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Chinese Investor Consortium Reaches Agreement To Acquires Amer Sports

Source:China Sport ShowRelease time:10-Dec-2018Clicks:

A consortium led by China’s Anta Sports made an offer to acquire Finland’s Amer Sports in a deal that values the company at €4.6 billion (US$5.23 billion) and Amer’s board is recommending shareholders approve the offer. The consortium plans to operate Amer Sports independently from Anta, with a separate board of directors.

Anta on September 12 made an all-cash offer to acquire Amer Sports, the owner of Salomon, Arc’teryx, Peak Performance, Atomic, Mavic, Suunto, Wilson and Precor.

The Investor Consortium consisting of Anta Sports, FountainVest Partners, Anamered Investments and Tencent announced a voluntary recommended public cash tender offer by the newly-incorporated Mascot Bidco Oy for all the issued and outstanding shares in Amer Sports Corporation. Anamered Investments is owned by Canadian billionaire Chip Wilson, founder of yoga apparel company Lululemon Athletica Inc .

KEY HIGHLIGHTS AND SUMMARY OF THE TENDER OFFER

On December 7, 2018, Mascot Bidco Oy, members of an Investor Consortium including ANTA Sports, FV Fund and Anamered Investments, and Amer Sports signed a Combination Agreement under which Mascot Bidco Oy will make a voluntary recommended cash Tender Offer for all of the issued and outstanding shares in Amer Sports, excluding shares held by Amer Sports and its subsidiaries. ANTA Sports, FV Fund, Anamered Investments and Tencent (which will invest through Tencent SPV as a limited partner in FV Fund) form an Investor Consortium for the purposes of the Tender Offer, which indirectly will own 100 percent of Mascot Bidco Oy upon completion of the Tender Offer.

The offer price under the Tender Offer is EUR 40.00 in cash per Amer Sports share.

The offer price represents a premium of 39 percent compared to the closing price of Amer Sports shares on September 10, 2018 (the day prior to Amer Sports confirming the receipt of a non-binding preliminary indication from ANTA Sports and FountainVest), and a premium of 43 percent compared to the volume-weighted average price of Amer Sports shares during the 3-month period prior to and up to September 10, 2018.

The terms of the Tender Offer value the entire issued and outstanding share capital of Amer Sports at EUR 4.6 billion.

The Investor Consortium intends to invest significant time, resources and effort in helping Amer Sports to accelerate several important ongoing and new strategic initiatives under private ownership, including expanding Amer Sports’ businesses in the Chinese market.

This includes investing capital and resources in product development and human talent on a global basis to provide Amer Sports’ existing management team and employees with the optimal platform from which to implement its medium- to long-term strategic plans. In doing so, Amer Sports will not only grow into a broader platform for Amer Sports’ employees to thrive on, but will also form stronger, mutually beneficial partnerships with all its stakeholders.

The Investor Consortium intends to provide Amer Sports with access to ANTA Sports’ extensive distribution network, R&D resources and manufacturing and sourcing capabilities in China, such that Amer Sports will have a significant opportunity to accelerate the expansion of its businesses in the Chinese market.

After the completion of the Tender Offer, the Investor Consortium plans for Amer Sports to be operated independently from ANTA Sports, with a separate Board of Directors. The Investor Consortium has invited Mr. Heikki Takala (President and CEO of Amer Sports) and his key executives to continue leading the business. Under the new ownership, Amer Sports’ management team would have the autonomy to execute on its business plan under the strategic direction of the Board of Directors.

The completion of the Tender Offer is not expected to have an immediate material effect on the operations, assets, the position of the management or employees or the business locations of Amer Sports.

The Investor Consortium currently expects to retain Amer Sports’ corporate head office in Helsinki after the completion of the Tender Offer.

The following major shareholders of Amer Sports have, subject to certain customary conditions, irrevocably undertaken to accept the Tender Offer: Kaleva Mutual Insurance Company, Ilmarinen Mutual Pension Insurance Company, Mandatum Life Insurance Company Limited and Varma Mutual Pension Insurance Company, representing in aggregate approximately 7.91 percent of the issued shares and votes in Amer Sports. In addition, Maa- ja vesitekniikan tuki r.y., who hold approximately 4.29 percent of the issued shares and votes in Amer Sports, have expressed that they view the Tender Offer positively.

The Board of Directors of Amer Sports has decided to unanimously recommend that Amer Sports’ shareholders accept the Tender Offer.

