Following March 14 and April 28, 2017 releases, Safran and Zodiac Aerospace have continued their exclusive negotiations leading to a new agreement, with a simplified one-step structure and new financial terms. Complementary analyses enabled Safran to confirm the compelling strategic rationale and value creation potential.
The contemplated combination, unanimously approved by Safran's Board of Directors and Zodiac Aerospace's Supervisory Board will create of global aerospace leader, taking into account the interest of shareholders, employees and clients of both groups.
Safran would acquire Zodiac Aerospace through an agreed Tender Offer by Safran for Zodiac Aerospace's shares:
- Primary uncapped cash offer targeting 100% of Zodiac Aerospace's shares1 at a price of €25 per Zodiac Aerospace share.
- Preferred shares of Safran offered in a subsidiary exchange offer capped at 31.4% of Zodiac Aerospace's shares, bearing the same rights as ordinary shares but not transferable before 3 years after their issuance.
- Exchange ratio, of 0.300 to 0.332 Safran preferred share per 1 Zodiac Aerospace share, reflecting a +5%/-5% collar mechanism.
- Some family shareholders as well as 2 institutional shareholders (FFP and Fonds Stratégique de Participations), reference shareholders of Zodiac Aerospace, expected to undertake to tender shares, representing 25% of Zodiac Aerospace's capital, in the Tender Offer.
- Certain family shareholders representing less than 5% of Zodiac Aerospace's capital expected to remain shareholders of Zodiac Aerospace for a specified period of time.
- Safran to exercise exclusive control of Zodiac Aerospace post tender offer.
Confirmed run-rate annual pre-tax cost synergies of €200 million. High single-digit and high double-digit accretive effect on earnings per share as of the first and second year, respectively.
Safran intends to return €2.3 billion to shareholders through an ordinary share buyback program over 2 years following completion of the Tender Offer. Optimized capital structure of the combined group targeting an investment grade profile.
Number of Directors at Safran's Board unchanged (17) with two members of Zodiac Aerospace's Supervisory Board to join Safran's Board of Directors subject to Safran shareholders' approval at 2018 AGM.