EQS-Adhoc : SIG Combibloc Group AG: SIG to take full ownership of joint venture to leverage growth opportunities in the Middle East and Africa

 
 EQS Group-Ad-hoc: SIG Combibloc Group AG / Key word(s): Takeover 
SIG Combibloc Group AG: SIG to take full ownership of joint venture to 
leverage growth opportunities in the Middle East and Africa 
 
25-Nov-2020 / 07:00 CET/CEST 
Release of an ad hoc announcement pursuant to Art. 53 KR 
The issuer is solely responsible for the content of this announcement. 
 
*MEDIA RELEASE* 
 
*25 November 2020 
SIG Combibloc Group ("SIG")* 
 
*SIG to take full ownership of joint venture to leverage growth 
opportunities in the Middle East and Africa* 
 
· *SIG to acquire the remaining 50% of shares in its Middle East & Africa 
joint venture * 
 
· *Enhances global presence in a region with strong growth prospects* 
 
· *Well-invested footprint (fillers and sleeves production) * 
 
· *Opportunity to continue to leverage SIG technology to meet evolving 
consumer needs* 
 
· *Full control of a business with a very attractive growth and financial 
profile* 
 
· *Free cash flow and earnings per share accretive from 2021; leverage 
broadly unchanged* 
 
SIG Combibloc has signed an agreement to take full ownership of its Middle 
East & Africa joint venture SIG Combibloc Obeikan by acquiring the 50% 
shareholding of its partner Obeikan Investment Group (OIG) in the two joint 
venture companies. The completion of the transaction is subject to several 
customary closing conditions, including Saudi Arabia and certain other 
antitrust approvals. The acquisition will expand SIG's global presence and 
enhance its medium and long term growth outlook. 
 
The transaction is a continuation of SIG's strategy for expanding its global 
footprint by entering new geographies. As a full member of the SIG group, 
the Middle East & Africa (MEA) business will be even better positioned to 
tap into SIG's experience in developing consumer-centric and innovative 
solutions for its customers. SIG Combibloc Obeikan supplies customers in MEA 
from a full scale manufacturing plant in Riyadh, Saudi Arabia, which will be 
fully integrated into SIG's global production network. 
 
To build on the success of the trusted partnership over the last 19 years 
and to continue to benefit from the strong local presence and expertise of 
OIG, Abdallah Al Obeikan, Chief Executive Officer of OIG and currently Chief 
Executive Officer of SIG Combibloc Obeikan, will be nominated for election 
to SIG's Board of Directors at the next Annual General Meeting, subject to 
completion of the acquisition prior to the Annual General Meeting and other 
customary conditions. Abdelghany Eladib, currently Chief Operating Officer 
of SIG Combibloc Obeikan, will join SIG's Group Executive Board as President 
& General Manager, Middle East & Africa, subject to and as of completion of 
the acquisition. 
 
*Rolf Stangl, Chief Executive Officer of SIG*, said: "I am very pleased to 
see this culmination of the strong relationship we have had with OIG over 
the years. This is a unique opportunity to acquire a high quality asset 
which we know very well. SIG Combibloc Obeikan is a leading player in 
meeting the growing demand for aseptic cartons in MEA and will be an 
additional driver of growth in our portfolio. Acquiring full ownership of 
the joint venture demonstrates our strong commitment to further expanding 
the business in the Middle East and Africa." 
 
*Samuel Sigrist, Chief Financial Officer and Chairman of SIG Combibloc 
Obeikan*, said: "We are delighted to welcome SIG Combibloc Obeikan as a full 
member of the SIG family and are looking forward to pursuing additional 
growth opportunities together. The strong MEA footprint built over the years 
will be further strengthened as we expand our product offering and 
geographic reach." 
 
*Strongly positioned to meet growing demand* 
 
SIG Combibloc Obeikan, the 50:50 joint venture between SIG and OIG formed in 
2001, provides SIG filling systems to customers in the MEA region where it 
is present in 17 countries. Its offering consists of SIG filling machines, 
aseptic carton sleeves and closures, accompanied by technical support and 
service. Today the company has around 190 fillers in the field with over 70 
customers, including global blue chip FMCG players and strong regional 
champions. 
 
In the twelve months ending 30 September 2020, SIG Combibloc Obeikan 
generated revenue of approximately &euro290 million and EBITDA of 
approximately &euro80 million. Over the last 15 years, the joint venture has 
grown revenues at a CAGR of 14% and EBITDA at a CAGR of 24%. The overall 
demand for aseptic beverage cartons in MEA is projected to grow at a CAGR of 
5.5% - 6.0% over the next five years, driven by strong fundamentals. These 
include population growth, urbanisation and rising disposable income. 
 
