Here is the announcement.
INCITEC LIMITED 2002-08-29 ASX-SIGNAL-G
HOMEX - Brisbane
+++++++++++++++++++++++++
Incitec Ltd and Orica Limited today jointly announced structural
changes to Orica's 77% owned subsidiary, Incitec Ltd. Both of
Incitec's principal businesses, fertilisers and industrial chemicals
are to undergo significant changes.
Incitec Ltd's Chairman, Mr Tony Larkin said it is proposed that
Incitec's fertiliser business merge with Pivot Limited, to create a
new listed entity - Incitec Pivot Limited - which would have a
shareholding of 54% Orica, Pivot shareholders 30%, Futuris 15% and
minorities of 1%.
"A further element of the restructuring involves Orica acquiring
Incitec's Industrial Chemicals business" Mr Larkin said.
Mr Larkin said the proposed merger with Pivot represented a major
step in reshaping the fertiliser industry in eastern Australia.
"The merger offers the opportunity to improve returns to shareholders
through elimination of duplicated logistics arrangements, and from
accessing economies of scale in purchasing, shipping and
distribution." he said
Mr Larkin said that Incitec Pivot Limited will be a more efficient
Australian supplier in the highly competitive fertiliser market which
will offer benefits to Australia's farmers.
Incitec's fertiliser business has significant production and
distribution facilities in Queensland and New South Wales, while the
focus of Pivot operations is in Victoria, South Australia and
Tasmania.
"The merged entity will have representation over the eastern and
Southern Australian fertiliser markets." Mr Larkin said. "This
coverage will provide farmers with improved choice and reliability of
supply of products and services." he added
Mr John Watson, Chairman of Pivot Limited will be the inaugural
Chairman of Incitec Pivot Limited. Mr Greg Witcombe, Incitec Managing
Director will be the Managing Director and CEO of the new company.
Other senior management will be composed of representatives of both
companies.
The merger will require approval by shareholders of both Incitec and
Pivot, and court approval of a Scheme of Arrangement. The merger is
subject to clearance by the Australian Competition and Consumer
Commission.
The mechanics by which the merger will proceed involve demerging the
fertiliser and industrial chemicals businesses of Incitec. This
process is conditional on the passage of demerger legislation through
Federal Parliament.
Orica proposes to acquire Incitec's Industrial Chemicals business for
$315 million, through the demerger and a selective capital reduction
in the demerged entity.
These steps will require approval by Incitec shareholders in General
Meeting. The independent Directors of Incitec have commissioned an
independent expert, Grant Samuel and Associates, to assist in their
consideration of the proposal. Comprehensive information, including a
copy of the independent expert's report will be provided to
shareholders to assist in their consideration of the proposal.
"Incitec is a significant supplier of industrial chemicals products
to Orica businesses and approximately 60% of Incitec's industrial
chemicals production is purchased by Orica." Mr Larkin said.
"There are natural synergies between the businesses, and it is a
logical step for the Incitec operations to move to total Orica
ownership." he added.
Mr Larkin said that, for Incitec shareholders, the demerger allows
the fertiliser business to participate in an exciting development for
the Australian industry.
"Shareholders will hold shares in an organisation formed through the
combination of substantial resources and, importantly, expertise,
which will be totally focused on the fertiliser market. There will be
benefits to shareholders and farmers alike," he added.
APPROVALS
The fertiliser merge is subject to:
- ACCC clearance.
- The transfer of the Industrial Chemicals assets to Orica.
- Approval by both Pivot and Incitec shareholders.
The transfer of the Industrial Chemicals assets will proceed by
Scheme of Arrangement and subsequent capital reduction and is subject
to:
- Passage of the relevant demerger legislation through Federal
Parliament.
- Incitec shareholder approval.
Subject to these approvals, it is intended to complete the
transactions by December 2002
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