Rana Gruber (RANA) M&A announcement summary

Deal rationale and strategic fit

• Acquisition expands presence in high-grade iron ore, supporting decarbonization and European market focus, and aims to create a global producer by combining complementary assets and expertise.

• Both companies share similar cultures, values, and operational climates, supporting integration and a commitment to decarbonizing the steel industry.

• Rana Gruber's proximity to European steel hubs, low CO2 intensity, and renewable energy access enhance competitive positioning and sustainability goals.

• The deal supports diversification of product mix, client base, and geographic reach, especially in Europe and North Africa.

• Provides a long-term, industrial, and strategic owner for the target, supporting operational development and growth.

Financial terms and conditions

• All-cash offer for 100% of shares at NOK 79 per share, valuing Rana Gruber at approximately NOK 2.93 billion (US$289 million), representing a 17.4% premium over the 20-day volume-weighted average share price.

• Funded by $100 million internal liquidity, $100 million (US$) private placement with La Caisse, and $150 million term loan from Scotiabank.

• La Caisse to become the largest shareholder at 8.5% post-transaction.

• Transaction expected to be accretive for shareholders, with only 5% dilution and near-term accretion to revenue, EBITDA, and cash flows.

• The offer is conditional and subject to customary launch and closing conditions, including Champion acquiring over 90% of shares and voting rights.

Synergies and expected cost savings

• Synergies expected in product optimization, blending, logistics, technical areas, and cross-asset operational improvements.

• Potential to increase Rana Gruber's output and grade, with projects to reach 67% FE under evaluation.

• Lower all-in sustaining costs and corporate tax rates at Rana Gruber compared to Canadian assets.

• Opportunities to expand specialty magnetite sales and enhance European market penetration.

• Combined company expected to benefit from a larger cash flow base and enterprise value.