Mascot Bidco Oy has, and will have on the closing date of the Tender Offer, access to debt and equity funding in sufficient amounts to finance the Tender Offer. The completion of the Tender Offer is not conditional upon availability of financing.

A tender offer document with detailed information on the Tender Offer will be published on or about December 20, 2018. The offer period under the Tender Offer is expected to commence on or about December 20, 2018, and to run for approximately 10 weeks. Mascot Bidco Oy reserves the right to extend the offer period from time to time in accordance with the terms and conditions of the Tender Offer. The Tender Offer is currently expected to be completed during the second quarter of 2019 at the latest.

The completion of the Tender Offer is subject to the satisfaction or waiver by Mascot Bidco Oy of certain conditions on or prior to Mascot Bidco Oy’s announcement of the final results of the Tender Offer including, among others, that approvals by the relevant regulatory authorities (including competition authorities) have been received and Mascot Bidco Oy having gained control of more than 90 percent of the issued and outstanding Amer Sports shares and voting rights.

COMMENTS FROM MEMBERS OF THE INVESTOR CONSORTIUM

Mr. Ding Shizhong, Chairman and CEO of ANTA Sports, commented: “We are delighted about the opportunity to invest in Amer Sports, a leading sporting goods company with a strong portfolio of internationally-recognized brands. Sports is a common language that connects people across the globe and transcends different cultures and backgrounds. We share the same passion as Amer Sports’ management in providing excellent products, services and experiences that inspire sports lovers’ achievements and enjoyment, as well as setting the standard for innovation. In particular, we are excited to bring these premium international brands and products to Chinese consumers, who increasingly seek high-end products with outstanding qualities and heritage in various niche and specialized sports segments. Working closely with the other Investor Consortium members, we are fully committed to backing Amer Sports‘ talented management and employee team to stay true to its premium brand value as it accelerates into the next stage of growth under the Investor Consortium’s ownership.”

Mr. Frank Tang, Chairman and CEO of FountainVest, commented: “We are excited about our partnership with ANTA Sports, Tencent, and Anamered Investments on this landmark transaction. We deeply respect and value the successful heritage of Amer Sports’ global brands. We are honored to be working with Amer Sports’ management team and employees to chart its continued growth in this next phase of development. The Investor Consortium shares a common long-term vision to invest further resources to expand the presence of Amer Sports’ business and provide the highest quality products to consumers around the world.”

Mr. Chip Wilson, Chairman of Hold It All Inc. and owner of Anamered Investments, commented: “Amer Sports owns an attractive portfolio of brands that I have admired and used in my day to day life. I am excited to have this opportunity to help their brands grow globally and to see Amer Sports lead the way in the evolution of the athletic apparel industry as a whole. Amer Sports’ brands have exceptional potential for growth in an environment that is increasingly valuing quality, technically oriented soft goods. I believe there to be great alignment between my own beliefs and those of Mr. Ding and the other members of the Investor Consortium with respect to the future direction of the global retail industry and the growth prospects for Amer Sports. The members of the Investor Consortium share a common philosophy and have backgrounds and capabilities that are highly complementary and these will be of considerable benefit to Amer Sports.”

Mr. Martin Lau, President and Executive Director of Tencent, commented, “We are pleased to be a member of the Investor Consortium and a strategic partner of Amer Sports and ANTA Sports, two superior companies in the athletic goods industry. With their great products, well-recognized brands and strong retail presence, we look forward to facilitating them to enhance their operational efficiency and capture the future growth opportunities via our smart retail initiatives supported by our advanced technologies and large user base on our social platforms.”

COMMENTS FROM THE CHAIRMAN AND PRESIDENT & CEO OF AMER SPORTS

Mr. Bruno Sälzer, Chairman of Amer Sports, commented: “Amer Sports has developed into a leading global sporting goods company with a portfolio of highly attractive brands. We are proud of what Amer Sports has achieved over time, and are very grateful to the management team and our people for all of their contributions.”

“The offer from the Investor Consortium represents an attractive proposition for our shareholders with a significant cash premium and, in our view, is in the best interests of our shareholders. The Board of Amer Sports is encouraged by the Investor Consortium’s focus on implementing a strategy at Amer Sports that is focused on growth, and their expectation of no immediate material effect on our people or operations.”

