabilities 499.9 343.9 - 843.8
--------------------------------------------------------------------------------
Total equity and
liabilities 773.3 810.6 - 1,584.0
--------------------------------------------------------------------------------
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.
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.
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
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)
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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