Filed by Safran S.A.
Pursuant to Rule 425 under the Securities Act of 1933, as amended
Subject Company: Zodiac Aerospace S.A.
Commission File No. 333-154066
Date: January 31, 2017
Amendment to Safran S.A.’s Rule 425 filing of the press release dated January 19, 2017, as filed with the SEC on January 20, 2017.
Reasons for Filing an Amendment
The press release dated January 19, 2017 and filed with the SEC on January 20, 2017 incorrectly stated the amount of the premium on the closing price of Zodiac Aerospace’s shares on January 18, 2017.
ESS RELEASE Safran and Zodiac Aerospace, a new global leader in aerospace Agreed Public Cash Offer by Safran of €29.47 per Zodiac Aerospace share andsubsequent merger on the basis of 0.485 Safran share (ex-special dividend) forone Zodiac Aerospace share with pre-closing €5.50 per share special dividend toSafran’s shareholders. Unique combination to enjoy global leadership positions across the whole aircraftvalue chain with a comprehensive range of world-class products and services.Strong post-delivery and aftermarket revenue stream balancing exposure toOEM delivery cycle. - No. 3 player in aerospace1 with combined revenues of over €21bn2 balanced between propulsion and aircraft equipment - No. 2 player in aircraft equipment with combined revenues of c. €10bn3 Optimized capital structure of the combined group targeting an investment gradeprofile. Safran intends to maintain its dividend practice unchanged thanks tostrong cash generation. Run-rate annual pre-tax cost synergies of €200m identified, to accelerate in thelong term. Double-digit accretive effect on earnings per share4 as of the first fullfiscal year of consolidation. January 19, 2017, Paris, Plaisir Safran (Euronext Paris: SAF), an international high-technology group and tier-1 supplier ofengines, systems and equipment in its core markets of Aerospace, Defense and Security5, andZodiac Aerospace (Euronext Paris: ZC), a global leader in Aerosafety, Aircraft systems, Seats andCabins, today announced that they have entered into exclusive negotiations for an acquisition ofZodiac Aerospace by Safran through an agreed public offer of €29.47 per share and a subsequentmerger on the basis of 0.485 Safran shares for one Zodiac Aerospace share. Prior to andconditional upon the merger, Safran would distribute a special dividend of €5.50 per share to itsexisting shareholders. 1 Excludes airframers 2 Pro forma based on Safran LTM figures at June 2016 excluding Safran Identity & Security and Zodiac Aerospace LTMfigures at August 2016 3 Pro forma based on Safran LTM figures at June 2016 and Zodiac Aerospace LTM figures at August 2016 4 Assuming 100% of targeted shares are tendered. Post phased synergies, before PPA and synergies and cost ofimplementation 5 Discontinued operations 1
Under the terms of the contemplated agreement: - Safran would launch a tender offer on Zodiac Aerospace’s shares6 at €29.47 per share,representing a premium of 26.4 per cent on Zodiac Aerospace’s closing price on 18th, January,2017, 36.1 per cent on Zodiac Aerospace’s 3-month volume-weighted average price. The tenderoffer would be subject to an acceptance threshold of50% of the share capital of ZodiacAerospace. Family shareholders and two institutional investors (FFP and Fonds Stratégique deParticipations) which are Zodiac Aerospace’s reference shareholders and in total representapproximately 32 per cent of Zodiac Aerospace’s share capital, intend to remain long-termshareholders of the combined entity and would undertake not to tender their shares into the publicoffer; - Subject to the tender offer being successful and to Safran and Zodiac Aerospace’srespective shareholders’ approval of the merger, Safran and Zodiac Aerospace would mergebased on an exchange ratio of 97 Safran shares (ex-special dividend) for 200 Zodiac Aerospaceshares (or 0.485 Safran share (ex-special dividend) per Zodiac Aerospace share), consistent withthe tender offer price after taking into account the special dividend. Family shareholders and twoinstitutional investors (FFP and Fonds Stratégique de Participations) would undertake to contributetheir shares to the merger; - Prior to and conditional upon the merger, and subject to the tender offer being successfuland to Safran and Zodiac Aerospace’s respective shareholders’ approval of the merger, Safranwould distribute a special dividend of €5.5 per share, for a total amount