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Altia and Arcus to join forces to form a leading wine and spirits brand house
The Boards of Directors of
Anora will offer a unique portfolio of iconic local, regional, and global brands.
Key transaction highlights
· The combination will be implemented as a statutory cross-border absorption merger whereby Arcus will be merged into Altia and dissolved.
· The shareholders of Arcus will receive 0.4618 new shares in Altia for each share in Arcus owned by them, resulting in an aggregate ownership in the Combined Company following completion of the combination of 53.5% for Altia shareholders and 46.5% for Arcus shareholders.
· Altia proposes to pay an extra dividend in the total amount of approximately
· Support and pre-commitments from the largest shareholders in both Altia and Arcus.
· Combined Company to be named
· Preliminary aggregated annual revenue of
· Potential annual EBITDA net synergies of
· Completion of the merger is conditional, inter alia, on approval of the respective EGMs of Altia and Arcus, and regulatory approvals including competition clearances having been obtained.
· EGMs are currently expected to be held in
· Altia and Arcus have obtained necessary commitments for the financing of the completion of the merger.
· Altia's Shareholders' Nomination Board, after consultation with the
·
·
· The shares of Anora will continue to be listed on Nasdaq Helsinki and a temporary secondary listing of the shares will be sought on the Oslo Børs.
Rationale of the merger
· The wine and spirits brand house in the Nordics
· Superior pan-Nordic route-to-market
· Competitive platform to grow in and outside home markets
· Step-change in scale with efficiencies across the value chain
· Strong value creation from significant synergies
The merger will form a wine and spirits brand house with leading presence across the Nordics with a relevant market presence also in the Baltics.
The transaction will allow the Combined Company to strive for growth and more powerful product launches both in and outside the Nordics.
The merger provides a step-change in scale with expected efficiencies throughout the value chain. It will allow the Combined Company to improve its cost position and seek for additional efficiency gains long term. The transaction will also form more competitive Industrial and Logistics business units through increased internal volumes. The combination targets EBITDA net synergies of around
"The new company will be a strong and visible Nordic entity. Together we will provide better opportunities for our international agencies and partners, to the benefit of our customers", says
The terms of the merger in brief
The proposed combination of Altia and Arcus will be executed through a tax neutral statutory cross-border absorption merger of Arcus into Altia pursuant to the Norwegian Public Limited Liability Companies Act and the Finnish Companies Act as agreed between the parties in the combination agreement entered into on
As merger consideration, the shareholders of Arcus will receive 0.4618 new shares in Altia for each share registered as held in Arcus upon completion of the merger. Arcus' shareholders will in aggregate receive shares representing approximately a 46.5% ownership in the Combined Company. The aggregate number of the new shares in Altia to be issued in connection with the merger is expected to be 31,409,930 shares, resulting in 67,550,415 shares in total in the Combined Company.
The Board of Directors of Altia will propose to its EGM resolving on the merger that the Board of Directors be authorised to resolve on the payment of an extra dividend in the maximum total amount of
As a consequence of the completion of the merger, Arcus will dissolve. The statutory tax neutral merger will not trigger Norwegian withholding tax consequences for Arcus' shareholders.
Completion of the merger is subject to approval by a majority of two-thirds of the votes cast and shares represented at the respective Extraordinary General Meetings ("EGMs") of Altia and Arcus, which are expected to be held in
Completion of the merger is also subject to obtaining necessary regulatory approvals, including competition clearances, as well as other customary closing conditions. As the transaction is proposed to be implemented by way of a cross-border absorption merger of Arcus into Altia, it is also subject to a statutory creditor notification period for Arcus' creditors.
The merger plan for the merger of Altia and Arcus is included as Annex 1 to this stock exchange release and contains further information on, inter alia, the merger consideration to Arcus shareholders, the contemplated timetable for completion of the merger, description of assets, liabilities and shareholders' equity of Arcus and the conditions for completion of the merger.
Further information on the combination, the merger and the Combined Company will also be available in a merger prospectus to be published by Altia prior to the EGMs of Altia and Arcus. Altia and Arcus will publish invitations to their respective EGMs through separate stock exchange releases.
