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Yara set to complete acquisition of Kemira GrowHow Oyj

Sep 21, 2007
"The approval from the European Commission paves the way for the further development of a world-class company. Kemira GrowHow's phosphate and Yara's nitrogen activities will serve as a solid platform for the future and further position the company as a knowledge leader in the global fertilizer industry, known for its broad portfolio and balanced fertilization", says Thorleif Enger, President and CEO of Yara International ASA.
 
On 24 May 2007 Yara Nederland B.V., a wholly-owned subsidiary of Yara International ASA, acquired 17,188,480 shares in Kemira GrowHow Oyj from the State of Finland, at a purchase price of EUR 12.12 per share. On 21 June 2007 Yara Nederland B.V., launched a mandatory tender offer for all the issued shares in Kemira GrowHow Oyj (the "Tender Offer"). The tender offer period commenced at 9.30 (Finnish time) on 20 July 2007 and was extended on 7 September 2007 to end at 16.00 (Finnish time) on 27 September 2007.
 
The completion of the Tender Offer is subject to the European Commission's prior approval of the transaction pursuant to Council Regulation (EC) No 139/2004 and to corresponding approvals in other jurisdictions. Yara International ASA notified the transaction to the European Commission on 2 August 2007. On 21 September 2007 the European Commission approved the acquisition subject to the fulfillment of certain commitments offered by Yara that Yara International ASA is committed to fulfill within 6 months of the completion of the Tender Offer.
 
Yara welcomes the European Commission's approval of its acquisition of Kemira GrowHow Oyj. The acquisition is a major step forward for Yara's growth objectives and industry shaper ambition. The European Commission has approved the transaction subject to the fulfillment by Yara of the following commitments, which in aggregate correspond to less than 3% of Kemira GrowHow Oyj revenues:
 
- Divestment of part of Yara's nitrogen chemicals business in Köping, Sweden
- Divestment of part of Kemira GrowHow's nitrogen chemicals business in Tertre, Belgium
- Dissolution of the Fertisupply distribution joint venture in Denmark
- Sale of Yara's share in the Zemnor distribution joint venture in Latvia
- Divestment of the CO2 liquefaction plant in Billingham, UK currently owned and operated by the newly established joint venture GrowHow UK Limited
 
Yara International ASA / Yara Nederland B.V. will waive to require any other authority consents, approvals, actions or court orders for the completion of the Tender Offer. Therefore, the conditions for the completion of the Tender Offer have become fulfilled and the Tender Offer will be completed after the termination of the Tender Offer Period in accordance with the terms and conditions of the Tender Offer with respect to all Kemira GrowHow Oyj shareholders who have validly accepted the Tender Offer by that time.
 
The offer consideration for each Share in the Tender Offer is EUR 12.12 in cash provided that the Tender Offer has been validly approved according to the terms and conditions of the Tender Offer Document and that its acceptance has not been validly withdrawn (the "Offer Consideration"). Subject to the completion of the Tender Offer the Offeror will pay interest on the Offer Consideration at the rate of five (5) percent per annum from the date of receipt (excluding the date of receipt) of acceptance of the Tender Offer until the payment (including the date of payment) of the Offer Consideration.
 
The Tender Offer will be completed with respect to all Kemira GrowHow's shareholders who have validly accepted the Tender Offer no later than on the fifth (5th) banking day following the end of the Tender Offer Period, i.e. by 4 October 2007 (Completion Date). If possible, the completion trades will be executed on the Helsinki Stock Exchange. The completion trades will be settled on the third (3rd) banking day following the completion trades, i.e. on 9 October 2007. The Offer Consideration will be paid on or about the third (3rd) banking day following the date of the completion trade. The accrued interest will be paid on or about the fifth (5th) banking day following the date of the completion trade.
 
Yara will fund the offer consideration from its existing cash balances and credit lines. Yara has confirmed to Kemira GrowHow that the funding will be available at the time of the tender offer as required by the Finnish Securities Markets Act. 
 
Kemira GrowHow Oyj is one of the leading producers of fertilizers and feed phosphates in Europe, with production facilities in 8 countries, sales to over 100 countries and about 2,500 employees. At the date of this release, the members of the Kemira GrowHow Oyj board of directors are Ossi Virolainen (Chairman), Lauri Ratia (Vice-Chairman), Arto Honkaniemi, Satu Raiski, Helena Terho, Esa Tirkkonen and Maija Torkko. The CEO of Kemira GrowHow Oyj is Heikki Sirviö. The members of the board of directors will be replaced following the completion of the Tender Offer.
 
