Qassim Cement clarifies terms to acquire Hail Cement via share swap

Logos of Qassim Cement Co. and Hail Cement Co.

Qassim Cement Co. (QCC ) clarified the terms and conditions pertaining to the buyout of Hail Cement Co. (HCC) via a securities swap and as confirmed by the financial advisor.

In a statement to Tadawul, QCC said the transaction will be in accordance with the conditions of the implementation agreement.

QCC will fully acquire HCC’s 97.9 million ordinary shares at a nominal value of SAR 10 each via a swap offer.

QCC will issue 20.56 million new ordinary shares with a nominal value of SAR 10 each for HCC shareholders (consideration shares). For this, QCC will increase its capital from SAR 900 million to SAR 1.11 billion and its shares from 90 million to 110.56 million—implying a capital increase by 22.8%.

After completion of the deal, HCC shareholders will receive 0.21 consideration share in QCC in return for every HCC share they own. HCC shareholders registered with Securities Depository Center Co. (Edaa) on the second trading day after approvals from general meetings of both companies are eligible.

Subsequently, HCC will delist from the Saudi Exchange (Tadawul) and become a wholly owned subsidiary of QCC.

The transaction is subject to a number of conditions, including regulatory approvals from the CMA and Tadawul.

The deal is also subject to submitting related notices to Edaa, along with obtaining approvals from the General Authority for Competition (GAC), the Ministry of Commerce and shareholders of HCC and QCC.

QCC also noted a material negative event should not happen; the guarantees offered by both companies should not be breached; and, a decision or a decree by any regulatory authority that may render the deal illegal, should not be issued.

In addition, the transaction requires the approval of a number of parties contracting with both companies, along with no breach of any warranties provided by either QCC or HCC.

HSBC Saudi Arabia, the financial adviser to QCC, is not required to provide a confirmation that QCC has sufficient resources to satisfy the completion of the transaction; given that the consideration payable by QCC does not include cash.

Both companies continue to work on satisfying the conditions required to complete the deal, including obtaining the relevant regulatory approvals.

Both companies will make further announcements on material developments in relation to the transaction.

On Jan. 17, QCC confirmed its intention to make an offer to HCC shareholders to acquire all shares of HCC in consideration for newly issued shares in QCC, Argaam reported.

In December 2023, QCC signed a binding agreement with HCC to buy the latter through a share swap, Argaam reported earlier.