SALINI S.P.A. IMPREGILO S.P.A.

Transcription

1 INFORMATION MEMORANDUM CONCERNING THE MERGER BY INCORPORATION OF SALINI S.P.A. Registered office at 22 Via della Dataria, Rome Fully paid-in share capital of 62,400, euros Tax I.D., VAT and Rome Company Register No Entered in Rome s R.E.A. under No Company subject to management and coordination by Salini Costruttori S.p.A., its sole shareholder, pursuant to Article 2497-bis of the Italian Civil Code INTO IMPREGILO S.P.A. Registered office at 97 Via dei Missaglia, Milan Fully paid-in share capital of 718,364, euros Tax I.D. and Milan Company Register No VAT No Entered in Milan s R.E.A. under No Company subject to management and coordination by Salini S.p.A. pursuant to Article 2497-bis of the Italian Civil Code This Information Memorandum, prepared in accordance with Article 70, Section 6, and consistent with Annex 3B, Form No.1, of the Regulations implementing Legislative Decree No. 58 of February24, 1998, adopted by the CONSOB with Resolution No of May 14, 1999, as amended, was made available to the public at the registered office of Impregilo S.p.A. and on its website ( on August 28, 2013.

2 HIGHLIGHTS OF PRO FORMA DATA AND PER SHARE DATA AT JUNE 30, 2013 (amounts in thousands of euros) Six months ended June 30, 2013 Impregilo Salini Historical data Pro forma data Historical data Number of shares (1) 449,048, ,048,182 62,400,000 Result from continuing operations 49,606 49, ,335 Result from continuing operations per share (in euros) Group interest in net result 132, , ,451 Group interest in net result per share (in euros) Total Group interest in shareholders equity 1,338, , ,126 Total Group interest in shareholders equity per share (in euros)

3 CONTENTS Risks related to opposition by creditors pursuant to Article 2530 of the Italian Civil Code Risks related the condition precedent for the closing of the merger Risks related to the valuation methods applied to determine the Exchange Ratio Risks related to the qualification of the Merger as a highly material related-party transaction Risks related to the preparation of pro forma accounting data Risks related to the potential failure to realize the synergies expected from the Merger Risks entailed by the existence of negative pledge covenants in some of the existing loan agreements Description of the Companies Parties to the Merger Absorbing Company Company Being Absorbed Economic and financial plan and description of the sources of financial resources and the pursued objectives Economic and Financial Plan Debt structure of the Companies Parties to the Merger Recent developments Sources of the projected financial resources needed to cover the obligations of the Absorbing Company after the Merger Financial and economic sustainability of the indebtedness of the Absorbing Company after the Merger Merger modalities, terms and conditions Naming and reduction of the share capital of the Absorbing Company Exchange Ratio Valuation criteria and methods applied to determine the Exchange Ratio Method for the allocation of the shares of the Absorbing Company and dividend ranking date of the shares Date when the Merger will become effective and date of recognition of the transactions of the Company Being Absorbed in the financial statements of the Absorbing Company Tax consequences of the Merger for the Issuer Projections about the presence of significant shareholders and control structure of the Absorbing Company following the Merger Effects of the Merger on any shareholders agreements Rationale for the Merger specifically regarding the Issuer s operational objectives Programs developed by the Absorbing Company specifically with regard to industrial opportunities and possible restructuring and/or reorganization programs

4 4.1.1 Consolidated statements of financial position of the Salini Group at December 31, Consolidated income statement of the Salini Group for the year ended December 31, Condensed notes to the consolidated financial statements of the Salini Group at December 31, Consolidated statements of financial position of the Salini Group at December 31, Consolidated income statement of the Salini Group for the year ended December 31, Consolidated statements of financial position of the Salini Group at June 30, Consolidated income statement of the Salini Group for the six months ended June 30, Consolidated statements of financial position of the Salini Group at June 30, 2013 presented in accordance with the format used by the Issuer to prepare pro forma consolidated financial statements Consolidated income statements of the Salini Group at June 30, 2013 presented in accordance with the format used by the Issuer to prepare pro forma consolidated financial statements Consolidated statement of cash flows of the Salini Group for the year ended December 31, Consolidated net financial position of the Salini Group at December 31, 2012 and June 30, 2013 presented in condensed form in accordance with the presentation formats used by the Issuer Foreword Pro Forma Consolidated Financial Statements Pro Forma Consolidated Statement of Financial Position Pro Forma Consolidated Income Statement Notes to the Pro Forma Consolidated Financial Statements

5 DEFINITIONS A list of the main definitions and terms used in this Information Memorandum is provided below. Unless otherwise stated these definitions and terms have the meaning stated below. Terms defined in the singular shall have the same meaning in the plural and vice versa, when the context requires it. Bond Issue Borsa Italiana Companies Parties to the Merger CONSOB Conveyance Date of the Information Memorandum Exchange Ratio The senior unsecured bond issue floated by Salini on August 1, for a total face value of 400,000, euros, maturing on August 1, 2018, with a fixed coupon rate of 6.125%, listed on the Irish Stock Exchange in Dublin (see the offering prospectus available on the Salini website Investor Relations Prospectus page). Borsa Italiana S.p.A., with registered office at 6 Piazza degli Affari, Milan. Collectively, Impregilo and Salini. The Commissione Nazionale per le Società e la Borsa, Italy s securities market regulatory authority, with registered office at 3 Via G.B. Martini, Rome The conveyance to Salini by its sole shareholder, of its business operations in the infrastructural construction sector, including all statutory relationships related to it carried out, directly and indirectly, in Italy and abroad, which was executed on December 21, 2011 effective as of January 1, Date of publication of the Information Memorandum. The exchange ratio between the Salini common shares and the Impregilo common shares, on the basis of which the common shares of the Absorbing Company will be allocated to Salini s sole shareholder, understood as the ratio suitable to express the mutual weight of the two 5

6 Companies Parties to the Merger, equal to 6.45 Impregilo common shares for Each Salini share. IFRSs The International Financial Reporting Standards published by the International Accounting Standards Board (IASB) and endorsed by the European Union. Impregilo Group or Group Impregilo or Issuer or Absorbing Company Information Memorandum Issuers Regulations Joint Expert or BAKER TILLY REVISA The group headed by Impregilo. Impregilo S.p.A., with registered office at 97 via dei Missaglia, Milan, subject to management and coordination by Salini pursuant to Article 2497 and following articles of the Italian Civil Code. This Information Memorandum. The regulations that implement Legislative Decree No. 58 of February 24, 1998, concerning regulations applicable to issuers of securities, adopted by the Consob with Resolution No of May 14, 1999, as amended. Baker Tilly Revisa S.p.A., with registered office at 2/2 via Guido Reni, Bologna, in its capacity as expert pursuant to Article 2501-sexies of the Italian Civil Code, designated by the Court of Milan with an order dated June 14, 2013, filed on June 25, Lender Banks Collectively, Banca IMI S.p.A., with registered office at 3 Largo Mattioli, Milan, and Natixis S.A. Milan Branch, with registered office at 8 Via Borgogna, Milan, in their capacity as lender banks pursuant to the Loan Agreement. Loan Agreement Merger or Transaction The loan agreement for a total of 1,410,000, euros executed by Salini and the Lender Banks, which includes the TO Facility. The reverse merger by incorporation of Salini into 6

7 Impregilo, pursuant to Article 2501-bis of the Italian Civil Code, the main characteristics of which are described in Chapter 2. Merger Plan The merger plan pursuant to Article 2501-bis, Section 2, and Article 2501-ter, of the Italian Civil Code approved by the Boards of Directors of Impregilo and Salini on June 24, 2012, appended to this Information Memorandum as Annex A. MTA Opinion Piano Pro Forma Consolidated Financial Statements PwC Related-Party Information The Online Securities Market organized and operated by Borsa Italiana. The assessment opinion supporting the determination of the Exchange Ratio issued by Partners S.p.A., in its capacity as financial advisor appointed by Impregilo on June 24, The economic and financial plan prepared by the boards of directors of the Companies Parties to the Plan, pursuant to Article 2501-bis, Section 3, of the Italian Civil Code, incorporated into the Merger Plan and the reports prepared by the boards of directors of the Companies Parties to the Plan pursuant to Article 2501-bis, Section 3, and Article 2501-quinquies of the Italian Civil Code. The pro forma consolidated statement of financial position at June 30, 2013 and the pro forma consolidated income statement at June 30, 2013 of Impregilo and accompanying notes presented in Section 4 of this Information Memorandum, prepared in accordance with Annex 3B to the Issuers Regulations, Form No. 1, Section No. 5. PricewaterhouseCoopers S.p.A., with registered office at 91 via Monte Rosa, Milan. The information document regarding highly material 7

8 Document related-party transactions, prepared pursuant to Article 5 of the RPT Regulations and Annex 4 of the RPT Regulations and available on the Company website - Investor Relations Salini Impregilo Merger page, which is included in this Information Memorandum by reference. RPT Committee Impregilo s Related-party Transaction Committee, appointed by Impregilo s Board of Directors on July 18, 2012 and comprise of the following independent Directors: Alberto Giovannini (Chairman), Marina Brogi, Giuseppina Capaldo (elected from the minority slate) and Geert Linnebank. RPT Procedure RPT Regulations Salini Costruttori Salini Group Salini or the Company Being Absorbed Tender Offer The procedure governing related-party transactions approved on November 30, 2010 by Impregilo s Board of Directors pursuant to Article 2391-bis of the Italian Civil Code and Article 4, Sections 1 and 3, of the RPT Regulations, as most recently amended on May 13, The regulations concerning related-party transactions adopted by the Consob with Resolution No of March 12, 2010, as amended. Salini Costruttori S.p.A., a company with registered office at 3 via del Lauro, Milan. The group headed by Salini, which, following the acquisition of statutory control of Impregilo by Salini as a result of to the Tender Offer, includes the Issuer. Salini S.p.A., a single shareholder company with registered office at 22 via della Dataria, Rome, subject to management and coordination by Salini Costruttori, its sole shareholder, pursuant to Article 2497 and following articles of the Italian Civil Code. The voluntary, all-inclusive tender offer, pursuant to 8

9 Article 102 and Article 106, Section 4, of the TUF, launched by Salini on February 6, 2013 for all common shares issued by Impregilo that Salini did not own as of the abovementioned date (i.e., 282,381,888 common share without par value, equal to about 70.16% of Impregilo s subscribed and paid in share capital). TO Facility TUF The credit line provided to Salini by the Lender Banks, pursuant to the Loan Agreement, to fund, inter alia, the maximum total outlay projected for the Tender Offer, amounting to 1,129,527, euros, computed assuming that all of the Impregilo shares subject of the Tender Offer are tendered. Legislative Decree No. 58 of February 24, 1998, as amended. 9

10 FOREWORD This Information Memorandum was prepared by Impregilo, pursuant to Article 70, Section 6, and in accordance with Annex 3B to the Issuers Regulations, for the purpose of providing its shareholders and the market with the necessary information regarding the planned Merger by incorporation of Salini into Impregilo. In this regard, please note that the transaction that is being submitted for approval to Impregilo s Extraordinary Shareholders Meeting is the merger (so-called reverse merger) by incorporation of Salini into Impregilo (see Chapter 2, Section 2,2). Because indebtedness contracted by Salini will be used to carry out the Tender Offer, Article 2501-bis of the Italian Civil Code became applicable to the Merger (see Chapter 2, Section 2.1). As a result of the statutory control relationship that was established between the Company Being Absorbed and the Absorbing Company as a result of the Tender Offer and due to the materiality of the Merger, the Merger qualifies as a highly material related-party transaction pursuant to the RPT Regulations and the RPT Procedure (see the Related-Party Information Document published by Impregilo on July 1, 2013 and available on the Company website - Investor Relations Salini Impregilo Merger page, which shall be understood to have been incorporated into this Information Memorandum by reference). Pursuant to Article 2501-quarter of the Italian Civil Code. the Merger will be carried out using as financial position data the financial statements of the Companies Parties to the Merger for the year ended December 31, 2012, as approved by the respective Shareholders Meetings (see Annex C.1 and Annex C.2, respectively). The Merger Plan, prepared pursuant to Article 2501-bis, Section 2, and Article 2051-ter of the Italian Civil Code, containing the Plan and listing the financial resources planned to meet the obligations of the company resulting from the Merger (see Annex A), and the explanatory reports, prepared pursuant to Article 2501-bis and Article 2501-quinquies of the Italian Civil Code setting forth the rationale for the transaction and the Plan (see Annex B.1 and Annex B.2), were approved on June 24, 2013 by the Boards of Directors of the Companies Parties to the Merger and, insofar as Impregilo is concerned, with the prior. unanimous, reasoned, favorable opinion of the RPT Committee regarding: (i) the existence of Impregilo s interest in executing the Merger, in accordance with the terms and conditions specified by management in the draft of the Merger Plan, and (ii) the advantageous nature and substantive fairness of the 10

11 abovementioned terms and conditions. On June 28, 2013, the independent auditors PwC issued a report pursuant to Article 2501-bis, Section 5, of the Italian Civil Code about the reasonableness of the Plan included in the Merger Plan (se Annex E). The Merger Plan with its annexes, including the report by PwC, were placed on file at the registered offices of Impregilo and Salini and published on the respective websites (for Impregilo Investor relations Salini Impregilo Merger page) on June 30, Pursuant to Article 2501-ter, Section Three, of the Italian Civil Code, the Merger Plan was submitted for recording in the Milan and Rome Company Registers on July 1, 2013 and was recorded in the Milan Company Register on July 2, 2013 and the Rome Company Register on July 3, On August 5, 2013, BAKER TILLY REVISA, in its capacity as the Joint Expert appointed by the Court of Milan pursuant to Article 2501-sexies of the Italian Civil Code, submitted its report pursuant to Article 2501-bis and Article 2501-sexies of the Italian Civil Code, attesting, inter alia, the fairness of the Exchange Ratio and the reasonableness of the information provided in the Merger Plan regarding the financial resources planned to meet the obligations of the company resulting from the Merger (see Annex F). Also on August 5, 2013, the Boards of Directors of the Companies Parties to the Merger, without altering the Merger Plan and the Plan, updated the explanatory reports prepared pursuant to Article 2501-bis and Article 2501-quinquies of the Italian Civil Code to report on developments resulting from the operating activities of the Companies Parties to the Merger with regard to the financial debt, both in net and gross terms, described in the Merger Plan, during the period between the date of approval of the Merger Plan and the date when the abovementioned reports were made available, which was on August 9, 2013 (see Section 3.3 of Annex B.1 and Section 3.3 of Annex B.2 and the website Investor relations Salini Impregilo Merger page). The transactions described therein were already consistently taken into account for Plan preparation purposes. Consequently, the assumptions regarding the ability of the Absorbing Company to meet its obligations upon completion of the Merger were confirmed as valid in their entirety in accordance with the profiles assumed when the Merger Plan was approved. The Merger will be submitted for approval to the respective Shareholders Meetings of the Companies Parties to the Merger, both convened in extraordinary session for September 12, 11

12 2013. Impregilo s notice of Shareholders Meeting and the additional documents concerning the Merger were concurrently made available to the public and published on the website Governance Shareholders Meeting page on August 9, As described in the Merger Plan (see Annex A) and the corresponding explanatory reports (see Annexes B), the statutory, economic and tax effects of the Merger will be reflected in the financial statements of the Absorbing Company as of January 1, 2014 or from any other date stated in the deed of Merger, pursuant to Article 2504-bis of the Italian Civil Code and the applicable provisions of the Uniform Income Tax Code, as approved by Presidential Decree No. 917 of December 22, The foregoing considerations notwithstanding, the closing of the Merger transaction is conditional, in addition to the approval by the Extraordinary Shareholders Meetings of Impregilo and Salini, respectively, on the non-occurrence or should this condition not be satisfied, the waiver thereof by the Companies Parties to the Merger by the date of execution of the deed of Merger, of extraordinary situations or circumstances of any type not reasonably foreseeable on the date of the Merger Plan that, considering the financial statements used to determine the Exchange Ratio, have or are likely to have a material negative impact on one or both Companies Parties to the Merger and/or the Groups to which they belong and their respective shareholders equities, income statements and statements of financial position, or their respective operating or financial performance, or their respective future outlooks, and provided that the effects in question are not determined by a change, potentially significant and substantial, in the market price of Impregilo shares (see Chapter 2). 12

13 1 NOTICE The main risks affecting the Transaction subject of this Information Memorandum are reviewed below. In addition to the risks reviewed below, the Impregilo Group is subject to standard risks and uncertainties inherent, inter alia, in the nature of its activities and the corresponding markets in which it operates. These risks and uncertainties are described in the Issuer s financial statements for the year ended December 31, 2012 and the semiannual financial report at June 30, 2013, both of which are available on the website Investor Relations Results page, which should be consulted for additional information. 1.1 Risks or uncertainties related to the Merger process that could have an impact on the implementation of the Transaction Risks related to opposition by creditors pursuant to Article 2530 of the Italian Civil Code Pursuant to Article 2530 of the Italian Civil Code, the merger may be implemented only after 60 days have elapsed from the date the last of the registrations required by Article 2502-bis of the Italian Civil Code has been duly recorded, unless evidence is provided of the consent of creditors of the Companies Parties to the Merger with claims predating the registration required by Article 2501-ter, Section 3, of the Italian Civil Code or the claims of creditors who did not consent are satisfied, or the corresponding amounts have been deposited with a bank, or unless the Joint Expert attests, under his responsibility, in a report issued pursuant to Article 2501-sexies of the Italian Civil Code, that the equity and financial position of the Companies Parties to the Merger makes guarantees for the protection of their creditors redundant. Since none of the abovementioned exceptions are applicable, creditors acting within the abovementioned 60-day deadline, could object to the implementation of the Merger. However, please note that, in the event of a challenge, the court of venue, should it believe that the danger of injury to the creditors is unfounded or if the debtor company posted suitable guarantees, could still order that the Merger be allowed to proceed despite the challenge, in accordance with the terms of Article 2503, Section 2, and Article 2445, Section 4, of the Italian Civil Code Risks related the condition precedent for the closing of the merger The closing of the Merger transaction is conditional, in addition to the approval by the Extraordinary Shareholders Meetings of Impregilo and Salini, respectively, on the non- 13

14 occurrence or should this condition not be satisfied, the waiver thereof by the Companies Parties to the Merger by the date of execution of the deed of Merger, of extraordinary situations or circumstances of any type not reasonably foreseeable on date of the Merger Plan that, considering the financial statements used to determine the Exchange Ratio, have or are likely to have a material negative impact on one or both Companies Parties to the Merger and/or the Groups to which they belong and their respective shareholders equities, income statements and statements of financial position, or their respective operating or financial performance, or their respective future outlooks, and provided that the effects in question are not determined by a change, potentially significant and substantial, in the market price of Impregilo shares (see Chapter 2) Risks related to the valuation methods applied to determine the Exchange Ratio The Boards of Directors of Impregilo and Salini, having reviewed and endorsed the valuations of the respective advisors and, insofar it concerns Impregilo, being cognizant of the reasoned favorable opinion of the RPT Committee (see below Section of this Chapter), approved the Exchange Ratio, understood as the ratio suitable to express the mutual weight of the two Companies Parties to the Merger, set at 6.45 Impregilo common shares for Each Salini share. No cash adjustments will be provided. For the purposes mentioned above, the Boards of Directors of Impregilo and Salini adopted as economic company values the average values obtained by comparing the results produced by applying the different valuation methods adopted by the Boards themselves (see the reports of the Boards of Directors of Impregilo and Salini, in Annex B.1 and Annex B.2, the valuation opinion issued by Partners S.p.A., in Annex D, and the report pursuant to Article 2501-bis and Article 2501-sexies of the Italian Civil Code issued by BAKER TILLY REVISA in its capacity as Joint Expert on August 5, 2013, in Annex E, page 30). In order to arrive at an estimate of the economic value of the common shares of the Absorbing Company and the Salini common shares and the resulting Exchange Ratio between the abovementioned shares, Impregilo relied on generally accepted valuation principles, with special emphasis on those most widely used nationally and internationally in connection with mergers, giving prevalence to the principle of the uniformity of estimating criteria, applied compatibly with the characteristic elements of each of the Companies Parties to the Merger subject of the valuation process and the comparability elements that arise in part by virtue of the commercial agreement signed by the Absorbing Company and Salini Costruttori on 14

