Melrose Industries : Shareholder Circular

THIS DOCUMENT AND THE ACCOMPANYING FORM OF PROXY ARE IMPORTANT AND REQUIRE YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you are recommended to seek your own personal financial advice as soon as possible from your stockbroker, bank, solicitor, accountant, fund manager or other appropriate independent financial adviser authorised under the Financial Services and Markets Act 2000, as amended ("FSMA") if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

This document is a circular relating to the Demerger which has been prepared in accordance with the Listing Rules and approved by the Financial Conduct Authority (the "FCA"). This document has been published solely in connection with the Demerger, the Melrose Share Consolidation and the proposed adjustments to the Melrose incentive arrangements (collectively, the "Proposal") as described herein. Those considering the admission of all the ordinary shares of Dowlais Group plc (the "Dowlais Shares") to the premium listing segment of the Official List of the FCA (the "Official List") and to trading on the main market of the London Stock Exchange plc (the "London Stock Exchange") for listed securities (together, "Dowlais Admission"), including the risks relevant to Dowlais Admission, the Dowlais Shares and the Dowlais Group should rely only on the information in the Dowlais Prospectus.

If you sell or transfer or have sold or otherwise transferred all of your existing ordinary shares (the "Melrose Shares") in Melrose Industries PLC ("Melrose" or the "Company"), please forward this document (but not any personalised Form of Proxy) as soon as possible to the purchaser or transferee, or to the bank, stockbroker or other agent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee. If you sell or transfer or have sold or otherwise transferred only part of your holding of Melrose Shares, please retain this document and any accompanying document and consult the bank, stockbroker or other agent through whom the sale or transfer was effected as to the action you should take. If you receive this document from another Shareholder, as a purchaser or transferee, please contact the Registrar for a personalised Form of Proxy.

Any person (including, without limitation, custodians, nominees and trustees) who may have a contractual or legal obligation or may otherwise intend to forward this document to any jurisdiction outside the United Kingdom should seek appropriate advice before taking any action. The distribution of this Circular and any accompanying document into jurisdictions other than the United Kingdom may be restricted by law. Any person not in the United Kingdom into whose possession this Circular and any accompanying document come should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities law of any such jurisdiction. This document is not a prospectus, and it does not constitute or form part of any offer or invitation to purchase, acquire, subscribe for, sell, dispose of or issue, or any solicitation of any offer to sell, dispose of, purchase or subscribe for, any securities.

MELROSE INDUSTRIES PLC

(Incorporated and registered in England and Wales with

Registered No. 09800044)

Circular to Shareholders

and

Notice of General Meeting

Proposed Demerger of Dowlais Group plc

from Melrose Industries PLC

This document, including the information incorporated by reference, should be read as a whole. Your attention is drawn to the letter from the Chairman of Melrose, which is set out in Part I (Letter from the Chairman of Melrose Industries PLC) of this Circular and which contains information on the Resolution to be proposed at the general meeting of the Company to be held at Investec Bank plc, 30 Gresham St, London EC2V 7QN at 10:00 a.m. on 30 March 2023 (the "General Meeting"). Your attention is also drawn to the risk factors set out in Part IV (Risk Factors Relating to the Proposal) of this Circular which you should consider carefully when deciding whether or not to vote in favour of the Resolution to be proposed at the General Meeting. The Demerger will not take place unless the Resolution is passed at the General Meeting.

The Notice of the General Meeting is set out at the end of this Circular.

Shareholders are entitled to attend the General Meeting and are entitled to vote. A Shareholder entitled to attend, speak and vote at the General Meeting is also entitled to appoint a proxy to exercise all or any of his/her rights to attend, speak and vote at the General Meeting in his/her place. Such a Shareholder may appoint more than one proxy, provided that each proxy is appointed to exercise the rights attached to different shares. A proxy need not be a Shareholder.

