Cerha Hempel Spiegelfeld Hlawati has advised RHI AG in connection with the completion of its acquisition of control of Brazilian Magnesita Refratários S.A. and the accompanying merger of both companies, thus creating RHI Magnesita N.V., a leading provider of refractory products with its registered office located in the Netherlands and its shares listed on the London Stock Exchange.
The management board of RHI AG ("RHI") and the controlling shareholders of Magnesita Refratários S.A. ("Magnesita"), consisting of affiliated undertakings of GP Investments ("GP") and Rhône Capital ("Rhône"), and the additional sellers adhered to the share purchase agreement, have completed the acquisition and transfer of a controlling stake of 50% plus one share of the share capital of Magnesita (the "Transaction").
The cross-border merger of RHI with its subsidiary RHI Magnesita N.V. ("RHI Magnesita"), which was a condition precedent for the Transaction, became effective on 26 October 2017. The final day on which RHI's shares were traded on the Vienna Stock Exchange was 25 October 2017. As of 27 October 2017, the new shares in RHI Magnesita are listed in the Premium segment of the Official List on the Main Market of the London Stock Exchange. The controlling shareholders of Magnesita, GP and Rhône and the additional sellers adhered to the share purchase agreement have simultaneously delivered 50% plus one share in Magnesita, and in exchange they have jointly received a payment of EUR 117.3 million in cash and five million newly-issued shares in RHI Magnesita.
The Transaction is being financed by additional debt capital as well as the issuance of five million RHI Magnesita shares to the controlling shareholders of Magnesita and to the additional sellers adhered to the share purchase agreement.To this end, RHI entered into an agreement to secure a EUR 477.2 million syndicated loan facility and a EUR 88.0 million equity bridge facility, consequently enabling it to (i) finance the acquisition costs, (ii) refinance the existing liabilities of RHI and (iii) finance the mandatory takeover offer to the minority shareholders of Magnesita.
Based on the annual financial statements for 2016, the combined revenue of RHI and Magnesita amounted to approximately EUR 2.5 billion. The new company will serve over 10,000 customers, with customers in almost every country in the world. The merger of RHI and Magnesita will enable the combined company to offer an even more comprehensive range of services to its customers and thus provide increased added value. There is considerable value creation potential due to the realization of planned synergies, strong cash flow generation, and innovations based on the combined know-how of the companies.
All legal aspects relating to the formation of RHI Magnesita were overseen and managed for RHI by its legal department led by Mag. Robert Ranftler and by a team of lawyers from Pinheiro Guimarães, Clifford Chance LLP, Linklaters LLP, and CHSH. CHSH was responsible for structuring the Transaction in compliance with company, capital markets, financing and takeover law and it also provided advice as to Austrian law as well as for the coordination in the international context. In close cooperation with the legal department of RHI, CHSH implemented the complex two-step restructuring of the RHI in a leading role towards the other involved law firms, consisting initially of a demerger and spin-off of its entire business operations to its wholly-owned subsidiary RHI Feuerfest GmbH, followed by a cross-border merger of RHI with its wholly-owned Dutch subsidiary RHI Magnesita, with the shares of the new company subsequently being listed on the London Stock Exchange. In addition to preparing the necessary legal documents and the listing prospectus, CHSH provided assistance to RHI in relation to the EGM (the consent of which was required for the restructuring), the subsequent handling of the cash settlement for withdrawing shareholders and the exchange of shares. Furthermore, CHSH also provided legal advice to RHI on financing the acquisition costs and refinancing the existing liabilities of RHI.
The team at CHSH was headed by partner Dr. Albert Birkner (Corporate/M&A, Takeovers) and also consisted of partner Dr. Volker Glas (Capital Markets), partner Mag. Heinrich Foglar-Deinhardstein (Corporate), senior attorney MMag. Christian Aichinger (Capital Markets), counsel Sarah Wared (Corporate/M&A), and associates Mag. Nadine Leitner, Maximilian Mayer, Alistair Heschl-Gillespie (all Corporate/M&A) and Michael Soukup (Capital Markets).