Brazilian Plastics

World Plastics News

Mexichem and Wavin create global leader in the plastic pipe systems and solutions industry.

Mexichem intends to make a recommended all cash public offer of € 10.50 per ordinary Wavin share

February 8, 2012 – Mexichem S.A.B. de C.V. ("Mexichem") and Wavin N.V. ("Wavin") jointly announced they have reached a conditional agreement in connection with a public cash offer by Mexichem for all issued and outstanding ordinary shares of Wavin at an offer price of € 10.50 for each Wavin ordinary share (the "Offer"). The offer price represents a 177% premium to Wavin's closing share price as at 18 November 2011, and a 97% premium to Wavin's average closing price for the three months up to and including 18 November 2011, respectively. The Offer values 100% of the issued and outstanding shares of Wavin at approximately € 531 million.

The combination of Mexichem and Wavin will create the global leader (€ 4.0 billion annual sales) in plastic pipe systems and solutions, building on a combined history of innovation and a commitment to client servicing. The companies will capitalise on a strong complementary fit in geography, product portfolio, R&D and business lines and together will be better equipped for future growth from consolidation and expansion into new markets.

"A combination between Mexichem and Wavin represents an important step for both of our companies in creating the leading global operator in the plastic pipe systems industry. The geographic footprint and product portfolio of Wavin and Mexichem are highly complementary and together we will be exceptionally positioned to capitalise on growth opportunities. We welcome Wavin to the Mexichem group and are excited about the opportunity of working with the Wavin management team", said Ricardo Gutiérez Muñoz, President of Executive Committee, Mexichem

"We believe Mexichem's offer provides an opportunity for Wavin to join forces with a leading plastic pipe systems company whilst preserving our history, culture and assets such as our brand, our broad portfolio and our innovative power. We will be able to accelerate the Wavin 2015 strategy, to participate in the industry consolidation and to benefit from cross selling, sourcing power and best practice sharing. We look forward to a sustainable future together", explains Henk ten Hove, Wavin CEO.

Transaction Highlights

Mexichem intends to make a cash offer of € 10.50 per Wavin ordinary share representing a premium of 177% over the closing price of 18 November 2011, for 100% of the outstanding shares of Wavin
The Management and Supervisory Boards of Wavin support and recommend the intended Offer

Compelling Strategic Rationale

The combination of Wavin and Mexichem creates the global market leader in plastic pipe systems with total annual sales of around € 4.0 billion
The combined group will be better equipped for future growth from consolidation and expansion into new markets
Mexichem and Wavin are highly complementary with very limited geographic overlap
The combined group will have stronger design, engineering and R&D capabilities whilst leveraging Mexichem's low cost manufacturing platform
The combined group will have a more diversified end-market profile across the residential, non-residential and infrastructure segments exposing it to different economic and construction cycles

Identity of Wavin Maintained Within the Combination

Wavin will retain a separate operating and legal structure with headquarters in Zwolle, the Netherlands
Wavin's brand will be retained and R&D innovation centre will be kept in the Netherlands
Existing rights of the employees, including pension rights, will be respected and the current Wavin employee consultation structure will be left unchanged. There will be no reduction of the number of employees as a consequence of the Transaction
The combination represents an opportunity for Wavin and Mexichem employees and management to become part of a diversified group with a strong capital structure

Source: Mexichem