James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — Merger or Acquisition (June 2009)
24 slides from James Hardie Industries's merger presentation, Jun 24, 2009
Slide 1: Proposal to move domicile to Ireland
Proposal to move domicile to Ireland 24 June 2009
Slide 2: Disclaimer: Forward looking statements
2 Disclaimer: Forward looking statements This presentation, and other statements that James Hardie Industries N.V. (James Hardie) may make, including statements about the benefits of James Hardie's transformation from a Dutch NV to a Dutch SE and subsequent redomicile to Ireland as an Irish SE (the
Slide 3: Forward-looking statements risk factors
3 Forward-looking statements are based on our estimates and assumptions and because forward-looking statements address future results, events and conditions, they, by their very nature, involve inherent risks and uncertainties. Such known and unknown risks, uncertainties and other factors may cause
Slide 4: Additional information and where to find it
4 Additional information and where to find it In connection with the Proposal, James Hardie has lodged with Australian Securities Exchange (ASX) and filed with the United States Securities and Exchange Commission (SEC) a Registration Statement on Form F-4 with additional information concerning the P
Slide 5: Background
5 Background Corporate domicile has been under review for considerable time The review concluded that remaining in The Netherlands is no longer desirable due to: the requirement for key senior managers to spend substantial time in The Netherlands away from key markets and operations in order to qual
Slide 6: Issues with the existing structure
6 Key senior managers have to spend substantial time in The Netherlands away from key markets and operations in order for the company to qualify under the US/Netherlands tax treaty The IRS asserted that James Hardie did not qualify under the US/Netherlands tax treaty and issued a proposed tax adjust
Slide 7: Issues with the existing structure - continued
7 The Dutch tax concessions under the Financial Risk Reserve regime expire on 31 December 2010 Distributions made to most shareholders are subject to Dutch dividend withholding tax at a rate of 15%, although in most cases this is available for offset or credit Issues with the existing structure - co
Slide 8: Dutch corporate law
8 Dutch corporate law makes it difficult and complicated to reorganise James Hardie Industries NV Dutch law does not provide for schemes of arrangement Under Dutch law replacing JHINV with a single new parent company requires an acceptance threshold of 95% of all issued capital, therefore it is not
Slide 9: The Proposal: transform into a Dutch SE then an Irish SE
9 The Proposal is for James Hardie Industries NV to transform into a Dutch SE and then into an Irish SE - ie to move to Ireland The Proposal is to be implemented in two stages: Stage 1 is achieved by an upstream merger of a newly-formed Irish subsidiary into James Hardie Industries NV, resulting in
Slide 10: Key benefits of the proposal
10 Allows key senior managers to spend more time with the company's operations and in its markets Provides greater certainty for James Hardie to obtain benefits under the current US/Ireland tax treaty than is the case under the US/Netherlands tax treaty Increases the company's flexibility by allowin
Slide 11: Key benefits of the proposal - continued
11 The Proposal will not change James Hardie's overall commitment to make contributions to the AICF 3 under the AFFA 4 Implementing the Proposal is expected to have medium and long-term benefits for James Hardie and therefore the AICF The relatively low rate of tax in Ireland is the statutory rate t
Slide 12: Costs
12 The total cost associated with the Proposal and the transfer of intellectual property and finance activities is estimated at approximately US$51-71m Associated with Stage 1 of the Proposal, James Hardie plans to exit its Financial Risk Reserve regime and also plans to move its intellectual proper
Slide 13: What does the proposal mean for shareholders
13 Shareholders will continue to hold the same securities James Hardie will continue to be listed on the ASX and NYSE Most shareholders7 will be able to receive distributions from Irish SE free from dividend withholding tax (currently subject to 15% Netherlands withholding tax - which may, depending
Slide 14: What does the proposal mean for shareholders - continued
14 There should be no adverse capital gains tax consequences for most shareholders8 and a draft ruling has been obtained from the ATO to that effect for Australian shareholders Once Stage 2 is implemented, AGMs, EGMs and Board meetings will be held in Ireland Shareholders will be able to participate
Slide 15: Other options considered
15 James Hardie considered other alternative options including: Moving James Hardie to the US not practically possible as it requires acceptance by a minimum of 95% of issued shares to move to compulsory acquisition was not considered possible without the risk of two listed entities or significant u
Slide 16: Other options considered - continued
16 Remaining in The Netherlands key senior managers would have to continue to spend considerable time in The Netherlands the favourable tax concessions James Hardie enjoys in The Netherlands expire on 31 December 2010 which would increase the statutory rate of tax to 25.5%9 the risk of the IRS takin
Slide 17: Next steps - Key Dates
17 Next steps - Key Dates Event Date Explanatory memorandum mailed to shareholders mid-July 2009 Record date for CUFS for voting at Stage 1 Extraordinary General Meeting 17 August 2009 Stage 1 Extraordinary Information Meeting in Sydney 11.30am AEST on 18 August 2009 Deadline for submission of Direc
Slide 18: Summary
18 Summary Review of domicile has been completed after several years Other options were considered, however due to a number of factors and the complexity of operating in multiple jurisdictions many options were not considered viable or appropriate Moving the domicile to Ireland offers considerable o
Slide 19: Appendix
19 Appendix What the proposal means for the Asbestos Injuries Compensation Fund (AICF) Approvals sought for the proposal Key risks associated with the proposal
Slide 20: The AICF
20 The Proposal will not change James Hardie's overall commitment to make contributions to the AICF under the Amended and Restated Final Funding Agreement (AFFA) James Hardie, as a Dutch SE and then an Irish SE, will continue to be bound by the AFFA The NSW Government and the trustees of the AICF ha
Slide 21: AICF contributions and tax rulings
21 If a contribution is due to the AICF in FY2011, which is not yet known, the costs associated with the Proposal will most likely reduce the amount of any contribution the company is required to make in that year by up to 35% of those costs associated with the Proposal The extent to which these cos
Slide 22: Approvals sought for the proposal
22 In addition to shareholder approval, there are also a number of steps that must be satisfied to implement the Proposal: Stage One: establishing a special European employee negotiating and representative body obtaining a "statement of no objection" from the Dutch Ministry of Justice and the Treasu
Slide 23: Key risks associated with the proposal
23 The expected benefits could be materially different from actual benefits obtained as a result of actions outside the control of James Hardie, including: the Proposal and the transfer of intellectual property, finance and treasury operations to Ireland is delayed and therefore expected benefits ar
Slide 24: Proposal to move domicile to Ireland
Proposal to move domicile to Ireland 24 June 2009
James Hardie Industries — Merger or Acquisition (June 2009) on 6ix