Full Press Release Details
CONFIDENTIAL AND PRIVILEGED
BUSINESS COMBINATION AGREEMENT
THERMO FISHER SCIENTIFIC INC.
| Clause | Page | |||||||
| 1 | DEFINITIONS AND CONSTRUCTION | 9 | ||||||
| 1.1 | Definitions | 9 | ||||||
| 1.2 | Construction | 9 | ||||||
| 2 | THE OFFER | 10 | ||||||
| 2.1 | Buyer Undertakings; Preparations of the Offer | 10 | ||||||
| 2.2 | Offer Consideration | 11 | ||||||
| 2.3 | Financing | 12 | ||||||
| 2.4 | Announcement of the Offer | 14 | ||||||
| 2.5 | Submission of Offer Documents to BaFin | 14 | ||||||
| 2.6 | Commencement of the Offer and Filing of the Schedule TO | 16 | ||||||
| 2.7 | Submission of the Reasoned Position Statement and the Schedule 14D-9 | 17 | ||||||
| 2.8 | Acceptance Period and Settlement | 19 | ||||||
| 2.9 | No Additional Purchases | 20 | ||||||
| 2.10 | SEC Exemptions and Relief | 20 | ||||||
| 2.11 | Withholding | 21 | ||||||
| 3 | RECOMMENDATION AND SUPPORT | 21 | ||||||
| 3.1 | Recommendation | 21 | ||||||
| 3.2 | Support | 22 | ||||||
| 3.3 | Fairness Opinions | 23 | ||||||
| 3.4 | Intervening Event | 23 | ||||||
| 3.5 | Call Option | 24 | ||||||
| 4 | OFFER CONDITIONS | 25 | ||||||
| 4.1 | Offer Conditions | 25 | ||||||
| 4.2 | Waiver | 29 | ||||||
| 4.3 | Announcement | 29 | ||||||
| 4.4 | Reasonable Best Efforts | 30 | ||||||
| 5 | EXTRAORDINARY GENERAL MEETING | 30 | ||||||
| 5.1 | Convocation of the EGM | 30 | ||||||
| 5.2 | EGM Resolutions | 30 | ||||||
| 6 | POST-OFFER CORPORATE GOVERNANCE | 34 | ||||||
| 6.1 | Composition of the Managing Board Post Completion of the Offer | 34 | ||||||
| 6.2 | Composition of the Supervisory Board | 34 | ||||||
| 6.3 | Particular Responsibilities of the Independent Members | 35 | ||||||
| 6.4 | Resignation of Other Supervisory Board Members | 35 |
| 7 | POST-OFFER RESTRUCTURING | 36 | ||||||
| 7.1 | Delisting | 36 | ||||||
| 7.2 | Statutory Squeeze-Out Proceedings | 36 | ||||||
| 7.3 | Post-Closing Restructuring | 37 | ||||||
| 7.4 | Financing | 41 | ||||||
| 7.5 | Treatment of Certain Indebtedness | 45 | ||||||
| 7.6 | Treatment of Call Options and Warrants | 47 | ||||||
| 7.7 | Post-Closing Measures | 48 | ||||||
| 8 | INDEMNIFICATION; INSURANCE | 49 | ||||||
| 8.1 | Indemnification | 49 | ||||||
| 8.2 | Insurance | 50 | ||||||
| 8.3 | Third-Party Beneficiaries | 50 | ||||||
| 8.4 | Merger and Liquidation Indemnification | 51 | ||||||
| 9 | NON-FINANCIAL COVENANTS | 51 | ||||||
| 10 | DURATION, NON-FINANCIAL COVENANTS | 52 | ||||||
| 10.1 | Duration | 52 | ||||||
| 10.2 | Benefit and Enforcement | 53 | ||||||
| 11 | COMPANY EQUITY PLANS AND COMPANY PLANS | 53 | ||||||
| 11.1 | Vested Company Options | 53 | ||||||
| 11.2 | Unvested Company RSUs and Company PSUs that Will Vest at Settlement | 53 | ||||||
