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Clifford Chance advises GP Investments and Rhône Capital on the combination of RHI and Magnesita

6 October 2016

Clifford Chance advises GP Investments and Rhône Capital on the combination of RHI and Magnesita

Clifford Chance is advising GP Investments and Rhône Capital ("Magnesita's Controlling Shareholders") as to English law and antitrust matters in connection with the combination of RHI AG ("RHI") and Magnesita Refratários S.A. (“Magnesita”) to create a leading refractory company. The combined company, to be named RHI Magnesita, will be established in the Netherlands and listed in London.

Accordingly, RHI’s Management Board has agreed to sign a share purchase agreement with Magnesita’s Controlling Shareholders regarding the acquisition of a controlling stake of at least 46%, but no more than 50% plus one share of the entire share capital in Magnesita, pending RHI’s Supervisory Board approval. The consideration for the 46% stake will consist of cash and new shares to be issued by RHI Magnesita (with the implied value of the 46% stake amounting to €208 million).

Completion of the transaction is, amongst other things, subject to approvals by the relevant competition authorities and RHI's shareholders' meeting. The transaction is expected to be completed in 2017.

Following completion of the transaction, a mandatory tender offer will be launched by RHI Magnesita or one of its affiliates for the remaining shares in Magnesita. The implied value for the entire share capital of Magnesita amounts to €451 million.

The Clifford Chance team was led by Graham Phillips with support from David Lewis, Nikita Culhane, Jenine Hulsmann and Jennifer Storey in London, and Timothy Cornell and Brian Concklin in Washington.