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Rule 424(b)(2)
File No. 33-64167
Prospectus Supplement to Prospectus dated November 14, 1995.
PROSPECTUS SUPPLEMENT/OFFER TO PURCHASE
OFFER TO EXCHANGE OR PURCHASE EACH OUTSTANDING SHARE OF COMMON STOCK,
PAR VALUE FF 10 PER SHARE, OF
CARNAUDMETALBOX
FOR 1.086 UNITS, EACH UNIT CONSISTING OF .75 SHARES OF COMMON STOCK, PAR
VALUE $5.00 PER SHARE, AND .25 SHARES OF 4.5% CONVERTIBLE PREFERRED STOCK,
PAR VALUE $41.8875 PER SHARE, OF
CROWN CORK & SEAL COMPANY, INC.
OR
FF 225 IN CASH
THE EXPIRATION DATE FOR THE OFFER IS 11:59 P.M., PARIS TIME, 10:59 P.M.,
LONDON TIME, AND 5:59 P.M., NEW YORK CITY TIME, ON THURSDAY, FEBRUARY 1, 1996,
UNLESS THE OFFER IS EXTENDED. ANNOUNCEMENT OF THE RESULTS OF THE OFFER WILL BE
MADE WITHIN APPROXIMATELY TEN BUSINESS DAYS AFTER THE EXPIRATION DATE.
WITHDRAWAL RIGHTS WILL NOT BE AVAILABLE FOLLOWING THE EXPIRATION OF THE OFFER.
THE OFFER IS CONDITIONED UPON THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN
PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST A MAJORITY OF THE VOTING POWER
OF CARNAUDMETALBOX BASED ON THE NUMBER OF OUTSTANDING SHARES (AND OPTIONS TO
ACQUIRE SHARES) OF COMMON STOCK, PAR VALUE FF 10 PER SHARE ("CARNAUDMETALBOX
SHARES"), ON DECEMBER 19, 1995 AND ASSUMING LOSS OF ALL DOUBLE VOTING RIGHTS
OF THE CARNAUDMETALBOX SHARES TO BE ACQUIRED BY CROWN CORK & SEAL COMPANY,
INC. ("CROWN") OR ITS SUBSIDIARIES. SEE "THE OFFER--MINIMUM CONDITION" IN THIS
PROSPECTUS SUPPLEMENT.
THE SUPERVISORY BOARD OF CARNAUDMETALBOX HAS UNANIMOUSLY DETERMINED THAT THE
OFFER IS IN THE INTEREST OF CARNAUDMETALBOX AND ITS SHAREHOLDERS, AND HAS
UNANIMOUSLY RECOMMENDED THAT CARNAUDMETALBOX SHAREHOLDERS ACCEPT THE OFFER.
----------------
This Prospectus Supplement/Offer to Purchase (the "Prospectus Supplement"),
together with the Proxy Statement/Prospectus of Crown dated November 14, 1995
(the "Prospectus"), constitutes the prospectus of Crown with respect to offers
and sales by Crown in the United States and to U.S. persons (as such terms are
defined in Regulation S under the Securities Act of 1933, as amended (the
"Securities Act")), and reoffers and resales from time to time into the United
States and to U.S. persons, of shares of Common Stock, par value $5.00 per
share ("Crown Common Stock"), of Crown and shares of 4.5% Convertible
Preferred Stock, par value $41.8875 per share ("Crown Acquisition Preferred
Stock"), of Crown issued in connection with the offer described herein to the
extent that such offers, sales, reoffers and resales are not exempt from
registration under the Securities Act. This Prospectus Supplement, together
with the accompanying Prospectus, also constitutes the Offer to Purchase for
offers in the United States and to CarnaudMetalbox shareholders who are
persons described in the preceding sentence with respect to the cash portion
of the offer described herein.
FOR INFORMATION ON THE TENDER PROCEDURES FOR THE OFFER DESCRIBED HEREIN, SEE
"THE OFFER--TENDER PROCEDURES" IN THIS PROSPECTUS SUPPLEMENT.
Capitalized terms not otherwise defined in this Prospectus Supplement have
the meanings set forth in the Prospectus. For definitions of selected defined
terms, see "GLOSSARY OF SELECTED DEFINED TERMS" in the Prospectus.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------------
THE U.S. DEALER MANAGERS FOR THE OFFER ARE:
CS First Boston Corporation Societe Generale Securities Corporation
January 3, 1996
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NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION
WITH RESPECT TO THE MATTERS DESCRIBED IN THIS PROSPECTUS SUPPLEMENT OR THE
ACCOMPANYING PROSPECTUS OTHER THAN THE INFORMATION OR REPRESENTATIONS
CONTAINED OR INCORPORATED BY REFERENCE HEREIN OR THEREIN. IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY CROWN. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO EXCHANGE OR A SOLICITATION OF AN
OFFER TO EXCHANGE SECURITIES IN ANY JURISDICTION IN WHICH OR TO ANY PERSON TO
WHOM IT WOULD BE UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. THE OFFER
REFERRED TO HEREIN OR THEREIN IS NOT BEING MADE BY MEANS OF THIS PROSPECTUS
SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS IN ANY JURISDICTION IN WHICH THE
MAKING OF THE OFFER BY MEANS OF THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS OR ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH
THE LAWS OF SUCH JURISDICTION. HOWEVER, CROWN MAY, IN ITS SOLE DISCRETION,
TAKE SUCH ACTION AS IT MAY DEEM NECESSARY TO MAKE THE OFFER IN ANY SUCH
JURISDICTION AND EXTEND THE OFFER BY MEANS OF THIS PROSPECTUS SUPPLEMENT AND
THE ACCOMPANYING PROSPECTUS TO HOLDERS OF SHARES OF CARNAUDMETALBOX IN SUCH
JURISDICTION. IN THE UNITED STATES, IN THOSE JURISDICTIONS WHERE THE
SECURITIES, BLUE SKY OR OTHER LAWS REQUIRE THE OFFER TO BE MADE BY A LICENSED
BROKER OR DEALER, THE OFFER IS BEING MADE ON BEHALF OF CROWN BY CS FIRST
BOSTON CORPORATION, SOCIETE GENERALE SECURITIES CORPORATION OR ONE OR MORE
REGISTERED BROKERS OR DEALERS WHICH ARE LICENSED UNDER THE LAWS OF SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE
ACCOMPANYING PROSPECTUS NOR ANY EXCHANGE OR SALE HEREUNDER OR THEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF CROWN SINCE THE DATE HEREOF OR THAT THE INFORMATION
IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS OR IN THE
DOCUMENTS INCORPORATED BY REFERENCE HEREIN OR THEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO THE DATES HEREOF OR THEREOF.
----------------
THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS HAVE NOT RECEIVED
THE VISA OF THE FRENCH COMMISSION DES OPERATIONS DE BOURSE. ACCORDINGLY, THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS MAY NOT BE USED TO MAKE
OFFERS OR SALES IN FRANCE IN CONNECTION WITH THE OFFER DESCRIBED HEREIN AND
THEREIN.
----------------
IN CONNECTION WITH THE OFFER, CROWN AND CERTAIN OF ITS ADVISORS (OR THEIR
AFFILIATES) MAY ENGAGE IN TRANSACTIONS FOR THEIR OWN ACCOUNT OR FOR THE
ACCOUNTS OF OTHERS IN CARNAUDMETALBOX SHARES OR OPTIONS ON SUCH SHARES
PURSUANT TO EXEMPTIONS FROM RULES 10b-6, 10b-7 AND 10b-13 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED. SEE "THE OFFER--GENERAL" IN THE PROSPECTUS.
ii
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AVAILABLE INFORMATION
Crown has filed with the Commission des operations de bourse, the
administrative agency of the Republic of France responsible for overseeing the
French securities markets (the "COB"), a document de reference and a note
d'information with respect to the offer described herein. The note
d'information and the document de reference have also been used to apply for
listing of shares of Crown Common Stock and Crown Acquisition Preferred Stock
on the Cote officielle (the "Official List") of the Bourse de Paris (the
"Paris Stock Exchange"). On December 28, 1995, the COB issued a visa, or
approval, on the note d'information and its use in connection with the offer
described herein. Crown has also submitted the terms of the offer described
herein for approval by the Conseil des bourses de valeurs, the self-regulatory
organization that has general supervisory authority over French stock
exchanges (the "CBV"). On December 22, 1995, the Societe des bourses
francaises, the financial institution responsible for the supervision of
trading in listed shares on French stock exchanges (the "SBF"), on behalf of
the CBV, issued a notice declaring the terms of the offer described herein
acceptable to the CBV. See "THE OFFER--Regulatory Approvals" in this
Prospectus Supplement for additional information in respect of the approvals
and authorizations of the CBV and the COB.
Crown has filed with the Securities and Exchange Commission (the "SEC") a
Registration Statement on Form S-4 (together with all amendments thereto, the
"Registration Statement") under the Securities Act with respect to offers and
sales by Crown in the United States and to U.S. persons, and reoffers and
resales from time to time into the United States and to U.S. persons, of
shares of Crown Common Stock and Crown Acquisition Preferred Stock issued in
the offer described herein to the extent that such offers, sales, reoffers and
resales are not exempt from registration under the Securities Act. This
Prospectus Supplement and the accompanying Prospectus do not contain all the
information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the SEC. Reference
is hereby made to the Registration Statement and related exhibits for further
information with respect to Crown and the securities offered hereby.
The offer document used in the United States or with respect to certain U.S.
persons in connection with the offer described herein consists of this
Prospectus Supplement and the accompanying Prospectus (including as they may
be amended or supplemented, whether by means of incorporation by reference
into the Registration Statement or otherwise). This Prospectus Supplement
should be read in conjunction with the Prospectus.
See also "AVAILABLE INFORMATION" and "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE" in the Prospectus with respect to additional available information
in respect of the offer described herein, including Crown's Current Reports on
Form 8-K filed December 15, 1995 and January 2, 1996. Any request for
documents referred to in "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE"
should be directed to: Crown Cork & Seal Company, Inc., 9300 Ashton Road,
Philadelphia, PA 19136 (telephone number (215) 698-5208), Attention: Richard
L. Krzyzanowski, Executive Vice President, Secretary and General Counsel. In
order to ensure timely delivery of the documents, any request should by made
by January 17, 1996.
iii
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THE OFFER
GENERAL
Crown hereby offers, upon the terms and subject to the conditions set forth
in this Prospectus Supplement and the accompanying Prospectus (the "Offer"),
to exchange or purchase each CarnaudMetalbox Share validly tendered in the
Offer for, at the election of the holder, either (1) 1.086 Units, each Unit
consisting of (x) .75 shares of Crown Common Stock and (y) .25 shares of Crown
Acquisition Preferred Stock, with cash (in French francs) being paid in lieu
of any fractional share interest, or (2) FF 225 in cash. The ratio of 1.086
Units for each CarnaudMetalbox Share is referred to herein as the "Exchange
Ratio." For a description of the determination of the Exchange Ratio, see
"SUMMARY--The Offer--Exchange Ratio and Market Value of Crown Common Stock" in
the Prospectus. The "Expiration Date" for the Offer is 11:59 p.m., Paris time,
10:59 p.m., London time, and 5:59 p.m., New York City time, on Thursday,
February 1, 1996, unless the Offer is extended. The Offer is being made as an
Offre publique d'echange a titre principal assortie d'une offre publique
d'achat a titre subsidiaire, or public exchange offer with a secondary cash
offer, under French law for all of the outstanding CarnaudMetalbox Shares
pursuant to an Exchange Offer Agreement, dated as of May 22, 1995, as amended
(the "Exchange Offer Agreement"), between Crown and Compagnie Generale
d'Industrie et de Participations ("CGIP"), a societe anonyme organized under
the laws of the Republic of France and the principal shareholder of
CarnaudMetalbox.
As set forth in the avis d'ouverture, or opening notice, published by the
SBF with respect to the Offer, unless the Offer is extended or the following
dates are revised, the results of the Offer will be announced on February 15,
1996 and, in the event the Offer is consummated, the final settlement date for
transfer of Offer Consideration for validly tendered CarnaudMetalbox Shares
will be on or about February 26, 1996. Crown intends to issue a press release
to reflect any revisions to the foregoing dates. The opening notice has also
confirmed that shares of Crown Stock have been admitted to listing on the
Official List of the Paris Stock Exchange, subject to consummation of the
Offer. See "--Listing of Crown Common Stock and Crown Acquisition Preferred
Stock."
In accordance with the Exchange Offer Agreement, the par value of Crown
Acquisition Preferred Stock has been determined to be $41.8875, which was the
average Market Closing Price of Crown Common Stock over the 20 trading day
period ending on December 18, 1995. See "SUMMARY--The CarnaudMetalbox
Proposals--Terms of Proposed Series of Crown Acquisition Preferred Stock" in
the Prospectus. The liquidation preference of Crown Acquisition Preferred
Stock is the sum of (1) such par value and (2) all accrued and unpaid
dividends on Crown Acquisition Preferred Stock. The preferred dividend on
Crown Acquisition Preferred Stock will be $1.8848 per share per annum, payable
$0.4712 per share per quarter. If the Offer is consummated within the
timeframe contemplated in the opening notice for the Offer, the initial
dividend payment date with respect to shares of Crown Acquisition Preferred
Stock will be May 20, 1996, and dividends will accrue from the date of initial
issuance of such shares to, but excluding, such date. See "DESCRIPTION OF
CROWN STOCK--Crown Acquisition Preferred Stock" in the Prospectus.
Subject to applicable securities and takeover laws, rules and regulations
(including the rules and regulations of the SEC, the COB and the CBV) and
subject to the provisions of the Exchange Offer Agreement, Crown expressly
reserves the right, in its sole discretion, at any time and from time to time,
to (1) extend the period of time during which the Offer is open and thereby
delay the exchange of, or payment for, any CarnaudMetalbox Shares as to which
valid tenders or acceptances have been made, (2) amend the Offer in any
respect, (3) waive the Minimum Condition (as hereinafter defined), or (4)
terminate the Offer by giving notice to (and if required, obtaining approval
or authorization of) applicable regulatory authorities. Subject to the
provisions of the Exchange Offer Agreement, if by the expiration or closing of
the Offer the Minimum Condition has not been satisfied, Crown reserves the
right (but shall not be obligated) to (1) terminate the Offer and (2) commence
another offer or offers. Crown shall have no obligation, and does not intend,
to pay interest on the Offer Consideration for tendered CarnaudMetalbox
Shares. The CarnaudMetalbox Shares acquired in the Offer will be acquired
fully paid and free and clear from all liens, charges, equitable interests,
encumbrances, rights of pre-emption and any other third party rights of any
nature whatsoever and together with all rights attaching thereto on or after
the settlement date of the exchange or purchase of the CarnaudMetalbox Shares
tendered into the
S-1
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Offer for the Offer Consideration, including the right to receive and retain
all dividends and other distributions declared, made or paid on such date or
thereafter.
In the event the Offer is consummated, Crown intends to hold any
CarnaudMetalbox Shares owned, directly or indirectly, by Crown in forme
nominative, or registered form, in order to gain double voting rights under
French law for such shares as soon as possible following the Offer.
Holders of CarnaudMetalbox Shares who accept the Offer will not be obliged
to pay certain brokerage fees and commissions, charges of Societe Generale or
Credit Suisse France S.A. ("CS France"), the co-presenting banks for the Offer
under French law, or of CS First Boston Corporation, one of Crown's financial
advisors and U.S. Dealer Managers with respect to the Offer ("CS First
Boston"), or to pay certain transfer taxes in respect of the exchange or
purchase of CarnaudMetalbox Shares pursuant to the Offer. Crown will pay all
charges and expenses incurred in connection with the Offer of CS First Boston,
Societe Generale and CS France, as well as CS First Boston Limited and Societe
Generale Strauss Turnbull Securities Limited, affiliates of CS First Boston
and Societe Generale, respectively, which will act as the financial advisors
with respect to the Offer in the United Kingdom. In addition, Crown will pay
the fees and expenses of Societe Generale Securities Corporation, one of the
U.S. Dealer Managers for the Offer. See "--Fees and Expenses" below and in the
Prospectus.
For a description of Crown Common Stock, Crown Acquisition Preferred Stock
and Crown Common Stock Purchase Rights, see "DESCRIPTION OF CROWN STOCK" in
the Prospectus. In the case of Crown Common Stock and the Rights, such
descriptions are qualified in their entirety by reference to Crown's
Registration Statements on Form 8-B filed on May 2, 1989 and on Form 8-A filed
on August 10, 1995, respectively. In the case of Crown Acquisition Preferred
Stock, such description is qualified in its entirety by reference to Annex B
of the Prospectus.
Crown has received an exemption from the SEC on behalf of itself and its
affiliates to bid for or purchase CarnaudMetalbox Shares prior to and during
the pendency of the Offer, subject to French law and regulation, in accordance
with exemptions obtained from the SEC from the application of Rules 10b-6,
10b-7 and 10b-13 under the Exchange Act. In addition, Societe Generale has
received an exemption from the SEC on behalf of itself and its affiliates to
continue to engage in certain market-making and trading activities, subject to
French and other applicable law and regulation, prior to and during the
pendency of the Offer in accordance with exemptions obtained from the SEC from
the application of Rules 10b-6, 10b-7 and 10b-13 under the Exchange Act. See
"THE OFFER--General" in the Prospectus for additional information in respect
of such trading and market-making activities of Societe Generale.
The activities referred to above may result in the market prices for
CarnaudMetalbox Shares (and, possibly, Crown Common Stock) being different
from those that might otherwise have prevailed in the open market if Rules
10b-6, 10b-7 and 10b-13 had applied.
To facilitate the making of the Offer in the United States, the SEC has
granted certain relief to Crown with respect to certain regulations under the
Exchange Act pertaining to tender and exchange offers in the United States,
particularly with respect to the manner of announcements of amendments and
extensions of the Offer, and the timing of the exchange or purchase or return
of tendered securities as described in the Prospectus. See "THE OFFER--
General" and "--Extension, Termination and Amendment" in the Prospectus.
For information in respect of the presentation of currency amounts and for
information in respect of the Noon Buying Rate, see "DOLLAR PRESENTATION AND
EXCHANGE RATES" in the Prospectus. On December 29, 1995, the Noon Buying Rate
was FF 4.898 = $1.00. For the period from July 1, 1995 through December 29,
1995 the high, low and average Noon Buying Rates (calculated as noted in the
Prospectus) were 5.139, 4.776 and 4.923, respectively.
CERTAIN INFORMATION IN RESPECT OF CGIP
As provided more fully in the Prospectus, pursuant to the Exchange Offer
Agreement and subject to the terms and conditions thereof, Crown has agreed to
make the Offer for all of the outstanding CarnaudMetalbox
S-2
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Shares, and CGIP has agreed to tender pursuant to the Offer all
CarnaudMetalbox Shares beneficially owned by CGIP (or one of its subsidiaries)
and to receive Units in exchange for such shares. As of December 18, 1995,
CGIP beneficially owned, directly or indirectly, approximately 30.4% of the
total outstanding CarnaudMetalbox Shares, representing approximately 44.4% of
the aggregate voting power of the outstanding CarnaudMetalbox Shares (taking
into account double voting rights with respect to certain CarnaudMetalbox
Shares owned by CGIP and certain other shareholders of CarnaudMetalbox (which
double voting rights Crown will not have if the Offer is consummated)). For a
description of the Exchange Offer Agreement, a copy of which is attached to
the Prospectus as Annex A, and the terms and conditions of CGIP's obligation
to tender and not withdraw its CarnaudMetalbox Shares in the Offer, including
in the event of any competing bid for CarnaudMetalbox Shares, see "THE
EXCHANGE OFFER AGREEMENT--Agreement to Tender" and "--Conditions; Waiver" in
the Prospectus.
Depending upon the number of CarnaudMetalbox shareholders that elect to
receive Units and based on the total number of outstanding shares of Crown
Common Stock and outstanding CarnaudMetalbox Shares (in each case, not
including outstanding options) as of December 18, 1995, if the Offer is
consummated, CGIP's percentage ownership of (1) the issued and outstanding
Crown Common Stock immediately following the Offer, assuming no conversion of
Crown Acquisition Preferred Stock, could range from approximately 13.3% to
19.1%, (2) the issued and outstanding Crown Common Stock immediately following
the Offer, assuming conversion of Crown Acquisition Preferred Stock (which
percentage ownership corresponds to CGIP's percentage ownership of the total
voting power in the election of directors of Crown immediately following the
Offer), could range from approximately 15.3% to 23.5% and (3) the issued and
outstanding Crown Acquisition Preferred Stock immediately following the Offer
could range from approximately 30.4% to 100%. For additional information
regarding CGIP and the Shareholders Agreement which Crown and CGIP have agreed
to execute on the Closing Date, see "SUMMARY--Compagnie Generale d'Industrie
et de Participations S.A.," "THE CARNAUDMETALBOX PROPOSALS--Description of the
CarnaudMetalbox Proposals," and "THE SHAREHOLDERS AGREEMENT" in the
Prospectus.
MINIMUM CONDITION
The obligation of Crown to close the Offer and to exchange or purchase any
CarnaudMetalbox Shares thereunder is subject to the Minimum Condition. The
"Minimum Condition" means the condition that the number of CarnaudMetalbox
Shares validly tendered and not withdrawn prior to the expiration of the Offer
is at least equal to a majority of the Voting Power of CarnaudMetalbox based
on the number of outstanding CarnaudMetalbox Shares (and options to acquire
CarnaudMetalbox Shares) on December 19, 1995 and assuming loss of all double
voting rights of the CarnaudMetalbox Shares to be acquired by Crown (or its
subsidiaries). For this purpose, "Voting Power" means the voting power in the
general election of members of the supervisory board of CarnaudMetalbox and is
calculated for options to acquire CarnaudMetalbox Shares by reference to the
votes attributable to the number of CarnaudMetalbox Shares for which such
options are exercisable. On December 19, 1995, 87,874,398 CarnaudMetalbox
Shares were outstanding (assuming exercise of all outstanding options for such
shares), and 30,885,099 CarnaudMetalbox Shares had double voting rights.
Assuming CGIP tenders its CarnaudMetalbox Shares into the Offer, and depending
on the number of other CarnaudMetalbox Shares having double voting rights
tendered into the Offer, the Minimum Condition will be satisfied if between
43,937,200 and 46,535,242 CarnaudMetalbox Shares (representing between
approximately 50.01% and 52.96% of the outstanding CarnaudMetalbox Shares on a
fully-diluted basis) are validly tendered and not withdrawn prior to the
expiration of the Offer.
Crown reserves the right to waive the Minimum Condition. Crown has agreed in
the Exchange Offer Agreement that it will not waive the Minimum Condition
without the prior written consent of CGIP.
RECOMMENDATION OF SUPERVISORY BOARD OF CARNAUDMETALBOX
In the note d'information jointly filed by Crown and CarnaudMetalbox with
the COB and published in France with respect to the Offer, and in a separate
letter to its shareholders dated January 3, 1996, CarnaudMetalbox stated that
its supervisory board has unanimously determined that the Offer is in the
interest
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of CarnaudMetalbox and its shareholders and has unanimously recommended that
CarnaudMetalbox shareholders tender their CarnaudMetalbox Shares in response
to the Offer. CarnaudMetalbox shareholders should refer to the letter for a
description of the supervisory board's determination.
REGULATORY APPROVALS
On December 20, 1995, Societe Generale and CS France, the presenting banks
with respect to the Offer, submitted to the CBV on behalf of Crown the terms
of the Offer together with certain other information. Under applicable French
law and regulation, Crown was required to submit for the approval of the CBV
the Exchange Ratio and the other terms of the Offer, the nature of the Minimum
Condition and the nature, characteristics and market of the Crown Stock
offered in exchange for CarnaudMetalbox Shares. On December 22, 1995, the SBF,
on behalf of the CBV, issued an avis de recevabilite, or notice of
acceptability, declaring the Offer, and the terms thereof, acceptable to the
CBV. On December 20, 1995 the co-presenting banks also submitted to the COB on
behalf of Crown the note d'information for approval of the COB in accordance
with French law and regulation. On December 28, 1995 the COB issued a visa, or
approval, on the note d'information and its use in connection with the Offer.
In addition to its review of the Offer terms discussed above, the CBV is
permitted, under applicable French law and regulation, to extend the
Expiration Date of the Offer should such extension be advisable in the CBV's
discretion.
For information on other regulatory approvals in connection with the Offer,
see "THE CARNAUDMETALBOX PROPOSALS--Regulatory Approvals" in the Prospectus.
TENDER PROCEDURES
General
The description set forth below supersedes the information contained in the
Prospectus under the captions "THE OFFER--Tender Procedures" and "--Exchange
and Payment of Offer Consideration."
