| Thu 24 Nov 2011, 9:03 | | FWD - Freeworld Coatings Limited - Joint announcement by Freeworld and Kansai in |
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FWD
FWD
FWD - Freeworld Coatings Limited - Joint announcement by Freeworld and Kansai in
relation to the setting aside of the divestiture condition imposed on Freeworld
Freeworld Coatings Limited
(Incorporated in the Republic of South Africa)
(Registration number 2007/021624/06)
Share code: FWD
ISIN: ZAE000109450
("Freeworld" or "the Company")
Kansai Paint Co., Ltd.
(Incorporated in Japan)
(Registration number 1402-01-001093)
TSE share code: 4613
("Kansai")
JOINT ANNOUNCEMENT BY FREEWORLD AND KANSAI IN RELATION TO THE SETTING ASIDE OF
THE DIVESTITURE CONDITION IMPOSED ON FREEWORLD
1. INTRODUCTION
Kansai made a tender offer ("Kansai`s Tender Offer") to Freeworld shareholders
in terms of an offer circular dated 15 December 2010. Pursuant to Kansai`s
Tender Offer, it became the controlling shareholder of Freeworld.
2. COMPETITION CASE SETTLEMENT
Kansai`s Tender Offer was subject to the fulfilment of, inter alia, the
suspensive condition that unconditional approval, or approval subject to
conditions that would not result in a material adverse change, was obtained in
terms of the Competition Act, 1998 for the implementation of Kansai`s Tender
Offer. Kansai reserved the right to accept any condition that resulted in a
material adverse change.
On 18 April 2011, the South African Competition Commission ("Commission")
approved Kansai`s Tender Offer subject to a number of conditions. The conditions
were accepted by Kansai for the purpose of implementing Kansai`s Tender Offer
but Kansai reserved the right to appeal the conditions. Included in the set of
conditions was a requirement that Freeworld divest its entire automotive
coatings business ("Divestiture Condition").
On 11 July 2011, Kansai filed a request for consideration with the Competition
Tribunal ("Tribunal") requesting the Tribunal to set aside the Divestiture
Condition on the basis that the merger resulting from Kansai`s Tender Offer did
not raise competition concerns that justify the Divestiture Condition.
In October 2011, the Commission initiated settlement discussions with Kansai
which resulted in the parties reaching an agreement that the Divestiture
Condition should fall away and be substituted by revised conditions. The
Commission indicated that it had concluded, following further analysis, that the
Divestiture Condition was unnecessary.
After a hearing on 22 November 2011, the Tribunal issued an order confirming the
revised conditions.
In terms of the revised conditions, Freeworld will no longer be required to
divest of its automotive coatings business or establish OEM (original equipment
manufacturer) automotive coatings facilities in South Africa. The current toll
manufacturing agreements between Freeworld and E. I. du Pont Nemours and Company
and its subsidiaries ("DuPont") will continue, subject to such amendments as may
be agreed between Freeworld and DuPont, with agreed protections to prevent the
flow of DuPont`s confidential information to Kansai.
The public interest conditions imposed by the Commission on 18 April 2011 were
not the subject of the request for consideration and continue to form part of
the revised conditions.
Freeworld`s CEO, Nauman Malik, commented: "Both Kansai and Freeworld are
delighted with the outcome of the Tribunal`s order, including the decision to
rescind the Divestiture Condition. Freeworld may now move forward positively
without the uncertainty created by the Divestiture Condition. With Kansai`s
support, I look forward to working with the Freeworld team to take the company
through its next stage of development."
Paulshof
24 November 2011
Enquiries:
Newman Lowther & Associates
Ben Lowther, +27 (0)21 673 7000
Freeworld
Eleanor Chamberlain, +27 (0)11 549 8009
Financial advisors to Freeworld and Kansai
Newman Lowther & Associates (Pty) Ltd
Attorneys to Freeworld and Kansai
Bowman Gilfillan Inc.
JSE Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 24/11/2011 09:03:01 Produced by the JSE SENS Department.
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