MONTREAL, June 20 /CNW Telbec/ -
- Creation of one of the major players in the recycled cartonboard world
- Unique portfolio of production assets in 4 European countries,
presenting a combined annual capacity of above 1,100 kT
- Initial estimated potential synergies of 15-20m euros per year starting
from 2008, deriving from optimised procurement and logistics costs,
reciprocal sharing of best practices and specialisation of plant
- Cascades S.A.'s recycled cartonboard business (facilities of
Blendecques, France, Arnsberg, Germany and Wednesbury, UK) would be
merged debt free into Reno De Medici, in exchange for approximately
115.6 million Reno De Medici ordinary shares in the form of either all
newly issued shares or a combination of newly issued shares and the
existing treasury shares (the "Merger")
- Future potential combination of Cascades S.A.'s virgin fibre
cartonboard assets (facilities at La Rochette, France and Djupafors,
- Key Reno De Medici shareholders after the Merger would be Cascades Inc.
(approximately 30.6%), Alerion Industries (approximately 9.0%),
Eurinvest (approximately 5.5%), and Industria della Costruzione
- In order to provide Reno De Medici with a stable and unitary governance
post-combination, Cascades Inc., Alerion Industries, Eurinvest and
Industria della Costruzione are expected to enter into a shareholders'
agreement instrumental to the success of the Merger
- The transaction is subject, inter alia, to the applicable employee
consultation procedures, to due diligence, to satisfactory negotiation
and signing of definitive agreements that the parties expect to enter
into by September 2007, to antitrust and shareholders' approvals as
well as to the exemption from a mandatory tender offer on Reno De
Medici shares pursuant to applicable Consob regulation
- The transaction is expected to be completed by the end of 2007
Reno De Medici S.p.A. ("RdM" - RM.MI) and Cascades Inc. ("Cascades Inc" -
CAS-TSX) today announced the signing of a Letter of Intent for the
negotiation, on an exclusive basis, of the terms and conditions of a possible
combination of RdM and the European recycled cartonboard business of
The contemplated combination would create a new leader in the recycled
cartonboard market. In addition to significantly increasing RdM's current
production capacity, becoming one of the major players in the recycled
cartonboard world market with more than one million tons per annum, this
compelling strategic fit would result in an operationally and financially
stronger company better able to address the demands of global customers.
Based on current estimates, it is anticipated that the new company would
achieve approximately 15-20 million euros in annualised synergies beginning in
2008, deriving from the optimisation of the value chain processes resulting in
lower operating costs and reduction of logistics and procurement costs; the
implementation of best-in-class business practices; and the specialisation of
the plant portfolio towards the most profitable product mix for each plant.
These initial estimates will be reviewed and finalized subsequent to
completion of reciprocal due diligence.
The combination would be structured in two steps:
1. Combination of RdM and Cascades SA's recycled cartonboard business
located in Blendecques, France and Arnsberg, Germany as well as its
sheeting operations in Wednesbury, England (the "Business"), for a
total production capacity of such Business of around 350 kT p.a..
For the purpose of the Merger, Cascades S.A. would reorganize its
recycled cartonboard business by contributing it, debt free, to a
newly incorporated Italian subsidiary of Cascades S.A. which would
then be merged into RdM in exchange for approximately
115.6 million RdM ordinary shares (in the form of either all newly
issued shares or a combination of newly issued shares and existing
treasury shares). The Merger is expected to be based on the half
year financial statements as at June 30, 2007.
2. Potential combination of Cascades SA's virgin fibre cartonboard
assets located in La Rochette, France and Djupafors, Sweden pursuant
to the possible exercise of a call option (the "Call") by RdM or a
put option (the "Put") by Cascades Inc. The Call would be
exercisable in the 60 days following the availability of 2009
audited financial results for the virgin assets at a price
equivalent to 6.5 times the 2009 audited EBITDA; the Put would be
exercisable at Cascades Inc.'s discretion during the 180 days
following the end of 2010 at a price equivalent to 6.0 times the
2010 audited EBITDA.
After the Merger, a new sales structure would be created through a joint
venture between Cascades S.A. and Reno de Medici to manage jointly the sales
of both companies.
Management of Cascades S.A. would join RdM management creating the best
team to lead the group going forward. The new group headquarters would
continue to be in Milan - Italy.
"The new Reno De Medici would be a global leader with a brighter future
than either company would have on its own. We would be proactively improving
the quality of our assets and products, as well as taking decisive actions to
achieve a significant amount of synergies in the way we run our business. We
strongly believe this would enable Reno De Medici to strengthen its leading
position in the highly competitive global marketplace" commented Mr. Giuseppe
Garofano, chairman of Reno De Medici.
