Tuesday May 29, 2018

Grammer signs a Business Combination Agreement with companies affiliated with its strategic partner Ningbo Jifeng – concurrent public takeover offer for Grammer

  • Grammer signs a comprehensive Business Combination Agreement with affiliated companies of its strategic partner Ningbo Jifeng from China
  • Preserving Grammer Group's independence and jobs are the key points of the agreement  
  • Concurrently, the Wang family, majority owners of Ningbo Jifeng, announced their intention to make a voluntary public takeover offer for all shares in Grammer via its German acquisition entity Jiye Auto Parts
  • Grammer shareholders to receive a total consideration of EUR 61.25 per share in cash, which includes the expected dividend of EUR 1.25 per share for the fiscal year 2017
  • Attractive total premium of 19.4% over the closing price of Grammer shares as of 28 May, 2018
  • Minimum acceptance ratio of 50% plus one share (including the current shareholding indirectly held by the Wang family of >25%)
  • Further stabilisation of the shareholder structure and securing Grammer's growth strategy
  • Subject to the review of the offer document, the Executive Board of Grammer AG welcomes und supports the takeover offer

 

Amberg, May 29, 2018 – Grammer AG, a leading international supplier of components for passenger car interiors and commercial vehicles seating systems, today concluded a comprehensive Business Combination Agreement with affiliated companies of Ningbo Jifeng Auto Parts Co. Ltd („Ningbo Jifeng“), which is majority-owned and controlled by the Wang family. As part of this agreement on intensified cooperation, the bidder (Jiye Auto Parts GmbH, a German entity also controlled by the Wang family) will launch a voluntary public takeover offer for all outstanding shares of Grammer AG. Accordingly, a cash consideration of 60.00 Euro per Grammer share will be offered to all Grammer shareholders. On top, Grammer shareholders will receive the expected dividend of 1.25 Euro per share for the fiscal year 2017, resulting in a total consideration of 61.25 Euro per share.

The main objectives of both measures are to deepen the strategic partnership between Grammer AG and Ningbo Jifeng, which has existed since 2017, to further stabilize the shareholder structure by expanding the Ningbo Jifeng group’s existing stake in Grammer AG, and to optimize the global footprint and secure the global growth strategy. In addition, the total consideration offers shareholders an attractive premium. 

In connection with the takeover offer, the bidder stated its commitment to further stabilize Grammer's shareholder structure in the long term. Grammer AG shall remain listed on the German stock exchange after a successful takeover.

Comprehensive Business Combination Agreement to secure Grammer's future 

In the legally binding Business Combination Agreement concluded by the bidder and Grammer, both parties have agreed on key cornerstones of the transaction and a common understanding of the future cooperation between the Parties in the event of a successful completion of the takeover. According to the agreement, the company's headquarters and its national and international locations shall be maintained and extensive commitments shall be made to all employees of the Grammer Group. The individual undertakings of the agreement have a term of up to 7.5 years and offer a corresponding security for customers, employees and suppliers. Moreover, the bidder supports the continuation of the company's growth and innovation strategy. In addition, the bidder undertakes not to take any structural measures in the future, such as spin-off, domination agreement, delisting, squeeze-out or similar measures, unless the Executive Board and the Supervisory Board support such measure. The Business Combination Agreement also provides extensive protection for Grammer's trademark, patents and other proprietary rights. In connection with the takeover offer, the bidder also aims at appointing two members to the Supervisory Board of Grammer AG in the medium term.

Maintaining the group structure and strengthening the growth strategy

The product and customer portfolios of both groups in the automotive sector complement each other perfectly. In the future, both groups shall together develop their respective markets in a better and more sustainable way. While Grammer benefits from better access to the Chinese market, the Chinese partner would benefit from Grammer's international positioning. 

In order to sustainably exploit these respective advantages, the bidder attaches great importance to the fact that the existing management remains with the Company. The use of Grammer's technologies and know-how by the bidder to the detriment of Grammer is clearly excluded in the Business Combination Agreement.

Voluntary public takeover offer

The bidder has announced a voluntary public takeover offer for Grammer AG. In this regard, the bidder will offer all shareholders of Grammer a cash consideration of 60.00 Euro per share in addition to the expected dividend of 1. 25 Euro per share. Compared to the last XETRA closing price on 28 May 2018 (a day prior to today's announcement of the takeover offer), the total consideration of 61.25 Euro per share represents a premium of 19.4%. Compared to the average price targets of the analysts on 28 May 2018, this results in a premium of 11.7%.

The completion of the public takeover offer is subject to regulatory approvals, a minimum acceptance rate of 50% plus one share, including the current shareholding of approx. 25%, which is held by a Ningbo Jifeng affiliate, and other customary offer conditions. Subject to the review of the offer document in the course of the preparation of the reasoned opinion, the Executive Board of Grammer AG welcomes und supports the takeover offer.

Upon completion of the public takeover offer, the bidder intends to contribute the acquired Grammer shares, including the current shareholding, to Ningbo Jifeng, subject to certain formal approvals in China required for such transaction.

Following publication of the offer document by the bidder, the Executive Board and the Supervisory Board of Grammer AG will publish a reasoned opinion pursuant to section 27 of the German Takeover Act (WpÜG).

The opinion on the public takeover offer and further information (if any) on the offer will be published on the company's website: www.grammer.com

Company profile

Located in Amberg, Germany, Grammer AG specializes in the development and production of components and systems for automotive interiors as well as suspension driver and passenger seats for onroad and offroad vehicles. 

In the Automotive Division, we supply headrests, armrests, center console systems and high-quality interior components and operating systems to premium automakers and automotive system suppliers. The Commercial Vehicle Division comprises seats for the truck and offroad seat segments (tractors, construction machinery, forklifts) as well as train and bus seats. 

With 13,000 employees, Grammer operates in 19 countries around the world. 

Grammer shares are listed in the SDAX and traded on the Frankfurt and Munich stock exchanges via the electronic trading system Xetra.

 

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