CarnaudMetalbox shareholders hold CarnaudMetalbox Shares in either forme
nominative, or registered form, or forme au porteur, or bearer form. Because
CarnaudMetalbox Shares have been issued under French law, both registered and
bearer shares are held in uncertificated, or book-entry, form in SICOVAM
accounts. Registered CarnaudMetalbox Shares are recorded in a register
maintained by Demachy Worms et Cie ("Demachy") on behalf of CarnaudMetalbox
and are inscribed in SICOVAM accounts in the name of Demachy. Certain
registered CarnaudMetalbox Shares are held through a sub-register maintained
by Barclays Registrars, a trading name of Barclays Bank PLC ("Barclays
Registrars"). Depositary certificates ("Certificates of Registration")
representing shares held through the Barclays sub-register have been issued to
facilitate trading of CarnaudMetalbox Shares on the London Stock Exchange
Limited (formerly The International Stock Exchange of the United Kingdom and
the Republic of Ireland Limited). As used herein, "SICOVAM" refers to the
Societe interprofessionnelle pour la compensation des valeurs mobilieres.
The manner in which tenders must be made into the Offer depends on the
manner in which a shareholder of CarnaudMetalbox holds CarnaudMetalbox Shares
(i.e., in bearer or registered form, and if in registered form, whether
through Certificates of Registration). Shareholders who wish to accept the
Offer should contact the bank, financial institution, broker or other
intermediary (an "Intermediary") through which such shareholder holds
CarnaudMetalbox Shares to determine the manner in which such holder's shares
are held and how to tender in the Offer. Holders of Certificates of
Registration should contact Barclays Registrars at the address and telephone
number below with any questions regarding tender procedures. CarnaudMetalbox
shareholders who hold CarnaudMetalbox Shares in both registered and bearer
form and/or who hold Certificates of Registration should use the appropriate
tender procedure in respect of each holding. For information in respect of the
status of the double voting rights, if any, of registered CarnaudMetalbox
Shares tendered into the Offer and the timing and payment of Offer
Consideration, see "--Exchange and Payment of Offer Consideration" below.
S-4
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Based on the opening notice for the Offer, CarnaudMetalbox Shares purchased
on the marche a reglement mensuel, or monthly settlement market, of the Paris
Stock Exchange after January 24, 1996 are subject to settlement in February
1996 and will not be eligible for tender into the Offer, and CarnaudMetalbox
Shares purchased on the marche au comptant, or cash market, of the Paris Stock
Exchange from January 25, 1996 through February 1, 1996 will be eligible for
tender into the Offer.
None of Crown, Societe Generale, CS First Boston or Barclays Registrars or
their respective affiliates will be under any duty to give notification of any
defect or irregularities in any tendering or non-tendering shareholder's
instructions or incur any liability for failure to give any such notification.
No acknowledgement of the receipt by any Intermediary or Barclays Registrars
of any tender instructions or other documentation will be given by Crown,
Societe Generale, CS First Boston or Barclays Registrars or their respective
affiliates. All communications, documents, certificates and remittances to be
delivered by or sent to or from CarnaudMetalbox shareholders (or their
designated agents) will be delivered by or sent to or from CarnaudMetalbox
shareholders (or their designated agents) at their own risk.
Tender Procedures for Bearer Shares
To accept the Offer, a holder of CarnaudMetalbox Shares in bearer form
should, as soon as possible but in any event on or prior to the Expiration
Date, transmit an exchange or sale order to the Intermediary through which the
CarnaudMetalbox Shares being tendered are held in accordance with the
procedures specified by such Intermediary (including, if required, by
executing any necessary documentation).
A CarnaudMetalbox shareholder tendering into the Offer should indicate in
the exchange or sale order transmitted to the holder's Intermediary that such
shareholder is electing to receive Units (together with cash in lieu of
fractional share interests) or the Cash Election Price for all of the
CarnaudMetalbox Shares being tendered by such shareholder or, alternatively,
that such shareholder is electing to receive Units (together with cash in lieu
of fractional share interests) for a portion of such shares and the Cash
Election Price for the remaining portion of such shares.
Tender Procedures for Registered Shares (other than Certificates of
Registration)
To accept the Offer, a holder of CarnaudMetalbox Shares in registered form
(other than holders of Certificates of Registration) should, as soon as
possible but in any event on or prior to the Expiration Date, (1) if the
holder holds such shares directly through Demachy, transmit an exchange or
sale order to Demachy in accordance with the procedures specified by Demachy
(including, if required, by executing any necessary documentation) or (2) if
the holder holds through an Intermediary other than Demachy, transmit an
exchange or sale order to the Intermediary through which the CarnaudMetalbox
Shares being tendered are held in accordance with the procedures specified by
such Intermediary (including, if required, by execution of necessary
documentation). In addition, it will be necessary for any holder of
CarnaudMetalbox Shares held in forme nominatif pur, or pure registered form
(generally where the shares are registered in the name of the beneficial
owner), to request the conversion of such shares into forme nominatif
administre, or administrative registered form (generally where the shares are
registered in the name of the beneficial owner but noted as being held through
an Intermediary), in order to effectuate such holder's exchange or sale order.
It will not be necessary for holders of CarnaudMetalbox Shares in registered
form to convert such shares to bearer form in order to tender such shares into
the Offer. See "--Exchange and Payment of Offer Consideration" below.
A CarnaudMetalbox shareholder tendering into the Offer should indicate in
the exchange or sale order transmitted to the holder's Intermediary or to
Demachy that such shareholder is electing to receive Units (together with cash
in lieu of fractional share interests) or the Cash Election Price for all of
the CarnaudMetalbox Shares being tendered by such shareholder or,
alternatively, that such shareholder is electing to receive Units (together
with cash in lieu of fractional share interests) for a portion of such shares
and the Cash Election Price for the remaining portion of such shares.
S-5
<PAGE>
Tender Procedures for Certificates of Registration
Holders of Certificates of Registration have been sent with this Prospectus
Supplement a form of acceptance (a "Form of Acceptance"). To accept the Offer,
holders of Certificates of Registration should deliver, so as to arrive as
soon as possible but in any event on or prior to the Expiration Date, the
Certificates of Registration, together with a properly completed and duly
executed Form of Acceptance, and all other documents required by the Form of
Acceptance in accordance with the instructions thereon by mail or by hand to
New Issues Department, Barclays Registrars, P.O. Box 166, Bourne House, 34
Beckenham Road, Beckenham, Kent BR3 4TH, United Kingdom or deliver such
certificates and documentation by hand only to Barclays Registrars, 8 Angel
Court, Throgmorton Street, London EC2 United Kingdom.
IF A HOLDER OF CERTIFICATES OF REGISTRATION HAS ANY QUESTIONS RELATING TO
THE PROCEDURE TO BE FOLLOWED, SUCH HOLDER SHOULD CONTACT NEW ISSUES
DEPARTMENT, BARCLAYS REGISTRARS, P.O. BOX 166, BOURNE HOUSE, 34 BECKENHAM
ROAD, BECKENHAM, KENT BR3 4TH, UNITED KINGDOM (TELEPHONE 0-181-639-2152 FOR
PERSONS IN THE UNITED KINGDOM AND 44-181-639-2152 FOR PERSONS OUTSIDE THE
UNITED KINGDOM).
If a holder of Certificates of Registration has not received a Form of
Acceptance, such shareholder should contact Barclays Registrars at the address
and telephone number above to obtain such a form.
Exchange and Payment of Offer Consideration
Following the Expiration Date, Intermediaries which have received valid
exchange or sale orders for the tender of CarnaudMetalbox Shares into the
Offer will be required under regulations of the CBV to forward such shares by
book-entry transfer to the SICOVAM accounts of the SBF set forth in the
opening notice for the Offer. If any such Intermediary is not an Intermediary
authorized to deal directly through the clearance system of SICOVAM (any such
authorized Intermediary, an "Accredited Intermediary"), it will be necessary
for such Intermediary to instruct the Accredited Intermediary maintaining the
SICOVAM account for such shares to deliver such shares to the applicable
SICOVAM account of the SBF. Upon the terms and subject to the conditions of
the Offer (including, if the Offer is extended or amended, the terms and
conditions of any such extension or amendment), Crown will exchange or
purchase and pay for all CarnaudMetalbox Shares as to which valid exchange or
sale orders were received by the Intermediary through which such shares are
held on or prior to the Expiration Date and which have been forwarded by book-
entry transfer to the SBF following expiration of the Offer in accordance with
CBV regulations.
Any CarnaudMetalbox Shares tendered into the Offer which are held in
registered form (including shares represented by Certificates of Registration)
need not be converted to bearer form to accomplish their transfer to the SBF
following the Expiration Date as set forth above. Any such registered
CarnaudMetalbox Shares having double voting rights will therefore maintain
such voting rights in the event the Offer is not consummated, unless
conversion of such shares to bearer form is expressly requested. In the event
the Offer is consummated, the SBF will transfer to applicable Intermediaries
any registered CarnaudMetalbox Shares which have been tendered into the Offer
for conversion of such shares to bearer form to complete the transfer of such
shares to Crown pursuant to the Offer in exchange for the Offer Consideration.
ANY CONVERSION BY A HOLDER OF REGISTERED CARNAUDMETALBOX SHARES INTO BEARER
FORM PRIOR TO THE PUBLICATION BY THE SBF OF THE AVIS DE RESULTAT, OR CLOSING
NOTICE, FOR THE OFFER WILL RESULT IN THE LOSS OF DOUBLE VOTING RIGHTS, IF ANY,
AT THE TIME OF SUCH CONVERSION, INCLUDING IF THE OFFER IS NOT CONSUMMATED.
HOLDERS OF CARNAUDMETALBOX SHARES WHO HAVE INSTRUCTED THE APPLICABLE
INTERMEDIARY TO TENDER SUCH SHARES IN THE OFFER WILL NOT HAVE THE RIGHT TO
WITHDRAW SUCH SHARES FOLLOWING EXPIRATION OF THE OFFER.
The SBF has, in the opening notice for the Offer, announced the timing for
the announcement of the results of the Offer and the exchange and payment of
Offer Consideration pursuant thereto. See "--General." Shareholders are
referred to the opening notice for the Offer for further information in this
regard. Subject to applicable law and regulation, under no circumstances will
interest or other compensation on the Offer Consideration be paid by or on
behalf of Crown by reason of any delay in making exchange or payment of Offer
Consideration.
S-6
<PAGE>
If the Offer is not consummated, the tendered CarnaudMetalbox Shares will be
returned to the applicable Intermediaries without any interest or other
compensation, and, where applicable, Certificates of Registration will be
returned by mail in the manner referred to in the Form of Acceptance.
SPECIAL MEETING OF CROWN SHAREHOLDERS
On December 19, 1995, Crown's shareholders approved the CarnaudMetalbox
Proposals, the Articles Modernization Proposal and the Additional Preferred
Stock Proposal at a Special Meeting of Crown's shareholders. See "THE
MEETING," "THE CARNAUDMETALBOX PROPOSALS" and "OTHER PROPOSALS TO BE
CONSIDERED AT THE MEETING" in the Prospectus for additional information with
respect to the actions taken at such Special Meeting.
DEBT RATING
On November 14, 1995, Moody's Investors Service Inc. ("Moody's") confirmed
Crown's senior long-term unsecured debt rating of Baa1. Crown's Prime-2
commercial paper rating was not under review by Moody's and was also
confirmed.
On November 30, 1995, Standard & Poor's Corp. ("S&P") announced that Crown's
BBB+ senior long-term unsecured debt and A-2 commercial paper ratings would
remain on CreditWatch with negative implications. S&P had placed such
securities on CreditWatch on May 23, 1995. S&P further said that, subject to
the execution of Crown's plan to finance the proposed CarnaudMetalbox
Transaction significantly with equity, S&P intends to affirm Crown's BBB+ and
A-2 ratings.
For information with respect to Crown's plans for obtaining necessary funds
for the Offer, as well as Crown's plans for a possible issuance of equity or
equity-linked securities, if necessary, of up to approximately $1 billion with
a view to maintaining its existing debt ratings, and the significance of such
ratings with respect to Crown's business and certain provisions of the
Shareholders Agreement, see "--Sources of Funds" below and "THE
CARNAUDMETALBOX PROPOSALS--Sources of Funds" and "THE SHAREHOLDERS AGREEMENT--
Debt Rating" in the Prospectus.
SOURCES OF FUNDS
On December 1, 1995 (the "Financing Signing Date"), Crown entered into a
Revolving Credit and Term Loan Agreement (the "Credit Agreement"), among
Crown, a syndicate of financial institutions (the "Lenders"), Chemical Bank
("Chemical") as arranger and administrative agent and Credit Suisse and
Societe Generale as arrangers and documentation agents. Pursuant to the Credit
Agreement, the Lenders will make available to Crown, subject to the terms and
conditions of the Credit Agreement, FF 13.7 billion (or $2.8 billion based
upon the Noon Buying Rate on December 29, 1995) in a multi-currency revolving
credit facility (the "Credit Facility") to pay the cash portion of the
consideration to be paid in connection with the Offer, to fund the costs and
expenses of the Offer, to repurchase shares of capital stock of Crown, or,
following the Offer, to be used for general corporate purposes.
Set forth below is a summary description of the Credit Facility. The summary
description is qualified by reference to the Credit Agreement, which has been
filed as an exhibit to Crown's Current Report on Form 8-K dated December 15,
1995 which is hereby incorporated by reference herein.
The Credit Facility will consist of a multi-currency credit facility in a
principal amount of FF 13.7 billion. Prior to November 30, 1996 (the
"Commitment Termination Date"), amounts borrowed and repaid may be reborrowed,
subject to availability under the Credit Facility. On the Commitment
Termination Date, all commitments to advance loans under the Credit Facility
will terminate and any loans outstanding under the Credit Facility may be
converted to term loans at Crown's option (the "Term Loans"). All Term Loans
will mature on the date one year after the Commitment Termination Date.
S-7
<PAGE>
Loans under the Credit Facility will bear interest, at the option of Crown,
at either (1) the London interbank offered rate ("LIBOR") (as adjusted for
certain reserve requirements, as incurred by the lenders), or the Paris
interbank offered rate for certain loans in British pounds sterling to
borrowers not located in the United Kingdom, for one-, two-, three-, six- and
(subject to the Lenders' consent) twelve-month periods, plus .100% if Crown's
unsecured long term debt (the "Index Debt") is rated A or better by S&P or A2
or better by Moody's, .125% if the Index Debt is rated A- to BBB by S&P or A3
to Baa2 by Moody's and .175% if the Index Debt is rated BBB- or below by S&P
and Baa3 or below by Moody's (with an additional .05% to be added to such
rates on the earlier of (a) the date six months after the initial borrowing
under the Credit Facility and (b) 210 days after the Financing Signing Date)
or (2) a base rate equal to the highest of (a) the rate announced from time to
time by Chemical as its prime commercial lending rate, (b) the Base CD rate
plus 1% per annum or (c) the Federal Funds Effective Rate plus 1/2 of 1% per
annum.
The Credit Agreement includes certain terms and conditions, including
conditions precedent to the lenders' funding obligations, cost and yield
protection provisions, events of default and covenants limiting Crown's and
its subsidiaries' ability to encumber their assets and to incur debt and
imposing maximum leverage ratios and minimum fixed charge coverage ratios.
INTERESTS OF CERTAIN PERSONS IN THE OFFER
As of December 28, 1995, Crown and CGIP amended the Exchange Offer Agreement
with respect to the treatment of certain CarnaudMetalbox employee stock
options (referred to in the Prospectus as the Outstanding Options). Subject to
applicable law and regulation and the terms of the Outstanding Options, Crown
has agreed to offer, (1) in exchange for the waiver of the holder's rights
under the applicable Outstanding Option, to each holder of such options
outstanding for less than 3 years as of the Expiration Date, a cash indemnity
in an amount equal to the difference between the Cash Election Price and the
exercise price of the option (provided that the cash indemnity will not exceed
the Cash Election Price and no payment will be made for taxes, social
contributions or other costs) and (2) to each holder of such options that is a
French tax resident as of January 3, 1996 with respect to each option held by
such person outstanding for at least 3 years but less than 5 years as of the
Expiration Date (or outstanding less than 5 years as of the Expiration Date in
the limited cases where the exercisability of such options is not restricted
in the first 3 years following grant), the right to sell the CarnaudMetalbox
Shares received upon exercise of the option to Crown at a price equal to the
Cash Election Price, plus interest calculated at a rate equal to 6% per annum
(subject to adjustment upon certain increases or decreases in the six-month
LIBOR rate) calculated from and including the Expiration Date to but excluding
the date the CarnaudMetalbox Shares received upon exercise of the applicable
option are purchased by Crown. Such put right will terminate with respect to
CarnaudMetalbox Shares received upon exercise of the option 90 days following
the earlier of (1) exercise of the applicable option and (2) the fifth
anniversary of the date of grant of the applicable option. This summary
description of the treatment of the Outstanding Options is qualified by
reference to the amendment to the Exchange Offer Agreement filed as an exhibit
to Crown's Current Report on Form 8-K filed January 2, 1996, which is
incorporated by reference herein.
The foregoing terms (which supersede the terms previously provided in
respect of the Outstanding Options as described in the first two sentences
under "THE EXCHANGE OFFER AGREEMENT--CarnaudMetalbox Stock Options" in the
Prospectus) apply only to the Outstanding Options specified above. No special
treatment will be offered by Crown in connection with the Offer to holders of
any other Outstanding Options or other options to acquire CarnaudMetalbox
Shares. To the extent any such Outstanding Options or other options are
exercisable in accordance with their terms, the holders may exercise such
options and tender into the Offer the CarnaudMetalbox Shares received upon
such exercise.
LISTING OF CROWN COMMON STOCK AND CROWN ACQUISITION PREFERRED STOCK
The shares of Crown Common Stock and Crown Acquisition Preferred Stock to be
issued in the Offer have been admitted for listing on the NYSE, subject to
official notice of issuance. In addition, the shares of Crown Common Stock and
Crown Acquisition Preferred Stock to be issued in the Offer, and the currently
issued Crown Common Stock, have been admitted to the Official List of the
Paris Stock Exchange, subject to consummation of the Offer.
S-8
<PAGE>
According to the published guidelines of the NYSE, the NYSE may consider
delisting Crown Acquisition Preferred Stock if, among other things: (1) the
number of publicly-held shares of Crown Acquisition Preferred Stock (exclusive
of holdings of CGIP, any other subsidiaries or affiliates of CGIP or Crown,
officers of directors of Crown or their immediate family members, and other
concentrated holdings of 10% or more ("Excluded Holdings")) should fall below
100,000; or (2) the aggregate market value of such publicly-held shares of
Crown Acquisition Preferred Stock (exclusive of Excluded Holdings) should fall
below $2 million.
According to the published guidelines of the CBV, the CBV may consider
delisting Crown Acquisition Preferred Stock from the Official List of the
Paris Stock Exchange if, among other things: (1) the percentage of the shares
of Crown Acquisition Preferred Stock held by the public falls below 5% and (2)
the average daily trading volume of such shares (as determined by the CBV) is
less than FF 10,000 and involves fewer than 250 shares.
If Crown Acquisition Preferred Stock does not meet the requirements of the
NYSE or the Paris Stock Exchange for continued listing, and the listing of
such shares is discontinued, the liquidity and price for Crown Acquisition
Preferred Stock could be adversely affected. In addition, depending upon
factors similar to those described above with respect to the NYSE listing
criteria, following the Offer it is possible that shares of Crown Acquisition
Preferred Stock may not constitute "margin securities" for the purposes of
margin regulations of the Governors of the Federal Reserve System and,
therefore, could not be used as collateral for loans made by brokers for the
purpose of buying, carrying or trading in securities.
Although the Crown Stock will be issued in the Offer in the form of Units,
the shares of Crown Common Stock and Crown Acquisition Preferred Stock issued
in the Offer will be separately transferable and, subject to the foregoing,
will be listed separately on the NYSE and the Paris Stock Exchange. There will
not be a separate listing for Units on the NYSE or the Paris Stock Exchange
following the Offer.
FEES AND EXPENSES
Crown will pay certain fees of Intermediaries in connection with the
solicitation and collection of acceptance orders with respect to the Offer.
Intermediaries will receive a fee of FF 2.25 per CarnaudMetalbox Share
tendered in the Offer, subject to a maximum fee of FF 2,000 and a minimum fee
of FF 25 per account. Such Intermediary fees will be reduced by 50% in the
event the Offer is not consummated, except that no such fees will be paid to
Intermediaries in the event a competing offer for CarnaudMetalbox Shares is
filed with the CBV and Crown does not consummate the Offer. In addition, Crown
will pay the impot de bourse, or stock exchange tax, on CarnaudMetalbox Shares
tendered in the Offer for the Cash Election Price assessed at the rate of 0.3%
on transactions up to FF 1 million and at a rate of 0.15% thereafter (less, in
either case, a tax discount of FF 150), subject to a maximum assessment of FF
4,000 per transaction. No such tax will be assessed in respect of
CarnaudMetalbox Shares tendered for Units, and persons who are residents
outside France will not be obligated to pay such tax. Crown will also pay the
fees (including any related applicable value added tax) incurred by holders of
CarnaudMetalbox Shares who tender in the Offer for the Cash Election Price in
respect of the societe de bourse, or broker, who executes the transfer of such
shares to Crown pursuant to the Offer in an amount of 0.5% for transactions up
to FF 1 million, 0.3% for transactions from FF 1 million up to FF 5 million,
and 0.15% thereafter.
SGE Delahaye, a subsidiary of Societe Generale ("Delahaye"), will act as
broker on behalf of Crown in connection with Crown's purchase of
CarnaudMetalbox Shares in the Offer. Crown has agreed to pay Delahaye FF
600,000 in connection with such activities.
Except as provided in this Prospectus Supplement or the accompanying
Prospectus, Crown will not pay fees or commissions to any broker or dealer or
any other person for soliciting tenders of CarnaudMetalbox Shares pursuant to
the Offer. In the United States, brokers, dealers, commercial banks and trust
companies will, upon request, be reimbursed by Crown for reasonable and
necessary costs incurred by them in forwarding material to their customers.
S-9
<PAGE>
SUMMARY CROWN HISTORICAL FINANCIAL INFORMATION
For a presentation of additional summary financial information for Crown and
CarnaudMetalbox, see "SUMMARY HISTORICAL AND UNAUDITED PROFORMA FINANCIAL
INFORMATION" in the Prospectus. The summary financial data presented below for
Crown for and as of the nine-month period ended September 30, 1995 and 1994
are unaudited and, in the opinion of Crown management, include all
adjustments, consisting of only normal recurring accruals, necessary for a
fair presentation of such data. Such unaudited data should be read in
conjunction with the information and the consolidated financial statements
contained in Crown's Quarterly Report on Form 10-Q for the nine months ended
September 30, 1995, as amended (the "September 30, 1995 Crown Form 10-Q"),
which is incorporated by reference herein. Certain amounts in prior years have
been reclassified to conform with the current year's presentation. Crown
prepares its financial statements in accordance with United States generally
accepted accounting principles ("U.S. GAAP"). See "UNAUDITED PRO FORMA
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS" in this Prospectus Supplement and
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE" in the accompanying
Prospectus. The summary financial data set forth in the table below do not
include the financial results of Crown for any periods after September 30,
1995. Crown publishes its financial statements in U.S. dollars. If the Offer
is consummated, a substantial portion of Crown's assets, liabilities, sales
and earnings will be denominated in currencies other than U.S. dollars,
meaning that Crown will have significantly increased exposure to fluctuations
in the values of foreign currencies against the U.S. dollar. These currency
fluctuations could have a material impact on Crown's results of operations.
See "SUMMARY HISTORICAL AND UNAUDITED PRO FORMA FINANCIAL INFORMATION--Crown
Cork & Seal Company, Inc.--Recent Developments" in the Prospectus for
additional information in respect of the financial results of Crown after June
30, 1995, including a description of Crown's third quarter results and Crown's
previously announced reduced earnings outlook for the balance of 1995, which
was based upon the weak second quarter 1995 results as well as management's
review of preliminary third quarter results and its assessment of future
prospects.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
AND AS OF
SEPTEMBER 30,(1)
--------------------------
1995 1994
------------ ------------
(IN $ MILLIONS, EXCEPT
PER SHARE AND RATIO DATA)
<S> <C> <C>
SUMMARY OF OPERATIONS
Net sales........................................ $ 3,940 $ 3,361
Cost of products sold.......................... 3,335 2,787
Depreciation and amortization.................. 197 160
Selling and administrative expense............. 108 101
Provision for restructuring(2)................. 103 115
Interest expense............................... 112 70
Interest income................................ (9) (5)
Translation and exchange adjustments........... (1) 6
------------ ------------
Income before income taxes, equity in earnings of
affiliates and cumulative effect of accounting
changes......................................... 95 127
Income taxes..................................... 17 42
Equity in earnings of affiliates, net of minority
interests....................................... (9) 6
------------ ------------
Net income....................................... $ 69 $ 91
============ ============
RATIO OF EARNINGS TO FIXED CHARGES(2)(3) .......... 1.8x 2.7x
FINANCIAL POSITION
Total assets....................................... $ 5,235 $ 4,780
Short-term debt plus current maturities of long-
term debt......................................... $ 1,064 $ 944
Long-term debt, excluding current maturities ...... $ 1,163 $ 888
Shareholders' equity............................... $ 1,458 $ 1,363
PER SHARE OF COMMON STOCK
Net income......................................... $ .76 $ 1.02
Cash dividends declared per common share(4)........ -- --
Book value per common share........................ $ 16.10 $ 15.29
</TABLE>
- -------
(1) Certain reclassifications of prior years data have been made to improve
comparability. See also Note C to the 1994 Crown Audited Consolidated
Financial Statements with respect to the effect of certain acquisitions by
Crown.
(2) Reflects restructuring of certain metal packaging facilities announced in
1994 and 1995. See Note H to the 1994 Crown Audited Consolidated Financial
Statements and Note C to the September 30, 1995 Crown Form 10-Q.
(3) For purposes of calculating this ratio in this Prospectus Supplement and
the accompanying Prospectus, "earnings" consist of consolidated pre-tax
income from continuing operations plus fixed charges exclusive of
capitalized interest, plus distributed income from less than 50% owned
companies and amortization of previously capitalized interest. "Fixed
charges" consist of interest, whether expensed or capitalized (including
amortization of debt issue costs and debt discount), and that portion of
rental expense that is representative of interest. There was no preferred
stock outstanding during the periods shown.
(4) Crown traditionally has not paid dividends. With respect to Crown's future
dividend policy, see "THE OFFER--Ownership of Crown Stock after the
Offer," and "THE SHAREHOLDERS AGREEMENT--Dividend Policy" in the
Prospectus.
S-10
<PAGE>
COMPARATIVE PER SHARE DATA
The following table sets forth historical per share data for Crown and
CarnaudMetalbox, pro forma per share data for Crown giving effect to the Offer
under the purchase method of accounting and equivalent pro forma per share
data for CarnaudMetalbox. The information presented should be read in
conjunction with the historical financial information and related notes
thereto of Crown incorporated by reference into this Prospectus Supplement and
the accompanying Prospectus, the unaudited pro forma consolidated condensed
financial statements and related notes thereto appearing elsewhere in this
Prospectus Supplement, the historical financial statements of CarnaudMetalbox
and related notes thereto, and the selected historical financial data,
including the notes thereto, each appearing in the Prospectus. Comparative pro
forma data have been included for comparative purposes only and do not purport
to be indicative of (1) the results of operations or financial position which
would actually have been obtained if the acquisition had been completed at the
beginning of the period or as of the date indicated or (2) the results of
operations or financial position which may be obtained in the future. Certain
additional comparative and other data derived from the note d'information
filed by Crown and CarnaudMetalbox on December 20, 1995 with respect to the
Offer are set forth in Annex A of this Prospectus Supplement.
<TABLE>
<CAPTION>
AT OR FOR AT OR FOR
SIX MONTHS ENDED JUNE 30, 1995 YEAR ENDED DECEMBER 31, 1994
-------------------------------------------------- --------------------------------------------------
51% TENDERED 100% TENDERED 51% TENDERED 100% TENDERED
CARNAUDMETALBOX CARNAUDMETALBOX CARNAUDMETALBOX CARNAUDMETALBOX
SHARES SHARES SHARES SHARES
36% UNITS/ 50% UNITS/ 36% UNITS/ 50% UNITS/
15% CASH 50% CASH 15% CASH 50% CASH
HISTORICAL PRO FORMA(1) PRO FORMA(1) HISTORICAL PRO FORMA(1) PRO FORMA(1)
-------------- ----------------- ----------------- -------------- ----------------- -----------------
CARNAUD- CARNAUD- CARNAUD- CARNAUD- CARNAUD- CARNAUD-
CROWN METALBOX CROWN METALBOX CROWN METALBOX CROWN METALBOX CROWN METALBOX CROWN METALBOX
----- -------- ------- --------- ------- --------- ----- -------- ------- --------- ------- ---------
$ FF $ $ $ $ $ FF $ $ $ $
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net income per
common share(2)... 0.99 6.4 0.98 1.06 0.70 0.76 1.47 11.6 1.47 1.60 0.89 0.97
Book value per
common share...... 16.28 139.9 24.54 26.65 26.78 29.08 15.28 141.9 23.56 25.59 26.08 28.32
Cash dividends
declared per
common share(3)... 4.4 4.0
</TABLE>
- --------
(1) CarnaudMetalbox equivalent per share amounts are calculated by multiplying
Crown Common Stock pro forma per share amounts by an Exchange Ratio of
1.086 shares of Crown Common Stock for each CarnaudMetalbox Share. Holders
of CarnaudMetalbox Shares that do not elect to receive cash will actually
have the right to receive 1.086 Units, each Unit consisting of (x) .75
shares of Crown Common Stock and (y) .25 shares of Crown Acquisition
Preferred Stock. For a discussion of the pro forma adjustments and related
assumptions with respect to the Offer and more complete pro forma
financial data, see "UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL
STATEMENTS" below.
(2) Crown Common Stock equivalents do not reduce primary earnings per share by
more than 3% and have been excluded from the net income per common share
calculation. Crown has determined that Crown Acquisition Preferred Stock
is not a Crown Common Stock equivalent and is not assumed to be converted
for purposes of computing net income per common share.
(3) As to certain dividend information, see "COMPARATIVE MARKET PRICE DATA,"
Note (1), in this Prospectus Supplement and the accompanying Prospectus.
With respect to Crown's future dividend policy, see "THE OFFER--Ownership
of Crown Stock after the Offer" and "THE SHAREHOLDERS AGREEMENT--Dividend
Policy" in the Prospectus.
S-11
<PAGE>
COMPARATIVE MARKET PRICE DATA
Information with respect to the historical market prices of Crown Common
Stock and CarnaudMetalbox Shares is included in the Prospectus under the
caption "COMPARATIVE MARKET PRICE DATA." The following tables reflect the
range of reported high and low sales prices, based upon published financial
sources, of shares of Crown Common Stock on the NYSE and CarnaudMetalbox
Shares on the Paris Stock Exchange, and dividends paid, for the periods
indicated, on the CarnaudMetalbox Shares. Crown has not paid dividends on
Crown Common Stock during the period set forth below (see Note (1) below).
Except as otherwise provided, amounts have been translated into French francs,
in the case of Crown, and U.S. dollars, in the case of CarnaudMetalbox, using
the Noon Buying Rate on the specific dates that shares of Crown Common Stock
and CarnaudMetalbox Shares traded at a high or low price and on dates
dividends were paid.
CROWN CORK & SEAL COMPANY, INC.
<TABLE>
<CAPTION>
STOCK PRICE RANGE DIVIDENDS PAID(1)
----------------------------------------- -------------------
(IN U.S. (IN FRENCH
HIGH LOW HIGH LOW DOLLARS) FRANCS)
--------- --------- --------------------- -------- ----------
(IN U.S. DOLLARS) (IN FRENCH FRANCS)(2)
<S> <C> <C> <C> <C> <C> <C>
1995 Fourth Quarter
(through
December 29, 1995).... 44.63 33.50 219.78 163.21 -- --
CARNAUDMETALBOX
<CAPTION>
STOCK PRICE RANGE DIVIDENDS PAID(1)
----------------------------------------- -------------------
(IN U.S. (IN FRENCH
HIGH LOW HIGH LOW DOLLARS) FRANCS)
--------- --------- --------------------- -------- ----------
(IN FRENCH FRANCS) (IN U.S. DOLLARS)(3)
<S> <C> <C> <C> <C> <C> <C>
1995 Fourth Quarter
(through
December 29, 1995).... 224.10 198.70 45.55 40.71 -- --
</TABLE>
- --------
(1) Crown traditionally has not paid dividends. However, Crown intends, if the
Offer is consummated, to pay cash dividends on an annualized basis of
$1.00 per share in 1996 ($.25 per quarter), starting with the calendar
quarter in which the Closing Date occurs. See "THE SHAREHOLDERS
AGREEMENT--Dividend Policy" in the Prospectus. There can be no assurance
that such dividends will be paid. See "DESCRIPTION OF CROWN STOCK--Crown
Common Stock" in the Prospectus. Crown currently anticipates that the
Closing Date will occur in the first quarter of 1996. See "THE OFFER--
General."
(2) Translation based on the Noon Buying Rate in effect on the date that Crown
Common Stock traded at a high or low. The absolute French franc high and
low sale prices of Crown Common Stock are as follows:
<TABLE>
<CAPTION>
HIGH LOW
--------- ---------
(IN FRENCH FRANCS)
<S> <C> <C>
1995 Fourth Quarter (through December 29, 1995).......... 219.78 163.21
</TABLE>
(3) Translation based on the Noon Buying Rate on the date that CarnaudMetalbox
Shares traded at a high or low.
On December 19, 1995 (the Measurement Date, as such term is defined in the
Prospectus), the last sale prices of CarnaudMetalbox Shares and shares of
Crown Common Stock were FF 219.80 and $40.75 per share, respectively (or
$44.47 and FF 201.43, respectively, based on the Noon Buying Rate in effect on
such date). In accordance with applicable CBV regulations governing tender
offers, trading on the Paris Stock Exchange of CarnaudMetalbox Shares was
suspended prior to the opening of trading on December 20, 1995 until December
27, 1995. On December 29, 1995, the last sale prices of CarnaudMetalbox Shares
and shares of Crown Common Stock were FF 224.00 and $41.75 per share,
respectively (or $45.74 and FF 204.47, respectively, based on the Noon Buying
Rate in effect on such date).
S-12
<PAGE>
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Unaudited pro forma consolidated condensed financial statements are included
on pages 84-96 of the Prospectus, under the caption "UNAUDITED PRO FORMA
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS." Such pro forma financial
statements were prepared on the basis of certain assumptions described in the
Notes thereto, including the assumption that the Exchange Ratio would be 1.065
Units for each tendered CarnaudMetalbox Share, and reflected possible
variations in the Exchange Ratio in accordance with the terms of the Exchange
Offer Agreement. For the convenience of the reader, such pro forma financial
statements have been restated and presented below based on certain updated
assumptions disclosed below, including in respect of the actual Exchange Ratio
of 1.086 Units for each tendered CarnaudMetalbox Share. The accompanying
unaudited pro forma consolidated condensed financial statements should be read
in conjunction with the Notes thereto which are an integral part of such pro
forma financial statements.
REVIEW REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of Crown Cork & Seal Company, Inc.
We have reviewed the pro forma adjustments reflecting the transactions
described in the notes to the pro forma financial statements (the "Notes") and
the application of those adjustments to the historical amounts in the
accompanying unaudited pro forma consolidated condensed balance sheet of the
combined Crown Cork & Seal Company, Inc. ("Crown") and CarnaudMetalbox
("CarnaudMetalbox") businesses as of June 30, 1995 and the unaudited pro forma
consolidated condensed statements of operations for the year ended December
31, 1994 and the six months ended June 30, 1995. The historical consolidated
condensed financial statements of Crown are derived from the historical
consolidated financial statements of Crown which were reviewed as of June 30,
1995 and for the six-month period then ended and audited as of December 31,
1994 and for the year then ended by us. The historical consolidated condensed
financial statements of CarnaudMetalbox are derived from the historical
consolidated financial statements of CarnaudMetalbox which were reviewed as of
June 30, 1995 and for the six-month period then ended and audited as of
December 31, 1994 and for the year then ended by other independent
accountants. Such pro forma adjustments are based on management's assumptions
as described in the Notes. Our review was conducted in accordance with
standards established by the American Institute of Certified Public
Accountants.
A review is substantially less in scope than an examination, the objective
of which is the expression of an opinion on management's assumptions, the pro
forma adjustments and the application of those adjustments to historical
financial information. Accordingly, we do not express such an opinion.
The objective of this pro forma financial information is to show what the
significant effects on the historical information might have been had the
transactions occurred at an earlier date. However, the unaudited pro forma
consolidated condensed financial statements are not necessarily indicative of
the results of operations or related effects on financial position that would
have been attained had the above-mentioned transactions actually occurred
earlier.
