METAIR INVESTMENTS LIMITED - Potential Transactions and Cautionary Announcement

Release Date: 01/06/2018 08:30
Code(s): MTA
 
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Potential Transactions and Cautionary Announcement

Metair Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number 1948/031013/06)
Share code: MTA ISIN: ZAE000090692
(“Metair” or the “Company”)

POTENTIAL TRANSACTIONS AND CAUTIONARY ANNOUNCEMENT

Metair notes the recent media reports regarding the potential acquisition by Metair of Tovarna
Akumulatorskih Baterij d.d. (“TAB”), a manufacturer of batteries based in Mežica, Slovenia within the
European Union (the “Potential Transaction”).

Metair would like to advise its shareholders (“Shareholders”) that the Company has submitted an
indicative non-binding offer to acquire TAB to the controlling shareholders of TAB. TAB comprises
after-market automotive battery manufacturing facilities in Slovenia and Macedonia, an automotive
after-market battery distribution network throughout Europe as well as a global industrial battery
business and an energy storage business. Metair is in exclusive discussions regarding the Potential
Transaction, for which the indicative purchase consideration is EUR 300 million.

The Potential Transaction is still in its early stages, is subject to a number of conditions (including,
inter alia, satisfactory completion of a detailed full scope due diligence and negotiating the final terms
of the Potential Transaction with the shareholders of TAB), Metair securing the required financial and
shareholder support and other conditions customary to a transaction of this nature, such as regulatory
and shareholder approvals.

Shareholders are advised that the current discussions may or may not result in the successful
conclusion of the Potential Transaction. The probable date of completion of the Potential Transaction
is uncertain and, if successfully concluded, would likely only occur during the final quarter of 2018.

If implemented, the Potential Transaction is expected to execute on Metair’s stated strategy of
expanding its Energy Vertical with a targeted combined automotive battery production of 15 million
units and industrial cell manufacturing of 2 million units per annum, and would result in Metair
becoming a key player in the global energy storage solutions market. Metair has identified TAB as a
scarce strategic asset as it has a strong global presence in the industrial batteries segment and
provides a platform to secure Metair’s own European after-market distribution network. The Potential
Transaction, if successfully concluded, is expected to:

    -   leverage the scale of the combined group and TAB’s research and development expertise to
        allocate increased resources to research and development directed towards new
        technologies such as lithium-ion batteries and electric vehicles;
    -   balance Metair’s OEM and after-market exposure in automotive batteries and also provide a
        balance between the automotive and industrial segments;
    -   enhance Metair’s international brand portfolio with the TAB-owned distribution footprint in new
        regions;
    -   deliver on the Company’s desire, through marketing excellence, to become a consumer
        focussed business with the strength and reach of the TAB brands;
    -   secure a quality business with quality people and an excellent reputation in the industry built
        up over 53 years; and
    -   enhance the production capabilities and technological development of the combined group -
        Metair’s preliminary view is that it would seek to preserve and would consider expanding
        TAB’s existing production sites to benefit from the competitive manufacturing cost base in
        TAB’s current locations.

In addition, the Company is pleased to advise Shareholders that the Company has, separately from
the Potential Transaction, entered into an exclusivity agreement with a black female owned
empowerment partner in relation to a potential 30% direct shareholding in Metair’s Automotive
Components vertical (the “Potential BEE Transaction”). In addition to increasing black ownership
within Metair’s Automotive Components vertical, the successful conclusion of the Potential BEE
Transaction is expected to provide the Company with additional funds which may be applied towards
the Potential Transaction.

Metair believes that transformation is a strategic and business imperative, particularly in its South
African Automotive Components vertical. Securing the potential growth, both from a volume increase
and higher levels of localisation in this sector, will be greatly assisted by enhancing Metair’s
empowerment credentials in a sustainable and mutually beneficial manner.

Metair’s responsible approach to executing its strategy as well as delivering on transformation will
ensure that the Company applies fair value principles to each of Metair’s operating verticals in all
potential transactions, including both of the above, to target long-term sustainable Shareholder value
enhancement.

Shareholders are advised that the Potential Transaction and the Potential BEE Transaction may have
an effect on the price of the Company’s securities and, as a result, should exercise caution when
dealing in the Company’s securities until a further announcement regarding the Potential Transaction
and the Potential BEE Transaction is published.

Johannesburg
1 June 2018

Sponsor
One Capital

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