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SalMar - Clearance received from the European Commission – Settlement details for merger between SalMar and NRS and voluntary tender offer for shares in NTS

SalMar ASA
SalMar ASA

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, INTO OR WITHIN CANADA, AUSTRALIA, NEW ZEALAND, SOUTH AFRICA, HONG KONG, JAPAN OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL

Frøya, 31 October 2022

Reference is made to the offer document dated 17 March 2022 (the "Offer Document") for the recommended voluntary offer (the "Offer") by SalMar ASA (“SalMar” or the "Offeror") to acquire all outstanding shares in NTS ASA (“NTS”), and the subsequent stock exchange announcements relating thereto.

Reference is also made to the merger between SalMar and Norway Royal Salmon ASA (“NRS”) (the “Merger”) pursuant to the merger plan dated 30 May 2022 (the “Merger Plan”) approved by the extraordinary general meetings of SalMar and NRS on 30 June 2022 (as amended by resolutions of the extraordinary general meetings of SalMar and NRS on 27 and 28 October 2022, respectively).

Clearance received from the European Commission

The European Commission has today declared SalMar’s acquisition of a majority of the shares in NTS pursuant the Offer to be compatible with the EU Merger Regulations, and consequently also the Merger.

In connection with the clearance from the European Commission, SalMar has undertaken a commitment to divest the 16,346,824 shares in Arctic Fish Holding AS (“Arctic Fish”) currently held by NRS that will be assumed by SalMar upon completion of the Merger. The shares represent approximately 51.28% of the shares and votes in Arctic Fish. SalMar has entered into an agreement with Mowi ASA (“Mowi”) whereby Mowi will acquire these shares for a price of NOK 115 per share, subject to (i) completion of the Offer and the Merger, (ii) approval by the European Commission of Mowi as buyer of the shares and of the agreed terms of sale, and (iii) certain other customary closing conditions.

Strong strategic and operational rationale for a completion of the Merger and the Offer

Despite an uncertain situation for SalMar, NTS and NRS caused by the new tax system proposed by Government, the strategic and operational rationale for proceeding with the transaction remains, with strong backing from both owners, employees and the local communities where we operate.

The combination will strengthen the activities in the regions where we operate. These are the core regions in an industry in which Norway is the world leader. The position has been won through creativity, effort and passion over decades, from employees, management and shareholders. SalMar, NTS, NRS and SalmoNor are great companies, and will continue this work together. We believe, in spite of a tax proposal creating uncertainty in this industry, that striving for continued sustainability, operational excellence, and efficient use of resources remains the best path to protect jobs and value creation in this rurally based production.

The parties have a long track-record in salmon farming, both in Central and Northern Norway. It is expected that a combination of the parties will realize significant synergies through a more efficient utilization of the parties' common resources. The combination will facilitate improved capacity utilization of the combined MAB and site portfolio, as well as the implementation of operational excellence, which in total are expected to provide even better biological results and lower production costs. Further, the parties have strong expertise within sales and distribution, and the combination will provide improved security for delivery of our products to customers worldwide.

The parties have strong company cultures, and the anticipated production growth they expect going forward will strengthen the combined company’s position as an attractive employer requiring a competent workforce in the local communities.

By unconditionally clearing the transaction, both the Norwegian Competition Authority and the European Commission have confirmed that the transaction will not lead to any significant impediment of effective competition in the market for farming of Norwegian salmon.

SalMar has considered the need for a revision of the offer terms, given the major adverse setback for the industry experienced by the government’s tax proposals. This would have put the combination as such in jeopardy. While the industry will have to scale back and reduce planned investments going forward, the need to seek efficiency and economies of scale has become even greater. SalMar will pursue ambitious synergy targets and expects the transaction to increase shareholder value going forward. The entire industry will have to reassess its growth strategies and structures, and SalMar welcomes the increased resource base and operational leverage the transaction entails.

More details on will be given in the upcoming quarterly presentation from SalMar on the 10th of November 2022.

Completion of the Merger

Based on the clearance from the European Commission and the Settlement Notification with respect to the Offer described below, SalMar and NRS have resolved to proceed to complete the Merger in accordance with the terms and conditions of the Merger Plan.

In accordance with the Merger Plan, NRS will immediately prior to completion of the Merger complete the agreed acquisition of SalmoNor AS from NTS, with settlement in cash and NRS shares.

It is expected that final registration of completion of the Merger in the Norwegian Register of Business Enterprises will take place after close of trading on Oslo Børs on 7 November 2022 (the “Merger Effective Date”), which will be the last day of trading in the NRS shares.

Shareholders of NRS will receive merger consideration consisting of 0.303933 shares in SalMar and NOK 52.84 in cash for each share in NRS they own as at the expiry of the Merger Effective Date, as such shareholders appear in NRS’ shareholders register with Euronext Securites Oslo (VPS) as at the expiry of 9 November 2022 (the “Merger Record Date”). SalMar will issue at total of 17,851,550 new shares as consideration in the Merger.

Settlement Notification with respect to the Offer

Pursuant to Section 4.17 (Settlement) of the Offer Document, the Offeror hereby confirms that that the closing conditions of the Offer have been satisfied or waived. Accordingly, this announcement constitutes the Settlement Notification (as defined in the Offer Document) with respect to the Offer.

Settlement of the Offer is expected to take place on or about 11 November 2022 (and no later than 14 November 2022). See Section 4.11 (Conditions for completion of the Offer) and Section 4.17 (Settlement) of the Offer Document for further information.