of approximately €2.3bn toits shareholders. Zodiac Aerospace’s founding families, FFP, Fonds Stratégique de Participations and the FrenchState intend to remain core shareholders of Safran with around 22 per cent7 of its capital, and,upon completion of the transaction, to sign a shareholders agreement comprising a two-year lock-up provision. Combining two market leaders The transaction would create a global leader in aircraft equipment, allying the market leadingpositions, expertise, technologies and talents of both Safran and Zodiac Aerospace. The newentity would combine Safran’s capabilities in landing gear, wheels and brakes, nacelles, powersystems, actuation and avionics, with Zodiac Aerospace’s leading positions in seats, cabininteriors, power distribution, lighting, fuel, oxygen and fluid systems and safety equipment.In electrical systems, Zodiac Aerospace’s assets would reinforce Safran’s portfolio of technologiesand position the group ideally for future developments towards the “more electrical aircraft”.On a pro forma basis, including Safran’s world leading propulsion business, the combined groupwould have around 92,000 employees (of which more than 45,000 in France), c. €21.2bn inadjusted revenues8 and c. €2.7bn in adjusted recurring operating income8. On this basis thecombined group would form the third largest player worldwide in the aerospace sector9. The 6 100% of outstanding shares except those subject to undertakings not to tender them. 7 Assuming 100% of targeted shares are tendered. 8 Pro forma based on Safran LTM figures at June 2016 excluding Safran Identity & Security and Zodiac Aerospace LTMfigures at August 2016 9 Excludes airframers 2
combined group would become the second largest player worldwide in aircraft equipment with proforma revenues in these businesses of c. €10bn10. It would be present in over 60 countries. Reinforcing core aerospace business and enlarging footprint The transaction would be fully consistent with Safran’s stated strategy to focus on its coreaerospace and defense businesses. The new entity would offer a comprehensive product rangereinforcing Safran’s presence across all key aircraft programs, fueling organic growth and limitingexposure to aircraft-OEM delivery cycles. The combination would improve Safran’s exposure to a dollar-denominated cost-base, especiallyin North America where Zodiac Aerospace has a large footprint. Creating value Safran has already identified €200m p. a. of cost synergies, of which 50% should be achieved inyear 1 and 90% in year 2, enabling the transaction to meet Safran’s RoCE goal in 3 years.Synergies should come from savings in procurement and SG&A and the optimization of thecombined group’s footprint. Beyond identified cost synergies, Safran would enable ZodiacAerospace’s seats and interiors business to accelerate their recovery and progress towards orabove their historical margin levels. The transaction would be expected to have a double-digit accretive effect on earnings per share11as of the first full fiscal year of consolidation. Ross McInnes, Chairman of Safran’s Board of Directors stated: “Safran’s Board of Directors isvery proud to contribute to a new chapter in Safran’s story. This planned acquisition is fullyconsistent with the strategy we clearly outlined almost a year ago at our Capital Markets Day, tobolster Safran’s core aerospace activities with quality businesses which share our DNA:technology, tier-1 positions and recurring revenue streams. It will strengthen our position andcreate significant value through integration and synergies. The Board of Directors is unanimouslysupportive because it is favorable for Safran’s shareholders, employees and partners. I extend awarm welcome to Zodiac Aerospace’s teams with whom we are excited to embark on thisjourney.” Didier Domange, Chairman of Zodiac Aerospace’s Supervisory Board, said: “The creation of thisnew global leader in the aerospace industry is led by a strong industrial rationale and a long termvision. The new group will be ideally positioned to support its clients in their ambitious programsfor the future. We are delighted to participate in the combination of two leaders of the industry withcomplementary positions and strong innovation abilities dedicated to their customers.” Philippe Petitcolin, CEO of Safran, said: “The acquisition of Zodiac Aerospace represents a uniqueopportunity at this point in