Mr. Heikki Takala, President and CEO of Amer Sports, commented: “I would like to thank all of our people for building Amer Sports into what we are today – a leading global sporting goods company with a strong track record, great brands, and a world-class organization. The offer from the Investor Consortium represents an acknowledgement of the work we have done, and their plan to keep Amer Sports as an independent company signals a strong confidence in our strategy and business model.”

“Under the ownership of the Investor Consortium, there is an opportunity to continue to deliver our strong sustainable profitable growth with further acceleration in our strategic priorities including soft goods, direct-to-consumer and China. This acceleration provides further exciting opportunities for our people globally. I am pleased that the existing management team has been invited to continue leading the business, and also that the Investor Consortium is committed to retaining our Helsinki corporate head office.”

ABOUT THE INVESTOR CONSORTIUM

The ANTA brand was established in 1991 and ANTA Sports Products Limited (“ANTA Sports“) was listed on the Main Board of the Hong Kong Stock Exchange in 2007. In recent years, ANTA Sports‘ “Single-Focus, Multi-Brand, and Omni-Channel” strategy has deepened its footprint in the sportswear market in China. ANTA Sports’ brand portfolio includes ANTA, FILA, DESCENTE, SPRANDI, KINGKOW and KOLON SPORT.

Founded in 2007, FountainVest Partners (“FountainVest“) is one of the most established independent private equity firms in Asia. FountainVest focuses on long-term oriented investments in industry leaders, partnering closely with management teams to drive growth and create value in diversified areas including in strategy, operations, finance, and industry consolidation. FountainVest has completed a number of successful landmark investments in Asia, Europe, and the United States. Sectors of focus include Consumer, Media & Technology, Healthcare, Industrials, and Financial Services. FountainVest is backed by some of the largest sovereign wealth funds and public pensions plans around the world, with assets under management of close to USD 5.0 billion.

Anamered Investments Incorporation (“Anamered Investments“) is an investment vehicle owned by Mr. Chip Wilson, who is a pioneer in vertical retailing and technical apparel. As the founder of lululemon athletica inc., Mr. Wilson is an expert in designing technical fabrications and bringing technical apparel to global markets. Mr. Wilson retains a significant interest in lululemon athletica inc., as well as a well-diversified portfolio of investments in private equity, private companies, public securities, and real estate. Each of the businesses Mr. Wilson has invested in privately are nurtured and supported by long-term capital and are held to a high standard of performance, governance, financial return and accountability.

Tencent Holdings Limited (“Tencent“) was founded in Shenzhen, China, in 1998 and went public on the Main Board of the Stock Exchange of Hong Kong in 2004. Tencent uses technology to enrich the lives of Internet users. Its social products WeChat / Weixin and QQ link users to a rich digital content catalogue including games, video, music and books. Its proprietary targeting technology helps advertisers reach out to hundreds of millions of consumers in China. Its infrastructure services including payment, security, cloud and artificial intelligence create differentiated offerings and support its partners’ business growth. Tencent seeks to evolve with the Internet by investing in people and innovation.

ANTA Sports, FV Mascot JV, L.P. (“FV Fund“), Anamered Investments and Tencent (which will invest through Mount Jiuhua Investment Limited (“Tencent SPV“) as a limited partner in FV Fund) together form the investor consortium (the “Investor Consortium“). As at the date of this announcement, Mascot Bidco Oy (the “Offeror“), a Finnish private limited company, is indirectly wholly-owned by Mascot JVCo (Cayman) Limited, which is a limited partnership established under the laws of Cayman Islands offering limited partnership interests for the purposes of the Tender Offer. Mascot JVCo (Cayman) Limited was incorporated to be the holding company in the acquisition structure and is currently wholly-owned by ANLLIAN Sports Products Limited, a special purpose vehicle directly wholly-owned by ANTA Sports. It is expected that, before completion of the Tender Offer, ANTA Sports will indirectly through ANLLIAN Sports Products Limited own approximately 57.95 percent, FV Fund will own approximately 21.40 percent (and Baseball Investment Limited (which is currently owned/controlled by funds advised/managed by FountainVest) will indirectly, and Tencent will indirectly through Tencent SPV, in each case as a limited partner in FV Fund, respectively own approximately 15.77 percent and 5.63 percent) and Anamered Investments will own approximately 20.65 percent of the shares in the Offeror.

