Rheinmetall finalizes deal to acquire 25.1% stake in 4iG

Deals

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German defense industry company Rheinmetall has finalized a deal to acquire a 25.12% stake in listed Hungarian IT company 4iG, according to a report by news agency MTI.

Under the terms of the deal, Rheinmetall will purchase 24.9 million 4iG shares from KZF Vagyonkezelő, the investment company of 4iG chairman-CEO Gellért Jászai, in an OTC transaction, and it will raise 4iG's share capital by HUF 33.65 billion. Rheinmetall will enter a two-year lock-up period on the 25.12% stake acquired through the purchase and the capital raise, making it the biggest foreign owner in 4iG.

Rheinmetall's acquisition must be cleared by the Interior Ministry under rules on foreign acquisitions of interests in strategic sectors.

Before Rheinmetall carries out the transactions, iG COM Private Equity Fund, another of Jászai's interests, will raise capital by HUF 78 bln in 4iG and enter a one-year lock-up period on the shares acquired. 4iG will then convene a general meeting to approve new articles of association and to appoint a new member to the supervisory board nominated by Rheinmetall.

Additionally, 4iG said a fund managed by Alpac Capital will raise 4iG's share capital by HUF 13.24 bln.

The capital raises, totaling HUF 125 bln, will take place with the issue of 4iG shares with an issue value of HUF 670.

4iG shares closed at HUF 804 on Tuesday.

As a result of the transactions, Jászai's holding in 4iG will be reduced from 56.85% to 50.22%.

4iG announced a preliminary agreement concerning the transactions late in November. At the time, it said an IT company jointly owned by Rheinmetall, with a 51% stake, and 4iG, holding 49%, would be established after the transactions are closed.

The JV "could be involved in the development of armament industry and defense IT solutions", 4iG said in November, adding that it could be the IT service provider of a joint venture Rheinmetall and the state of Hungary have.

That JV is building a HUF 60 bln plant that will make Lynx infantry fighting vehicles in Zalaegerszeg.

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