15 September 27, 2012 (see Chapter 2, Section and Sections 4.2 and 4.3 of the explanatory report pursuant to Article 2501-bis and Article 2501-quinquies prepared by Impregilo s Board of Directors Annex B.1). The valuations performed for the purpose of determining the Exchange Ratio highlighted the issues typical of analyses of this type, which include the uncertainties that characterize the use of economic and financial forecast data, and the implementational difficulties and limitations inherent in the market prices method and the market multiples method (see Chapter 2, Section and Section 4.4 of the explanatory report pursuant to Article 2501-bis and Article 2501-quinquies prepared by Impregilo s Board of Directors Annex B.1). No mechanism for adjusting the Exchange Ratio before the Merger s effective date has been provided. The market price of the shares of the Absorbing Company have been and are subject to volatility and fluctuations, due in part to the general trend in the capital markets. The possibility cannot be excluded that, while the Exchange Ratio may continue to be fair based on the methods used to determine it, the market value of the shares of the Absorbing Company distributed in exchange upon the closing of the Merger may be lower that the market value of these securities on the date when the exchange ratio was determined Risks related to the qualification of the Merger as a highly material related-party transaction As a result of the statutory control relationship held by Company Being Absorbed over the Absorbing Company, which arose due to the outcome of the Tender Offer, and in view of the materiality of the Merger, the Merger qualifies as a highly material related-party transaction pursuant to the RPT Regulations and the RPT Procedure. Consequently: (a) Impregilo s Related-party Committee was involved during the Merger s preliminary phase and approval phase and, on June 24, 2013, rendered a unanimously favorable reasoned opinion about (i) the existence of Impregilo s interest in executing the Merger, in accordance with the terms and conditions specified by management in the draft of the Merger Plan, and (ii) the advantageous nature and substantive fairness of the abovementioned terms and conditions; (b) on July 1, 2013, Impregilo published the Related-Party Information Document, which is available on the Company website - Investor Relations Salini Impregilo Merger page, and shall be understood to have been incorporated into this Information Memorandum by reference A description of the related parties with whom the Transaction was executed and information 15

16 about the nature of the relationship and the scope of the interest of those parties in the Transaction is provided in Section 2.2 of the abovementioned Related-Party Information Document. As for the compositions of the Boards of Directors of Impregilo and Salini and the posts held by some members of Impregilo s Board of Directors in the Company Being Absorbed, see the information provided in Section 1.1 of the abovementioned Related-Party Information Document. For a description of the activities carried out by the RPT Committee in connection with the Transaction, please see Section 2.8 of the abovementioned Related-Party Information Document Risks related to the preparation of pro forma accounting data Chapter Errore. L'origine riferimento non è stata trovata. of this Information Memorandum presents Impregilo s Pro Forma Consolidated Financial Statements, comprised of a pro forma consolidated statement of financial position at June 30, 2013, a pro forma consolidated income statement for the six months ended June 30, 2013 and the accompanying notes. These Pro Forma Consolidated Financial Statements were prepared to present the main effects on Impregilo s consolidated statement of financial position at June 30, 2013 and consolidated income statement for the six months ended June 30, 2013 resulting from: (i) the Merger; and (ii) the Bond Issue floated by Salini, including the use of the resulting cash flows by the Company being Absorbed (collectively the Transactions ). More specifically, the Pro Forma Consolidated Financial Statements, which were audited by the independent auditors PwC pursuant to a report issued on August 27, 2013 (see Section Errore. L'origine riferimento non è stata trovata. below and Annex G to this Information Memorandum) were prepared for the purpose of simulating, in accordance with valuation criteria consistent with historical data and compliant with the applicable regulations, the main effects of the Transactions on the consolidated statement of financial position at June 30, 2013 and consolidated income statement for the six months ended June 30, 2013 of the Impregilo Group as if the abovementioned Transactions had virtually occurred on June 30, 2013 with regard to the statement of financial position and on January 1, 2013 exclusively with regard to the effects on the income statement. 16