ABOUT AMER SPORTS

Amer Sports Corporation (“Amer Sports“) is a sporting goods company with internationally-recognized brands including Salomon, Arc’teryx, Peak Performance, Atomic, Mavic, Suunto, Wilson and Precor. Its technically advanced sports equipment, footwear, apparel and accessories aim to improve performance and increase the enjoyment of sports and outdoor activities. Amer Sports’ business is balanced by its broad portfolio of sports and products and a presence in all major markets. Amer Sports’ shares are listed on Nasdaq Helsinki Ltd. (“Nasdaq Helsinki“).

BACKGROUND AND REASONS FOR THE TENDER OFFER

The Investor Consortium believes that the proposed transaction is underpinned by a very compelling business rationale:

The Investor Consortium intends to invest significant time, resources and effort in helping Amer Sports to accelerate several important ongoing and new strategic initiatives under private ownership, including expanding Amer Sports’ businesses in the Chinese market.

This includes investing capital and resources in product development and human talent on a global basis to provide Amer Sports’ existing management team and employees with the optimal platform from which to implement its medium- to long-term strategic plans, with a view to accelerating Amer Sports’ growth, improving Amer Sports’ competitive positioning in the global market, enhancing Amer Sports’ ability to respond quickly to the demands of a fast-changing marketplace, and optimizing Amer Sports’ products and services offerings to its customers. In doing so, Amer Sports will not only grow into a broader platform for Amer Sports’ employees to thrive on, but will also form stronger, mutually beneficial partnerships with all its stakeholders.

The Investor Consortium intends to provide Amer Sports with access to ANTA Sports’ extensive distribution network, R&D resources and manufacturing and sourcing capabilities in China, such that Amer Sports will have a significant opportunity to accelerate the expansion of its businesses in the Chinese market.

After the completion of the Tender Offer, the Investor Consortium plans for Amer Sports to be operated independently from ANTA Sports, with a separate Board of Directors. The Investor Consortium has invited Mr. Heikki Takala (President and CEO of Amer Sports) and his key executives to continue leading the business. Under the new ownership, Amer Sports’ management team would have the autonomy to execute on its business plan under the strategic direction of the Board of Directors.

The Investor Consortium has confirmed that the completion of the Tender Offer is not expected to have an immediate material effect on the operations or assets, the position of the management or employees or the business locations of Amer Sports and the Investor Consortium currently expects to retain Amer Sports’ corporate head office in Helsinki after the completion of the Tender Offer. The Offeror, however, intends to change the composition of the Board of Directors of Amer Sports after the completion of the Tender Offer.

THE TENDER OFFER IN BRIEF

The Offeror, together with ANTA Sports, FV Fund, Anamered Investments, Mascot JVCo (Cayman) Limited and Amer Sports have on December 7, 2018 entered into a combination agreement (the “Combination Agreement“) under which the Offeror undertakes to make a voluntary recommended public cash tender offer (the “Tender Offer“) to purchase all of the issued and outstanding shares in Amer Sports, including 1,679,936 shares of Amer Sports currently held indirectly by ANTA Sports, but excluding any shares of Amer Sports which are held by Amer Sports or its subsidiaries.

ANTA Sports will tender the shares it holds in Amer Sports into the Tender Offer in accordance with the terms and conditions of the Tender Offer.

The following major shareholders of Amer Sports have, subject to certain customary conditions, irrevocably undertaken to accept the Tender Offer: Kaleva Mutual Insurance Company, Ilmarinen Mutual Pension Insurance Company, Mandatum Life Insurance Company Limited and Varma Mutual Pension Insurance Company, representing in aggregate approximately 7.91 percent of the issued shares and votes in Amer Sports. In addition, Maa- ja vesitekniikan tuki r.y., who hold approximately 4.29 percent of the issued shares and votes in Amer Sports, have expressed that they view the Tender Offer positively.

The offer price is EUR 40.00 in cash (the “Offer Price“) for each share in Amer Sports. Any change to the number of shares of Amer Sports as a result of a new share issue, reclassification, stock split (including a reverse split) or any other similar transaction with dilutive effect, or distribution of dividend or other distribution of funds or assets by Amer Sports after the date of the Combination Agreement shall reduce the Offer Price accordingly on a euro-for-euro basis on the gross value declared or made, before the deduction of any withholding tax and/or any other applicable taxes.

The Offer Price is determined after arm’s length negotiation among the Investor Consortium and Amer Sports with reference to Amer Sports’ market positioning, the historical business and financial performance of Amer Sports and the prospects of the business and its financial condition in the foreseeable future, as well as Amer Sports’ current and historical share prices.