Safran’s development, just a few months after initiating the refocus ofthe group on our core activities of Aerospace and Defense. The technological complementaritieswill ensure that we accelerate domains as strategic as critical systems and the more electricalaircraft, which make up 40% of Zodiac Aerospace’s activities. Our industrial expertise will alsoaccelerate the return to their historical levels of profitability in the seats and cabin activities. Finally,and above all, the strength of Safran’s managerial talent and the timing of this transaction will 10 Pro forma based on Safran LTM figures at June 2016 and Zodiac Aerospace’s LTM figures at August 2016 11 Assuming 100% of targeted shares are tendered. Post phased synergies, before PPA, and synergies and cost ofimplementation 3
ensure the success of integrating Zodiac Aerospace into our Equipment businesses whilePropulsion is focused on the LEAP programme. I am eager to drive this strategic move.” Olivier Zarrouati, Chairman of Zodiac Aerospace’s Management Board, said: “The combinationwith Safran will lead to the creation of a world leader, with a high technological know-how, able toshape the future of aerospace. It will benefit our employees, our clients and our shareholders; itrepresents a new step in the consolidation of the aerospace industry. We are proud of ZodiacAerospace’s industrial and commercial achievements and excited by the prospect of joining Safranand creating a global leader, with a strong European base.” Financing Safran will finance the cash portion of the transaction and its special dividend with a combinationof cash on hand, including future proceeds from the disposals of Safran Identity & Security,existing committed undrawn facilities and a €4bn fully underwritten bridge loan. Upon completionof the transaction, Safran would target an investment grade profile with a targeted adjusted netdebt / adjusted EBITDA ratio around 2.5x. After the completion of the transaction, Safran wouldmaintain its practice of distributing an annual dividend amounting to approximately 40 per cent ofadjusted net income. Governance of Safran Under the terms of the contemplated combination, Safran’s Board of Directors would comprise 20members, including representatives of Zodiac Aerospace’s reference shareholders.Ross McInnes would be Chairman of the Board. Philippe Petitcolin would be CEO and Olivier Zarrouati, Chairman of Zodiac Aerospace’sManagement Board, would become deputy CEO. Bernard Delpit would be CFO. A modification of Safran’s bylaws extending the age limit of the CEO from 65 to 68 years will beproposed by Safran’s Board of Directors to the next shareholders’ meeting. Next steps Safran’s Board of Directors unanimously approved the principle of the planned transaction anddecided to submit it to the group’s employee representatives. Zodiac Aerospace’s SupervisoryBoard unanimously approved the principle of the planned transaction and decided to submit it toZodiac Aerospace’s employee representatives. The finalization of a binding agreement is subjectto the completion of procedures with Safran’s and Zodiac Aerospace’s respective employeesrepresentative bodies under applicable laws and regulations. The finalization of the transactionwould be subject to the approval of Safran’s and Zodiac Aerospace’s shareholders, relevantantitrust clearances, regulatory approvals and other customary conditions. The completion of thetender offer is expected by the end of the 4th quarter 2017 and completion of the merger isexpected early 2018. Safran and Zodiac Aerospace will update the market as required. Advisors Bank of America Merrill Lynch and Lazard acted as financial advisors to Safran, BDGS served aslegal counsel, and Bank of America Merrill Lynch acted as bridge underwriter. BNP Paribas and 4