Based on our review, nothing came to our attention that caused us to believe
that management's assumptions do not provide a reasonable basis for presenting
the significant effects directly attributable to the above- mentioned
transactions described in the Notes, that the related pro forma adjustments do
not give appropriate effect to those assumptions, or that the pro forma column
does not reflect the proper application of those adjustments to the historical
financial statement amounts in the unaudited pro forma consolidated condensed
balance sheet as of June 30, 1995 and the unaudited pro forma consolidated
condensed statements of operations for the year ended December 31, 1994 and
the six months ended June 30, 1995.
The accompanying unaudited pro forma consolidated condensed financial
statements were prepared by Crown using assumptions and sensitivity analyses
that Crown believes are reasonable given the current structure
S-13
<PAGE>
of the transactions described in the Notes. However, the ultimate impact of
the transactions on pro forma financial information is subject to the
following uncertainties:
(1) As discussed in Note 1, the accompanying unaudited pro forma
consolidated condensed financial statements were prepared using two
possible alternatives, including arbitrary assumptions that if 100% of the
CarnaudMetalbox Shares are tendered, 50% of such shares are tendered for
cash and 50% for Units, and that if 51% of the CarnaudMetalbox Shares are
tendered, 15% of CarnaudMetalbox Shares are tendered for cash and 36% for
Units. Since Crown is unable to determine in advance the number of
CarnaudMetalbox Shares tendered into the Offer or cash/Unit election
preferences, the ultimate purchase price, borrowings and number of shares
of Crown Stock issued and the resultant effect on pro forma financial
information could vary materially from the alternatives presented.
(2) As discussed in Notes 2 and 7, the accompanying unaudited pro forma
consolidated condensed financial statements do not reflect any allocation
of purchase price to assets and liabilities since the appraisals and other
studies on which the allocation will be based are not yet completed.
Accordingly, the final allocations could be different from the amounts
reflected therein and the differences could be material. Further, depending
on the final determination of lives attributable to the excess purchase
price over net assets acquired and identifiable intangibles, the pro forma
financial information could also be materially affected.
(3) As discussed in Note 1, the accompanying unaudited pro forma
consolidated condensed financial statements have been prepared using
assumed exchange rates. The use of exchange rates different from those
disclosed in the Notes could have a material impact upon the pro forma
financial information.
(4) As discussed in Note 3, the accompanying unaudited pro forma
consolidated condensed financial statements do not reflect any cost
reductions or synergies which are expected in connection with consummating
the transaction. Such savings, and the costs and expenses to accomplish
them cannot be determined at this time. Such adjustments could have a
material effect on the unaudited pro forma consolidated condensed financial
statements.
Price Waterhouse LLP
Philadelphia, PA
December 13, 1995
S-14
<PAGE>
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1995
UNAUDITED
<TABLE>
<CAPTION>
ASSUMING 51% TENDERED ASSUMING 100% TENDERED
CARNAUDMETALBOX SHARES CARNAUDMETALBOX SHARES
HISTORICAL AMOUNTS 36% UNITS/15% CASH(1) 50% UNITS/50% CASH(1)
---------------------- ----------------------- -----------------------
CARNAUD- PRO FORMA PRO FORMA
CROWN METALBOX ADJUSTMENTS PRO FORMA ADJUSTMENTS PRO FORMA
---------- ---------- ----------- ----------- ----------- -----------
(IN $ MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
NET SALES............... $2,513 $2,460 $4,973 $4,973
Costs of products
sold.................. 2,086 1,919 4,005 4,005
Depreciation and
amortization(2)(10)... 129 146 $ 4 279 $ 35 310
Selling and
administrative
expense............... 72 234 306 306
Provision for
restructuring(3)...... 20 18 38 38
Interest expense(4).... 74 58 24 156 83 215
Interest income........ (6) (12) (18) (18)
Translation and
exchange adjustments.. 1 2 3 3
Preference share
dividends and other... (21) (21) (21)
---------- ---------- ---- ----------- ----- -----------
INCOME FROM OPERATIONS
BEFORE INCOME TAXES.... 137 116 (28) 225 (118) 135
Income taxes(5)........ 41 16 (8) 49 (27) 30
Equity in earnings of
affiliates............ 3 2 5 5
Minority interests..... (10) (1) (49) (60) (11)
---------- ---------- ---- ----------- ----- -----------
NET INCOME.............. $ 89 $ 101 $(69) $ 121 $ (91) $ 99
Crown Acquisition
Preferred Stock
dividends(6)........... 8 8 11 11
---------- ---------- ---- ----------- ----- -----------
Net income available for
common stock........... $ 89 $ 101 $(77) $ 113 $(102) $ 88
========== ========== ==== =========== ===== ===========
EARNINGS PER SHARE(11).. $ 0.99 $ 1.19 $ 0.98 $ 0.70
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING..... 89,920,245 84,605,561 115,260,188 124,865,747
</TABLE>
S-15
<PAGE>
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
JUNE 30, 1995
UNAUDITED
<TABLE>
<CAPTION>
ASSUMING 51% TENDERED ASSUMING 100% TENDERED
CARNAUDMETALBOX SHARES CARNAUDMETALBOX SHARES
HISTORICAL AMOUNTS 36% UNITS/15% CASH(1) 50% UNITS/50% CASH(1)
--------------------- -------------------------- --------------------------
CARNAUD- PRO FORMA PRO FORMA
CROWN METALBOX ADJUSTMENTS PRO FORMA ADJUSTMENTS PRO FORMA
--------- ---------- ------------ ----------- ------------ -----------
(IN $ MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and cash
equivalents(9(a))........ $ 69 $ 474 $ (32) $ 511 $ (92) $ 451
Receivables............... 911 899 1,810 1,810
Inventories............... 945 936 1,881 1,881
Prepaid expenses and other
current assets........... 72 503 575 575
Long-term receivables..... 66 19 85 85
Investments............... 57 41 98 98
Excess of purchase price
over net assets acquired,
net of
amortization(2)(7)(9(b)).. 1,112 1,292 380 2,784 1,888 4,292
Property, plant and
equipment(2)(7).......... 1,937 1,766 3,703 3,703
Other non-current assets.. 109 109 109
--------- --------- ---------- ----------- ---------- -----------
TOTAL ASSETS.............. $ 5,278 $ 5,930 $ 348 $ 11,556 $ 1,796 $ 13,004
========= ========= ========== =========== ========== ===========
LIABILITIES AND SHAREHOLD-
ERS' EQUITY
Short-term debt and
current portion of long-
term debt................ $ 1,087 $ 568 $ 1,655 $ 1,655
Accounts payable and
accrued liabilities...... 700 1,383 2,083 2,083
Other current
liabilities(9(c))........ 13 72 $ 67 152 $ 48 133
Long-term debt, excluding
current
maturities(4)(7)......... 1,152 1,055 578 2,785 1,959 4,166
Postretirement and pension
liabilities.............. 627 127 754 754
Other non-current liabili-
ties..................... 127 361 488 488
Minority interests........ 102 288 431 821 390
Crown Acquisition
Preferred Stock(7)....... 355 355 490 490
Crown Common Stock(9(d)).. 593 177 (51) 719 (2) 768
Retained earnings(9(e))... 1,063 959 (1,036) 986 (1,061) 961
Cumulative translation ad-
justment................. (174) (537) 542 (169) 545 (166)
Other shareholders'
equity(9(f))............. (12) 1,477 (538) 927 (183) 1,282
--------- --------- ---------- ----------- ---------- -----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY..... $5,278 $ 5,930 $ 348 $ 11,556 $ 1,796 $ 13,004
========= ========= ========== =========== ========== ===========
</TABLE>
S-16
<PAGE>
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
UNAUDITED
<TABLE>
<CAPTION>
ASSUMING 51% TENDERED ASSUMING 100% TENDERED
CARNAUDMETALBOX SHARES CARNAUDMETALBOX SHARES
HISTORICAL AMOUNTS 36% UNITS/15% CASH(1) 50% UNITS/50% CASH(1)
---------------------- ----------------------- -----------------------
CARNAUD- PRO FORMA PRO FORMA
CROWN METALBOX ADJUSTMENTS PRO FORMA ADJUSTMENTS PRO FORMA
---------- ---------- ----------- ----------- ----------- -----------
(IN $ MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
NET SALES............... $4,452 $4,516 $8,968 $8,968
Costs of products
sold.................. 3,700 3,521 7,221 7,221
Depreciation and
amortization(2)(10)... 218 262 $ 11 491 $ 73 553
Selling and
administrative
expense............... 135 403 538 538
Provision for
restructuring(3)...... 115 38 153 153
Interest expense(4).... 99 73 49 221 167 339
Interest income........ (7) (17) (24) (24)
Translation and
exchange adjustments.. 10 2 12 12
Preference share
dividends and other... (11) (11) (11)
---------- ---------- ----- ----------- ----- -----------
INCOME FROM OPERATIONS
BEFORE INCOME TAXES.... 182 245 (60) 367 (240) 187
Income taxes(5)........ 55 22 (16) 61 (55) 22
Equity in earnings of
affiliates............ 16 16 16
Minority interests..... (12) (41) (84) (137) 5 (48)
---------- ---------- ----- ----------- ----- -----------
NET INCOME.............. 131 182 (128) 185 (180) 133
Crown Acquisition
Preferred Stock
dividends(6)........... 16 16 22 22
---------- ---------- ----- ----------- ----- -----------
Net income available for
common stock........... $ 131 $ 182 $(144) $ 169 $(202) $ 111
========== ========== ===== =========== ===== ===========
EARNINGS PER SHARE(11).. $ 1.47 $ 2.22 $ 1.47 $ 0.89
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING..... 89,086,999 82,048,458 115,260,188 124,865,747
</TABLE>
S-17
<PAGE>
NOTES TO THE UNAUDITED PRO FORMA
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. The pro forma adjustments set forth herein were prepared on the basis of
the following principal assumptions:
(a) The unaudited pro forma consolidated condensed financial statements give
effect to the acquisition of CarnaudMetalbox under the purchase method of
accounting. Under the purchase method of accounting, the total purchase cost
will be allocated to the assets and liabilities of CarnaudMetalbox based upon
their relative fair values. The unaudited pro forma consolidated condensed
financial statements do not reflect any allocation of purchase price to assets
and liabilities since the appraisals and other studies on which the allocation
will be based are not yet completed. Accordingly, the final allocations will
be different from the amounts reflected herein. The unaudited pro forma
consolidated condensed balance sheet combines the historical consolidated
balance sheets of Crown and CarnaudMetalbox giving effect to the acquisition
as if it had occurred on June 30, 1995. The unaudited pro forma consolidated
condensed statements of operations for the year ended December 31, 1994 and
the six months ended June 30, 1995 combine the historical consolidated
statements of operations of Crown and CarnaudMetalbox giving effect to the
acquisition as if it had occurred on January 1, 1994.
The unaudited pro forma consolidated condensed financial statements are for
illustrative purposes only and have been presented to meet the requirements of
the SEC. They are not necessarily indicative of the results of operations that
might have occurred had the acquisition actually taken place on January 1,
1994 or the actual financial position that might have resulted had the
acquisition been consummated on June 30, 1995, or of future results of
operations or financial position of Crown. Crown believes that the assumptions
used, and sensitivity analyses presented, in the unaudited pro forma
consolidated condensed financial statements are reasonable given the structure
of the Offer. Crown also believes that any further adjustments to the
unaudited pro forma consolidated condensed financial statements, other than in
respect of transition and restructuring costs and expenses, would not have a
material effect on these statements.
The unaudited pro forma consolidated condensed financial statements are
based on the historical consolidated financial statements of Crown and
CarnaudMetalbox and should be read in conjunction with such historical
financial statements and the notes thereto, which are, in the case of
CarnaudMetalbox, included in the accompanying Prospectus, and, in the case of
Crown, incorporated by reference herein. Furthermore, the historical financial
statements for CarnaudMetalbox, prepared in accordance with French law (see
"CARNAUDMETALBOX--Management's Discussion and Analysis of Financial Condition
and Results of Operations--Results of Operations--Six Months Ended June 30,
1995 Compared to Six Months Ended June 30, 1994" in the accompanying
Prospectus) and presented in French francs, have for purposes of preparing
these unaudited pro forma consolidated condensed financial statements been
conformed to comply with U.S. GAAP and, in accordance with SFAS No. 52, have
been translated to U.S. dollars at an assumed exchange rate equal to FF
5.511/$1.00 (the Average 1994 Noon Buying Rate) and FF 4.992/$1.00 (the
Average Six Month 1995 Noon Buying Rate) for the pro forma statements of
operations presented for the year ended December 31, 1994 and the six months
ended June 30, 1995, respectively, and FF 4.853/$1.00 (the June 1995 Noon
Buying Rate) for the pro forma balance sheet presented as of June 30, 1995.