Kemira GrowHow Oyj focuses on providing customized fertilizers and related services for crop cultivation, feed phosphates for use in animal feed, as well as process chemicals for selected industrial segments. The company owns and operates a major phosphate mine at Siilinjärvi, Finland and has access to additional phosphate rock through mining rights at Sokli, also in Finland. For the year ended 31 December 2006, Kemira GrowHow Oyj reported Net sales of EUR 1,166.2 million, Operating profit of EUR 11.1 million, a Net loss after minority interest of EUR 7.8 million and Total assets of EUR 844.7 million. For the six months ended 30 June 2007, Kemira GrowHow Oyj reported Net sales of EUR 682 million, Operating profit of EUR 38.9 million, Net income after minority interest of EUR 28.3 million and Total assets of EUR 868.2 million. At 31 December 2006, Kemira GrowHow Oyj unrecognized net actuarial losses relating defined benefit pension plans were EUR 41.8 million.
 
The combination of the two companies will create a strong, world-class company able to compete effectively in the global fertilizer market. Phosphate rock mining, phosphoric acid and finished products at Siilinjärvi and Uusikaupunki in Finland will be important additions to Yara's phosphate-related capabilities and represent new capacity within Yara. Yara is interested in opening the Sokli mine in Finnish Lapland and to explore the commercial utilization of the phosphate raw material extracted from the mine, if a commercially sustainable means of implementation will be found. Kemira GrowHow's phosphate mining and primary upgrading operations in Finland will provide new competencies to the combined company, complementary to Yara's existing operations. Yara foresees that these operations will continue in the role of key competence centers in these fields as part of the combined company. Yara and Kemira GrowHow have both streamlined their operations during the last ten years. The combination creates new opportunities for value creation through further synergies and growth.
 
Based on 2006 reported financials, the acquisition of Kemira GrowHow Oyj will increase Yara International ASA revenues and assets by approximately 21% and 20% respectively.
 
Kemira GrowHow will be consolidated into Yara International ASA fourth-quarter 2007 results. The impact on the Yara International ASA third quarter 2007 results will not be material.
 
Subject to the agreement by and between Yara and the relevant individuals, the CEO, CFO and other members of the senior management of Kemira GrowHow Oyj who will reach retirement age prior to 2010, will continue their respective service relationship with the combined company in a combination of active assistance in the transition followed by engagement in a consultancy capacity at the present compensation (salary, bonus, benefits, etc.) level until eligible for pension at the age of 60.
 
All shares issued pursuant to the 2004 - 2006 incentive compensation schemes of Kemira GrowHow Oyj will be subject to the Tender Offer. The rights for the shares scheduled to be issued during 2008 under the 2005 incentive compensation scheme of Kemira GrowHow Oyj will be compensated for in cash to the participants of the incentive compensation scheme. In addition, the rights of the participants of the 2007 - 2009 incentive compensation schemes of Kemira GrowHow Oyj will be settled in cash in accordance with the terms and conditions of such incentive compensation schemes. The parties acknowledge that the obligation to settle the 2007 - 2009 incentive compensation schemes in cash applies to incentive compensation payable under the schemes in respect of the ear in which the combination is completed (and the prior year if the Combination is not completed in 2007). Thereafter, the incentive compensation shall be determined in accordance with any replacement plan.
 
Reference is made to the Tender Offer document (enclosed) including the Combination Agreement of 24 May 2007 between Yara International ASA and Kemira GrowHow Oyj.
 
Yara International ASA
Board of Directors
 
 


 
Torgeir Kvidal, Investor Relations
Telephone  (+47) 24 15 72 95
Cellular (+47) 91 339 832
 
Hamed Brodersen, Media Relations
Cellular (+47) 40 468 110
 
 
Yara International ASA is a leading chemical company that converts energy and nitrogen from the air into essential products for farmers and industrial customers. As the number one global supplier of mineral fertilizers and agronomic solutions, we help provide food for a growing world population. Our industrial product portfolio includes environmental protection agents that safeguard air and water purity and preserve food quality. Yara's global workforce of 7,000 employees represents great diversity and talent enabling Yara to remain a leading performer in its industry.
 
 
 
DISCLAIMER
 
This press release must not be published, released or otherwise distributed in whole or in part in or into the United States, Canada, Japan or Australia. This stock exchange release is neither an offer to purchase nor a solicitation for an offer to sell shares, and the Tender Offer will not be made directly or indirectly in the United States, Canada, Japan or Australia or any other jurisdiction where such an offer would violate laws of that jurisdiction. This stock exchange release and tender offer will not and may not be distributed, forwarded or transmitted in any way, such as by post, fax, email or telephone, or in any other way to or from areas where it would violate the law.

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