| 11.3 | Unvested Company RSUs and Company PSUs | 54 | ||||||
| 11.4 | Transaction Payments | 55 | ||||||
| 11.5 | Timing of Payments | 55 | ||||||
| 11.6 | Tax | 55 | ||||||
| 11.7 | Supervisory Board Action | 56 | ||||||
| 12 | INTERIM PERIOD AND FURTHER UNDERTAKINGS | 56 | ||||||
| 12.1 | Consultation and Cooperation | 56 | ||||||
| 12.2 | Conduct of the Company during Interim Period | 57 | ||||||
| 12.3 | Conduct of the Buyer during Interim Period | 57 | ||||||
| 12.4 | Merger | 58 | ||||||
| 12.5 | Transaction Planning | 59 | ||||||
| 12.6 | Tender of Treasury Shares | 61 | ||||||
| 12.7 | Additional Company Undertakings | 61 | ||||||
| 13 | ANTITRUST COVENANTS | 62 | ||||||
| 14 | EXCLUSIVITY | 67 |
| 15 | COMPETING OFFER | 69 | ||||||
| 16 | TERMINATION | 72 | ||||||
| 16.1 | Termination by Either of the Parties | 72 | ||||||
| 16.2 | Consequences of Termination | 74 | ||||||
| 17 | TERMINATION PAYMENT | 74 | ||||||
| 17.1 | Termination Payment | 74 | ||||||
| 17.2 | Reverse Termination Payment | 76 | ||||||
| 17.3 | Termination Payment and Tax | 78 | ||||||
| 17.4 | Specific Performance and Related Provisions | 79 | ||||||
| 18 | CONFIDENTIALITY AND PUBLIC ANNOUNCEMENTS | 79 | ||||||
| 18.1 | Substance of Agreement | 79 | ||||||
| 18.2 | Non-Disclosure | 80 | ||||||
| 18.3 | Press Releases and Contact with Journalists | 80 | ||||||
| 18.4 | Confidentiality Agreement | 81 | ||||||
| 19 | ASSIGNMENT | 81 | ||||||
| 19.1 | No Assignment | 81 | ||||||
| 19.2 | Assignment to Wholly-Owned Subsidiaries of the Buyer | 81 | ||||||
| 19.3 | Assignment to Affiliates by the Company after Liquidation or Dissolution | 81 | ||||||
| 20 | COSTS | 82 | ||||||
| 21 | NO WAIVER | 82 | ||||||
| 22 | NO RECISSION | 82 | ||||||
| 23 | FURTHER ASSURANCES | 82 | ||||||
| 24 | INVALIDITY | 82 | ||||||
| 25 | THIRD-PARTY RIGHTS | 83 | ||||||
| 26 | ENTIRE AGREEMENT AND AMENDMENT | 83 | ||||||
| 27 | NOTICES | 83 | ||||||
| 28 | COUNTERPARTS | 86 | ||||||
| 29 | GOVERNING LAW AND FORUM | 86 | ||||||
| 29.1 | Governing Law | 86 | ||||||
| 29.2 | Forum | 86 | ||||||
| 29.3 | Waiver Of Jury Trial | 87 | ||||||
| 29.4 | Applicability to Other Agreements | 87 | ||||||
| 29.5 | Rules of Construction | 87 |
| 30 | REPRESENTATIONS AND WARRANTIES | 88 | ||||||
| 30.1 | Representations and Warranties of the Company | 88 | ||||||
| 30.2 | Representations and Warranties of the Buyer | 103 | ||||||
| 30.3 | No recourse | 105 | ||||||
| 31 | DEBT FINANCING SOURCES | 106 | ||||||
| 32 | OFFEROR OBLIGATIONS | 107 |
BUSINESS COMBINATION AGREEMENT
THIS AGREEMENT IS DATED 3 MARCH 2020 AND MADE BETWEEN:
THE PARTIES AGREE AS FOLLOWS:
Certain terms used in this Agreement are defined in Schedule 1 (Definitions).
