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Merger of YIT and Lemminkäinen

Disclaimer

Notice to Lemminkäinen Shareholders in the United States

The YIT shares to be issued in connection with the merger have not been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”) and are being issued in reliance on the exemption from registration set forth in Rule 802 under the Securities Act.

YIT and Lemminkäinen are Finnish companies and the issuance of YIT shares will be subject to procedural and disclosure requirements in Finland that may be different from those of the United States. Any financial statements or other financial information included on this website may have been prepared in accordance with non-U.S. accounting standards that may not be comparable to the financial statements of U.S. companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.

It may be difficult for U.S. shareholders of Lemminkäinen to enforce their rights and any claims they may have arising under U.S. federal securities laws in connection with the merger, since YIT and Lemminkäinen are located in non-U.S. jurisdictions, and some or all of YIT’s and Lemminkäinen's officers and directors may be residents of countries other than the United States. As a result, U.S. shareholders of Lemminkäinen may not be able to sue YIT or Lemminkäinen or their respective officers and directors in a court in Finland for violations of U.S. federal securities laws. Further, it may be difficult to compel YIT or Lemminkäinen to subject themselves to the jurisdiction or judgment of a U.S. court.

Lemminkäinen’s shareholders should be aware that YIT may purchase Lemminkäinen’s shares otherwise than under the merger, such as in open market or privately negotiated purchases, at any time during the pendency of the proposed merger.

YIT and Lemminkäinen to combine

The combination will create a financially strong company with urban development as the engine for growth and profitability. The companies’ business areas will complement and balance each other and decrease sensitivity to economic cycles.

The preliminary combined annual revenue of the combined company is approximately EUR 3.4 billion and operating profit approximately EUR 85 million (IFRS, 2016)*. The combined company will employ around 10,000 employees located in 11 different countries.

The combination is expected to create significant value for the shareholders of the combined company through decreased sensitivity to economic cycles and improved competitiveness providing a strong platform for growth.

The total synergies are expected to be approximately EUR 40 million annually, and they are expected to materialise in full by the end of 2020.

The combination will be implemented as a statutory absorption merger whereby Lemminkäinen will be merged into YIT.

Lemminkäinen’s shareholders will receive as merger consideration 3.6146 new shares in YIT for each share in Lemminkäinen owned by them, corresponding to an ownership in the combined company post-completion of 60% for YIT shareholders and 40% for Lemminkäinen shareholders.

Based on the latest three-month volume-weighted average share prices of both YIT and Lemminkäinen, the corresponding ownership of YIT and Lemminkäinen shareholders would have been approximately 67.1% and 32.9%, respectively.**

The Extraordinary General Meetings (each, an “EGM”) of YIT and Lemminkäinen held on September 12, 2017 approved the merger. 

The completion of the merger is still subject to, inter alia, merger control approval from the Finnish Competition and Consumer Authority (the "FCCA"). The FCCA's investigation on the merger of YIT and Lemminkäinen is still pending and, in order to handle the matter, the FCCA has applied for an extension from the Finnish Market Court until January 26, 2018. The Finnish Market Court has, on December 13, 2017, granted the FCCA an extension for handling the matter until January 26, 2018 as requested by the FCCA. During the extended investigation, the FCCA may approve the merger as such, attach conditions to the approval or request that the Finnish Market Court prohibit the merger. Due to the granting of the extension, the merger will likely be completed on February 1, 2018, at the earliest.

The combined company has obtained necessary commitments for the financing of the completion of the merger.

The preliminary long-term financial targets of the combined company will be return on capital employed (ROCE) of more than 12 percent, equity ratio above 40 percent, positive cash flow after dividends as well as annually growing dividend per share.

* The combined illustrative financial information is presented for illustrative purposes only and they should not be regarded as pro forma financial information. The combined illustrative income statement information and key figures are presented as if the business operations would have been in the same Group starting from the beginning of the year 2016.

**Based on the volume-weighted average prices of YIT (approximately EUR 7.01) and Lemminkäinen (approximately EUR 18.63) on Nasdaq Helsinki during the latest three months until June 16, 2017, said date included.

TIMETABLE

June 19, 2017: Announcement

Merger plan

Presentation material

Webcast recording

Webcast transcript

Stock Exchange release, June 19, 2017

YIT and Lemminkäinen to combine

August 25, 2017: Publication of merger prospectus

Merger prospectus

Stock Exchange release, August 24, 2017

The FIN-FSA has approved YIT's and Lemminkäinen's merger prospectus and granted exemption from the obligation to publish listing prospectus

Stock Exchange release, September 7, 2017

YIT Corporation: Supplement to the Merger Prospectus

September 12, 2017: YIT and Lemminkäinen EGMs

Meeting material

Stock Exchange release, July 27, 2017

Notice to YIT Corporation’s Extraordinary General Meeting

Stock Exchange releases, September 12, 2017

Resolutions passed at the Extraordinary General Meeting of YIT Corporation

The Extraordinary General Meeting of Lemminkäinen Corporation approved the merger of Lemminkäinen Corporation into YIT Corporation

OTHER information

Stock Exchange release, September 28, 2017

The Finnish Competition and Consumer Authority initiates further proceedings concerning the combination of YIT and Lemminkäinen

Stock Exchange release, October 9, 2017

PEAB divested its holdings in Lemminkäinen: YIT no longer obliged to redeem shares

Stock Exchange Release, December 11, 2017

The Finnish Competition and Consumer Authority applies for an extension for investigating the merger of YIT Corporation and Lemminkäinen Corporation

Stock Exchange Release, December 13, 2017

The Finnish Competition and Consumer Authority has been granted an extension until January 26, 2018 to investigate the merger of YIT and Lemminkäinen

Due to the granting of the extension, the merger will likely be completed on February 1, 2018, at the earliest.

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