In accordance with the terms of the Offer, on settlement the Offeror will pay a consideration consisting of NOK 26.86482 in cash and 0.143241 newly issued shares in SalMar for every share in NTS for which the Offer has been lawfully accepted. Upon completion of the Offer, SalMar will issue at total of 9,487,371 new shares as consideration in the Offer.

In addition, the Offeror will, pursuant to section 4.7 (Consideration) of the Offer Document, pay interest on the cash portion of the consideration at an interest rate of 3 month NIBOR + 1.35% per annum calculated from 15 June 2022 until settlement of the Offer. The interest will be paid together with settlement of the cash consideration in the Offer.

See Section 4.17 (Settlement) of the Offer Document for further details on the settlement of the Offer.

Following settlement of the Offer, the Offeror will hold approximately 52.69% of the shares and votes in NTS and intends to put forward a mandatory offer for all the remaining shares in NTS in accordance with chapter 6 of the Norwegian Securities Trading Act. The Offeror currently owns no shares in NTS.

Following completion of the Merger and settlement of the Offer, SalMar will have a registered share capital of NOK 36,284,730 divided into 145,138,920 shares each having a par value NOK 0.25.

Arctic Securities AS acts as financial advisor and receiving agent and Advokatfirmaet BAHR AS acts as legal advisor to SalMar.

For further information, please contact:

Frode Arntsen, CEO SalMar
Tel: +47 482 06 665
Email: frode.arntsen@salmar.no

Håkon Husby, IR-ansvarlig SalMar
Tel: +47 936 30 449
Email: hakon.husby@salmar.no

This information is information required to be made public pursuant to the EU Market Abuse Regulation and section 5-12 of the Norwegian Securities Trading Act.  The information was submitted by Håkon Husby at 17:00 (Norwegian time) on 31 October 2022.

About SalMar

SalMar is one of the world's largest and most efficient producers of salmon. The group has farming operations in Central Norway, Northern Norway and Iceland, as well as substantial harvesting and secondary processing operations in Norway, at InnovaMar in Frøya, InnovaNor in Senja and Vikenco in Aukra. In addition, the company is operating within offshore aquaculture through the company SalMar Aker Ocean. SalMar also owns 50% of the shares in Scottish Sea Farms Ltd.

See www.salmar.no for more information about SalMar.

***

The Offer and the distribution of this announcement and other information in connection with the Offer may be restricted by law in certain jurisdictions. When published, the Offer Document and related acceptance forms will not and may not be distributed, forwarded or transmitted into or within any jurisdiction where prohibited by applicable law, including, without limitation, Canada, Australia, New Zealand, South Africa, Hong Kong and Japan. The Offeror does not assume any responsibility in the event there is a violation by any person of such restrictions. Persons into whose possession this announcement or such other information should come are required to inform themselves about and to observe any such restrictions.

This announcement is not a tender offer document and, as such, does not constitute an offer or the solicitation of an offer to acquire the Shares. Investors may accept the Offer only on the basis of the information provided in the Offer Document. Offers will not be made directly or indirectly in any jurisdiction where either an offer or participation therein is prohibited by applicable law or where any tender offer document or registration or other requirements would apply in addition to those undertaken in Norway.

Notice to U.S. Holders

U.S. Holders (as defined below) are advised that the Shares are not listed on a U.S. securities exchange and that the Company is not subject to the periodic reporting requirements of the U.S. Securities Exchange Act of 1934, as amended (the "U.S. Exchange Act"), and is not required to, and does not, file any reports with the U.S. Securities and Exchange Commission (the "SEC") thereunder. The Offer will be made to holders of Shares resident in the United States ("U.S. Holders") on the same terms and conditions as those made to all other holders of Shares of the Company to whom an offer is made. Any information documents, including the Offer Document, will be disseminated to U.S. Holders on a basis comparable to the method that such documents are provided to the Company's other shareholders to whom an offer is made. The Offer will be made by the Offeror and no one else.

The Offer will be made to U.S. Holders pursuant to Section 14(e) and Regulation 14E under the U.S. Exchange Act as a "Tier II" tender offer, and otherwise in accordance with the requirements of Norwegian law. Accordingly, the Offer will be subject to disclosure and other procedural requirements, including with respect to the offer timetable, settlement procedures and timing of payments, that are different from those that would be applicable under U.S. domestic tender offer procedures and law.

Pursuant to an exemption from Rule 14e-5 under the U.S. Exchange Act, the Offeror and its affiliates or brokers (acting as agents for the Offeror or its affiliates, as applicable) may from time to time, and other than pursuant to the Offer, directly or indirectly, purchase or arrange to purchase, Shares or any securities that are convertible into, exchangeable for or exercisable for such Shares outside the United States during the period in which the Offer remains open for acceptance, so long as those acquisitions or arrangements comply with applicable Norwegian law and practice and the provisions of such exemption. To the extent information about such purchases or arrangements to purchase is made public in Norway, such information will be disclosed by means of an English language press release via an electronically operated information distribution system in the United States or other means reasonably calculated to inform U.S. Holders of such information. In addition, the financial advisors to the Offeror may also engage in ordinary course trading activities in securities of the Company, which may include purchases or arrangements to purchase such securities.

Neither the SEC nor any securities supervisory authority of any state or other jurisdiction in the United States has approved or disapproved the Offer or reviewed it for its fairness, nor have the contents of the Offer Document or any other documentation relating to the Offer been reviewed for accuracy, completeness or fairness by the SEC or any securities supervisory authority in the United States. Any representation to the contrary is a criminal offence in the United States.