Rothschild acted as financial advisors to Zodiac Aerospace and Bredin Prat served as legalcounsel. Analyst and investor conference calls Safran will host today a conference call open to analysts and investors at 8:00am CET which canbe accessed at +33 (0) 1 70 77 09 43 (France), +44 (0) 203 367 9454 (UK) and +1 855 402 7764 (US). A replay will be available at +33 (0)1 72 00 15 00, +44 (0) 203 367 9460 and +1 877 642 3018 (access code 306293#). The press release and presentation are available on Safran’s website at www.safran-group.com. Zodiac Aerospace will also host today a conference call open to analysts and investors at9:00am CET which can be accessed at +33 (0)1 70 77 09 47 (France), +44 (0) 203 367 9461 (UK). A replay will be available at +33 (0)1 72 00 15 00, +44 (0) 203 367 9460 and +1 877 6423018 (access code 306297#). The press release and presentation are available on Zodiac Aerospace’s website athttp://www.zodiacaerospace.com/fr. Press conference Safran and Zodiac Aerospace will host today a press conference at 10:00am CET at the PavillonGabriel (5, avenue Gabriel, Paris 75008). To follow the press conference live: http://www.safran-group.com/fr/conference-de-presse-du-19-01-2017 IMPORTANT ADDITIONAL INFORMATION This communication is not intended to and does not constitute an offer to sell or the solicitation ofan offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or thesolicitation of any vote or approval in any jurisdiction in connection with the transaction orotherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction incontravention of applicable law. The tender offer and the merger are subject to consultation of the work’s council committees,execution of definitive documentation and obtaining of required regulatory and other customaryauthorisations. The tender offer and the merger would only be filed after such and other conditionshave been fulfilled. These materials must not be published, released or distributed, directly orindirectly, in any jurisdiction where the distribution of such information is restricted by law. It is intended that Safran and Zodiac Aerospace will file with the French Market Authority (“AMF”) aprospectus and other relevant documents with respect to the tender offer to be made in France, 5
and with respect to the merger of Zodiac Aerospace into Safran. Pursuant to French regulations,the documentation with respect to the tender offer and the merger which, if filed, will state theterms and conditions of the tender offer and the merger will be subject to the review by the FrenchMarket Authority (AMF). Investors and shareholders in France are strongly advised to read, if andwhen they become available, the prospectus and related offer and merger materials regarding thetender offer and the merger referenced in this communication, as well as any amendments andsupplements to those documents as they will contain important information regarding Safran,Zodiac Aerospace, the contemplated transactions and related matters. ADDITIONAL U.S. INFORMATION Any securities to be issued under the transaction may be required to be registered under the U.S.Securities Act of 1933, as amended (the “Securities Act”). The transaction will be submitted to theshareholders of Zodiac Aerospace for their consideration. If registration with the U.S. Securitiesand Exchange Commission (the “SEC”) is required in connection with the transaction, Safran willprepare a prospectus for Zodiac Aerospace’s shareholders to be filed with the SEC, will mail theprospectus to Zodiac Aerospace’s shareholders and file other documents regarding the proposedtransaction with the SEC. Investors and shareholders are urged to read the prospectus and theregistration statement of which it forms a part when and if it becomes available, as well as otherdocuments that may be filed with the SEC, because they will contain important information. Ifregistration with the SEC is required in connection with the transaction, shareholders of ZodiacAerospace will be able to obtain free copies of the prospectus and other documents filed by Safranwith the SEC at the SEC’s web site, http://www.sec.gov. Those documents, if filed, may also beobtained free of charge by contacting Safran Investor Relations at 2, Boulevard du Général MartialValin 75724 Paris Cedex 15 - France or by calling (33) 1 40 60 80 80. Alternatively, if therequirements of Rule 802 under the Securities Act are satisfied, offers and sales made by Safranin the proposed business combination will be exempt from the provisions of Section 5 of theSecurities Act and no registration statement will be filed with the SEC by Safran. FORWARD-LOOKING STATEMENTS This communication contains forward-looking statements relating to Safran, Zodiac Aerospace andtheir combined businesses, which do not refer to historical facts but refer to expectations based onmanagement’s current views and assumptions and involve known and unknown risks anduncertainties that could cause actual results, performance, or events to differ materially from