Shareholders who receive hard copy documents will find enclosed with this Circular a Form of Proxy for use in connection with the General Meeting. You are asked to complete and sign the enclosed Form of Proxy in accordance with the instructions printed on it and return it to the Company's Registrar, Equiniti, of Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA as soon as possible and, in any event so as to be received by Equiniti by no later than 10:00 a.m. on 28 March 2023. You may alternatively register your vote online by visiting Equiniti's website at www.sharevote.co.uk. In order to register your vote online, you will need to enter the Voting ID, Task ID and your Shareholder Reference Number which are set out on the enclosed Form of Proxy, and you will need to ensure that your vote is registered online no later than 10:00 a.m. on 28 March 2023. Shareholders who receive an email broadcast will be directed to this Circular on the Company's website at www.melroseplc.net.

If you are an institutional investor, you may be able to appoint a proxy electronically via the Proxymity platform ("Proxymity"), a process which has been agreed by the Company and approved by the Registrar. For further information regarding Proxymity, please go to www.proxymity.io. Your proxy must be lodged by 10:00 a.m. on 28 March 2023 in order to be considered valid. Before you can appoint a proxy via this process you will need to have agreed to Proxymity's associated terms and conditions. It is important that you read these carefully as you will be bound by them and they will govern the electronic appointment of your proxy.

If you hold your Melrose Shares in CREST, and you wish to appoint a proxy or proxies through the CREST electronic proxy appointment service, you may do so by using the procedures described in the CREST Manual (available via http://www.euroclear.com). In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST Proxy Instruction must be properly authenticated in accordance with Euroclear's specifications, and must contain the information required for such instruction, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or is an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by Equiniti, ID RA19 by 10:00 a.m. on 28 March 2023.

Each of Citigroup Global Markets Limited ("Citigroup") and J.P. Morgan Securities plc (which conducts its UK investment banking business as J.P. Morgan Cazenove) ("JP Morgan"), which are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, and N.M. Rothschild & Sons Limited ("Rothschild & Co"), which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, are acting solely for Melrose and no one else in connection with the Proposal and, save for any responsibility which may arise under FSMA or the regulatory regime established thereunder, will not be responsible to anyone other than Melrose for providing the protections afforded to the respective clients of Rothschild & Co, Citigroup and JP Morgan, or for providing advice in connection with the Proposal, the contents of this document or any transaction, arrangement or other matter referred to in this document.

Apart from the responsibilities, if any, which may be imposed on any of Rothschild & Co, Citigroup or JP Morgan by FSMA or the regulatory regime established thereunder to the extent the exclusion of responsibility under the relevant regulatory regime would be illegal, void or unenforceable, none of Rothschild & Co, Citigroup and JP Morgan nor any of their respective subsidiaries, holding companies, branches or affiliates nor any of their respective directors, officers, employees, agents or advisers, owes or accepts any duty, responsibility or liability whatsoever (whether direct or indirect and whether arising in contract, in tort, under statute or otherwise) to any person in relation to this Circular or for any acts or omissions of Melrose and no representation or warranty, express or implied, is made by any of them as to the contents of this Circular, including its accuracy, completeness, verification or sufficiency, or for any other statement made or purported to be made by Melrose, or on its behalf, or by any of Rothschild & Co, Citigroup or JP Morgan, or on their behalf, in connection with Dowlais or the Dowlais Shares, and nothing in this Circular should be relied upon as a promise or representation in this respect, whether or not to the past or future. To the fullest extent permitted by law, each of Rothschild & Co, Citigroup and JP Morgan and their respective subsidiaries, holding companies, branches and affiliates and their respective directors, officers, employees, agents and advisers accordingly disclaims all and any responsibility or liability whatsoever (whether

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direct or indirect and whether arising in contract, in tort, under statute or otherwise (save as referred to above)), which they might otherwise have in respect of this Circular or any such statement or otherwise.