It is expected that the completion of the merger will take place during the first half of 2021, subject to all regulatory approvals having been obtained and other conditions for completion having been fulfilled.
Financing
Altia has obtained a commitment for back-up financing of the merger from
Management and Corporate governance
The name of the Combined Company will be
Upon completion of the merger,
The Shareholders' Nomination
Altia and Arcus will comply with the rules for arranging employee participation in connection with a cross-border merger, which may include arrangements to have employee representatives on the Board of Directors of the Combined Company.
Listing venue
Following completion of the merger the shares in the Combined Company will continue to be listed on the official list of Nasdaq Helsinki.
In addition, the companies will seek to ensure that the shares in the Combined Company or depository receipts or interests representing the shares in the Combined Company, as the case may be, will be subject to a secondary listing on the Oslo Børs, in connection with the completion of the merger or as soon as possible thereafter, for a transitional period of four (4) months from the first day of the secondary listing on the Oslo Børs, after which the shares in the Combined Company (or depository receipts or interests representing the shares in the Combined Company, as the case may be) shall be delisted from the Oslo Børs.
Shareholder support
Altia's largest shareholder, the
Top 10 shareholders of the Combined Company
The shareholders of Arcus will receive 31,409,930 new shares in Altia upon completion of the merger, corresponding to an ownership in the Combined Company following completion of 53.5% for Altia shareholders and 46.5% for Arcus shareholders.
Based on the latest available data and assuming all current Altia and Arcus shareholders are shareholders also at the completion of the merger, the largest 10 shareholders of the Combined Company would be as follows:
Shareholder Number of shares % of shares
Sundt AS 1,108,070 1.6%
Verdipapirfondet Eika Spar 897,582 1.3%
Folketrygdfondet 831,240 1.2%
Danske Invest Norske Instit. II 827,861 1.2%
Top 10 shareholders 38,703,164 57.3%
Other shareholders 28,847,251 42.7%
Total 67,550,415 100.0%
The calculation is based on Altia's and Arcus' actual knowledge and is indicative only. The calculation may not represent the actual situation at the completion of the merger or thereafter.
Employees
On a combined basis, Altia and Arcus will have approximately 1,100 employees in 8 different countries.
Recommendation and Fairness Opinions
The board of Altia has concluded that the proposed transaction is in the best interests of the company and its shareholders. The board of Altia made its assessment after taking into account, amongst other factors, the fairness opinion of Nordea delivered to the board of Altia on
The board of Arcus has concluded that the proposed transaction is in the best interests of the company and its shareholders. The board of Arcus made its assessment after taking into account, amongst other factors, the fairness opinion of
Combination agreement
Altia and Arcus have on
The combination agreement contains certain customary representations and warranties as well as undertakings, such as each party conducting its business in the ordinary course 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, preparing the necessary regulatory filings and notifications, including competition filings, preparing the merger prospectus, cooperating with the other party in relation to the financing of the Combined Company and organising employee representation in the Combined Company, and that Arcus conducts negotiations with the Arcus creditors potentially opposing the merger and actions concerning settlement of Arcus employee incentives. In addition, Altia and Arcus each undertake not to solicit proposals competing with the transaction agreed in the combination agreement.
In addition, Altia and Arcus have given each other certain representations and warranties related to, inter alia, authority to enter into the combination agreement, due incorporation, status of the shares in the respective company, preparation of financial statements and interim reports, compliance with applicable licenses, laws and agreements, legal proceedings, ownership of intellectual property, employees and the due diligence materials provided to the other party.
With the exception of certain jointly incurred costs, Altia and Arcus shall bear their own fees, costs and expenses incurred in connection with the merger.
The combination agreement may be terminated by mutual written consent. Each of Altia and Arcus may further terminate the combination agreement if, inter alia, (i) the merger has not been completed by
Illustrative aggregated financial information
The illustrative aggregated financial information presented below is based on Altia's and Arcus' audited consolidated financial statements as of and for the year ended
The illustrative aggregated financial information presented herein is based on a hypothetical situation and should not be viewed as pro forma financial information as any impacts of purchase price allocation, differences in accounting principles, adjustments related to transaction costs, tax impacts and impacts of the potential refinancing have not been taken into account.