*Accretive to free cash flow and earnings per share * 
 
The transaction will be funded through a combination of newly issued SIG 
shares (from authorised share capital) and available cash balances and 
credit facilities. OIG will receive around 17.5 million SIG shares, 
equivalent to a stake of approximately 5% of SIG's share capital on a 
pro-forma fully diluted basis, and a cash consideration of &euro167 million 
for its 50% stake in SIG Combibloc Obeikan. The transaction is expected to 
be accretive to SIG's free cash flow and earnings per share from 2021. 
 
*Advisors* 
 
Goldman Sachs International acted as exclusive financial advisor to SIG, Bär 
& Karrer and Latham & Watkins acted as legal advisors. 
 
*Webcast and conference call * 
 
The company will host a webcast at 11:00 a.m. CET on Wednesday 25 November. 
Please register for the webcast here [1]. The webcast will be followed by an 
audio Q&A session. If you wish to join the conference call and ask questions 
during the audio Q&A session, please register here [2]. The slide 
presentation will be available from 10:30 a.m. CET on 25 November at: 
https://www.investor.sig.biz [3] 
 
*About SIG Combibloc* 
 
SIG is a leading systems and solutions provider for aseptic carton 
packaging. We work in partnership with our customers to bring food and 
beverage products to consumers around the world in a safe, sustainable and 
affordable way. Our unique technology and outstanding innovation capacity 
enable us to provide our customers with end-to-end solutions for 
differentiated products, smarter factories and connected packs, all to 
address the ever-changing needs of consumers. Sustainability is integral to 
our business and we are going Way Beyond Good to create a net positive food 
packaging system. 
 
Founded in 1853, SIG is headquartered in Neuhausen, Switzerland. The skills 
and experience of our approximately 5,500 employees worldwide enable us to 
respond quickly and effectively to the needs of our customers in over 60 
countries. In 2019, SIG produced 38 billion carton packs and generated 
&euro1.8 billion in revenue. SIG has an AA ESG rating by MSCI, an 18.8 (low 
risk) score by Sustainalytics and a Platinum CSR rating by EcoVadis_._ For 
more information, visit www.sig.biz [4]. 
 
*About Obeikan Investment Group* 
 
Obeikan Investment Group (OIG) is a family-run business, founded in 1982 by 
the Obeikan family with headquarters in Riyadh. The company has a strong 
foothold in manufacturing, packaging, education and health care. On top of 
being a leading provider of fully integrated packaging solutions in the MENA 
region, OIG had a growing focus on digital transformation providing B2B, B2C 
and B2G business and industrial solutions. 
 
*Investor contact:* 
Jennifer Gough [phone] 
Director Investor Relations 
SIG Combibloc Group AG 
Neuhausen am Rheinfall, Switzerland 
[e-mail] 
 
*Media contact:* 
Lemongrass Communications 
Andreas Hildenbrand [phone] 
[e-mail] 
 
*Forward-looking statements* 
Portions of the narrative set forth in this media release that are not 
statements of historical or current facts are forward-looking statements. 
Our actual future performance may materially differ from that contemplated 
by the forward-looking statements as a result of a variety of factors. These 
factors include, without limitation and in addition to those mentioned 
elsewhere herein, our ability to successfully consummate the acquisition of 
SIG Combibloc Obeikan; our ability to achieve the strategic and other 
objectives related to the proposed acquisition of SIG Combibloc Obeikan, 
including any expected synergies; our ability to successfully fully 
integrate the SIG Combibloc Obeikan business and achieve the expected 
benefits of the acquisition, including, without limitation, the acquisition 
being accretive in the expected timeframe or at all; antitrust approvals and 
other conditions to the completion of the acquisition being satisfied; as 
well as the ultimate impact of the COVID-19 pandemic on our business, 
results of operations, financial condition, and liquidity. Consequently, 
these forward-looking statements should be regarded as the Company's current 
plans, estimates, and beliefs. 
The Company does not undertake and specifically declines any obligation to 
update or publicly release the results of any revisions to these 
forward-looking statements that may be made to reflect any future events or 
circumstances after the date of such statements or to reflect the occurrence 
of anticipated or unanticipated events. 
 
Additional features: 
 
File: SIG joint venture 20201125 [5] 
End of ad hoc announcement 
Language:    English 
Company:     SIG Combibloc Group AG 
             Laufengasse 18 
             8212 Neuhausen am Rheinfall 
             Switzerland 
Phone:       [phone] 
Fax:         [phone] 
E-mail:      [e-mail] 
Internet:    www.sig.biz 
ISIN:        CH0435377954 
Listed:      SIX Swiss Exchange 
EQS News ID: 1150374 
 
End of Announcement EQS Group News Service 
 
1150374 25-Nov-2020 CET/CEST 
 
 
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