AmRest Holdings S.E. — M&A Activity 2018

Apr 30, 2018

RB 23/2018 Master Franchise Agreement and Asset Purchase Agreementbetween AmRest and Pizza Hut Russia;AmRest Holdings SE ("AmRest", the"Company") informs about signing on April 27, 2018 the Master FranchiseAgreement (the "MFA") with Pizza Hut Europe S.à.r.l. ("PHEurope").;Based on the MFA AmRest will gain the master-franchisee rightsfor Pizza Hut brand in Russia, Azerbaijan and Armenia (the "Territory").After the completion of MFA AmRest will have the exclusive right togrant the license to the third parties to operate Pizza Hut restaurants(sub-franchise) in the Territory and become the franchisor for nearly 30restaurants currently operated by multiple sub-franchisees in abovementioned countries.;In order to facilitate the growth of scale of PizzaHut business, PH Europe introduced an incentive mechanism reducingcertain fees incurred by AmRest under the MFA ("Reduced Fees"), providedthat the Company meets certain development obligations specified in theMFA. Upon entry into force of the MFA AmRest will be required to openand operate Pizza Hut Dine in, Express and Delivery restaurants inaccordance with the development schedule setting the minimum number ofopenings in the subsequent years of the MFA's term. If AmRest fails tomeet the development obligations, PH Europe will have the right toincrease the Reduced Fees and change the terms or terminate the MFA. TheCompany's intention is to open more than 200 Pizza Hut restaurants inthe Russian market within 5 years.;The MFA was granted for initialperiod of 10 years with an option of further prolongations upon thefulfillment of certain terms and conditions.;Simultaneously AmRestinforms about signing on April 27, 2018 the Asset Purchase Agreement(the "APA") between Pizza Company OOO, being the subsidiary of AmRestand Yum Restaurants International Russia and CIS LLC ("PH Russia").;As aresult of the APA Pizza Company will acquire the assets of 16 Pizza HutDelivery and Express restaurants run by PH Russia in Moscow. Thepurchase price is estimated at RUB 142.6m (EUR 1.9m).;It is theintention of the parties that the MFA and the APA shall be completed(including transfer of restaurants' assets and signing of complementaryagreements necessary to ensure the proper development of the network) inthe coming months.;In the opinion of the Executive Team of AmRest thereis a great potential for growing presence of Pizza Hut brand in Russia.The master franchise rights will contribute to strengthening thepartnership with Yum! Brands and AmRest's leadership position ofrestaurant operator in Russia. ;Legal act: Art. 17 Sec. 1 of Regulation(EU) No 596/2014 of The European Parliament and of The Council of 16April 2014 on market abuse (Market Abuse Regulation) and repealingDirective 2003/6/EC of the European Parliament and of the Council andCommission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC