AZ Electronic Materials : Notice of closing and compulsory acquisition

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

For immediate release

8 May 2014

RECOMMENDED CASH OFFER

for

AZ Electronic Materials S.A.

By

Merck 15. Allgemeine Beteiligungs-GmbH

Darmstadt, Germany

an indirect wholly owned subsidiary of

Merck KGaA

Darmstadt, Germany

Offer update - closing of offer and compulsory acquisition

On 2 May 2014, Merck KGaA, Darmstadt, Germany (Merck ) announced that all of the Conditions to its recommended cash offer (the Offer ) made by Merck 15. Allgemeine Beteiligungs-GmbH (Bidco ) for the entire issued and to be issued share capital of AZ Electronic Materials S.A. (AZ ) had been satisfied or waived and the Offer was declared unconditional in all respects.

Closing of the Offer

Notice is now given to AZ Shareholders that, in anticipation of the compulsory acquisition referred to below, the Offer will close at 1.00 p.m. (London time) / 2.00 p.m. (CET) on 23 May 2014 and, accordingly, there will be no further extensions to the Offer.

Level of acceptances

As at 1.00 p.m. (London time) on 8 May 2014, Bidco had received valid acceptances of the Offer in respect of 372,608,841 AZ Shares, representing approximately 97.81 per cent. of the existing issued share capital of AZ.  As at 1.00 p.m. (London time) on 8 May 2014, Bidco had purchased 150,000 AZ Shares, representing approximately 0.04 per cent. of AZ's existing issued share capital.

Accordingly, as at 1.00 p.m. (London time) on 8 May 2014, Bidco had purchased or received valid acceptance in respect of a total of 372,758,841 AZ Shares, representing approximately 97.85 per cent. of the existing share capital of AZ.

Before the announcement of the Offer on 5 December 2013, Bidco had received irrevocable undertakings from AZ Directors who (or whose close family) hold AZ Shares in respect of, in aggregate, 2,735,070 AZ Shares issued or subject to options and/or awards, representing approximately 0.705 per cent. of AZ's fully diluted share capital.  Acceptances in respect of all of these AZ Shares have been received pursuant to these undertakings and are included in the total number of acceptances referred to above.

Compulsory Acquisition

As Bidco has purchased or received valid acceptances in respect of AZ Shares representing not less than 95 per cent. of: (i) the capital carrying voting rights in AZ; and (ii) the voting rights in AZ, once the Offer closes at 1.00 p.m. (London time) / 2.00 p.m. (CET) on 23 May 2014, Bidco intends to exercise its compulsory acquisition right pursuant to Article 15 of the Luxembourg law of 19 May 2006 on takeover bids (the Takeover Law ), under the supervision of the Luxembourg regulator, the Commission de Surveillance du Secteur Financier (and as described under paragraph 13(b) of Part 2 of the offer document which was posted to AZ Shareholders on 20 December 2013 (the Offer Document )) and will acquire, by operation of law and in consideration for payment by Bidco of a "fair price" as required by Article 15(2) of the Takeover Law, the remaining AZ Shares in respect of which the Offer has not been accepted. 

Action to be taken

AZ Shareholders who have not yet accepted the Offer are urged to do so immediately and in any event by the following deadlines:

·     If you are a holder of AZ Shares in certificated form (that is, not in CREST), you should complete and return the Form of Acceptance, which accompanied the Offer Document, as soon as possible and, in any event, by no later than 1.00 p.m. (London time) on 23 May 2014.

·     If you are a holder of AZ DIs (in CREST), you should ensure that an Electronic Acceptance is made by you or on your behalf and that settlement occurs as soon as possible and, in any event, by no later than 1.00 p.m. (London time) on 23 May 2014.  If you are a CREST-sponsored member, you should refer to your CREST sponsor as only your CREST sponsor will be able to send the necessary TTE instruction(s) to Euroclear.

