Filing and Packing Materials Manufacturing Co. — M&A Activity 2020

Mar 2, 2020

Filling & Packing Materials MFG. Co. (FIPCO) announces the signing of Acquisition agreement to acquire the full minority shareholding at its subsidiary (FPC Industries Co.)

2180 · 02/03/2020 08:01:29 · Announcement #57710 · View on Saudi Exchange

Filling & Packing Materials MFG. Co. (FIPCO) announces the signing of Acquisition agreement to acquire the full minority shareholding at its subsidiary (FPC Industries Co.)

Element List	Explanation
Announcement Detail	Filling & Packing Material Mfg. Co. (FIPCO) is pleased to announce to its valued shareholders that

An acquisition agreement has been signed with Eirad Investment Co. to acquire the full minority shareholding at its subsidiary (FPC Industries Co.), following getting the approval of the Board of Directors through its meeting held on March 01, 2020.

FPC industries Co. ltd. Was owned by FIPCO with 80%, while the other 20% owned by Eirad Investment Co., there after the acquisition, FPC will be fully owned by FIPCO with 100%.

Where the acquisition agreement stipulates that the partner (Eirad Investment Company) waives his full 20% stake in FPC with its rights and liabilities in favor of FIPCO, in exchange for obtaining 20% of the net profit according to the audited financial statements in The end of each fiscal year for a period of only 10 years (the period of the agreement's validity) until the end of the fiscal year ending on December 31, 2029.

Non-competition for 10 years condition has been established by FIPCO to ensure that the partner is obliged not to compete with FPC duration of the period of the agreement, directly or indirectly.

It is worth to mention that FIPCO with an ownership of 80% of the project, was required to issue a consolidated interim financial statements, unlike FPC, which is a limited liability company that has a longer grace period to issue its financial statements, which may negatively affect the issuance of the consolidated financial statements For FIPCO during the regular periods, in addition that the presence of a partner impedes the unification of the tax and zakat base, which raises the company's expenses, which can be avoided after the acquisition, as well as the merging of some departments and shared services will contribute to raising the efficiency of management, enhancing the decision-making and reducing expenses.

FIPCO assures that no related parties will be involved, and any material developments in this regard will be announced in due course.

The Capital Market Authority and Saudi Exchange take no responsibility for the contents of this disclosure, make no representations as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this disclosure, and the issuer accepts full responsibility for the accuracy of the information contained in it and confirms, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts or information the omission of which would make the disclosure misleading, incomplete or inaccurate.