Assa Abloy East Europe Ab, Assa Abloy Czech & Slovakia S. R.O. and Assa Abloy AB signed a preliminary agreement to acquire fire partitions division and Hasil a.s. and 55% stake in Mercor Ukraine from Mercor Spolka Akcyjna (WSE:MCR) for approximately 220 million on September 6, 2013. Out of total consideration, PLN 22 million will be held as security in a special bank account opened for Mercor, for two years from the closing date of the transaction against any claims that the buyers may have with respect to the condition the companies being sold. Additionally, the escrow amount may be increased by up to PLN 5 million if between the date of signing of the agreement and the date of signing of the final agreements the buyers raise a claim in this regard for no less than PLN 2 million. Upon the lapse of 12 months from the conclusion of the final agreements, PLN 11 million of the escrow amount will be released, which amount will be decreased by any claims made by the buyers within that 12 month period. The price paid by the buyers at the time of performance of the final agreement will be adjusted to reflect changes in the working capital of the businesses being acquired and the level of net debt as at the time of conclusion of the final agreements.

The transaction will be structured in two stages. Stage one, which will consist transfer of the fire partitions division of Mercor, Hasil a.s. and the 55% stake in Mercor Ukraine into the subsidiary Mercor HD SKA, will be followed by stage two, that is the sale of fire partitions business to Assa Abloy. The agreement obliges the buyers to pay penalties of PLN 10 million in the event of violation of their obligations in the conclusion of the final sale agreements. The agreement also obliges Mercor to pay contractual penalties in the following cases: for breach by Mercor with regard to the fire partitions business in the agreed area of Europe of PLN 20 million and of PLN 4 million per each month of breach or breach of a ban on hiring employees from the enterprise being sold or from Hasil and Mercor Ukraine of PLN 4 million, and failure by SKA to fulfil its obligations in the conclusion of the final sale agreements of PLN 10 million. The transaction is subject to obtaining the consent of the anti-monopoly authorities in Poland, obtaining of other required consents from relevant banks and lessors to the transaction, registration of the necessary corporate changes as part of the contribution in kind to SKA, and obtaining regulatory approval. The conditions precedent of the agreement should be fulfilled no later than by December 11, 2013, with conclusion of the final agreements to close the transaction by December 23, 2013. Mercor SA intends to use the proceeds from the sale to reduce its debt level by PLN 60 million and to implement an investment program for its remaining business. The acquisition is EPS accretive from start. KPMG acted as accountant, Espírito Santo Investment sp z.o.o. acted as financial advisor, and Agnieszka Janicka, Jaroslaw Gajda, Jaroslaw Lorenc, Kamil Sarnecki, Krzysztof Hajdamowicz, Marcin Bartnicki, Mateusz Stepien, Wojciech Polz, Agnieszka Kolasinska, Aleksandra Lis , Joanna Keska, Marcin Czarnecki, Marek Sawicki and Patrycja Szot of Clifford Chance acted as legal advisor for Mercor. Magda Kolodziejczyk of M+G acted as public relation advisor for Mercor.

Assa Abloy East Europe Ab, Assa Abloy Czech & Slovakia S. R.O. and Assa Abloy AB completed the acquisition of fire partitions division and Hasil a.s. and 55% stake in Mercor Ukraine from Mercor Spolka Akcyjna (WSE:MCR) for approximately 200 million on December 16, 2013.