The aggregated financial information is presented for illustrative purposes only. The illustrative aggregated financial information of the Combined Company is presented assuming the activities were included in the same group from the beginning of each period. The illustrative aggregated net sales, comparable EBITDA, EBITDA and operating result have been calculated as a sum of Altia's and Arcus' financial information for the year ended
The difference of
The actual consolidated financial information for the Combined Company will be prepared based on the final merger consideration and the fair values of Arcus' identifiable assets and liabilities at the merger completion date, including the impacts of any possible refinancing that is contingent on the completion of the merger.
Pro forma information with full notes disclosures will be available in a merger prospectus to be published by Altia prior to the EGMs of Altia and Arcus. For reconciliations on the alternative performance measures, see Annex 2 of this release.
Unaudited illustrative aggregated financial information
[][][][][][][][][][][][][][][][][]
H1 2020 FY 2019
Illustrative Altia Arcus Illustrative
aggregated [7] aggregated
EUR in million
Net sales 276.5 149.3 127.3 640.2 359.6 280.6
Comparable 35.9 18.8 17.2 85.1 44.8 40.3
EBITDA
EBITDA 33.5 18.0 15.5 81.4 43.1 38.3
Operating 18.9 9.2 9.7 51.3 25.1 26.2
result [1]
Total assets 1,052.1 428.9 550.9 400.2 566.7
[2,3]
Total equity 391.7 149.5 159.6 151.2 168.5
[2,3]
Total 660.4 279.4 391.3 249.0 398.2
liabilities
[3]
Net debt [3,4] 188.3 29.9 126.1
Gearing, % 48.1 20.0 n/a
[2,3,5]
Equity ratio, 37.2 34.9 29.0
% [2,3,6]
[1]
Illustrative
aggregated
operating
result does
not include
amortisation
and
depreciation
for any fair
value
adjustments on
non-current
assets or any
other purchase
accounting
impacts to be
recognised in
the
combination
under IFRS
and, thus is
not
representative
of future
operating
results of the
Combined
Company.
[2] In the
aggregated
balance sheet
information,
the difference
between the
preliminary
merger
consideration
which has been
calculated
based on the
closing share
price of the
Altia share on
22 September
2020 and
Arcus' net
assets as at
totalling EUR
104.7 million,
has been
allocated to
non-current
assets. The
preliminary
merger
consideration
of
million has
been allocated
to total
equity.
[3] In the
illustrative
aggregated
balance sheet
information,
the maximum
total amount
of dividends
authorised and
proposed to be
distributed to
Altia's
shareholders
before the
completion of
the merger of
share,
totalling EUR
22.0 million,
has been
deducted from
the total
equity and
cash and cash
equivalents.
Dividend
payment made
by Arcus on 10
the year 2019,
totalling EUR
10.3 million
(
million) has
been deducted
from the cash
and cash
equivalents
and total
liabilities in
the aggregated
balance sheet.
[4] Net debt
is calculated
as a total of
non-current
and current
borrowings and
non-current
and current
lease
liabilities
less cash and
cash
equivalents.
[5] Gearing, %
is calculated
by dividing
net debt by
total equity.
[6] Equity
ratio, % is
calculated by
dividing total
equity by
total assets
less advances
received.[7
]NOK have been
translated to
EUR with an
exchange rate
EUR/NOK
10.8287 for
income
statement
items and
EUR/NOK
10.9120 for
balance sheet
items.[8 ]NOK
have been
translated to
EUR with an
exchange rate
EUR/
for income
statement
items and
EUR/
for balance
sheet items.
Indicative timeline
·
·
·
· Last quarter of 2020 - Altia dividend payment of
· First half of 2021 - Completion of the merger (subject to all regulatory approvals having been obtained and other conditions for completion having been fulfilled or waived), Altia dividend payment of
All dates are preliminary and subject to change. The proposed merger is subject to competition approvals in a number of jurisdictions and the preliminary timetable is therefore dependent on this process.
