Qassim Cement confirms intention to acquire 100% of Hail Cement

Logos of Qassim Cement Co. and Hail Cement Co.

Qassim Cement Co. (QCC) agreed to make an offer to Hail Cement Co.’s (HCC) shareholders to acquire all shares of HCC in consideration for newly issued shares in QCC.

The offer will be in accordance with Article 26 of the Merger and Acquisition Regulations and the Rules on the Offer of Securities and Continuing Obligations issued by the board of the Capital Market Authority (CMA), along with the conditions of the implementation agreement, QCC said in a statement to Tadawul today, Jan. 17.

QCC said it does not own any shares directly in HCC. The company has established a private investment fund that is managed by a licensed capital market institution to invest in securities and shares. QCC owns all the units in this fund. The latter (a related party) owns 2.3 million shares in HCC, representing 2.36% of HCC’s share capital.

The cement producer added that there is no person acting in concert with QCC in relation to the transaction, other than the above mentioned.

QCC does not have any option to purchase HCC shares, nor does any person acting in concert with it. QCC has not received any irrevocable commitment from any party to vote in favor of the transaction at the relevant extraordinary general meeting (EGM).

There are no indemnity arrangements in relation to the shares of HCC involving QCC, HCC or any person acting in concert with them.

HSBC Saudi Arabia, the financial adviser of 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 consideration.

Both companies continue to work on satisfying the conditions required to complete the deal, including obtaining the relevant regulatory approvals. Completion of the deal is not yet certain and remains subject to all conditions referred to in the transaction announcement, the two cement producers said in separate statements.

After obtaining the necessary regulatory approvals, QCC will issue a circular addressed to its shareholders, which will contain all details related to the capital increase. QCC will also publish an offer document to the shareholders of HCC, setting out specific information related to the transaction. HCC’s board of directors will also issue a circular addressed to its shareholders on its views in relation to the transaction. QCC and HCC agreed to thereafter call their respective shareholders to vote on the deal.

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

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