Pergo and Witex Agree On Merger

Trelleborg, Sweden, Jan. 28—As previously reported, Pergo AB and HW Industries GmbH, the main stockholder of Witex AG, have been conducting ongoing discussions concerning a merger between Pergo and Witex. Negotiations have been concluded and the parties have signed a binding agreement in which Pergo, which currently owns 25.1% of Witex, will acquire all Witex shares owned by HW Industries. Under the terms of the agreement, Pergo will acquire all of HW Industries’ stake in Witex by a directed share issue and a cash consideration of six million euros. After completion of the transaction, HW Industries will own 20% of Pergo’s shares and become its largest shareholder. A total of 13,392,421 new shares will be issued. After a vote at a general shareholders’ meeting, HW Industries will receive representation on Pergo’s board of directors. It’s estimated that the deal will close this April. After the acquisition, it’s estimated that annual sales for the Pergo Group will be five billion SEK. The merger is expected to result in increased revenues due to a broader product range, lower costs—particularly in distribution and production—as well as economies of scale in design, product development and purchasing. The merger is subject to bank commitments, antitrust authority approval and approval by Pergo’s shareholders to issue the new shares.