thoseincluded in such statements. These statements or disclosures may discuss goals, intentions andexpectations as to future trends, plans, events, results of operations or financial condition, or stateother information relating to Safran, Zodiac Aerospace and their combined businesses, based oncurrent beliefs of management as well as assumptions made by, and information currentlyavailable to, management. Forward-looking statements generally will be accompanied by wordssuch as “anticipate,” “believe,” “plan,” “could,” “estimate,” “expect,” “forecast,” “guidance,” “intend,”“may,” “possible,” “potential,” “predict,” “project” or other similar words, phrases or expressions. 6
Many of these risks and uncertainties relate to factors that are beyond Safran’s or ZodiacAerospace’s control. Therefore, investors and shareholders should not place undue reliance onsuch statements. Factors that could cause actual results to differ materially from those in theforward-looking statements include, but are not limited to: the ability obtain the approval of thetransaction by shareholders; failure to satisfy other closing conditions with respect to thetransaction on the proposed terms and timeframe; the possibility that the transaction does notclose when expected or at all; the risks that the new businesses will not be integrated successfullyor that the combined company will not realize estimated cost savings and synergies; Safran’s orZodiac Aerospace’s ability to successfully implement and complete its plans and strategies and tomeet its targets; and the benefits from Safran’s or Zodiac Aerospace’s (and their combinedbusinesses) plans and strategies being less than anticipated. The foregoing list of factors is notexhaustive. Forward-looking statements speak only as of the date they are made. Safran andZodiac Aerospace do not assume any obligation to update any public information or forward-looking statement in this communication to reflect events or circumstances after the date of thiscommunication, except as may be required by applicable laws. Pursuant to the commission implementing regulation (EU) 2016/1055 of 29 June 2016 laying downimplementing technical standards with regard to the technical means for appropriate publicdisclosure of inside information and for delaying the public disclosure of inside information inaccordance with Regulation (EU) No 596/2014 of the European Parliament and of the Council, thispress release may contain inside information and has been sent to the authorized broadcaster ofboth companies on 19 January 2017 at 7:00am CET. 7
an is a leading international high-technology group with three core businesses: Aerospace (propulsion equipment), Defence and Security. Operating worldwide, the Group has70,000 employees andgenerated sales of 17.4 billion euros in 2015. Working independently or in partnership, Safran holds world orEuropean leadership positions in its core markets. The Group invests heavily in Research & Development tomeet the requirements of changing markets, including expenditures of more than 2 billion euros in 2015.Safran is listed on Euronext Paris and is part of the CAC40 index, as well as the Euro Stoxx 50 Europeanindex. For more information : www.safran-group.com / Follow @Safran on Twitter Press Catherine MALEK : catherine.malek@safrangroup.com / T +33 (0))6 47 88 03 17Julien TAHMISSIAN : julien.tahmissian@havas.com / T +33 (0)7 88 35 98 90 Investor Relations Peter CAMPBELL : peter.campbell@safrangroup.com / T +33 (0)1 40 60 35 96 Frédéric LUCAND : frederic.lucand@safrangroup.com / T +33 (0)1 40 60 82 19 Cécilia MATISSART : cecilia.matissart@safrangroup.com / T +33 (0)1 40 60 82 46 About Zodiac Aerospace Zodiac Aerospace is a world leader in aerospace equipment and systems for commercial, regional andbusiness aircrafts and for helicopters and spacecrafts. It develops and manufactures state-of-the-art solutionsto improve comfort and facilities on board aircrafts and high-technology systems to increase aircraftperformance and flight safety. Zodiac Aerospace has 35,000 employees worldwide and generated revenue of€5.2bn in 2015/2016. www.zodiacaerospace.com Contacts Zodiac Aerospace Pierre-Antony VASTRA Tel: +33 (0)1 61 34 25 68 / pierreantony.vastra@zodiacaerospace.com Contacts Media/Press - Image 7 Priscille RENEAUME Tel: +33 (0) 1 53 70 74 61 / preneaume@image7.frGrégoire LUCAS Tel: +33 (0) 1 53 70 74 84 / glucas@image7.fr 8