See Note 2 of CarnaudMetalbox's consolidated financial statements for a
reconciliation of CarnaudMetalbox's 1994 and 1993 net income and shareholders'
equity to U.S. GAAP. Such translations should not be construed as
representations that French franc amounts represent, have been or could be
converted into, U.S. dollars at that or any other rate. The use of exchange
rates different from those used in the unaudited pro forma consolidated
condensed financial statements could have a material impact on the information
presented therein. Certain information presented in the unaudited pro forma
consolidated condensed financial statements is calculated based upon the Noon
Buying Rate of December 18, 1995 which was FF 4.930/$1.00, as expressly noted
therein.
The unaudited pro forma consolidated condensed financial statements are
based in part on the historical consolidated financial statements of
CarnaudMetalbox included in the accompanying Prospectus. Although
S-18
<PAGE>
Crown has no knowledge that would indicate such financial statements are
materially inaccurate or incomplete, Crown did not prepare such financial
statements and is not in a position to verify the information therein.
These notes to the unaudited pro forma consolidated condensed financial
statements describe the principal assumptions made in the preparation of the
pro forma information. The unaudited pro forma consolidated condensed
financial statements do not reflect financial results for Crown or
CarnaudMetalbox after June 30, 1995. See "SUMMARY CROWN HISTORICAL FINANCIAL
INFORMATION" in this Prospectus Supplement and "SUMMARY HISTORICAL AND
UNAUDITED PRO FORMA FINANCIAL INFORMATION--Crown Cork & Seal Company, Inc.--
Recent Developments" and "--CarnaudMetalbox--Recent Developments" in the
accompanying Prospectus.
(b) The Average Crown Common Stock Price is FF 207.26, the Exchange Ratio is
1.086 and all of the 2,017,922 employee options to purchase CarnaudMetalbox
Shares outstanding as of June 30, 1995 are settled for cash. Crown has agreed
pursuant to the Exchange Offer Agreement to settle for cash certain employee
options for CarnaudMetalbox Shares, as discussed in "THE OFFER--Interests of
Certain Persons in the Offer." Generally, holders of such options may also
exercise their options and receive CarnaudMetalbox Shares which may be
tendered into the Offer. Crown does not believe that any such option exercises
would have a material effect on the unaudited pro forma consolidated condensed
financial statements, taken as a whole.
The number of CarnaudMetalbox Shares outstanding was 85,841,476 as of June
30, 1995. Since Crown is unable to determine in advance the proportion of
tenders for the Cash Election Price versus Units in the Offer, Crown has
prepared the unaudited pro forma consolidated condensed financial statements
using the arbitrary assumption that, in the case where 100% of the
CarnaudMetalbox Shares are tendered, 50% of such shares are tendered for cash
and 50% for Units, meaning approximately 28% of the shares tendered by persons
other than CGIP are tendered for Units. In addition, to facilitate comparison,
Crown has assumed in the case where 51% of the CarnaudMetalbox Shares are
tendered, approximately 28% of the shares tendered by persons other than CGIP
are similarly tendered for Units, meaning that, in the aggregate,
approximately 36% of the outstanding CarnaudMetalbox Shares are tendered for
Units and approximately 15% are tendered for cash.
The purchase price and related excess of purchase price over net assets
acquired have been recorded in the unaudited pro forma consolidated condensed
financial statements in U.S. dollars. The borrowings necessary to finance the
cash portion of consideration under the Credit Facility have been committed in
French francs. For information with respect to the impact of these assumptions
on the unaudited pro forma consolidated condensed financial statements, see
Note 7.
S-19
<PAGE>
The following table presents certain information with respect to the number
of tendered CarnaudMetalbox Shares and cash/Unit elections resulting from the
assumptions described in the preceding paragraph and used in the preparation
of the unaudited pro forma consolidated condensed financial statements:
<TABLE>
<CAPTION>
ASSUMING 51% ASSUMING 100%
TENDERED TENDERED
CARNAUDMETALBOX CARNAUDMETALBOX
SHARES SHARES
--------------- ---------------
<S> <C> <C>
Number of Shares Outstanding................... 85,841,476 85,841,476
CarnaudMetalbox Shares Owned by CGIP........... 26,188,956 26,188,956
CarnaudMetalbox Shares Held by Persons Other
Than CGIP..................................... 59,652,520 59,652,520
CarnaudMetalbox Shares Tendered by Persons
Other Than CGIP............................... 17,590,197 59,652,520
CarnaudMetalbox Shares Tendered for Units by
Persons Other than CGIP....................... 4,934,050 16,731,782
Percentage of Non-CGIP CarnaudMetalbox Shares
Tendered For Units(1)......................... 28.0% 28.0%
CarnaudMetalbox Shares Tendered for Cash by
Persons Other Than CGIP....................... 12,656,147 42,920,738
Percentage of Non-CGIP CarnaudMetalbox Shares
Tendered for Cash............................. 72.0% 72.0%
Total CarnaudMetalbox Shares Tendered for
Units......................................... 31,123,006 42,920,738
Exchange Ratio................................. 1.086 1.086
Units Issued................................... 33,799,545 46,611,921
Shares of Crown Common Stock (75%)............ 25,349,659 34,958,941
Shares of Crown Acquisition Preferred Stock
(25%)........................................ 8,449,886 11,652,980
Share Value(2)................................ $42.04 $42.04
Value of Crown Common Stock Consideration ($
millions).................................... $1,065 $1,469
Value of Crown Acquisition Preferred Stock
Consideration ($ millions)................... $355 $490
Cash Paid ($ millions)(3)...................... $578 $1,959
</TABLE>
- --------
(1) Changes in cash/Unit elections by tendering CarnaudMetalbox shareholders
will affect the pro forma financial information. See Note 6 for certain
effects of all CarnaudMetalbox shareholders tendering and electing Units.
See Note 4 for certain effects of all CarnaudMetalbox shareholders
tendering and, except for CGIP, electing cash.
(2) Equals Average Crown Common Stock Price of FF 207.26 divided by FF 4.930
(the Noon Buying Rate on December 18, 1995).
(3) Equals assumed number of CarnaudMetalbox Shares tendered for cash
multiplied by the Cash Election Price of FF 225 divided by FF 4.930 (the
Noon Buying Rate on December 18, 1995). Only holders of CarnaudMetalbox
Shares who elect to receive cash will be entitled to receive such cash.
Consequently, there can be no assurance as to the amount of cash that will
be paid as consideration in the Offer.
2. The pro forma adjustments reflect (a) assuming Crown acquires 100% of the
CarnaudMetalbox Shares, increased amortization expense of $73 million and $35
million for the year ended December 31, 1994 and the six months ended June 30,
1995, respectively, resulting from purchase price in excess of net assets
acquired of $3,215 million, and total pro forma depreciation and amortization
for the year ended December 31, 1994 and the six months ended June 30, 1995 of
$553 million and $310 million, respectively, and (b) assuming Crown acquires
51% of the CarnaudMetalbox Shares, increased amortization expense of $11
million and of $4 million for the year ended December 31, 1994 and the six
months ended June 30, 1995, respectively, resulting from the purchase price in
excess of net assets acquired of $1,676 million, and total pro forma
depreciation and amortization for the year ended December 31, 1994 and the six
months ended June 30, 1995 of $491 million and $279 million, respectively.
The purchase price in excess of net assets acquired aggregates $3,215
million assuming Crown acquires 100% of the CarnaudMetalbox Shares, and $1,676
million assuming Crown acquires 51% of the CarnaudMetalbox Shares. For
additional information as to the allocation of the purchase price for
S-20
<PAGE>
CarnaudMetalbox Shares among the assets of CarnaudMetalbox and the
determination of the purchase price in excess of net assets acquired, refer to
Note 7 below. For purposes of determining amortization expense for the
unaudited pro forma income statements the following assumptions were made:
. Historical goodwill of approximately $1.3 billion reflected on
CarnaudMetalbox's financial statements has been amortized over a period
of 40 years. This balance arose primarily from acquisitions, and the 40
year life assigned by CarnaudMetalbox was therefore deemed appropriate.
Crown believes, based on knowledge obtained during its due diligence
investigation, that this amount is the minimum amount which ultimately
will be assigned a 40 year life.
. The remaining purchase price in excess of net assets acquired of
approximately $1.9 billion, assuming Crown acquires 100% of the
CarnaudMetalbox Shares, and $400 million, assuming Crown acquires 51% of
the CarnaudMetalbox Shares, has been amortized over a period of 25
years. Given the incomplete status of the property, plant and equipment
appraisals, no fair value allocation can be made to these assets or to
other identifiable intangible assets. Since no final allocation can
currently be made, based upon an assumed range of depreciable lives of a
minimum of 10 years up to a maximum of 40 years, an average of 25 years
was used to amortize this excess. Crown believes that no material
depreciable assets will be acquired from CarnaudMetalbox with lives
shorter than 10 years. Depending on the final allocation of purchase
price to intangibles other than excess purchase price over net assets
acquired and property, plant and equipment, these average lives could
vary substantially. Assuming Crown acquires 100% of the CarnaudMetalbox
Shares, if the average life of the remaining excess purchase price
increased five years, the effect would be to decrease amortization
expense by $13 million per year and increase pro forma net income by $13
million or $0.10 per share for the year ended December 31, 1994 and $6.5
million or $0.05 per share for the six months ended June 30, 1995.
Assuming Crown acquires 100% of the CarnaudMetalbox Shares, if the
average life of the remaining excess purchase price decreased five
years, the effect would be to increase pro forma amortization expense by
$20 million per year and decrease pro forma net income by $20 million or
$0.16 per share of the year ended December 31, 1994 and $10 million or
$0.08 per share for the six months ended June 30, 1995.
3. The unaudited pro forma consolidated condensed financial statements do
not reflect any cost reductions attributable to increased purchasing volumes,
knowledge of markets and economies of scale of the combined company with
respect to certain raw materials or any cost savings which may result from
reductions and elimination of redundancies in sales, general and
administrative, marketing and research and development expenses and other
integration efficiencies. In addition, these unaudited pro forma consolidated
condensed financial statements do not include any transition and restructuring
costs and expenses which are expected to be incurred in connection with
consummating the Offer and integrating the operations of Crown and
CarnaudMetalbox. Such costs and expenses presently cannot be reasonably
predicted by Crown, given the limited nature of Crown's due diligence
investigation to date, in a manner sufficient to quantify the amount and
timing of such charges under U.S. GAAP. Crown expects to determine the amount
and timing of these costs and expenses after the consummation of the Offer and
to make appropriate adjustments to amortization expense and reserves for
restructuring charges and other appropriate items. Such adjustments to the
purchase price in excess of net assets acquired will be consistent with the
principles set forth in APB 16, SFAS 38 and EITF 95-3. Any such adjustments
may have a material impact on these unaudited pro forma consolidated condensed
financial statements. To the extent that such costs are incurred, the purchase
price in excess of net assets acquired and the related amortization would
increase. For illustrative purposes only, if costs of this nature totalled
$250 million, assuming Crown acquires 100% of the CarnaudMetalbox Shares,
amortization expense would increase by approximately $10 million on a yearly
basis and pro forma income would decrease by $0.08 per share. For every
increment or reduction by $50 million of such restructuring costs,
amortization expense would increase or decrease, respectively, by
approximately $2 million on a yearly basis and pro forma income would increase
or decrease by $0.02 per share. See "THE CARNAUDMETALBOX PROPOSALS--
Recommendation of Crown's Board of Directors; Reasons for the CarnaudMetalbox
Transaction" in the accompanying Prospectus.
S-21
<PAGE>
In addition, these unaudited pro forma consolidated condensed financial
statements do not include the effects of any proposed divestiture of plants
and operations Crown has undertaken in connection with obtaining the
authorization of the European Commission. Crown believes such proposed
divestiture will not be material to the combined company or its results of
operations or financial position. See "THE CARNAUDMETALBOX PROPOSALS--
Regulatory Approvals" in the accompanying Prospectus.
