Cargotec Corporation (“Cargotec”) and Konecranes Plc (“Konecranes”) announced on 1 October 2020 that the Boards of Directors of Cargotec and Konecranes have agreed upon the combination of the two companies by signing a combination agreement and a merger plan (the “Merger Plan”), according to which Konecranes shall be merged into Cargotec through a statutory absorption merger in accordance with the Finnish Companies Act whereby all assets and liabilities of Konecranes shall be transferred without a liquidation procedure to Cargotec (the “Merger”), and that the Boards of Cargotec and Konecranes unanimously recommend the Merger to their respective shareholders.
The shareholders of Konecranes will receive new class A and class B shares in Cargotec in proportion to their shareholdings as merger consideration (the “Merger Consideration Shares”). The Boards of Directors of Cargotec and Konecranes have on 2 November 2020 proposed that the Extraordinary General Meetings of Cargotec and Konecranes both convened to be held on 18 December 2020 would resolve upon the Merger as set forth in the Merger Plan.
The Finnish Financial Supervisory Authority has today, on 3 December 2020, approved the Finnish-language merger prospectus concerning the Merger (the “Merger Prospectus”) prepared for the issuance of the Merger Consideration Shares to Konecranes’ shareholders. An English language translation of the Merger Prospectus (the “English Prospectus”) and Swedish and German language translations of the summary will be notified to the financial supervisory authorities in Sweden and Germany.
The Merger Prospectus, the English Prospectus and the Swedish and German summary translations will be available on or about 4 December 2020 online. In addition, the Merger Prospectus and the English Prospectus will be available on or about 7 December 2020 in print at the offices of Cargotec at Porkkalankatu 5, FI-00180 Helsinki, Finland, at the offices of Konecranes at Koneenkatu 8, FI-05830 Hyvinkää, Finland and at the reception of Nasdaq Helsinki at Fabianinkatu 14, FI-00100 Helsinki, Finland.
The English Prospectus contains the following previously unpublished information in relation to the Merger (any capitalised terms not defined in the following shall have the meanings assigned to them in the English Prospectus):
Pro forma financial information
The English Prospectus includes the unaudited pro forma combined financial information (the “Pro Forma Information”) presented for illustrative purposes to give effect to the Merger of Cargotec and Konecranes to Cargotec’s financial information as if the Merger had been completed at an earlier date. The Pro Forma Information included in the English Prospectus has been attached in full as Annex 1 to this stock exchange release.
The unaudited pro forma statement of income for the nine months ended 30 September 2020 and for the year ended 31 December 2019 give effect to the Merger as if it had occurred on 1 January 2019. The unaudited pro forma balance sheet as at 30 September 2020 gives effect to the Merger as if it had occurred on that date.
The Pro Forma Information has been presented for illustrative purposes only. The Pro Forma Information addresses a hypothetical situation and is not therefore necessarily indicative of what the Future Company’s financial position or financial performance actually would have been had the Merger been completed as of the dates indicated. Further, the Pro Forma Information does not purport to project the operating results or financial position of the Future Company as of any future date. In addition, the Pro Forma Information does not reflect any cost savings, synergy benefits or future integration costs that are expected to be generated or may be incurred as a result of the Merger.
The Pro Forma Information has been compiled in accordance with the Annex 20 to the Commission Delegated Regulation (EU) 2019/980 and on a basis consistent with the accounting principles applied by Cargotec in its consolidated financial statements prepared in accordance with IFRS. The Pro Forma Information has not been compiled in accordance with Article 11 of Regulation S-X under the United States Securities Act of 1933 or the guidelines established by the American Institute of Certified Public Accountants.
The Pro Forma Information reflects adjustments to the historical financial information to give pro forma effect to events that are directly attributable to the Merger and are factually supportable. They include certain assumptions related to the fair value of the purchase consideration, the fair valuation of the net assets acquired, accounting policy alignments, financing arrangements and other events related to the Merger, that the management believes are reasonable under the circumstances. Considering the ongoing regulatory approval processes which restrict Cargotec’s access to detailed data of Konecranes and the fact that the final accounting measures of the Merger can only be done at the Effective Date, the pro forma adjustments presented are preliminary and based on information available at this time. The Pro Forma Information is subject to change, among other things, due to the final fair value of the purchase consideration being determined based on the then-current fair value of Cargotec’s class A and class B shares as at the Effective Date and the final purchase price allocation being based on the fair values of Konecranes’ assets acquired and liabilities assumed as at the Effective Date. Further, Cargotec is able to conduct a detailed review of Konecranes’ accounting policies only after the Effective Date due to restrictions on information sharing before the Merger.
There can be no assurance that the assumptions used in the preparation of the Pro Forma Information or presenting Konecranes’ financial information in the Pro Forma Information in Cargotec’s presentation format will prove to be correct. The actual results of the Merger may materially differ from the assumptions used and the pro forma adjustments reflected in the Pro Forma Information. Further, the accounting policies to be applied by the Future Company in the future may differ from the accounting policies applied in the Pro Forma Information.