Internal reorganisation of the
Arcus has resolved to carry out a change to its corporate structure before the completion of the merger with Altia. This reorganisation will result in the creation of new holding company, Arcus Holding AS, for the operations of the
Technically, the reorganisation will be carried out by way of a de-merger of
Additional information on the reorganisation will be included in the notice of Arcus' EGM.
Advisors
Presentation and press conference
A joint presentation of the merger announcement will be held today
The presentation is hosted by
The presentation will be held in English and it can be followed live as a webcast:
https://altiaarcus.videosync.fi/2020-09-29-press
Questions to the management can be sent through the chat board.
Representatives of the media and financial community are warmly welcomed to join the event at Hotel Kämp in
Questions can also be asked in person via Teams. Remember to use the "Raise your hand" function in Teams.
Presentation material is available at www.altiagroup.com/investors and www.arcus.no.
Further information
Altia
For enquiries and interview requests, please contact:
Petra Gräsbeck, Corporate Communications, tel. +358 40 767 0867, petra.grasbeck@altiagroup.com
Arcus
Per Bjørkum, Group Director Communications and IR, tel. +47 922 55 777, per.bjorkum@arcus.no
Images of key persons and both companies: https://bit.ly/30fOS84
Information on Altia and Arcus in brief
Altia is a leading Nordic alcoholic beverage brand company operating in the wine and spirits markets in the Nordic and
Altia's current strategy is built on two core strengths: Altia is the Nordic distillery that masters the sustainable production of high-quality grain-based spirits, and provides the best route-to-market through distribution and channel execution for its brands and partners.
Arcus is a leading Nordic branded consumer goods company within wine and spirits. Arcus is the world's largest producer of aquavit, and holds strong market positions for wine and spirits across the Nordics. Vectura, a wholly owned company, supplies complete logistics solutions for the beverage industry in
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, in whole or in part, directly or indirectly, in or into
Altia is a Finnish company and Arcus is a Norwegian company. The transaction, including the information distributed in connection with the merger and the related shareholder votes, is subject to disclosure, timing and procedural requirements of a non-
It may be difficult for
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 merger of Arcus into Altia should be made solely on the basis of information to be contained in the actual notices to the EGM of Arcus and Altia, 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 Altia, Arcus, 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 Altia nor Arcus, 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 Altia, Arcus, their respective securities and the merger, including the merits and risks involved. The transaction may have tax consequences for Arcus shareholders, who should seek their own tax advice.
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 Altia, Arcus or the merger 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 includes 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 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 Altia nor Arcus, 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 contains financial information regarding the businesses and assets of Altia and Arcus and their consolidated subsidiaries. Such financial information may not have been audited, reviewed or verified by any independent accounting firm. Certain financial data included in this release consists of "alternative performance measures." These alternative performance measures, as defined by Altia and Arcus, may not be comparable to similarly titled measures as presented by other companies, nor should they be considered as an alternative to the historical financial results or other indicators of Altia's and Arcus' cash flows based on IFRS. Even though the alternative performance measures are used by the management of Altia and Arcus to assess the financial position, financial results and liquidity and these types of measures are commonly used by investors, they have important limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of Altia's or Arcus' financial position or results of operations as reported under IFRS.
This release includes estimates relating to the cost and revenue synergy benefits expected to arise from the merger (which are forward-looking statements), which have been prepared by Altia and Arcus and are based on a number of assumptions and judgments. Such estimates present the expected future impact of the merger on the Combined Company's business, financial condition and results of operations. The assumptions relating to the estimated cost and revenue 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 and revenue synergy benefits from the merger, 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.
