RECORDATI: MERGER BY ABSORPTION OF FIMEI S.P.A. AND ROSSINI
INVESTIMENTI S.P.A. INTO RECORDATI S.P.A. APPROVED
RECORDATI: MERGER BY ABSORPTION OF
FIMEI S.P.A. AND ROSSINI INVESTIMENTI S.P.A. INTO RECORDATI S.P.A.
APPROVED
- Reverse merger by absorption of Fimei S.p.A. and Rossini
Investimenti S.p.A. into Recordati 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 by CVC 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 of Recordati
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.
Milan, 1 October 2020 – The Boards of Directors
of Rossini Investimenti S.p.A. (“Rossini
Investimenti”), Fimei S.p.A. (“Fimei”
and, together with Rossini Investimenti, the “Disappearing
Companies”) and Recordati S.p.A.
(“Recordati” or the “Surviving
Company” and, together with the Disappearing Companies,
the “Participants in the Merger”) - all subject to
the management and coordination activity of Rossini Luxembourg S.à
r.l. (“Rossini Luxembourg”) - examined and
approved [by unanimous vote of those present] the reverse merger by
incorporation of Rossini Investimenti and Fimei into Recordati (the
“Transaction” or the “Merger”)
and the documentation preparatory to implementation of the Merger,
including the relevant merger plan (the “Merger
Plan”).
The Merger, together with the merger agreement
described below, received the favourable opinion of Recordati’s
Control, Risk and Sustainability Committee (the
“Committee”), which acts as the Related Party
Transactions Committee pursuant to the regulations governing
Related Party Transactions (the “Procedure”).
Participants in the Merger
Recordati
Recordati S.p.A., a company incorporated and
existing under Italian law, with registered office at via Matteo
Civitali no. 1, Milan, tax number, VAT number and registration
number with the Milan-Monza-Brianza-Lodi Companies’ Register:
00748210150, listed in the Milan Economic and Administrative Index
under no. 401832, a company subject to the management and
coordination activity of Rossini Luxembourg.
Fimei
Fimei S.p.A., a company incorporated and
existing under Italian law, with registered office at via del
Vecchio Politecnico no. 9, Milan, tax number and registration
number with the Milan-Monza-Brianza-Lodi Companies’ Register:
01001630159, VAT number 10042010156, listed in the Milan Economic
and Administrative Index under no. 784291, a company subject to the
management and coordination activity of Rossini Luxembourg.
As at today's date, Fimei holds shares
representing 51.820% of the share capital of Recordati and the
share capital of Fimei is held entirely by Rossini
Investimenti.
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, Milan, tax number, VAT number
and registration number with the Milan-Monza-Brianza-Lodi
Companies’ Register: 10428410962, listed in the Milan Economic and
Administrative Index under no. 2530577, a company subject to the
management and coordination activity of Rossini Luxembourg.
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, Fimei and Rossini
Luxembourg are therefore to be considered related parties of
Recordati pursuant to letter (a)(i) of the definition of “Related
Parties” in Annex 1 to the regulation adopted by Consob under
resolution no. 17221 of 12 March 2010 and most recently amended by
resolution no. 21396 of 10 June 2020 (the “OPC
Regulations”). The Merger, together with the merger
agreement, also constitutes a “major” related party transaction,
pursuant to the OPC Regulations and the Procedure, insofar as at
least one of the significance indicators set out in Annex 3 to the
OPC Regulations exceeds the threshold of 5% (in particular, the
“countervalue significance indicator” is 51.82% and the “assets
significance indicator” is 112.43%).
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 28 September 2020, expressed its
reasoned favourable opinion on the existence of the interest of
Recordati in carrying out the Transaction, as well as on the
expediency and substantial correctness of the terms and conditions
of the Transaction, pursuant to the OPC Regulations and the
Procedure.
