RECORDATI: MERGER BY ABSORPTION OF FIMEI S.P.A. AND ROSSINI INVESTIMENTI S.P.A. INTO
- Reverse merger by absorption of
Fimei S.p.A . and Rossini Investimenti S.p.A. intoRecordati S.p.A . approved by Board of Directors. - Objective - shortened chain of control and simplified corporate governance structure.
- As a result of the merger, no variations of Recordati S.p.A.’s share capital and Articles of Association.
- As a result of the merger, the shareholdings in
Recordati S.p.A . of Rossini S.à r.l. (indirectly held byCVC Capital Partners VII Limited ), currently equal to 51.820% of Recordati S.p.A.’s share capital, as well as those of the other shareholders, remain unchanged. - Reassignment to Rossini S.à r.l. of all Recordati shares held by
Fimei against cancellation of all Rossini Investimenti shares held by Rossini S.à r.l. itself. - No effect on Recordati S.p.A.’s net financial position, capital allocation policy or strategy.
- No recognition of goodwill or intangible assets arising from the transaction in Recordati S.p.A.’s financial statements.
- Lower taxes due to transfer of tax benefits to
Recordati S.p.A .. A non-recurring tax benefit of € 12.9 million (subject to tax ruling) and a recurring benefit estimated at € 1.3 million per year are expected. - The Board also approved the execution of a merger agreement with Rossini Luxembourg S.à r.l., providing customary representations and warranties and related indemnification obligations of the latter.
- The merger, together with the merger agreement, - as major related party transaction - received unanimous favourable opinion from
Control, Risks and Sustainability Committee ofRecordati S.p.A ., acting as Related Party Transactions Committee. - Completion of the merger is conditional upon approval by the extraordinary shareholders’ meeting and favourable opinion on the fairness of the exchange ratio by the expert appointed by the Court.
- Accounting and tax effective date referred to in the merger plan:
1 April 2021 .
The Merger, together with the merger agreement described below, received the favourable opinion of Recordati’s
Participants in the Merger
Recordati
As at today's date,
Rossini Investimenti
Rossini Investimenti S.p.A., a company incorporated and existing under Italian law, with registered office at via del Vecchio Politecnico no. 9,
As at today's date, the share capital of Rossini Investimenti is held entirely by Rossini S.à r.l. (“Rossini Sarl”).
Major related party transaction
As indicated in the above description of the Participants in the Merger, on the date of this press release:
- Rossini Investimenti directly and legally controls
Fimei , holding 100% of its share capital; Fimei directly and legally controls Recordati, holding 51.820% of its share capital;- all the Participants in the Merger are subject to the management and coordination activity of Rossini Luxembourg, pursuant to Articles 2497 et seq. of the Italian Civil Code.
Rossini Investimenti,
For the reasons set out above, the Committee was involved in the negotiation and investigation of the Merger, as well as the merger agreement, and in the approval of the proposed resolution to be submitted to the extraordinary shareholders' meeting of Recordati and, on
In addition, the information document referred to in Article 5 and Annex 4 of the OPC Regulations (the “Information Document”) will be published within the deadlines and in accordance with the methods established pursuant to the law and regulations. It should also be noted that, although the Merger is to be considered significant also pursuant to Article 70 of the Issuers' Regulation, Recordati opted, with effect from
Finally, it should be noted that the Merger does not entail a public offering of securities and cannot be classed as a reverse merger pursuant to European Regulation 2017/1129 (the Prospectus Regulation), Article 117-bis of the TUF (Italian Consolidated Law on Finance) and IFRS 3, paragraph B.19; therefore, a prospectus does not have to be published.
Purpose of the Transaction
The main reasons underlying the decision to proceed with the Merger, with the consequent expediency of the Transaction for Recordati and for the entire group to which it belongs (the “Group”), are as follows:
- shortening the chain of control with respect to the operating companies and simplifying the Group’s corporate structure, in line with national and international practice;
- reducing the administrative costs associated with maintaining the Disappearing Companies, with the consequent release of resources for the benefit of the entire Group;
- obtaining administrative synergies and synergies linked to fixed structural costs, as well as greater financial efficiency resulting from a shortening of the chain of control which will allow a faster recovery of dividend flows, and resulting in a lower tax cost as a consequence of the elimination of additional tax levels.