As promptly as practicable after the date of this Agreement, the Buyer shall submit confidentially to the staff of the SEC a draft request for
exemptive and/or no-action relief from requirements of the Exchange Act that are in conflict with the requirements of German or Dutch Applicable Rules with respect to the Offer and any other such relief as the
Parties may decide to request in connection with the Transactions ( SEC Relief ). The Buyer will consult with the Company and its counsel and provide the Company and its counsel a reasonable opportunity to review and comment on each
draft and the final request for SEC Relief a reasonable time prior to the submission of such draft or final request to the SEC, and the Buyer will keep the Company and its counsel reasonably informed as to the discussions and status of such request
for SEC Relief and will provide the Company with a copy of the letter providing SEC Relief as soon as possible after Buyer s receipt thereof. The Buyer will consider in good faith all comments reasonably proposed by the Company and its counsel
in connection with the request for SEC Relief. The Buyer shall submit the final request for SEC Relief to the SEC as soon as practicable prior to the date the Offeror submits (or is required to submit) the Tender Offer Document to BaFin pursuant to
Notwithstanding anything to the contrary in this Agreement, each of the Buyer and the Company and any of their respective Affiliates or agents
(including any third-party paying agent) shall be entitled to deduct and withhold from any payments under this Agreement such amounts as the Buyer or the Company or any of their respective Affiliates or agents are required to deduct and withhold
with respect to any such payments under applicable Law. To the extent that such amounts are so withheld and paid to the appropriate Governmental Authority by the Buyer, the Company or any of their respective Affiliates or agents, as the case may be,
they shall be treated for all purposes of this Agreement as having been paid to such Person in respect of which such deduction and withholding was made.
The Company confirms that:
Subject to clause 3.4 or 15, the Company shall ensure that neither the Boards nor any of their members shall, directly or indirectly:
Any of the actions described in clauses (a) (d), an Adverse Recommendation Change .
The Boards have obtained the written opinions, from Barclays and Goldman Sachs, in each case to the effect that, as of the date of this
Agreement, and subject to the qualifications and assumptions set forth in their respective opinions:
(such opinions hereinafter, the Fairness Opinions ) and will be referenced in the Joint Announcement and the Offer Documents.
The Company will deliver to the Buyer for informational purposes a signed copy of the Fairness Opinions promptly following the date of this Agreement. The Fairness Opinions will be attached to the Reasoned Position Statement, subject to each of
Barclays and Goldman Sachs prior review and written approval of the wording of the Fairness Opinions.
Notwithstanding anything to the contrary set forth in clause 3.2 or elsewhere in this Agreement, upon the occurrence of any Intervening Event,
the Boards may, at any time prior to the End of the Acceptance Period, make an Adverse Recommendation Change, or authorize, resolve, agree or propose publicly to take any such action, only if all of the following conditions are met:
where Acceptance Threshold means 75% of the Company s issued and outstanding ordinary share capital
(geplaatst en uitstaand gewoon kapitaal), excluding for the avoidance of doubt any Treasury Shares which shall be not tendered into the Offer, as of the End of the Acceptance
(A) a penalty or fine imposed by, or settlement with, a Governmental Authority, or
(B) any restriction or limitation on the ability of the Company, the Buyer or any of their
respective Affiliates to conduct their respective businesses or any revocation or termination of any of their respective licenses, authorizations or agreements,
in each case, that has resulted in, or is reasonably likely to result in the Financial Threshold (as defined below).
Offer Material Adverse Effect means any change, event, occurrence or effect that has resulted in, or would reasonably be
expected to result in, individually or in the aggregate, at least,
such amounts above, however, each adjusted upwards
by adding the product of (i) in case of (a) above USD 6 million and (ii) in case of (b) above USD 12 million, multiplied in each case by the percentage points by which the S&P 500 Health Care (Sector)
( HCX) ticker: SPXHC, Bloomberg ticker: S5HLTH measured over the period starting at January 1 2020 until the date five (5) Business Days prior to the date of the Independent Expert opinion has decreased (such amounts,
the Financial Threshold ).
