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Qassim Cement Company (“QCC”) announces its entry into a binding implementation agreement with Hail Cement Company (“HCC”) to acquire all of HCC’s shares through a securities exchange transaction.

3040
QACCO
-0.51 %
1445/06/11     24/12/2023 08:44:56

Element ListExplanation
Introduction With reference to the announcement made by Qassim Cement Company (“QCC” or the “Company”) on the Saudi Exchange website on 29-02-1444H (corresponding to 25-09-2022G) about its entry into a nonbinding memorandum of understanding with Hail Cement Company (“HCC”) relating to a potential securities exchange transaction and including a nonbinding agreement on the structure and the exchange ratio, QCC is pleased to announce its entry into a binding implementation agreement with HCC on 08-06-1445H (corresponding to 21-12-2023G) (the “Implementation Agreement”) pursuant to which QCC has agreed to make an offer to HCC’s shareholders to acquire all shares of HCC in consideration for newly issued shares in QCC pursuant to Article (26) of the Merger and Acquisition Regulations and in accordance with the Rules on the Offer of Securities and Continuing Obligations issued by the board of the Capital Market Authority (the “CMA”), and in accordance with the conditions and provisions of the Implementation Agreement (the “Transaction”).

The Company provides further details below and in the attached document.

Date of Signing the Agreement 2023-12-21 Corresponding to 1445-06-08
Name of (the Acquired Company)/(Asset to be Purchased) Hail Cement Company
Value of (The Company to be Acquired)/(The Asset to be Purchased) Based on the Exchange Ratio and the closing share price of QCC of SAR 63.20 on 08-06-1445H (corresponding to 21-12-2023G) (which is the last trading day prior to the date of this announcement), each HCC share is valued – for the purposes of the Transaction – at SAR 13.27 and HCC’s total shares are valued – for the purposes of the Transaction – at 1,299,328,800 SAR.
Value of the listed company The market value of QCC is SAR 5,688,000,000 as of 08-06-1445H (corresponding to 21-12-2023G) (which is the last trading day prior to the date of this announcement).
Capital before Increase SAR 900,000,000
Number of Shares before Increase 90000000
Value of capital increase 20,559,000 new shares, with total nominal value of 205,590,000 SAR.
Capital Increase Percentage (%) 22.8 %
Capital After Increase SAR 1,105,590,000
Number of Shares After Increase 110559000
Share Exchange Equation (Ratio) 0.21 new share in QCC in return for every share in HCC.
Potential Effects or Risks for Issuing such Shares on the Shareholders of the Current Company, the Company, and Decision Making thereon Upon Transaction completion, QCC’s existing shareholders will own 81.4% of QCC after the capital increase, and HCC’s shareholders will own 18.6% of QCC after the capital increase. After obtaining regulatory approvals, QCC will publish a shareholders’ circular to its shareholders with all details relating to the capital increase and associated risks.
Listed Company's Ownership Percentage in (Company to be Acquired)/(Asset to be Purchased) after the Issuance of Shares (%) 100 %
Ownership Percentage of Shareholders to Whom New Shares will be Issued after Conclusion of the Acquisition (%) 18.6 %
Additional Information or Substantial Conditions This announcement is not meant to be a firm intention announcement by QCC for the purposes of the Merger and Acquisition Regulations issued by the Capital Market Authority’s board, as the firm intention announcement issuance is subject to certain conditions in the Implementation Agreement relating to coordination with certain regulators to confirm certain approval requirements. The firm intention announcement will be made at a later date following the fulfilment of such conditions. The firm intention announcement will be made at a later date following the fulfilment of certain conditions of the Implementation Agreement and in any case before the publication of the Offer Document and the Shareholders’ Circular issued by QCC and the Board Circular issued by HCC.

Please review the attached file for more details about the Transaction, its terms, rationale and other details.

Related Parties QCC established a private investment fund, which is managed by a capital market institution, to invest in securities and shares. QCC owns all the units in this fund, and the fund owns 2,308,206 shares in HCC. which represents 2.36% of HCC’s share capital prior to the Transaction. This fund is considered a related party pursuant to the Merger and Acquisition Regulations.
The expiry date of the agreement The Implementation Agreement terminates if the Transaction’s conditions are not satisfied or waived before the end of one year from the date of the Implementation Agreement (or any other date agreed in writing), and also terminates according to the below termination terms.
Agreement Termination Terms The Implementation Agreement terminates with immediate effect, and the rights and obligations of both parties under it cease (with certain surviving provisions such as confidentiality and dispute resolution) upon the occurrence of a number of events, including:

1. A written notice to terminate is given by one party to the other party following breach, where such breach caused a Material Adverse Event (as defined in the Implementation Agreement), including a breach of the business conduct restrictions, breach of the warranties and breach of the undertaking regarding providing and submitting the documents required under relevant laws and providing the information required to allow the other party to prepare such documents.

2. If the Transaction’s conditions are not satisfied or waived before the end of one year from the date of the Implementation Agreement (or any other date agreed in writing).

3. If the Parties agree to terminate the Implementation Agreement in writing.

Approvals The Transaction completion is subject to a number of conditions, which are summarized as follows:

1. Obtaining all required approvals of the CMA with respect to the Transaction.

2. Obtaining the approval of the Saudi Exchange on the listing of the Consideration Shares on the Exchange and obtaining any other approvals which the Saudi Exchange may require with respect to the Transaction.

3. The delivery of any required notification to Securities Depository Center Company (Edaa) with respect to the Transaction.

4. Obtaining a non-objection from the General Authority for Competition with respect to the Transaction, or the expiration of the applicable waiting periods under the Competition Law.

5. Obtaining a non-objection from the Ministry of Commerce in respect of the amendments to the bylaws of QCC.

6. Obtaining the approval of the requisite majority of QCC’s shareholders on the Transaction’s resolutions at the Transaction’s extraordinary general assembly.

7. Obtaining the approval of the requisite majority of HCC’s shareholders on the Transaction’s resolutions at the Transaction’s extraordinary general assembly.

8. No Material Adverse Event (as such term is defined in the Implementation Agreement) having occurred and being continuing.

9. No breach of specific warranties provided by each QCC and HCC having occurred, unless such breach is capable of remedy and has been remedied to the reasonable satisfaction of the non-breaching party.

10. No governmental body of competent jurisdiction in Saudi Arabia having enacted, issued, promulgated, enforced or entered any order, injunction, judgment, decree or other action which is in effect and which prohibits or makes illegal the consummation of the Transaction in accordance with the Implementation Agreement.

11. Obtaining the approval of a number of contractual counterparties of both companies as outlined in the Implementation Agreement.

Attached Documents  

The Capital Market Authority and Saudi Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.

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Last Price 58.6
Net Change -0.3 (-0.51%)
Value Traded (Sar) 1,043,532
Volume Traded 17,872
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