A summary of action to be taken by Shareholders is set out on page 13 of this Circular and in the Notice of General Meeting set out at the end of this Circular.

Capitalised terms have the meaning ascribed to them in the 'Definitions' section of this document.

This Circular is dated 3 March 2023.

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TABLE OF CONTENTS

Page

EXPECTED TIMETABLE OF PRINCIPAL EVENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 DIRECTORS, COMPANY SECRETARY, REGISTERED OFFICE AND ADVISERS . . . . . . . . . . . 8 PART I LETTER FROM THE CHAIRMAN OF MELROSE INDUSTRIES PLC . . . . . . . . . . . . . . 9 PART II INFORMATION ON THE PROPOSAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 PART III QUESTIONS AND ANSWERS ON THE PROPOSAL . . . . . . . . . . . . . . . . . . . . . . . . 31 PART IV RISK FACTORS RELATING TO THE PROPOSAL . . . . . . . . . . . . . . . . . . . . . . . . . . 39 PART V FINANCIAL INFORMATION RELATING TO THE DOWLAIS GROUP . . . . . . . . . . . . . 43

PART VI UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE CONTINUING

MELROSE GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 PART VII PROPOSED MELROSE INCENTIVE ADJUSTMENTS . . . . . . . . . . . . . . . . . . . . . . . 50 PART VIII ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 PART IX DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 NOTICE OF GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 APPENDIX TO THE NOTICE OF GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 EXPLANATORY NOTES TO THE NOTICE OF GENERAL MEETING . . . . . . . . . . . . . . . . . . . 94

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EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Each of the following times and dates in the table below is indicative only and subject to change. References to a time of day are to London time.

Event

Time and Date

Publication of this Circular, the Form of Proxy and the Dowlais Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Latest time and date for receipt of Forms of Proxy, CREST Proxy Instructions and registration of online votes from Shareholders in respect of the General Meeting . . . . . . . . . . . . . . . . . . . . . . .

General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Announcement of result of General Meeting . . . . . . . . . . . . . . . . .

Latest time and date for transfers of Melrose Shares to be registered on the Melrose Share Register at the Consolidation Record Time and the Demerger Record Time . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Record time for the Melrose Share Consolidation (being the "Consolidation Record Time") . . . . . . . . . . . . . . . . . . . . . . .

Melrose Share Consolidation becomes effective . . . . . . . . . . . . . . .

Record time for the Demerger Distribution (being the "Demerger Record Time") . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Demerger Distribution to Qualifying Shareholders becomes effective .

Dowlais Admission and commencement of dealings in Dowlais Shares on the London Stock Exchange . . . . . . . . . . . . . . . . . . . . . . .

Melrose Admission and commencement of dealings in New Melrose Shares on the London Stock Exchange . . . . . . . . . . . . . . . . . . .

CREST accounts credited with uncertificated Dowlais Shares . . . . . .

CREST accounts credited with uncertificated New Melrose Shares . .

Despatch of definitive share certificates (where applicable) for the New Melrose Shares in certificated form . . . . . . . . . . . . . . . . . . . . .

Despatch of definitive share certificates (where applicable) for the Dowlais Shares in certificated form . . . . . . . . . . . . . . . . . . . . .

3 March 2023

10:00 a.m. on 28 March 2023

10:00 a.m. on 30 March 2023

10:30 a.m. on 30 March 2023

(or as soon as practicable after the

conclusion of the General

Meeting, if later)

6:00 p.m. on 19 April 2023

6:00 p.m. on 19 April 2023

immediately after 6:00 p.m. on

19 April 2023

10:00 p.m. on 19 April 2023

7:59 a.m. immediately prior to

Dowlais Admission on

20 April 2023

8:00 a.m. on 20 April 2023

8.00 a.m. on 20 April 2023

as soon as practicable after 8:00 a.m. on 20 April 2023

as soon as practicable after 8:00 a.m. on 20 April 2023

by 5 May 2023

by 5 May 2023

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