17 However, please note that. as mentioned above, the information contained in the Pro Forma Consolidated Financial Statements represent a simulation of the potential effects of the Transactions, provided exclusively for illustration purposes. More specifically, because the pro forma data are constructed to reflect retrospectively the effects of subsequent transactions, despite efforts to comply with generally accepted rules and use reasonable assumptions, there are limits inherent in the very nature of pro forma data. Therefore, it is important to keep in mind that, had the Transactions actually occurred on the hypothetical dates, the results obtained would not necessary have been the same as those presented in the Pro Forma Consolidated Financial Statements. Moreover, because of the different purposes of pro forma data compared with historical data and the different methods used to calculate the effects of the Transaction on the pro forma consolidated statement of financial position and pro forma consolidated income statement, these documents should be read and interpreted without seeking accounting linkages between them. Lastly, pleased note that the Pro Forma Consolidated Financial Statements should not be construed as representing a projection of future results of the Impregilo Group and, consequently, should not be used for such purpose. 1.2 Risks or uncertainties entailed by the implementation of the Merger that could affect the Issuer s activities Risks related to the potential failure to realize the synergies expected from the Merger The Merger is part of an industrial and strategic project for the creation of a single group operating throughout the world in the sector of major civil engineering projects, which is expected to establish itself as a global leader and as a key player in Italy s industrial system (see Chapter 2, Section 2.2). However, the Transaction s success will be predicated on management s ability to effectively integrate the businesses of the Companies Parties to the Merger and their internal procedures, resources and information management systems, as the Merger is associated with the risks and uncertainties normally entailed by extraordinary transactions of this type, involving mainly commercial, financial and corporate governance issues, but also affecting personnel management, operating systems and, more in general, the activities of the group created by the Merger. Impregilo e Salini have developed for some time coordination procedures for their respective 17

18 organizations aimed at realizing and maximizing the operational and industrial synergies specifically expected from the strategic commercial and organization cooperation agreement signed by Impregilo and Salini Costruttori on November 27, 2012 (see the information memorandum prepared pursuant to Article 71 of the Issuers Regulations, available on the website Investor Relations Strategy page). Nevertheless, the possibility that the abovementioned synergies will be realized to a lesser extent than anticipated and/or that the process of integrating the Companies Parties to the Merger will be longer, more complex and/or more expensive than originally anticipated, with a potentially negative effect on the operations and/or future profitability of the company created through the merger, cannot be excluded Risks entailed by the existence of negative pledge covenants in some of the existing loan agreements In the normal course of business, the companies of the Impregilo Group signed, inter alia and for various reasons, loan agreements with credit institutions, guarantee contracts and indemnification and counter-indemnification agreements with third parties. Some of these contracts include clauses by virtue of which some Group companies have undertaken, as the case may be, (a) not to execute extraordinary transactions (including mergers); or (b) not to pledge (and not cause others to pledge) their respective assets and/or the assets of their subsidiaries (so-called negative pledge covenant ); or (c) to ensure that no guarantees are provided by third parties regarding the financial debt of the Companies Parties to the Merger and their respective subsidiaries. In light of the foregoing considerations, if the abovementioned contracts were not to be amended before the effective date of the Merger, it may become necessary to request special waivers from the various counterparties and, should this not be possible, the Group could find itself in the position of having to refinance its debt or provide guarantees, as the case may be. 18

19 2 INFORMATION ABOUT THE MERGER 2.1 Brief description of the Transaction The Transaction subject of this Information Memorandum is the Merger (so-called reverse merger ) by incorporation of Salini into Impregilo. The Merger will be carried out based on the financial statements for the year ended December 31, 2012 of the Companies Parties to the Merger, approved by the respective Shareholders Meetings, which will be used as statements of financial position pursuant to Article 2501-quarter of the Italian Civil Code (see Annex C to this Information Memorandum), and will result in the dissolution of the Company Being Absorbed, with the Absorbing Company changing its name to Salini Impregilo S.p.A. (see Section for a description of the proposed changes to the Bylaws). Because of the financial debt incurred by Salini to carry out the Tender Offer in connection with the Merger, Article 2501-bis of the Italian Civil Code became applicable. Consequently, the Boards of Directors of Impregilo and Salini: (a) (b) (c) (d) pursuant to Article 2501-bis, Section 2, and Article 2501-ter of the Italian Civil Code, listed in the Merger Plan the financial resources planned to meet the obligations of the company resulting from the Merger; asked PwC, Impregilo s statutory independent auditors, to issue their report required pursuant to Article 2501-bis, Section 5, of the Italian Civil Code, which was issued in June 28, 2013 and is appended to the Merger Plan (see Annex A to this Information Memorandum); Pursuant to Article 2501-bis, Section 3, and Article 2501-quinquies of the Italian Civil Code, prepared and published a report specifying the rationale for the Transaction and included an economic and financial plan listing the source of the financial resources and describing the objectives that are being pursued (see Annex B to this Information Memorandum); pursuant to Article 2501-bis, Section 4, and Article 2501-sexies of the Italian Civil Code, jointly requested and obtained from the Court of Milan the appointed of BAKER TILLY REVISA as Joint Expert, tasked with attesting, in its report issued pursuant to Article 2501-bis, Section 4, and Article 2501-sexies of the Italian Civil Code, the fairness of the Exchange Ratio and the reasonableness of the information provided in the 19