"I am very enthusiastic about the combination with Reno De Medici. With
this transaction, we are presenting shareholders with new opportunities,
combining Cascades' ability to create value through joint ventures and Reno De
Medici's proven expertise in this industry. The combined group would be able
to serve better any demand of global customers who increasingly look for
global suppliers" added Mr. Laurent Lemaire, Executive Vice-Chairman of
Cascades Inc. and Chief Executive Officer of Cascades S.A.
Before the approval of the proposed Merger by the shareholders of RdM,
Cascades S.A., Alerion Industries, Eurinvest and Industria della Costruzione
are expected to enter into a three-year shareholders' agreement instrumental
to the Merger and the pursuit of the business objectives underlying the whole
transaction covering matters relating to the corporate governance (where
Cascades S.A., on the one hand, and Alerion Industries, Eurinvest and
Industria della Costruzione, on the other hand, would be equally represented
in the board of directors of RdM), and providing for an 18-month lock-up and
thereafter reciprocal first refusal and tag-along rights. The main provisions
of such shareholders' agreement are set forth in a letter of intent which was
entered into at the same time as the letter of intent regarding the proposed
Given the compelling industrial reasons underlying the proposed Merger
and the instrumental nature of the shareholders' agreement as described above,
the Merger and the shareholding structure resulting from the shareholders'
agreement would be exempt from mandatory tender offer rules pursuant to Consob
regulation 11971/99 (art. 49 (f)) and the combination would be subject to the
application of such exemption.
The Parties shall neither approve nor enter into definitive agreements
relating to the combination without previous completion of the required
employee and/or employee representatives information and consultations
The combination is also subject to reciprocal due diligence, the
negotiation and signing of definitive agreements which the parties expect to
complete by September 2007, as well as the approval of the Board of Directors
of RdM, Cascades Inc., and Cascades S.A.'s Italian subsidiary and the delivery
of the report on the fairness of the exchange ratio by the auditing firm
pursuant to applicable Italian law (article 2501-sexies Italian Civil Code),
the approval of the shareholders of RdM by special resolution at a meeting to
be called specifically for this purpose, the approval of the appropriate
anti-trust and regulatory authorities, to the transaction not being subject to
mandatory tender offer requirements for RdM shares in Italy and in Spain, and
to customary closing conditions.
The approval of the Merger project by the Board of Directors of RdM and
Cascades S.A.'s Italian subsidiary is expected in September 2007. The Merger
is expected to be effective by the end of 2007.
Reno De Medici S.p.A. has been advised by Merrill Lynch International.
Cascades Inc. has been advised by Société Générale Corporate & Investment
About Cascades Inc and Cascades S.A.
Founded in 1964, Cascades produces, transforms and markets packaging
products, tissue paper and fine papers, composed mainly of recycled fibers.
Cascades employs nearly 14 000 men and women who work in some 100 modern and
flexible production units located in North America and in Europe. Cascades'
management philosophy, its more than 40 years of experience in recycling, its
continued efforts in research and development are strengths which enable the
company to create innovative products for its clients. The Cascades shares
trade on the Toronto stock exchange under the ticker symbol CAS.
Cascades S.A. is a European division of Cascades Inc. It includes
primarily 4 virgin and recycled manufacturing boxboard mills in France,
Germany and Sweden, a sheeting operation in England and an overall active
sales structure in Europe.
About Reno De Medici SpA
Reno De Medici produces, transforms and markets cartonboards. Reno De
Medici employs more than 1,100 employees and conducts its activities through
subsidiaries based in Italy, France, Spain and Germany. Reno De Medici is
listed on the Italian stock exchange since 1996. In 2006, it posted revenues
of 314m euros and an EBITDA of 29m euros. Reno De Medici has a market
capitalization of ca. 170m euros, as of 18 June 2007.
Certain statements in this release, including statements regarding future
results and performance, are forward-looking statements (as such term is
defined under the Private Securities Litigation Reform Act of 1995) based on
current expectations. The accuracy of such statements is subject to a number
of risks, uncertainties and assumptions that may cause actual results to
differ materially from those projected, including, but not limited to, the
effect of general economic conditions, decreases in demand for the Company's
products, increases in raw material costs, fluctuations in selling prices and
adverse changes in general market and industry conditions and other factors
listed in the Company's Securities and Exchange Commission filings.
Representation of European development project :
For further information:
For further information: Mr. Hubert Bolduc, Vice-President,
Communications and Public Affairs, Cascades Inc, (514) 912-3790, (819)
363-5164; Mr. Guido Vigorelli, Communications, Reno de Medici, +39 339 128