The securities referred to in this release have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "
The new shares in Altia have not been and will not be listed on a
The new shares in Altia have not been approved or disapproved by the
Annex 1: Merger plan
Annex 2: Summary of Altia's and Arcus' Financial Information
Altia Key Financial Information
The following key Altia financial information has been derived from Altia's unaudited January -
Altia consolidated income statement information
H1 2020 FY 2019 FY 2018
EUR in million Unaudited Audited Audited
Net sales 149.3 359.6 357.3
Operating result 9.2 25.1 19.7
Result before taxes 9.3 24.6 18.6
Result for the period 7.5 18.4 15.1
Altia consolidated balance sheet information
H1 2020 FY 2019 FY 2018
EUR in million Unaudited Audited Audited
Total non-current assets 182.3 187.7 185.1
Total current assets 246.6 212.4 205.3
TOTAL ASSETS 428.9 400.2 390.4
Total equity 149.5 151.2 150.1
Total non-current liabilities 93.7 101.3 100.8
Total current liabilities 185.7 147.6 139.5
Total liabilities 279.4 249.0 240.3
TOTAL EQUITY AND LIABILITIES 428.9 400.2 390.4
Arcus Key Financial Information
The following key Arcus financial information has been derived from Arcus' unaudited January -
Arcus consolidated income statement information
H1 2020 FY 2019 FY 2018
NOK in million Unaudited Audited Audited
Total operating revenue 1,378 2,763 2,723
Operating profit 105 258 257
Profit before tax 108 172 221
Profit for the year 82 133 164
Arcus consolidated balance sheet information
[][][]
H1 2020 FY 2019 FY 2018
NOK in million Unaudited Audited Audited
Total fixed assets 3,567 3,506 2,373
Total current assets 2,444 2,084 2,064
TOTAL ASSETS 6,011 5,590 4,437
Total equity 1,741 1,662 1,654
Total non-current liabilities 2,176 2,050[1] 1,073[1]
Total current liabilities 2,094 1,878 1,711
Total liabilities 4,270 3,928 2,783
TOTAL EQUITY AND LIABILITIES 6,011 5,590 4,437
[1 ]Unaudited
Unaudited Illustrative Aggregated Alternative Performance Measures
This
The illustrative aggregated comparable EBITDA and net debt presented herein for illustrative purposes have been calculated as follows:
[][][][]
Comparable EBITDA H1 2020 FY 2019
EUR in million Illustrative Altia Arcus Illustrative
Aggregated Aggregated
Operating result [1] 18.9 9.2 9.7 51.3 25.1 26.2
Depreciation, 14.6 8.8 5.8 30.1 17.9 12.1
amortisation and
impairment
EBITDA 33.5 18.0 15.5 81.4 43.1 38.3
Items affecting 2.4 0.7 1.7 3.7 1.7 2.0
comparability [2]
Comparable EBITDA 35.9 18.8 17.2 85.1 44.8 40.3
[1 ]Illustrative
aggregated operating
result does not
include amortisation
and depreciation for
any fair value
adjustments on non
-current assets or
any other purchase
accounting impacts
to be recognised in
the combination
under IFRS and, thus
is not
representative of
future operating
results of the
Items affecting
comparability
comprises material
items outside normal
business such as net
gains or losses from
business and assets
disposals, costs for
closure of business
operations and
restructurings, cost
for major corporate
projects such as
direct transaction
costs related to
business acquisition
and the contemplated
merger, costs
related to other
corporate
development projects
and cost impact of
voluntary pension
plan change.
[][]
Net debt
EUR in million Illustrative
Aggregated
Non-current 141.4 70.4 71.1
borrowings
Current 51.5 51.5 -
borrowings
Non-current lease 116.0 5.7 110.3
liabilities
Current lease 10.1 3.5 6.6
liabilities
Less: Cash and 130.7 101.2 61.9
cash equivalents
[1]
Net debt 188.3 29.9 126.1
[1]In the
illustrative
aggregated
balance sheet
information, the
maximum total
amount of
dividends
authorised and
proposed to be
distributed to
Altia's
shareholders
before the
completion of the
merger of EUR
0.61 per share,
totalling EUR
22.0 million have
been deducted
from the total
equity and cash
and cash
equivalents.
Dividend payment
made by Arcus on
the year 2019,
totalling EUR
10.3 million (NOK
112.9 million)
has been deducted
from the cash and
cash equivalents
and total
liabilities in
the aggregated
balance sheet.
Altia is a leading Nordic alcoholic beverage brand company operating in the wines and spirits markets in the Nordic and
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