The Offer Price represents a premium of:

39 percent compared to the closing price of the Amer Sports shares on Nasdaq Helsinki on September 10, 2018 (the “Original Disclosure Date“), the last trading day prior to Amer Sports confirming the receipt of a non-binding preliminary indication of interest from ANTA Sports and FountainVest;

43 percent compared to the volume-weighted average trading price of the Amer Sports shares on Nasdaq Helsinki during the 3-month undisturbed trading period prior to and up to the Original Disclosure Date;

63 percent compared to the volume-weighted average trading price of the Amer Sports shares on Nasdaq Helsinki during the 12-month undisturbed trading period prior to and up to the Original Disclosure Date;

14 percent compared to the closing price of the Amer Sports shares on Nasdaq Helsinki on December 5, 2018, the last trading day before this stock exchange release announcing the Tender Offer; and

44 percent compared to the volume-weighted average trading price of the Amer Sports shares on Nasdaq Helsinki during the 12-month period preceding the date of this stock exchange release announcing the Tender Offer.

The terms of the Tender Offer value the entire issued and outstanding share capital of Amer Sports at EUR 4.6 billion.

The offer period under the Tender Offer is expected to commence on or about December 20, 2018 and to run for approximately ten (10) weeks. The Offeror reserves the right to extend the offer period from time to time in accordance with the terms and conditions of the Tender Offer. The Tender Offer is currently expected to be completed during the second quarter of 2019 at the latest.

As at the date of this announcement, the Board of Directors of Amer Sports has decided to unanimously recommend that the shareholders of Amer Sports accept the Tender Offer. The Board of Directors of Amer Sports will issue its complete statement on the Tender Offer in accordance with the Finnish Securities Market Act before the commencement of the Tender Offer. To support its assessment of the Tender Offer, the Board of Directors of Amer Sports has received financial advice from Amer Sports’ financial advisor Goldman Sachs International. The complete fairness opinion from Goldman Sachs International will be attached to the statement that will be issued by the Board of Directors of Amer Sports.

The completion of the Tender Offer will be subject to the satisfaction or waiver by the Offeror of the following conditions (“Offer Conditions“) on or prior to the Offeror’s announcement of the final results of the Tender Offer:

the Tender Offer has been validly accepted with respect to outstanding shares representing, together with any outstanding shares otherwise held by the Offeror prior to the final result announcement date, more than ninety (90) percent of the outstanding shares and voting rights of Amer Sports calculated in accordance with Chapter 18, Section 1 of the Finnish Companies Act governing the right and obligation to commence mandatory redemption proceedings;

the receipt of all necessary approvals, permits, consents, clearances, termination or expiration of any applicable waiting periods (or extensions thereof) or other actions by any competition authorities or other regulatory authorities required under any applicable competition laws or other regulatory laws in any jurisdiction for the completion of the Tender Offer by the Offeror;

the Tender Offer has been approved by the shareholders of ANTA Sports in accordance with, and to the extent required by, applicable law (including the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited);

the removal of Article 11 of the articles of association of Amer Sports (in relation to the obligation of shareholders, whose shareholding attains or exceeds certain thresholds, to, on demand by other shareholders, redeem the shares of such other shareholders as well as securities giving entitlement to such shares) has been duly approved by an extraordinary general meeting of shareholders of Amer Sports;

no legislation or other regulation has been issued or decision by a competent court or regulatory authority has been given that would wholly or in any material part prevent or postpone the completion of the Tender Offer;

no fact or circumstance has arisen after the announcement of the Tender Offer that constitutes a material adverse change;

the Combination Agreement has not been terminated in accordance with its terms and remains in full force and effect; and

the Board of Directors of Amer Sports has issued its recommendation that the shareholders of Amer Sports accept the Tender Offer and the recommendation remains in full force and effect and has not been modified or amended and the Board of Directors of Amer Sports has not included conditions to or decided not to issue its recommendation (excluding any technical modification or change of the recommendation required under applicable laws or the Helsinki Takeover Code as a result of a competing offer so long as the recommendation to accept the Tender Offer is upheld).

Subject to any restrictions under applicable laws, the Offeror reserves the right to withdraw the Tender Offer in the event that any of the Offer Conditions is not fulfilled.

