Cargotec Corporation and Konecranes Plc 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 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.
Conversion of Class A shares to Class B shares
If the Extraordinary General Meetings of Cargotec and Konecranes to be held on 18 December 2020 approve the Merger, Cargotec’s Board of Directors will propose to the next Annual General Meeting that subsection “Conversion of Class A shares to Class B shares” of 3 § (Share classes) of Cargotec’s Articles of Association be amended, in essential, as follows:
Cargotec’s class A shares may be converted into class B shares at a one-to-one ratio (1:1) at the demand of a shareholder or in case of nominee-registered shares at the demand of an asset manager entered into the book-entry register. The demand must be presented in writing and may be presented any time. The demand must state the number of shares to be converted as well as the book-entry account in which the book-entries corresponding to the shares have been entered.
A conversion demand made after Cargotec’s Board of Directors has resolved on convening a general meeting but before the next general meeting will be handled only after the general meeting and a possible record date following the meeting. Cargotec may request that a lock-up be registered in the shareholder’s book-entry account for the duration of the conversion procedure. Cargotec’s Board of Directors will handle the conversion demands and notify the changes in the numbers of shares due to the conversion to the Trade Register without delay.
The conversion demand may be withdrawn until the conversion has been notified to the Trade Register. After the withdrawal, Cargotec will request that a potential lock-up entry be removed from the shareholder’s book-entry account. A class A share will be converted into a class B share when the entry has been duly made in the Trade Register. The shareholder who has presented a request for conversion and the book-entry registrar will be notified of registration of the conversion. If necessary, Cargotec’s Board of Directors may decide on more specific procedures relating to the conversion of the shares. Cargotec’s Board of Directors may also decide that a conversion fee be charged by Cargotec for the conversion.
The exact wording of the conversion clause will be specified in the notice to Cargotec’s next annual general meeting.
Shareholder support
Cargotec and Konecranes announced on 1 October 2020 that shareholders holding in aggregate approximately 44.8 percent of the shares and approximately 76.3 percent of the votes in Cargotec and shareholders holding in aggregate approximately 27.4 percent of the shares and votes in Konecranes have undertaken, subject to certain customary conditions, to attend the respective Extraordinary General Meetings of Cargotec and Konecranes and to vote in favour of the Merger. In addition to the commitments previously announced, Sigrid Juselius Stiftelse has given corresponding commitments to attend the respective Extraordinary General Meetings of Cargotec and Konecranes and to vote in favour of the Merger and Ilkka Brotherus has given a commitment to attend the Extraordinary General Meeting of Konecranes and to vote in favour of the Merger. Thus, Wipunen varainhallinta oy, Mariatorp Oy, Pivosto Oy, KONE Foundation, Ilmarinen Mutual Pension Insurance Company, Elo Mutual Pension Insurance Company, Varma Mutual Pension Insurance Company and Sigrid Juselius Stiftelse, holding on 30 November 2020 in aggregate approximately 45.4 percent of the outstanding shares and approximately 76.6 percent of the votes carried by the outstanding shares in Cargotec, and HC Holding Oy Ab, Solidium Oy, Ilmarinen Mutual Pension Insurance Company, Varma Mutual Pension Insurance Company, Holding Manutas Oy, Elo Mutual Pension Insurance Company and Security Trading Oy, Sigrid Juselius Stiftelse and Ilkka Brotherus, holding on 30 November 2020 in aggregate approximately 28.3 percent of the outstanding shares and votes carried by the outstanding shares in Konecranes, have undertaken, subject to certain customary conditions, to attend the respective Extraordinary General Meetings of Cargotec and Konecranes and to vote in favour of the Merger.
Competition law processes required by the Merger
The Merger will be notified to, for example, the European Commission as well as the competition authorities of the United States and China as well as to several other competition authorities. An obligation to notify a concentration to several competition authorities is customary in transactions in which the target companies operate multinationally. Competition authorities will review the Merger in accordance with applicable statutory merger control laws. The completion of the Merger is conditional upon the obtaining of the required advance merger control clearances from competent competition authorities. Further information on the merger control proceedings will be provided in due course during the process.
