Yazicilar : Signing of binding agreements regarding Anadolu Group merger

As disclosed in our material event disclosure dated February 24, 2017, negotiations held between Kamil Yazici Yönetim ve Danisma A.S. ('KYYDAS') and Özilhan Sinai Yatirim A.S. ('ÖSYAS'), Yazicilar Holding A.S. ('Yazicilar Holding') and (C) and (D) group privileged shareholders of Yazicilar Holding regarding the merger of ÖSYAS and AEH under Yazicilar Holding (i.e. Anadolu Group merger), have resulted in the signing of binding agreements between the related parties as of July 29, 2017.

Through the merger planned in the framework of these agreements, KYYDAS and ÖSYAS aim to enhance the corporate and legal infrastructures Anadolu Group, maximize shareholder value and ensure the continuation of Anadolu Group beyond generations, through the establishment of principles and rules regarding the development, functioning and management of operations and the rights and obligations of the parties against each other, thereby entailing increases in profitability, effectiveness and efficiency in a dynamic state Anadolu Group to maintain sustainable, economic and strong operations.

During the general assembly of Yazicilar Holding to be held for the approval of the merger, the privileges of (A), (C) and (D) group shares will be removed, by reissuing these shares as (A) group unprivileged public shares. Without prejudice to the provisions of Capital Markets Board regarding the election of independent board members, the privilege of appointing half of the total 12 members of the new board among candidates offered by (B) group shareholders will be continued on reissued (B) group shares upon merger. During the same general assembly, it is foreseen that the name of Yazicilar Holding will be changed to Anadolu Endüstri Holding A.S. ('Merged Holding'). KYYDAS and Özilhan Family will participate with 50%-50% shares in a new management company (i.e. AG Sinai Yatirim ve Yönetim A.S.), which will own all of (B) group privileged shares and part of (A) group unprivileged shares of Merged Holding. As such, Merged Holding will be managed by KYYDAS and Özilhan Family on the basis of equal representation and equal governance principles.

The merger will be conducted based on financial statements as of June 30, 2017 and the related independent audit procedures are ongoing. Similarly, the appointed independent valuation firm is working on the expert opinion. Following the completion of the audit and valuation studies around the end of August, application to the Capital Markets Board is planned to be made. The merger will be finalized following the receipt of regulatory approvals from Competition Board and Ministry of Customs and Trade, besides Capital Markets Board; and the approval at ÖSYAS's, AEH's and Yazicilar Holding's general assemblies.

During the general assembly to be held for the approval of the merger, retirement right will be granted to the shareholders of Yazicilar Holding in accordance with relevant legislation and the February 24, 2017 will be the base date for the calculation of the exercise price of such retirement right.

On the other hand, Merged Holding will own the shares of Anadolu Group companies which are in the assets of Yazicilar Holding, AEH and ÖSYAS. It has been presumed that there will be no need for a mandatory tender offer for the shareholders of public Anadolu Group companies in this context. Nevertheless, the final decision regarding this matter is dependent upon CMB's evaluation and in case any obligation appears following the completion of the transaction, February 24, 2017 will also be the base date for the calculation of the exercise prices for such mandatory tender offers.

Seperately, cash amount of TL 50 million at Yazicilar Holding will be distributed to the shareholders of Yazicilar Holding through an additional dividend distribution to be made before the completion of the merger.

Informative presentation regarding the merger, which was first prepared on March 10, 2017, is updated in regard of this announcement and will be published on our website www.yazicilarholding.com. The public will be informed of additional information and details as they emerge in due course.