The Offer Document and a specimen Form of Acceptance are available on Merck's website at www.merckgroup.com and on AZ's website at www.azem.com.  Further copies of the Offer Document and the Form of Acceptance may be obtained by contacting the Receiving Agent, Capita Asset Services, on 0871 664 0321 from within the UK or on + 44 20 8639 3399 if calling from outside the UK.  Lines are open 9.00 a.m. to 5.30 p.m. (London time) Monday to Friday.

Unless otherwise stated, terms used in this announcement have the same meanings as given to them in the Offer Document.

Enquiries

Merck KGaA	[phone]
Constantin Fest Annett Weber
Bank of America Merrill Lynch (Financial adviser to Merck and Bidco)	[phone]
Adrian Mee Michael Findlay Peter Brown Geoff Iles

Further information

Merrill Lynch International (BofA Merrill Lynch ), a subsidiary of Bank of America Corporation, is acting exclusively for Merck and Bidco in connection with the Offer and for no one else and will not be responsible to anyone other than Merck and Bidco for providing the protections afforded to its clients or for providing advice in relation to the Offer.

This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the Offer or otherwise.  The Offer is made solely by means of the Offer Document and the Form of Acceptance accompanying the Offer Document, which contains the full terms and conditions of the Offer, including details of how the Offer may be accepted.  Any response to the Offer should be made only on the basis of information contained in the Offer Document.  AZ Shareholders are advised to read the formal documentation in relation to the Offer carefully.

This announcement has been prepared for the purpose of complying with English law, the Code and Luxembourg law and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom and Luxembourg.

Overseas jurisdictions

The distribution of this announcement in jurisdictions other than the United Kingdom or the United States and the availability of the Offer to AZ Shareholders who are not resident in the United Kingdom or the United States may be affected by the laws of relevant jurisdictions.  Therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom or the United States or AZ Shareholders who are not resident in the United Kingdom or the United States will need to inform themselves about, and observe, any applicable legal or regulatory requirements.  Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. Further details in relation to overseas shareholders are contained in the Offer Document.

The Offer is not being, and will not be, made, directly or indirectly, in or into or by the use of the mails of, or by any other means or instrumentality of interstate or foreign commerce of, or any facility of a national state or other securities exchange of any Restricted Jurisdiction, and will not be capable of acceptance by any such use, means, instrumentality or facility or from within any Restricted Jurisdiction.

Accordingly, copies of this announcement and all documents relating to the Offer are not being, and must not be, directly or indirectly, mailed, transmitted or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction and persons receiving this announcement (including, without limitation, agents, nominees, custodians and trustees) must not distribute, send or mail it in, into or from such jurisdiction.  Any person (including, without limitation, any agent, nominee or trustee) who has a contractual or legal obligation, or may otherwise intend, to forward this announcement and/or the Offer Document and/or any other related document to a jurisdiction outside the United Kingdom, Luxembourg or the United States should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdiction.

Notice to US holders of AZ Shares

The Offer is being made in the United States pursuant to Section 14(e) and Regulation 14E under the Exchange Act and otherwise in accordance with the requirements of the Code. Accordingly, the Offer is subject to disclosure and other procedural requirements, including with respect to withdrawal rights, offer timetable, settlement procedures and timing of payments, that are different from those applicable under US domestic tender offer procedures and law.

The Offer is being made for the securities of a Luxembourg company with a listing on the London Stock Exchange.  The Offer is subject to UK disclosure requirements, which are different from certain United States disclosure requirements.  The financial information on the AZ Group included in the Offer Document has been prepared in accordance with IFRS and the financial information on the Merck Group included in the Offer Document has been prepared in accordance with IFRS, thus neither may be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.

The receipt of cash pursuant to the Offer by a US holder of AZ Shares may be a taxable transaction for US federal income tax purposes and under applicable US state and local, as well as foreign and other, tax laws.  Each AZ Shareholder is urged to consult his independent professional adviser immediately regarding the tax consequences of accepting the Offer. Furthermore, the payment and settlement procedure with respect to the Offer will comply with the relevant United Kingdom rules, which differ from the United States payment and settlement procedures, particularly with regard to the date of payment of consideration.