Consolidated EBITDA means, in respect of any relevant period,
Consolidated EBIT of the Company for that relevant period after:
Consolidated EBIT means:
in each case of the above:
in each case, measured in accordance with the constant exchange rates policies as generally
applied by the Group when reporting on quarterly or full year results and to the extent added, deducted or taken into account, as the case may be, for the purposes of determining operating profits of the Group before taxation and so that no amount
shall be added or deducted more than once.
An Offer Material Adverse Effect or a Material Compliance Violation shall only be deemed to
have occurred if, within the Acceptance Period, an independent expert from Ernst & Young or another expert mutually selected by the Company and the Buyer (the Independent Expert ), using the due and careful consideration
of a diligent professional, has delivered an opinion to the Offeror that an Offer Material Adverse Effect or a Material Compliance Violation, as applicable, has occurred. The Independent Expert shall undertake an evaluation of whether an Offer
Material Adverse Effect or Material Compliance Violation has occurred only if so requested by the Buyer. The Offeror will publish the fact that it has received such expert opinion without undue delay, but in any case no later than the date of the
publication pursuant to Section 23 para. 1 sent. 1 no. 2 Wp G, on the Internet, in the (German) Federal Gazette (Bundesanzeiger) and the Wall Street Journal with reference to the Offer. The opinion of the Independent Expert shall be
binding upon the parties and non-appealable.
In accordance with the Applicable Rules, the Buyer shall make a public announcement if it ascertains that an Offer Condition is not, or is
incapable of being satisfied and it has decided not to use its right to waive the relevant Offer Condition.
Without prejudice to clauses 4.1 through 4.3, the Parties shall consult with each other and each of the Parties undertakes to use its
reasonable best efforts to procure the fulfilment of the Offer Conditions as soon as reasonably practicable. If at any time a Party becomes aware of a fact or circumstance that might prevent an Offer Condition from being satisfied, or may materially
delay the satisfaction of such Offer Condition, it shall, as soon as practicable but not later than twenty-four (24) hours after becoming so aware, inform the other Party in writing. Subject to clause 13, each Party shall make all
applications and notifications required by the Offer Conditions and shall use its reasonable best efforts to procure that all such information as is requested by the relevant authorities in connection with any such applications and notifications is
provided as promptly as reasonably practicable. For the avoidance of doubt, the Parties obligations with respect to obtaining Antitrust Clearance is governed solely by clause 13 and this clause 4.4 shall not be deemed to modify the
obligations of the Parties with respect to the matters forth in clause 13.
(the Back-End Resolution );
(resolutions (a) through (f), the
Resolutions , resolutions (b), (d) and (f), the Governance Resolutions and resolutions (c) and (e), the Discharge Resolutions ).
The Parties shall use, and the Company shall cause the Boards and all respective members thereof individually to use, their respective
reasonable best efforts to ensure that the Managing Board will, as per the Settlement, be comprised of the individuals who will be identified by the Buyer, at its sole discretion, prior to convening the EGM. The Company shall procure that Managing
Board members who will not continue as Managing Board members after the Settlement, if any, will resign from their positions as members of the Managing Board with effect from the Settlement and each such member will confirm prior to the Settlement
that he or she has no claim whatsoever against the Company in respect of loss of office or otherwise, except with respect to compensation duly accrued under any remunerations arrangements in respect of services rendered to the Company during the
relevant financial year and as to be otherwise agreed separately between the Company and the Buyer. The Buyer shall procure that each resigning member of the Managing Board (i) is fully released from any duties in respect of his or her position
as member of the Managing Board and (ii) will be granted full and final discharge for his/her acts of management up to his/her resignation; provided that no discharge shall be given to any Managing Board member for acts as a result of Fraud,
gross negligence (grove schuld) or willful misconduct (opzet) of such Managing Board member.
