Prior to and conditional upon the merger, Safran would distribute a special dividend of €5.50 per share to its existing shareholders.
Under the terms of the contemplated agreement:
- Safran would launch a tender offer on Zodiac Aerospace’s shares at €29.47 per share, representing a premium of 24.6 per cent on Zodiac Aerospace’s closing price on 18th, January, 2017, 36.1 per cent on Zodiac Aerospace’s 3-month volume-weighted average price. The tender offer would be subject to an acceptance threshold of 50% of the share capital of Zodiac Aerospace. Family shareholders and two institutional investors (FFP and Fonds Stratégique de Participations) which are Zodiac Aerospace’s reference shareholders and in total represent approximately 32 per cent of Zodiac Aerospace’s share capital, intend to remain long-term shareholders of the combined entity and would undertake not to tender their shares into the public offer;
- Subject to the tender offer being successful and to Safran and Zodiac Aerospace’s respective shareholders’ approval of the merger, Safran and Zodiac Aerospace would merge based on an exchange ratio of 97 Safran shares (ex-special dividend) for 200 Zodiac Aerospace shares (or 0.485 Safran share (ex-special dividend) per Zodiac Aerospace share), consistent with the tender offer price after taking into account the special dividend. Family shareholders and two institutional investors (FFP and Fonds Stratégique de Participations) would undertake to contribute their shares to the merger;
- Prior to and conditional upon the merger, and subject to the tender offer being successful and to Safran and Zodiac Aerospace’s respective shareholders’ approval of the merger, Safran would distribute a special dividend of €5.5 per share, for a total amount of approximately €2.3bn to its shareholders.
Zodiac Aerospace’s founding families, FFP, Fonds Stratégique de Participations and the French State intend to remain core shareholders of Safran with around 22 per cent of its capital, and, upon completion of the transaction, to sign a shareholders agreement comprising a two-year lock-up provision.
The transaction would create a global leader in aircraft equipment, allying the market leading positions, expertise, technologies and talents of both Safran and Zodiac Aerospace. The new entity would combine Safran’s capabilities in landing gear, wheels and brakes, nacelles, power systems, actuation and avionics, with Zodiac Aerospace’s leading positions in seats, cabin interiors, power distribution, lighting, fuel, oxygen and fluid systems and safety equipment.
In electrical systems, Zodiac Aerospace’s assets would reinforce Safran’s portfolio of technologies and position the group ideally for future developments towards the “more electrical aircraft”.
Reinforcing core aerospace business and enlarging footprint
The transaction would be fully consistent with Safran’s stated strategy to focus on its core aerospace and defense businesses. The new entity would offer a comprehensive product range reinforcing Safran’s presence across all key aircraft programs, fueling organic growth and limiting exposure to aircraft-OEM delivery cycles.
The combination would improve Safran’s exposure to a dollar-denominated cost-base, especially in North America where Zodiac Aerospace has a large footprint.