Qassim Cement reveals terms and conditions related to acquisition of Hail Cement

Qassim Cement disclosed the terms and conditions pertaining to the acquisition of Hail Cement on Thursday.

The acquisition transaction will be executed in accordance with the stipulations outlined in the Implementation Agreement. Qassim Cement Company (QCC) will acquire all 97,900,000 shares of Hail Cement Company, each with a nominal value of SAR 10 per share, through a securities exchange offer. In exchange, QCC will issue 20,559,000 new ordinary shares, each with a nominal value of SAR 10, as consideration for Hail Cement’s shareholders (referred to as the “Consideration Shares”). This acquisition will lead to an increase in QCC’s capital from SAR 900,000,000 to SAR 1,105,590,000 and a corresponding rise in QCC’s shares from 90,000,000 to 110,559,000, marking a 22.8% increase in its current capital.

The Company indicated that after Transaction’s completion, HCC’s shareholders, who are registered in HCC’s shareholders’ register at the end of the second trading day after the date of the approval of the extraordinary general assemblies relating to the Transaction of both companies, will receive (0.21) Consideration Share in QCC in return for every share they own in HCC, and HCC’s shares will delist from the Saudi Exchange and HCC will be a wholly owned subsidiary of QCC.

Pursuant to the Implementation Agreement, the completion of the Transaction is subject to a number of conditions, summarized as follows:

1. Obtaining all required approvals from the Capital Market Authority with respect to the Transaction.

2. Obtaining the approval of the Saudi Exchange on the listing of the Consideration Shares on the Exchange and obtaining any other approvals which the Saudi Exchange may require with respect to the Transaction.

3. The delivery of any required notification to the Securities Depository Center Company (Edaa) with respect to the Transaction.

4. Obtaining a non-objection from the General Authority for Competition with respect to the Transaction, or the expiration of the applicable waiting period for reviewing the application for economic concentration as specified in the Competition Law.

5. Obtaining a non-objection from the Ministry of Commerce in respect of the proposed amendments to the bylaws of QCC.

6. Obtaining the approval of the requisite majority of QCC’s shareholders on the Transaction’s resolutions at the Transaction’s extraordinary general assembly.

7. Obtaining the approval of the requisite majority of HCC’s shareholders on the Transaction’s resolutions at the Transaction’s extraordinary general assembly.

8. No Material Adverse Event (as such term is defined in the Implementation Agreement) having occurred and being continuing.

9. No breach of specific warranties provided by each QCC and HCC having occurred, unless such breach is capable of remedy and has been remedied to the reasonable satisfaction of the non-breaching party.

10. No governmental body of competent jurisdiction in Saudi Arabia having enacted, issued, promulgated, enforced or entered any order, injunction, judgment, decree or other action which is in effect and which prohibits or makes illegal the consummation of the Transaction in accordance with the Implementation Agreement.

11. Obtaining the approval of a number of contractual counterparties of both companies as outlined in the Implementation Agreement.

Whereas the resource required for the Transaction is the issuance of the Consideration Shares and the consideration is not wholly nor partially in cash, QCC’s financial adviser (HSBC Saudi Arabia) confirms that QCC has satisfied all conditions required for the registration and offer of the Consideration Shares and conditions for its admission into listing, except for regulatory approvals such as the Capital Market Authority, Saudi Exchange and the shareholders’ approvals, as clarified above.