The Offeror will seek to obtain approvals from relevant regulatory authorities in jurisdictions where the applicable laws and regulations require the Offeror to do so, including the Finnish Financial Supervisory Authority and Foreign Investment Review Board in Australia, as well as the competition authorities in the People’s Republic of China (“PRC“), the European Union, the United States, Canada, Mexico, Russia and Turkey, as soon as possible after this announcement of the Tender Offer. According to information currently available, it is not certain that all necessary authority approvals can be obtained by the end of the initial offer period. In case all necessary approvals have not been obtained by the end of the initial offer period, the Offeror will extend the offer period in order to receive the necessary approvals to be able to complete the Tender Offer. The Offeror currently estimates that the competition clearances may be obtained prior to the expiry of the initial offer period.

An Extraordinary General Meeting will be convened and held for the shareholders of ANTA Sports to approve the Tender Offer and all the transactions contemplated thereunder. ANTA International Group Holdings Limited, which holds directly and indirectly through Anda Investments Capital Limited and Anda Holdings International Limited approximately 61.45 percent of the voting rights in the general meeting of ANTA Sports as at the date of this announcement, has irrevocably and unconditionally undertaken to vote, and to procure Anda Investments Capital Limited and Anda Holdings International Limited to vote, in favor of the approval of the Tender Offer and the transactions contemplated thereunder in the Extraordinary General Meeting of ANTA Sports.

The sale and purchase of the issued and outstanding shares of Amer Sports validly tendered and not properly withdrawn in accordance with the terms and conditions of the Tender Offer is expected to be executed following the announcement by the Offeror of the final result of the Tender Offer, but in any event with settlement being commenced no later than on the twelfth (12th) business day following the date of the announcement of the final result of the Tender Offer (“Closing Date“). The sale and purchase of the issued and outstanding shares of Amer Sports will take place on Nasdaq Helsinki (if permitted by the applicable rules) or outside of Nasdaq Helsinki.

The detailed terms and conditions of the Tender Offer and information on how to accept the Tender Offer will be included in the tender offer document, which is expected to be published by the Offeror on or about December 20, 2018.

Pursuant to the Combination Agreement, the Offeror is to acquire all issued and outstanding shares in Amer Sports, including the shares of Amer Sports currently held indirectly by ANTA Sports, but excluding any shares of Amer Sports which are held by Amer Sports or its subsidiaries. On the date of this stock exchange release, the number of issued shares in Amer Sports is 116,517,285, of which 1,296,540 are held by Amer Sports or its subsidiaries. On the date of this stock exchange release, ANTA Sports indirectly holds 1,679,936 shares and votes in Amer Sports, corresponding to approximately 1.4 percent of the issued shares in Amer Sports. No other member of the Investor Consortium except ANTA Sports holds any shares in Amer Sports.

The Offeror reserves the right to also acquire shares of Amer Sports in public trading on Nasdaq Helsinki or otherwise before, during and/or after the offer period and any subsequent offer period or otherwise outside the Tender Offer to the extent permitted by Finnish, U.S. and other applicable law.

If the Offeror, or any party referred to in Chapter 11, Section 5 of the Finnish Securities Market Act, acquires, before the expiry of the offer period, shares of Amer Sports at a higher price than the Offer Price or otherwise on terms that are more favorable than those of the Tender Offer, the Offeror must amend the terms and conditions of the Tender Offer to the price corresponding to the more favorable acquisition terms. The Offeror shall then, without delay, make public the triggering of the obligation to increase the Offer Price and pay, in connection with the completion of the Tender Offer, the difference between the more favorable acquisition terms and the consideration offered in the Tender Offer to the shareholders who have accepted the Tender Offer.

If the Offeror, or any party referred to in Chapter 11, Section 5 of the Finnish Securities Market Act, acquires during the nine months following the expiry of the offer period shares of Amer Sports at a higher price than the Offer Price or otherwise on terms that are more favorable than those of the Tender Offer, the Offeror must compensate those shareholders who have accepted the Tender Offer by the amount equal to the difference between the more favorable acquisition terms and the Offer Price. The Offeror shall then, without delay, make public the triggering of the obligation to compensate and pay the difference between the more favorable acquisition terms and the consideration offered in the Tender Offer within one month after the triggering of the obligation to compensate to the holders of securities who have accepted the Tender Offer.

The Offeror and Amer Sports have undertaken to follow the Helsinki Takeover Code issued by the Finnish Securities Market Association as referred to in the Finnish Securities Market Act.