Furthermore, as a result of the Merger, Recordati will be able to enjoy the ACE tax benefits generated by Rossini Investimenti, as described in greater detail in the Merger Plan and the Information Document.
Terms and conditions of the Transaction
With reference to the methods of implementing the Merger, it is pointed out that the decision to proceed with the reverse merger by incorporation of the Disappearing Companies into Recordati will enable the
It should also be noted that the Participants in the Merger and Rossini Luxembourg today signed a merger agreement, containing certain representations and warranties given by Rossini Luxembourg with regard to the Disappearing Companies (concerning, inter alia, their accounting records, labour law and tax aspects, the absence of litigation pending or threatened in writing) and the relevant indemnity obligations in the event of their inaccuracy or untruthfulness (the “Merger Agreement”).
Based on, (i) the consolidated half-year financial report as at
- against cancellation (i) of the 10,000,000 shares representing the entire share capital of
Fimei , all held by Rossini Investimenti, as well as (ii) of the 82,550,000 shares representing the entire share capital of Rossini Investimenti, all held by Rossini Sarl, - all the 108,368,721 ordinary shares of Recordati currently held by
Fimei will be reassigned to Rossini Sarl, or a different number of ordinary shares of Recordati held byFimei on the Effective Date, as defined below (in other words, as at the date hereof, Rossini Sarl would obtain 1.313 Recordati shares for each Rossini Investimenti share),
with third-party shareholders (i.e. other than Rossini Sarl, following the Merger, and the
The Merger will not entail any change in the share capital of the
It should also be noted that the balance sheet and earnings profile of the entity resulting from the Merger will be substantially in line with that of the
The Exchange Ratio was assessed by the Committee, supported by Prof.
It should also be noted that, on
The ordinary shares of the
It is envisaged that the Merger shall be completed by the end of the first half of 2021 and in any event following the date of approval of the financial statements of the Disappearing Companies as at
Within the technical time strictly necessary immediately after the approval of the abovementioned closing balance sheets, the Participants in the Merger will execute the Merger deed and file it with the competent Companies’ Register. The transactions of the Disappearing Companies will be ascribed to the financial statements of the
The same Accounting Effective Date will be considered the start date for the purposes referred to in Article 172, paragraph 9, of Presidential Decree No. 917 of
The Merger will produce its statutory effects as from the last registration required by Article 2504 of the Italian Civil Code (the “Effective Date”). As from that date, the
The Articles of
The extraordinary shareholders’ meetings of the Participants in the Merger called to approve the Merger will be convened within the terms of the law as soon as the Expert has delivered their report certifying the appropriateness of the Exchange Ratio.
If the extraordinary shareholders' meetings of the Participants in the Merger approve the Merger Plan, the shareholders of Recordati who did not vote on the resolution to approve the Merger will not have the right of withdrawal, in any case, pursuant to Article 2437, paragraph 1, letter a), of the Italian Civil Code, or on any other grounds, as the company object of the Disappearing Companies does not provide for the performance of any commercial and/or industrial activity, but exclusively the assumption, holding, management and disposal, in an entrepreneurial and organised form, of the shareholding held (directly or indirectly) in Recordati and in the affiliated companies of Recordati, and therefore, following the Merger, no amendment will be made to the Recordati company object clause to include a significant change in its activity, nor will there be any exclusion from listing of Recordati.
In addition to the approval of the Merger Plan by the extraordinary shareholders' meetings of the Participants in the Merger, pursuant to Article 2502 of the Italian Civil Code, completion of the Transaction is subject to the occurrence of the following conditions:
- non-receipt of communications from the Presidency of the
Council of Ministers – to which the Merger shall be notified pursuant to Legislative Decree No. 21/2012, converted with Law No. 56/2012, containing “Rules concerning special powers over corporate assets in the defence and national security sectors, as well as for activities of strategic importance in the energy, transport and communication sectors”, and subsequent measures in this regard (the “Golden Power law”) – concerning the exercise of vetoes and/or remarks and/or the imposition of conditions on the Merger pursuant to the sameGolden Power law, by the Effective Date; - issue of a positive opinion on the appropriateness of the Exchange Ratio by the joint Expert;
- non-occurrence of one or more events or circumstances with a significant negative effect on the activities, legal relationships, liabilities and/or operating results of the Participants in the Merger, and, in any case, such as to alter the risk profile or assessments on which the Exchange Ratio is based, by the Effective Date;
- the absence, on the Effective Date, of pledges or other rights in rem of third parties on shares representing the entire share capital of
Fimei and on shares representing the entire share capital of Rossini Investimenti, on the current accounts ofFimei and Rossini Investimenti, on any claims of Rossini Investimenti againstFimei as well as personal guarantees provided by Rossini Investimenti within the framework of the indirect acquisition of Recordati.
