City Cement signs non-binding MoU to fully acquire Umm Al Qura Cement

Logo of City Cement Co.

City Cement Co. signed, on Nov. 3, a non-binding memorandum of understanding (MoU) with Umm Al-Qura Cement Co. to start talks on a share swap deal, through which City Cement will acquire all issued shares in Umm Al-Qura Cement.

City Cement and Umm Al-Qura Cement have agreed to proceed with relevant due diligence in relation to the proposed transaction, the two companies said in separate statements to Tadawul.

The MoU is valid for six months and can be extended upon approval of both parties.

City Cement and Umm Al-Qura agreed on a share swap deal to implement the merger. City Cement will submit an offer to Umm Al-Qura to acquire all its shares.

In return, City Cement will issue new shares for Umm Al-Qura shareholders.

The deal value and share swap coefficient will be determined after completing the necessary studies, including the due diligence, which would result in the delisting of Umm Al-Qura shares, as the company will be fully owned by City Cement.

The merger may possibly involve related parties, and some board members may have an interest in the deal.

Both parties intend to conclude the due diligence process and sign the definitive agreements of the deal, if they agree to the final terms, as soon as practicable.

The proposed deal is subject to the regulatory approvals, including from the competent authorities and the extraordinary general meetings of both the companies.

No financial advisor has been yet appointed. City Cement will later announce any relevant updates once its financial advisor is named.

It is worth noting that City Cement’s announcement followed Qassim Cement Co.’s plan, which was unveiled in September, to buy 100% of Hail Cement Co., Argaam earlier reported.

For More Mergers and Acquisitions