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 20 December 2012, to exercise its right to derogate
from the obligations to publish the information documents
prescribed for significant mergers, demergers, capital increases by
means of the contribution of assets in kind, acquisitions and
transfers, pursuant to Article 70, paragraph 8, and Article 71,
paragraph 1-bis, of the Issuers' Regulation and, therefore, the
preparation of the information document pursuant to Annex 3B of the
Issuers' Regulation is not planned.
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 Surviving Company to ensure the
continuation of its contractual relations and to maintain the
status of a listed company that it would otherwise have lost in the
event of the merger of Recordati into Rossini Investimenti or
Fimei.
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 30 June 2020, prepared pursuant to Article
154-ter of the TUF and approved by the Board of Directors of
Recordati on 30 July 2020 for the Surviving Company, and, (ii) for
the Disappearing Companies, their balance sheets as at 30 June
2020, prepared pursuant to Article 2501-quater of the Italian Civil
Code and approved by their Boards of Directors on 11 September
2020, used as reference financial data pursuant to and for the
purposes of Article 2501-quater of the Italian Civil Code, as well
as (iii) the other assumptions described in detail in the Merger
Plan and in the Information Document, the Boards of Directors of
the Participants in the Merger determined the following exchange
ratio (the “Exchange Ratio”):
- 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 by Fimei 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 Surviving Company
itself) maintaining the same number of ordinary shares of Recordati
held by them as at such date.
The Merger will not entail any change in the
share capital of the Surviving Company nor is any balancing cash
payment planned.
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 Surviving Company at
present and, in particular, the Merger will not alter the net
financial position and, therefore, the investment capacity of
Recordati or the strategy or its capital allocation policy.
The Exchange Ratio was assessed by the
Committee, supported by Prof. Pietro Mazzola as independent
financial advisor, which declared that such Exchange Ratio, as
identified through the calculation method submitted to the
Committee, can be deemed fair from a financial perspective; the
advisor further identified the assumptions which would made equally
fair a possible different value calculated if the number of
Recordati shares held by Fimei at the Effective Date were different
from that as at 30th June 2020.
It should also be noted that, on 1 September
2020, the management bodies of the Participants in the Merger filed
a petition with the Court of Milan for the appointment of the
expert pursuant to Article 2501-sexies of the Italian Civil Code,
with the option, in accordance with Article 2501-sexies, paragraph
4 of the Italian Civil Code, to request from the court of the place
where the company resulting from the merger is based the
appointment of one or more joint experts, with the task of
certifying, in their report, the appropriateness of the Exchange
Ratio (the "Expert").
The ordinary shares of the Surviving Company
that will be reassigned to Rossini Sarl in exchange will have the
same dividend entitlement date as that of the ordinary shares of
Recordati in circulation on the Effective Date (as defined below)
and will confer on their holder rights equivalent to those held by
the holders of the ordinary shares of the Surviving Company in
circulation at the time of their assignment.
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 31 December 2020 and of their closing
balance sheets as at 31 March 2021.
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 Surviving Company as from 1 April 2021
(the “Accounting Effective
Date”).
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 22 December
1986.
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 Surviving Company will succeed to all the legal rights
and obligations of the Disappearing Companies, which will therefore
be extinguished.
The Articles of Association of the Surviving
Company will not be amended as a result of the Merger.
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 same Golden 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 of Fimei
and Rossini Investimenti, on any claims of Rossini Investimenti
against Fimei 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 Incorporating Company
itself) will maintain the same number of ordinary shares of
Recordati held by them at that date.
Therefore, on the basis of the current indirect
holding of CVC Capital Partners VII Limited in Recordati and the
Exchange Ratio, CVC Capital Partners VII Limited would continue to
hold, indirectly, 51.820% of the ordinary capital of Recordati
S.p.A as resulting from the Merger and, subject to any changes in
shareholdings and/or the number of own shares independent of the
Merger, which are unforeseeable and unquantifiable as at today's
date, the shareholder structure of the issuer would be
unchanged.