The Tender Offer is not being made for American Depositary Shares representing the shares in Amer Sports (“ADSs“), nor for American Depositary Receipts evidencing such ADSs (“ADRs“). However, the Offer is being made for the shares underlying the ADSs.

On December 7, 2018, the Board of Directors of Amer Sports resolved to pay certain cash rewards under the existing performance share plan 2016 of Amer Sports in respect of the earnings period 2018-2020 to certain members of senior management of Amer Sports for their business achievements and in order to enhance their retention in connection with the Tender Offer. New programs or rewards have not been initiated. The payment of the cash reward is conditional upon the completion of the Tender Offer and a person entitled to the reward not resigning before the date that is six months from the date of completion of the Tender Offer. The maximum amount of the retention reward payable to such members of senior management is approximately EUR 9 million in the aggregate.

FINANCING

The Offeror has, and will have on the Closing Date of the Tender Offer, access to debt and equity funding in sufficient amounts, as evidenced in equity commitment letters executed by Investment Consortium members and/or their affiliates, to finance the payment of the aggregate Offer Price for all of the shares in connection with the Tender Offer (including any mandatory redemption proceedings in accordance with the Finnish Companies Act). The Offeror’s obligation to complete the Tender Offer is not conditional upon availability of financing (assuming that all the Offer Conditions are otherwise satisfied or waived by the Offeror).

COMBINATION AGREEMENT

The Combination Agreement between the Offeror, ANTA Sports, FV Fund, Anamered Investments, Mascot JVCo (Cayman) Limited and Amer Sports sets forth the principal terms under which the Offeror will make the Tender Offer.

Under the Combination Agreement, the Board of Directors of Amer Sports may not withdraw, modify, amend, include conditions to or decide not to issue its recommendation to accept the Tender Offer unless, after taking advice from its external legal advisor and its external financial advisor, the Board of Directors, on the basis of its fiduciary duties under Finnish laws and regulations (including the Helsinki Takeover Code), considers that, due to materially changed circumstances, the acceptance of the Tender Offer would no longer be in the best interest of the holders of outstanding shares of Amer Sports. The Board of Directors may withdraw, modify, amend, include conditions to or decide not to issue its recommendation to accept the Tender Offer in accordance with the above in the event of a possible competing or superior offer only if the Board of Directors has complied with certain agreed customary procedures allowing the Offeror to negotiate with the Board of Directors in respect of such competing or superior offer.

Amer Sports has undertaken not to actively, directly or indirectly, solicit or knowingly encourage a third party to launch a competing offer, except if such measures are required for the Board of Directors to comply with its fiduciary duties towards Amer Sports’ shareholders under applicable laws or regulations.

The Combination Agreement further includes certain customary representations, warranties and undertakings by the parties to the Combination Agreement, such as conduct of business by Amer Sports in the ordinary course of business before the completion of the Tender Offer, and cooperation by the parties in making necessary regulatory filings.

The Offeror’s intention is to acquire all the issued and outstanding shares in Amer Sports and cause the shares of Amer Sports to be delisted from Nasdaq Helsinki as soon as permitted and reasonably practicable under applicable laws and regulations.

The Combination Agreement may be terminated and the transaction abandoned by Amer Sports or the Offeror under certain circumstances, including, among other things,

by a mutual written agreement of the parties;

by either Amer Sports or the Offeror, if the Closing Date of the Tender Offer has not occurred on or before 28 June 2019 (“Long Stop Date“) (including due to the failure to satisfy the Offer Conditions by that date), which may be extended by three (3) months in certain circumstances;

by either Amer Sports or the Offeror, if any order that would wholly or in any material part prevent or postpone the completion of the Tender Offer has been issued by any court or other authority of competent jurisdiction and shall have become final and non-appealable;

by either Amer Sports or the Offeror, if any new legislation or regulation preventing the completion of the combination or a material part of it, have been issued and entered into force;

by Amer Sports, if the Board of Directors of Amer Sports has withdrawn, modified, amended, included conditions to or decided not to issue its recommendation to accept the Tender Offer in compliance with certain requirements under the Combination Agreement;

by Amer Sports, if the Offeror has not commenced the Tender Offer no later than within five (5) Helsinki Business Days (as defined in the Combination Agreement) following approval by the Finnish Financial Supervisory Authority of the tender offer document or such later date as permitted by the Finnish Financial Supervisory Authority but not later than the fifteenth (15th) Helsinki Business Day following approval by the Finnish Financial Supervisory Authority of the tender offer document;