20 Merger Plan regarding the financial resources planned to meet the obligations of the company resulting from the Merger. The Joint Expert issued his report on August 5, 2013 (see Annex F to this Information Memorandum). As a result of the statutory control relationship that was established between the Company Being Absorbed and the Absorbing Company as a result of the Tender Offer and due to the materiality of the Merger, the Merger qualifies as a highly material related-party transaction pursuant to the RPT Regulations and the RPT Procedure (see the Related-Party Information Document published by Impregilo on July 1, 2013 and available on the Company website Investor Relations Salini Impregilo Merger page, which shall be understood to have been incorporated into this Information Memorandum by reference). The Merger will be submitted for approval to the respective Shareholders Meetings of the Companies Parties to the Merger, both convened in extraordinary session for September 12, Impregilo s notice of Shareholders Meeting and the additional documents concerning the Merger were concurrently made available to the public and published on the website Governance Shareholders Meeting page on August 9, As described in the Merger Plan (see Annex A) and the corresponding explanatory reports by the Boards of Directors of the Companies Parties to the Merger (see Annexes B), the statutory, economic and tax effects of the Merger will be reflected in the financial statements of the Absorbing Company as of January 1, 2014 or from any other date stated in the deed of Merger, pursuant to Article 2504-bis of the Italian Civil Code and the applicable provisions of the Uniform Income Tax Code, approved with Presidential Decree No. 917 of December 22, 1986 (see Section below). The foregoing considerations notwithstanding, the closing of the Merger transaction is conditional, in addition to the approval, respectively, by the Extraordinary Shareholders Meetings of Impregilo and Salini, both convened for September 12, 2013, on the nonoccurrence or should this condition not be satisfied, the waiver thereof by the Companies Parties to the Merger by the date of execution of the deed of Merger, of extraordinary situations or circumstances of any type not reasonably foreseeable on date of the Merger Plan that, considering the financial statements used to determine the Exchange Ratio, have or are likely to have a material negative impact on one or both Companies Parties to the Merger and/or the Groups to which they belong and their respective shareholders equities, income statements and statements of financial position, or their respective operating or financial 20

21 performance, or their respective future outlooks, and provided that the effects in question are not determined by a change, potentially significant and substantial, in the market price of Impregilo shares (see Section below) Description of the Companies Parties to the Merger Absorbing Company Main company data The Absorbing Company is Impregilo S.p.A., with registered office at 97 Via dei Missaglia, Milan, Tax I.D. and Milan Company Register No , VAT No , entered in Milan s R.E.A. under No , a company subject to management and coordination by Salini pursuant to Article 2497-bis of the Italian Civil Code, with share listed on the MTA. Pursuant to Article 5 of the Bylaws, the company s duration is until December 31, 2050 and may be extended one or more times by a resolution approved by the Shareholders Meeting. Share capital and major shareholders As of the date of this Information Memorandum, the Issuer s approved and fully subscribed and paid-in share capital amounted to 718,364, euros, comprised of 404,073,428 shares, including 402,457,937 common shares and 1,615,491 savings shares. The Extraordinary Shareholders Meeting held on October 12, 2004 eliminated the par value of the common shares and savings shares. The Board of Directors has not been empowered to increase the company s share capital. Moreover, the Issuer has not issued bonds convertible into shares and there is no commitment to issued bonds and no power has been delegated to the Board of Directors authorizing it to approve the issuance of bonds convertible into shares and/or financial instruments different from shares. However, please note that Impregilo s extraordinary shareholders meeting convened for September 12, 2013 will be asked to approve, inter alia, a resolution delegating to the Board of Directors, pursuant to Article 2443 and Article 2420-ter of the Italian Civil Code, the power to increase the share capital and issue convertible bonds. For additional information about the content of the abovementioned delegation of powers and the term and conditions for its exercise, see the text of the information report on the motion for the second item on the Agenda of the extraordinary session, available on the website Governance Shareholders Meeting page. 21

22 Lastly, the Issuer does not have any stock option plans currently in effect nor does it hold any treasury shares and no purchases of such shares have been authorized. As of the date of this Information Memorandum, based on communications received, no party holds a number of Impregilo common shares representing an ownership stake greater than 2% of the share capital of the Absorbing Company, except for Salini, which owns directly 88.83% of Impregilo s common share capital and, consequently, has statutory control over it. Corporate governance bodies Board of Directors As of the date of this Information Memorandum, the Absorbing Company was managed by a Board of Directors comprised of the following members: First name Last name Post held Claudio Costamagna * Chairman Pietro Salini * Chief Executive Officer Marina Brogi *** / **** Independent Director Giuseppina Capaldo **** Independent Director Mario Giuseppe Cattaneo ** Independent Director Roberto Cera Director Laura Cioli * Independent Director Alberto Giovannini ** / **** Independent Director Pietro Guindani ** Independent Director Geert Linnebank *** / **** Independent Director Laudomia Pucci *** Independent Director Simon Pietro Salini Director * Executive Committee ** Control and Risk Committee *** Compensation and Nominating Committee **** Related-party Transaction Committee 22