The Offer is being made in the United States by Bidco and no one else.  Neither BofA Merrill Lynch nor Rothschild nor Goldman Sachs International nor UBS Limited, nor any of their respective affiliates, is or will be making the Offer in the United States.

It may be difficult for US holders of AZ Shares to enforce their rights and any claim arising out of US federal securities laws, since Bidco and Merck are incorporated under the laws of Germany and AZ is incorporated under the laws of Luxembourg, and some or all of their officers and directors are residents of non-US jurisdictions.  In addition, most of the assets of Bidco, Merck and AZ are located outside the United States.  US holders of AZ Shares may not be able to sue a non-US company or its officers or directors in a non-US court for violations of US securities laws.  Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgment.

This announcement does not constitute an offer of securities for sale in the United States or an offer to acquire or exchange securities in the United States.  No offer to acquire securities or to exchange securities for other securities has been made, or will be made, directly or indirectly, in or into, or by the use of the mails of, or by any means or instrumentality of interstate or foreign commerce or any facilities of a national securities exchange of, the United States or any other country in which such offer may not be made other than: (i) in accordance with the tender offer requirements under the Exchange Act, or the securities laws of such other country, as the case may be, or: (ii) pursuant to an available exemption from such requirements.

Neither the US Securities and Exchange Commission nor any US state securities commission has approved or disapproved the Offer, or passed comment upon the adequacy or completeness of this announcement or the Offer Document.  Any representation to the contrary is a criminal offence in the United States.

In accordance with normal UK market practice, Bidco, or its nominees or brokers (acting as agents) may from time to time make certain purchases of, or arrangements to purchase, AZ Shares outside the Offer before or during the period in which the Offer remains open for acceptance.  Those purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices.  Any information about such purchases will be disclosed to all investors to the extent required in the United Kingdom, the United States or Luxembourg, will be reported to a Regulatory Information Service provider and will be available on the London Stock Exchange website, www.londonstockexchange.com.  If such purchases or arrangements to purchase are made they will be made outside the United States and will comply with applicable law, including the Exchange Act.

Forward-looking statements

This announcement contains statements which are, or may be deemed to be, "forward-looking statements" which are prospective in nature.  All statements other than statements of historical fact may be forward-looking statements.  They are based on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements.  Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects", "is expected", "is subject to", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", "believes", "targets", "aims", "projects" or words or terms of similar substance or the negative thereof, as well as variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved.  Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations.

Such forward-looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward-looking statements.  Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date of this announcement.  Each of the Merck Group and the AZ Group, and each of their respective members, directors, officers, employees, advisers and any person acting on their behalf, expressly disclaims any intention or obligation to update or revise any forward-looking or other statements contained in this announcement, whether as a result of new information, future events or otherwise, except as required by applicable law.

Neither the Merck Group, the AZ Group, nor their respective members, directors, officers or employees, advisers or any person acting on their behalf, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur.

Except as expressly provided in this announcement, no forward-looking or other statements have been reviewed by the auditors of the Merck Group or the AZ Group.  All subsequent oral or written forward-looking statements attributable to the Merck Group or the AZ Group, or any of their respective members, directors, officers, advisers or employees or any person acting on their behalf are expressly qualified in their entirety by the cautionary statement above.

No profit forecasts or estimates

Nothing in this announcement shall be deemed to be a forecast, projection or estimate of the future financial performance of Merck or the Merck Group, or AZ or the AZ Group, except where otherwise stated.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on [phone] if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Publication on website

Pursuant to Rule 30.4 of the Code, this announcement will be made available on the website of Merck at www.merckgroup.com and on the website of AZ at www.azem.com no later than 12 noon on the business day following the date of this announcement.

This information is provided by RNS

The company news service from the London Stock Exchange

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