The Independent Members shall act in the best interest of the Company and its business (including the interests of the Group as a whole),
taking into account their fiduciary duties under the Laws of the Netherlands. In their position as members of the Supervisory Board, the Independent Members shall generally act as any other member of the Supervisory Board (including by considering
the interests of the Minority Shareholders and all other shareholders of the Company) and further monitor compliance with the Non-Financial Covenants.
If, following the Settlement Date, the Buyer, alone or together with its Affiliates, holds at least 95% of the Company s aggregate issued
and outstanding share capital (geplaatst en uitstaand kapitaal), the Buyer may commence a compulsory acquisition procedure (uitkoopprocedure) in accordance with Section 2:92a or 2:201a of the DCC to buy out the remaining holders
of the Company Shares. The Company shall provide the Buyer with any reasonable assistance as may be required, including, if needed, joining such proceedings as co-claimant or defendant.
provided that neither the Company
nor any of its Subsidiaries nor any of their respective Affiliates or Representatives shall be required pursuant to this clause 7.4.1 to (A) pay any commitment or other fees, in each case, in connection with the Financing other than any
Financing made available to the Company or any of its Subsidiaries, (B) give any indemnities in connection with the Financing other than any Financing made available to the Company or any of its Subsidiaries, (C) provide (i) any
information the disclosure of which is prohibited or restricted under applicable Law or subject to legal privilege (provided that the Company shall inform the Buyer that it is not providing certain information as a result of such privilege
and shall use reasonable best efforts to provide such information in a manner that does not result in a loss of such privilege) or (ii) any information with respect to which the Company or any of its Subsidiaries owes a duty of confidentiality
to a third party (it being understood, in that case, that the Company shall, to the extent permitted by such duty of confidentiality, inform the Buyer that it is not providing certain information as a result of such a duty and shall use reasonable
best efforts to provide such information in a manner that does not breach such duty and to obtain the consent of such third party to the Company s and its Subsidiaries disclosure of such information to the Buyer and its Financing
sources), (D) take any action that would conflict with or violate its organizational documents or any applicable Law or would result in a violation or breach of, or default under, any agreement to which the Company or any of its Subsidiaries is
a party or (E) execute any material agreement, certificate, document or instrument pursuant to this clause 7.4.1 with respect to any Financing that is not contingent on the Settlement (other than customary authorization letters).
in each case, for acts or omissions occurring at or prior to the Settlement Date, whether asserted or claimed prior to, at or after the
Settlement Date (including for acts or omissions occurring in connection with the approval of this Agreement and the consummation of the Transactions).
(collectively, D&O Insurance ) which, in each case, commences upon the Settlement Date (the Tail
Period ); provided, that in no event shall the total cost for the D&O Insurance exceed three hundred fifty percent (350%) of the annual premiums paid as of the date hereof by the Company for such insurance (the Premium
Cap ), and if such premium for such insurance would at any time exceed the Premium Cap, then the Buyer shall obtain, or cause to be obtained, D&O Insurance, which based upon consultation between the Buyer and the Company in good faith,
provides the maximum limits on liability available at a cost equal to the Premium Cap.
The obligations of the Buyer under this clause 8 shall be subject to any restrictions of applicable Law and shall not be terminated or
modified in such a manner as to adversely affect any indemnitee to whom clause 8.1 applies without the consent of such affected indemnitee (it being expressly agreed that the indemnitees to whom clause 8.1 applies shall be third-party
beneficiaries (with own right of demand) in the context of clause 8.1).
The Buyer hereby undertakes to indemnify and hold harmless, by way of irrevocable third-party stipulation for no consideration and subject to
customary conditions, the Liquidator and managing directors of the Liquidator (each of them, a Back-End Indemnified Party ) against any present and future, actual or contingent, ascertained