23 As announced to the market on July 9, 2013 (see the press release available on the website Media page), Giorgio Rossi Cairo resigned the post of Independent Director of the Issuer. In addition, on August 5, 2013, Massimo Ferrari and Claudio Lautizi resigned the posts of Director and member of the Executive Committee (see the press release of August 5, 2013, available on the website Media page). Please note that Impregilo s Ordinary Shareholders Meeting, convened for September 12, 2013, will be asked to vote, inter alia, on the election of three new members of the Board of Directors to replace the Directors Rossi Cairo, Ferrari and Lautizi, who resigned. For additional information see the content of the explanatory report of the motion for a resolution on the sole item on the Agenda of the Ordinary Shareholders Meeting, which is available on the website Governance Shareholders Meeting page. Board of Statutory Auditors As of the date of this Information Memorandum, Impregilo s Board of Statutory Auditors was comprised of the following members: First name Last name Post held Alessandro Trotter Chairman of the Board of Statutory Auditors Nicola Miglietta Statutory Auditor Fabrizio Gatti Statutory Auditor Pierumberto Spanò Alternate Marco Tabellini Alternate Independent Auditors By a resolution adopted by its Shareholders Meeting on May 3, 2006, the Issuer awarded to PricewaterhouseCoopers S.p.A., a company with registered office at 91 Via di Monte Rosa, Milan, the engagement to audit its financial statements, as well as the assignment to perform limited audits of its interim financial reports, for the period from 2006 to Subsequently, the Shareholders Meeting convened on May 3, 2007 extended the engagement of the independent auditors to include the period from 2012 to the date of the Shareholders Meeting convened to approve the financial statements at December 31,

24 Description of the main activities of the Impregilo Group The Absorbing Company, which was established in the mid-nineties through the merger of four major Italian construction companies, is a global player active in the design and construction of large-scale infrastructural projects. Its corporate purpose is the construction, for its own account and for third parties, of projects involving highway, ports, hydraulic facilities, buildings, railways and, in general, any civil engineering construction project in Italy and abroad. Impregilo operates in more than 30 countries, on 5 continents, with a consolidated presence in the Western Hemisphere and Italy and a staff of 11,890 employees at the end of Thanks to its exceptional technical and professional knowhow, the Issuer is among the world s leading players in the construction of important hydroelectric power plants and large dams (including, for example, the Ertan Dam in China, the Tarbela Dam in Pakistan and the Karanjukar Dam in Iceland) and is the proud developer of thousands of kilometers of road networks and transportation infrastructures: railways (the Bologna-Florence and Turin-Milan high speed rail lines in Italy, for example), subways in major cities worldwide (Rome, Milan, Genoa, Naples, New York, Paris, Singapore, Porto, Saint Petersburg, Montreal, Athens and Miami) and roads and highways both within and outside urban areas. Some of the projects completed in the past or currently under development represent milestones in the development of Italy s engineering tradition worldwide: from the project to save the Abu Simbel temples in Egypt to the construction of the Saint Gotthard Tunnel and now the expansion of the Panama Canal. These are major infrastructural projects in Italy and worldwide that bear witness to the leadership and established reputation of excellence in implementation of the Impregilo Group, which can boast to have constructed over 200 dams and hydroelectric power plants with total installed capacity of 25,000 MW, completed more than 1,000 kilometers of tunnels, built over 5,700 kilometers of new railroad lines, more than 30 kilometers of roads and, in the past 10 years, 56 kilometers of bridges and viaducts. At December 31, 2012: - The Impregilo Group reported consolidated revenues of 2,281 million euros. This amount, about 77% of which was generated outside Italy, reflects primarily the growth of the Construction sector (+26.3%); 24

25 - The result from discontinued operating activities was positive by 717 million euros due almost entirely to the effects of the divestment of the interest held in the Brazilian concession holder EcoRodovias Infraestrutura e Logistica S.A. (720.7 million euros); - The consolidated net profit attributable to the Impregilo Group amounted to million euros; - The shareholders equity of the Impregilo Group totaled 1.8 billion euros and its consolidated net financial position was positive by million euros due to the collection of million euros from the sale of the first two tranches of the investment in EcoRodovias Infraestrutura e Logistica S.A. and the deconsolidation of million euros in debt owed by this Brazilian investee company; - The construction and facilities order backlog amounted to about 10.6 billion euros Company Being Absorbed Main company data The Company Being Absorbed is Salini S.p.A., a company with registered office at 22 Via della Dataria, Rome, Tax I.D., VAT and Rome Company Register No , entered in Rome s R.E.A. under No , a company subject to management and coordination by Salini Costruttori, its sole shareholder, pursuant to Article 2497-bis of the Italian Civil Code. Salini was established on December 6, 2011 and, on December 21, 2011, became the beneficiary of the Conveyance, effective as of January 1, Pursuant to Article 4 of the Bylaws, the duration of the Company Bing Absorbed is currently set until December 31, 2050, subject to extension or early dissolution pursuant to a resolution approved by the Extraordinary Shareholders Meeting. Share capital and major shareholders Salini s fully subscribed and paid-in share capital amounts to 62,400,000.00, divided into 62,400,000 shares, par value 1 euro each. The shares of the Company Being Absorbed are not listed on any regulated market. Salini s entire share capital is owned by Salini Costruttori. As of the date of this Information Memorandum, Salini Simonpietro e C. S.a.p.a. owned 56,555,725 shares of Salini Costruttori, equal to about 47.13% of its share capital and about 52.23% of the voting shares, with 11,708,900 shares held as treasury shares. 25