Procedure followed for approval of the
Transaction
In a communication dated 15 June 2020, Rossini
Luxembourg, in its capacity as a company that performs management
and coordination activity over all of the Participants in the
Merger, expressed its intention to proceed with the Merger and
invited Recordati, Rossini Investimenti and Fimei to take the
necessary steps to complete the Transaction.
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 June
2020, received several drafts of an information dossier relating to
the proposed terms and conditions of the Merger, continuously
supplemented and updated on the basis of the requests of the
Committee, the final version of which was delivered to the
Committee on 26 September 2020 (the
"Dossier”).
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. Pietro Mazzola, through Partners S.p.A., as an
independent financial expert, (ii) Studio Legale Galbiati, Sacchi e
Associati, in the person of senior partner Aldo Sacchi, as legal
advisor to the Committee in the context of the decision-making
process resulted in the issuance of the opinion provided by Article
8 of the OPC Regulations, and (iii) Studio McDermott Will &
Emery, as independent tax advisor, - promptly began the activities
preliminary to the examination of the Merger and the merger
agreement and was duly involved in the negotiation, investigation
and approval of the proposed resolution to be submitted to the
extraordinary shareholders' meeting of Recordati through the
receipt of a complete, timely and adequate information flow on the
terms and conditions of the Transaction, including with reference
to the Merger Agreement. More specifically, this information -
which allowed the Committee to be constantly updated on the
development of the activities carried out in relation to the Merger
- concerned the existence and nature of the correlation,
implementation and conditions for carrying out the Merger, the
assessment procedure followed, the interests and grounds underlying
the Transaction, as well as the risk profiles inherent in the
Transaction.
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 28 September
2020 and [unanimously], the Committee expressed its favourable
opinion on the existence of Recordati's interest in carrying out
the Transaction, as well as on the expediency and substantial
correctness of the relevant conditions, as set out in the Merger
Plan and the Merger Agreement. This opinion will be appended to the
Information Document together with the fairness opinion of the
financial advisor engaged by the Committee, Pietro Mazzola,
relating to the appropriateness of the Exchange Ratio, and the
opinion of the Committee's tax advisor.
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 Surviving Company was assisted
by Studio Gatti, Pavesi, Bianchi exclusively with regard to matters
relating to the negotiation of the Merger Agreement.
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 Surviving Company has decided, also
in order to safeguard cost efficiency, not to entrust further
professionals with tasks having the same scope of work , and has
vetted that its evaluations as to the Exchange Ratio itself led
essentially to the same conclusions of the financial advisor and of
the tax advisor identified by the Committee.
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 8:30 am CET. Access numbers are as
follows:
Italy: +39 02 8058811, Freephone 800 213 858
UK: +44 1 212818003, Freephone 0 800 0156384
USA: +1 718 7058794, Freephone +1 855
2656959
France: +33 170918703
Germany: +49 69 255114451
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 Italian
Stock Exchange (Reuters RECI.MI, Bloomberg REC IM, ISIN IT
0003828271), with a total staff of more than 4,300, dedicated to
the research, development, manufacturing and marketing of
pharmaceuticals. Headquartered in Milan, Italy, Recordati has
operations throughout the whole of Europe, including Russia,
Turkey, North Africa, the United States of America, Canada, Mexico,
some South American countries, Japan and Australia. An
efficient field force of medical representatives promotes a wide
range of innovative pharmaceuticals, both proprietary and under
license, in a number of therapeutic areas including a specialized
business dedicated to treatments for rare diseases. Recordati is a
partner of choice for new product licenses for its territories.
Recordati is committed to the research and development of new
specialties with a focus on treatments for rare diseases.
Consolidated revenue for 2019 was € 1,481.8 million, operating
income was € 465.3 million and net income was € 368.9 million.
For further information:
Recordati website: www.recordati.com
Investor Relations
Media
Relations
Marianne
Tatschke
Studio Noris
Morano
(39)0248787393
(39)0276004736, (39)0276004745e-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.
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