Therefore, subject to the fulfilment of the aforementioned conditions, and assuming the absence of events outside the sphere of control of the Participants in the Merger, which could cause a delay in activities, the Participants in the Merger plan to complete the Transaction during the first half of 2021.
Shareholders post-Merger
As stated, the Exchange Ratio indicated in the Merger Plan provides that third-party shareholders (i.e. other than Rossini Sarl, following the Merger, and the
Therefore, on the basis of the current indirect holding of
Procedure followed for approval of the Transaction
In a communication dated
In view of the aforementioned nature of the Merger as a “major” transaction between related parties, the Committee was informed of the Transaction promptly and, as of
As from receipt of the first draft of the Dossier, the Committee - which in the performance of its work and for the purposes of issuing its decision on the Merger decided to consult (i) Prof.
Furthermore, the Committee which, as described in more detail in the Information Document, met on several occasions, exercised its right to request information and formulate observations, receiving prompt feedback from the management involved in the investigation phase.
On conclusion of its activities, on
As per the subject of this press release, the Merger Plan was finally approved by the Boards of Directors of the Participants in the Merger as at today's date.
As indicated above, the Participants in the Merger and Rossini Luxembourg also signed the Merger Agreement today.
Consultants
The Committee was assisted by the following advisors for the Transaction:
Pietro Mazzola , through Partners S.p.A., as independent financial advisor;- Studio Legale Galbiati, Sacchi e Associati, in the person of senior partner,
Aldo Sacchi , as legal advisor; - Studio Dermott Will & Emery, as independent tax advisor.
The Boards of Directors of the Participants in the Merger were assisted by:
- Studio Legale Gattai, Minoli,
Agostinelli & Partners , as legal advisor; - Facchini Rossi Michelutti Studio Legale Tributario, as tax advisor.
Furthermore, the
It should also be noted that, in view of the fact that the Committee identified, in addition to a legal advisor, both a financial advisor and a tax advisor to support its investigative activities, the
Further information
For more information on the terms and methods of execution of the Transaction, please refer to the Merger Plan, the Information Document and the explanatory report of the Board of Directors of Recordati prepared pursuant to Article 2501-quinquies of the Italian Civil Code and Article 70, paragraph 2, of the Issuers’ Regulation.
Said documents and the remaining documentation required by the provisions of law and regulations will be made available to the public according to the terms and conditions of law and regulations.
Note that the documentation relating to the shareholders' meeting of Recordati will be made available to the public, under the terms and conditions established by the provisions of law and regulations, at the registered office, on the website www.recordati.com and on the authorised storage mechanism 1Info https://www.1info.it.
Conference Call
Note that Recordati will organise a conference call on Friday, 2nd October at
If you are interested, please call 10 minutes before the start. To get support from the Help Desk, enter *0 or call +39 02 8061371.
A recording of the conference call will be available at www.recordati.com.
A set of slides which will be referred to during the call are available on our website www.recordati.com under Investors/Company Presentations.
Recordati, established in 1926, is an international pharmaceutical group, listed on the
For further information:
Recordati website: www.recordati.com
Investor Relations Media Relations
Marianne Tatschke Studio Noris Morano
(39)0248787393 (39)0276004736, (39)0276004745
e-mail: investorelations@recordati.it e-mail: norismorano@studionorismorano.com
Statements contained in this release, other than historical facts, are "forward-looking statements" (as such term is defined in the Private Securities Litigation Reform Act of 1995). These statements are based on currently available information, on current best estimates, and on assumptions believed to be reasonable. This information, these estimates and assumptions may prove to be incomplete or erroneous, and involve numerous risks and uncertainties, beyond the Company’s control. Hence, actual results may differ materially from those expressed or implied by such forward-looking statements. All mentions and descriptions of Recordati products are intended solely as information on the general nature of the company’s activities and are not intended to indicate the advisability of administering any product in any particular instance.
Attachment
- Reverse merger
Source: RECORDATI
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