Trondheim, 30 May 2022
· Norway Royal Salmon ASA ("NRS") and SalMar ASA ("SalMar") ("the Parties")
have entered into a merger plan whereby the two entities will merge, with SalMar
as the acquiring company in the merger (the "Merger").
· The agreed exchange ratio is based on the average volume weighted closing
share price of SalMar from 4 April to 20 May 2022. Based on an exchange ratio of
0.369 shares in SalMar per share in NRS, this results in a value of NOK 265.18
per NRS share, which gives a premium of 6.3% to the NRS closing price Friday 27
May 2022, and 12.1% to NRS' average closing share price over the past 30 days.
· The rationale behind the Merger is to increase value creation in the regions
where the companies operate and enable the realization of synergies between the
companies.
· The Merger is conditional on NRS acquiring SalmoNor AS ("SalmoNor")
immediately prior to the consummation of the Merger, and that all conditions for
the completion of SalMar's voluntary tender offer for the shares in NTS ASA
("NTS") (the "NTS Offer") have been met or waived, or the NTS Offer has been
completed.
Rationale
The Parties have several overlapping industrial interests, both in Norway, the
West Fjords of Iceland, and offshore. A combination of the Parties enables the
realization of significant synergies:
· Both Parties have a long-standing presence in, and considerable competence
from, salmon farming in Norway. The Merger will allow for improved utilisation
of the combined available MAB and site portfolio as well as improvements in
operations and cost.
· NRS's new smolt facility in Dåfjord outside Tromsø, together with SalMar's
development of the Senja 2 and Tjuin facilities will, together with the Parties'
existing smolt capacity, be valuable resources that can ensure delivery of the
right smolt at the appropriate time, which in turn will facilitate improved
biological results throughout the value chain.
· SalMar's new processing plant on Senja, InnovaNor, will attain large
additional volumes through the Merger. This will allow economies of scale
through improved capacity utilisation and logistics and reduce biological risk.
· SalmoNor has operations throughout the value chain and has delivered solid
results over several years. SalmoNor is located in Rørvik, in production area 7,
and will thus complement SalMar's operation in Mid-Norway.
· Both parties have significant expertise in sales and logistics, and the
Merger will improve access to customers worldwide.
· Both SalMar and NRS have made significant investments in offshore related
farming technology, creating a large synergy potential. The Parties will jointly
be a strong force in the further development and realisation of offshore
farming.
· Both parties operate in the West Fjords of Iceland through Icelandic Salmon
(controlled by SalMar) and Arctic Fish (controlled by NRS). Together the Parties
may realise significant synergies through e.g. improved operations at sea and an
optimal structure in the onshore value chain, including smolt, processing and
sales.
· A combination will strengthen the competence and capacity of the Parties,
and position them for further sustainable growth. The Parties have strong
company cultures, and the anticipated production growth they expect going
forward will strengthen the company's position as an attractive employer
requiring competent, local employees.
· The Merger will create an entity that is financially stronger, driven by
increased revenue and expected cost synergies.
Paal E. Johnsen, Chairman of NRS, says in a statement that "a merger between NRS
and SalMar is based on a sound industrial rationale, while also securing a good
solution for the shareholders of NRS. Through the merger, the shareholders will
receive a frequently traded share, and may expect significant synergies and
strong dividend capacity, in a merger that values the NRS share at a
historically high level."
Leif Inge Nordhammer, Chairman of SalMar, says in a statement that "a merger
between SalMar and NRS makes sense. We join strong teams that encompass the best
salmon farming know-how in Norway. The Merger will also allow synergies to be
earlier and better realised than solely through the completion of SalMar's
voluntary tender offer to acquire all shares in NTS."
Terms and conditions
The transaction will be completed in two interlinked stages.
First, NRS will immediately prior to completion of the Merger carry out the
agreed takeover of SalmoNor from NTS, where settlement will be in cash and NRS
shares, in line with the existing and amended agreements. The NRS share price
that will be the basis for the SalmoNor settlement will be equal to the value of
the NRS share agreed in the Merger. The cash settlement of the SalmoNor
transaction will be paid through the issue of a debt instrument that will be
settled following the completion of the merger between SalMar and NRS. NTS and
NRS/NRS Farming have entered into additional agreements related to the SalmoNor
transaction to regulate this. This means that the board of NRS has determined to
propose to the general assembly of NRS that the following equity issue is
carried out:
· The share capital of NRS is increased by NOK 15 360 452 through the issue of
15 360 452 new shares, each at NOK 1 par value, at a subscription price of NOK
265.18 per share