Magnesita Refratários S.A. (“Company”), pursuant to the terms of Law no. 6,404/76 and Rule no. 358/02 of Comissão de Valores Mobiliários (“CVM”), hereby informs its shareholders and the market in general and in connection with the transaction disclosed in the Material Fact dated October 5, 2016, by which Alumina Holdings, LLC (“Alumina”), Rearden L. Holdings 3 S.À R.L. (“Rearden”) and RHI AG (“RHI”) signed an agreement with the purpose of combining the operations of RHI and the Company to create a leading company in refractory solutions (“Transaction”):
On the date hereof, the European Commission has cleared the Transaction, subject to certain conditions, including (i) the divestment of the Company’s entire business in relation to the production and supply of magnesium carbon bricks and other products sold to magnesium carbon bricks customers (or affiliated undertakings) at the Company’s Oberhausen facility, in Germany, together with all essential assets and personnel which are necessary to ensure the viability and competitiveness of the business (“Oberhausen Business”), as well as a commitment to enter into an offtake agreement to provide the purchaser of the Oberhausen Business with the right to acquire up to a specified maximum volume per annum of sintered magnesia from the Company’s raw material business in Brazil on specified terms for a period of 12 (twelve) years; and (ii) divestment of certain of RHI’s assets related to dolomite-based refractory production, as detailed in RHI’s material fact disclosed on the date hereof (www.rhiag.com/internet_en/investor_relations_en/105506/28.06.17_EU+Commission+clearance) (“EU Remedy Package”). In 2016, worldwide net revenues attributable to the sale of products produced at the Oberhausen facility were USD 57.4 million (around 6% of the consolidated revenue of Magnesita).
The competent corporate bodies of the Company have already agreed with the EU Remedy Package related to the Company. Implementation of the EU Remedy Package remains subject to completion of the Transaction.
Without prejudice to other conditions precedent detailed in the Material Fact dated October 5, 2016, approval of the Transaction by the Brazilian Antitrust Authorities is still pending.
The Company will keep its shareholders and the market in general informed regarding the development of the Transaction.