by Amer Sports, if the Offeror fails to complete the Tender Offer in accordance with the Combination Agreement once the Offer Conditions have been satisfied;

by the Offeror, if the Board of Directors of Amer Sports has withdrawn, modified, amended, included conditions to or decided not to issue its recommendation to accept the Tender Offer (excluding any technical modification or change of the recommendation required under applicable laws or the Helsinki Takeover Code as a result of a competing offer so long as the recommendation to accept the Tender Offer is upheld);

by either Amer Sports or the Offeror upon a material breach of any warranty given or obligation assumed by the parties to the Combination Agreement;

by the Offeror if a material adverse change (as defined in the Combination Agreement) has occurred; and

by the Offeror if The Committee on Foreign Investment in the United States (“CFIUS“) informs the parties to the Combination Agreement to recommend to the President of the United States to block or prohibit the combination or the President of the United States announces a decision to block or prohibit the combination.

Subject to the terms of the Combination Agreement, the Offeror shall pay to Amer Sports liquidated damages if the Combination Agreement is terminated in certain specific circumstances; namely:

(a) EUR 175 million as liquidated damages, if the Combination Agreement is terminated due to:

(i) failure to satisfy regulatory approvals and requirements in the PRC before the Long Stop Date;

(ii) disapproval by the shareholders of ANTA Sports for the Tender Offer;

(iii) the issue of any final and non-appealable court decision in the PRC that wholly or in any material part prevents or postpones the completion of the Tender Offer;

(iv) failure on the part of the Offeror to commence the Tender Offer before a prescribed date or failure to complete the Tender Offer in accordance with the Combination Agreement once the Offer Conditions have been satisfied, including if a financing bank fails to provide funding in accordance with the financing arrangements described above which results in the Offeror failing to complete the Tender Offer (except to the extent that bank is insolvent and therefore prohibited from advancing funds by law or regulation); or

(b) EUR 100 million as liquidated damages, if the Combination Agreement is terminated due to, amongst other things:

(i) failure to satisfy certain regulatory approvals and requirements outside the PRC before the Long Stop Date; or

(ii) the issue of any final and non-appealable court or regulatory authority decision outside the PRC (other than a decision by CFIUS or the President of the United States pursuant to the applicable foreign investment laws) that wholly or in any material part prevents or postpones the completion of the Tender Offer.

(c) EUR 20 million as liquidated damages, if the Combination Agreement is terminated due to an order issued by CFIUS or the President of the United States

pursuant to Section 721 of the U.S. Defense Protection Act of 1950 or certain other action by or relating to CFIUS.

Amer Sports has agreed to reimburse expenses incurred by the Offeror up to EUR 15,000,000 in the event of the Combination Agreement is terminated due to certain reasons specified in the Combination Agreement.

ESCROW ARRANGEMENT

In connection with liquidated damages arrangements under the Combination Agreement, the Offeror has in place an escrow arrangement. The Offeror has deposited USD 216.88 million, representing the amount of liquidated damages of EUR 175 million with a buffer of 9 percent, in an escrow account with an independent third party escrow bank. Such escrow amount was advanced by ANTA Sports to the Offeror pursuant to a loan agreement and security agreements executed by ANTA Sports and the Offeror. If the Combination Agreement is terminated due to certain events as described above the Offeror and Amer Sports will jointly instruct the third party escrow bank to release the applicable amount of liquidated damages to Amer Sports, subject to the terms of the Combination Agreement and the escrow agreement between the Offeror, Amer Sports and the third party escrow bank.

ADVISORS

Citigroup is acting as the exclusive financial advisor and Freshfields Bruckhaus Deringer LLP as the international legal advisor, Roschier, Attorneys Ltd. as the Finnish legal advisor and Fangda Partners as the Chinese legal advisor to ANTA Sports, FountainVest and the Offeror in connection with the Tender Offer. Morgan, Lewis & Bockius LLP acts as the Hong Kong legal advisor to ANTA Sports, Kirkland Ellis acts as the international legal advisor to FountainVest and Paul, Weiss, Rifkind, Wharton & Garrison LLP acts as the international legal advisor to Tencent. Nordea Bank Abp acts as the Lead Manager of the Tender Offer.

Goldman Sachs International is acting as the exclusive financial advisor and White & Case LLP as the legal advisor to Amer Sports in connection with the Tender Offer.

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