4. Assuming 100% of the CarnaudMetalbox Shares are acquired by Crown in the
Offer, the pro forma adjustments reflect the estimated interest expense
attributable to borrowings of $1,959 million for the year ended December 31,
1994 and for the six months ended June 30, 1995 under the Credit Facility
incurred to finance the acquisition at an estimated borrowing rate of 8.5% per
annum. Changing the estimated borrowing rate by .5% ( 1/2%) per annum would
change pro forma net income by $6.6 million or $0.05 per share and $3.3
million or $0.03 per share for the year ended December 31, 1994 and the six
months ended June 30, 1995, respectively. Assuming 51% of the CarnaudMetalbox
Shares are acquired by Crown in the Offer, the pro forma adjustments reflect
the estimated interest expense attributable to borrowings of $578 million for
the year ended December 31, 1994 and for the six months ended June 30, 1995
incurred to finance the acquisition at an estimated borrowing rate of 8.5% per
annum. Changing the estimated borrowing rate by 0.5% ( 1/2%) per annum would
change pro forma net income by $1.9 million or $0.02 per share and $1 million
or $0.01 per share for the year ended December 31, 1994 and the six months
ended June 30, 1995, respectively. See "THE OFFER--Sources of Funds." For
information regarding the determination of the borrowings required to finance
the acquisition, see Note 1(b) above. If 100% of the CarnaudMetalbox Shares
were tendered into the Offer, and all holders of such shares, other than CGIP,
elected to receive cash, the pro forma adjustment for borrowings as of June
30, 1995 would have been $2.7 billion and (a) the pro forma adjustment for
interest expense would have been $230 million and pro forma net income would
have been $68 million or $0.55 per share for the year ended December 31, 1994
and (b) the pro forma adjustment for interest expense would have been $115
million and pro forma net income would have been $66 million or $0.53 per
share for the six months ended June 30, 1995. For information with respect to
the Credit Facility and the intended repayment thereof, including Crown's
intentions with respect to possible issuances of equity securities following
the Offer, see "THE OFFER--Sources of Funds" in this Prospectus Supplement and
"THE CARNAUDMETALBOX PROPOSALS--Recommendation of Crown's Board of Directors;
Reasons for the CarnaudMetalbox Acquisition" and "--Sources of Funds" in the
accompanying Prospectus. See Note 8 for additional effects of varying interest
rates on pro forma net income. The foregoing borrowings were calculated based
on the December 18, 1995 Noon Buying Rate of 4.930.
5. Pro forma adjustments to reflect income tax effects are calculated at an
estimated statutory rate of 33% for those adjustments subject to tax or which
qualify for tax deductions for the periods presented. The pro forma
adjustments were prepared on the assumption that interest expense on
borrowings incurred to finance the acquisition (see Note 4) is deductible at
such statutory rate. The applicable statutory tax rate may vary depending upon
the ultimate structure of such borrowings and the number of CarnaudMetalbox
Shares acquired by Crown in the Offer. See Note 8 for the effect of varying
tax rates on pro forma net income. Changing the estimated tax rate by 3% would
(a) assuming 100% of the CarnaudMetalbox Shares are acquired by Crown in the
Offer, change pro forma net income by $5 million or $0.04 per share and $2.5
million or $0.02 per share for the year ended December 31, 1994 and the six
months ended June 30, 1995, respectively, and (b) assuming 51% of the
CarnaudMetalbox Shares are acquired by Crown in the Offer, change pro forma
net income by $1.5 million or $0.01 per share and $0.7 million or less than
$0.01 per share for the year ended December 31, 1994 and the six months ended
June 30, 1995, respectively.
6. Assuming 100% of the CarnaudMetalbox Shares are tendered into the Offer,
the pro forma adjustment reflects $22 million and $11 million of dividends for
the year ended December 31, 1994 and six months ended June 30, 1995,
respectively, payable on $490 million aggregate liquidation value of Crown
Acquisition Preferred Stock issued in the Offer, and net income available to
common shareholders would have been $111 million or $0.89 per share for the
year ended December 31, 1994 and $88 million or $0.70 per share for the six
months ended June 30, 1995. See Note 1. Assuming 51% of the CarnaudMetalbox
Shares are tendered into the Offer, the pro forma adjustment reflects $16
million and $8 million of dividends for the year ended December 31, 1994
S-22
<PAGE>
and six months ended June 30, 1995, respectively, payable on $355 million
aggregate liquidation value of Crown Acquisition Preferred Stock issued in the
Offer, respectively, and net income available to common shareholders would
have been $169 million or $1.47 per share for the year ended December 31, 1994
and $113 million or $0.98 per share for the six months ended June 30, 1995. If
100% of the CarnaudMetalbox Shares were tendered into the Offer, and all
holders of such shares elected to receive Units, the pro forma adjustment for
preferred stock dividends would have been $44 million and $22 million for the
year ended December 31, 1994 and six months ended June 30, 1995, respectively,
payable on $980 million aggregate liquidation value of Crown Acquisition
Preferred Stock issued in the Offer, and pro forma net income available to
common shareholders would have been $201 million or $1.26 per share for the
year ended December 31, 1994 and $133 million or $0.84 per share for the six
months ended June 30, 1995.
7. Pro forma adjustments to allocate the purchase price are as follows:
<TABLE>
<CAPTION>
51% SHARES 100% SHARES
TENDERED TENDERED
36% UNITS/ 50% UNITS/
15% CASH 50% CASH
---------- -----------
(IN $ MILLIONS)
<S> <C> <C>
Components of estimated purchase price (1):
Crown Common Stock.................................... $1,065 $1,469
Crown Acquisition Preferred Stock..................... 355 490
Cash portion of consideration......................... 578 1,959
Transaction costs incurred............................ 50 50
Cost of settling outstanding stock options issued to
CarnaudMetalbox employees............................ 25 25
------ ------
Total purchase price: $2,073 $3,993
====== ======
Allocation of purchase price:
Net assets acquired at historical cost (2)............ $ 397 $ 778
Excess of purchase price over net assets acquired..... $1,676 $3,215
------ ------
$2,073 $3,993
====== ======
</TABLE>
- --------
(1) As set forth above, the purchase price allocation has been determined
using U.S. dollars. Assuming 100% of the CarnaudMetalbox Shares are
acquired by Crown in the Offer, the effect of financing the cash portion
of the consideration in French francs would reduce pro forma interest and
amortization expense by $26 million or $0.21 per share for the year ended
December 31, 1994 and by $2 million or $0.02 per share for the six months
ended June 30, 1995 as a result of translating French franc denominated
interest expense and amortization expense at the Average 1994 Noon Buying
Rate or the Average Six Month 1995 Noon Buying Rate, as the case may be.
(2) The historical cost of CarnaudMetalbox's net assets is calculated as set
forth below (all French franc amounts are translated into U.S. dollars at
the June 30, 1995 Noon Buying Rate of 4.853).
<TABLE>
<CAPTION>
FF $US
------- -------
(IN MILLIONS)
<S> <C> <C>
U.S. GAAP shareholders equity.................................. 10,075 2,076
Goodwill*...................................................... (4,241) (874)
U.S. GAAP adjustments to goodwill.............................. 161 33
Intangible assets*............................................. (4,812) (992)
U.S. GAAP adjustments to intangible assets..................... 2,593 535
------- ------
Historical cost of net assets.................................. 3,776 778
======= ======
</TABLE>
- --------
* Calculated in accordance with French accounting standards.
S-23
<PAGE>
There may be additional adjustments to reflect the fair value of assets
acquired or for costs to be incurred subsequent to the acquisition to reflect
the combination of the two companies. See Notes 2 and 3 above. In addition, as
described above, the allocations and adjustments set forth herein are not
final and are subject to change. Fluctuations in the value of Crown Common
Stock and Crown Acquisition Preferred Stock as of the consummation of the
Offer will affect the actual amount of the excess of purchase price over the
net assets acquired and the related amortization expense of the combined
company. Solely for purposes of calculating the estimated purchase price
above, each share of Crown Common Stock and Crown Acquisition Preferred Stock
is assumed to have a value of FF 207.26, or $42.04 assuming an exchange rate
equal to FF 4.930 (the December 18, 1995 Noon Buying Rate). If the Noon Buying
Rate at the time of consummation of the Offer is less than the December 18,
1995 Noon Buying Rate, the total purchase price and the amount allocated to
goodwill and other identified intangible assets will increase.
8. The following tables reflect the compounded impact of changes in assumed
interest rates, tax rates and the amortization period for the excess of the
purchase price over net assets acquired.
With respect to the pro forma net income per share of Crown Common Stock set
forth above, the effect of decreasing the interest rate to 8%, increasing the
tax rate to 36% on pro forma adjustments and increasing the amortization
period to 30 years for the excess of the purchase price over net assets
acquired is as follows:
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
JUNE 30, 1995 DECEMBER 31, 1994
--------------------------- ----------------------
51% SHARES 100% SHARES 51% SHARES 100% SHARES
TENDERED TENDERED TENDERED TENDERED
36% UNITS/ 50% UNITS/ 36% UNITS/ 50% UNITS/
15% CASH 50% CASH 15% CASH 50% CASH
------------ ------------ ---------- -----------
<S> <C> <C> <C> <C>
Net income per share of
Crown Common Stock....... $ 0.98 $ 0.70 $ 1.47 $ 0.89
Effect of decreasing the
interest rate by 1/2 of
1%....................... 0.01 0.03 0.02 0.05
Effect of increasing the
tax rate by 3 percentage
points................... -- 0.02 0.01 0.04
Effect of increasing the
amortization period by 5
years for the excess of
the purchase price over
net assets acquired...... 0.01 0.05 0.03 0.10
------------ ------------ ------ ------
Revised net income per
share of Crown Common
Stock.................... $ 1.00 $ 0.80 $ 1.53 $ 1.08
============ ============ ====== ======
</TABLE>
With respect to the pro forma net income per share of Crown Common Stock set
forth above, the effect of increasing the interest rate to 9%, decreasing the
tax rate to 30% on pro forma adjustments and reducing the amortization period
to 20 years for the excess of the purchase price over net assets acquired is
as follows:
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
JUNE 30, 1995 DECEMBER 31, 1994
---------------------------- ----------------------
51% SHARES 100% SHARES 51% SHARES 100% SHARES
TENDERED TENDERED TENDERED TENDERED
36% UNITS/ 50% UNITS/ 36% UNITS/ 50% UNITS/
15% CASH 50% CASH 15% CASH 50% CASH
------------ ------------ ---------- -----------
<S> <C> <C> <C> <C>
Net income per share of
Crown Common Stock..... $ 0.98 $ 0.70 $ 1.47 $ 0.89
Effect of increasing the
interest rate by 1/2 of
1%..................... (0.01) (0.03) (0.02) (0.05)
Effect of decreasing the
tax rate by 3
percentage points...... -- (0.02) (0.01) (0.04)
Effect of reducing the
amortization period by
5 years for the excess
of the purchase price
over net assets
acquired............... (0.02) (0.08) (0.04) (0.16)
------------ ------------ ------ ------
Revised net income per
share of Crown Common
Stock.................. $ 0.95 $ 0.57 $ 1.40 $ 0.64
============ ============ ====== ======
</TABLE>
S-24
<PAGE>
9. The pro forma adjustments reflected on the unaudited pro forma
consolidated condensed balance sheet at June 30, 1995 were prepared on the
basis of the following principal assumptions:
<TABLE>
<CAPTION>
ASSUMING ASSUMING
51% TENDERED 100% TENDERED
SHARES SHARES
------------ -------------
<S> <C> <C>
(a)Cash and cash equivalents:
Interest for period............................... (24) (83)
Preferred dividends............................... (8) (11)
Cumulative translation adjustment................. 2
------ ------
(32) (92)
====== ======
(b)Excess of purchase price over net assets
acquired, net of amortization:
Total acquisition goodwill........................ 1,676 3,215
Eliminate CarnaudMetalbox goodwill................ (1,292) (1,292)
Amortization for the period....................... (4) (35)
------ ------
380 1,888
====== ======
(c)Other current liabilities:
Taxes for period.................................. (8) (27)
Cost of settling outstanding stock options issued
to CarnaudMetalbox employees..................... 25 25
Transaction fees.................................. 50 50
------ ------
67 48
====== ======
(d)Common stock:
Total value of common stock issued................ 1,065 1,469
Excess over par................................... (939) (1,294)
------ ------
Par value of common stock issued.................. 126 175
Eliminate common stock of CarnaudMetalbox......... (177) (177)
------ ------
(51) (2)
====== ======
(e)Retained earnings:
Eliminate retained earnings of CarnaudMetalbox.... (959) (959)
Net income for six months ended June 30, 1995..... (77) (102)
------ ------
(1,036) (1,061)
====== ======
(f)Other shareholders' equity:
Excess over par of common stock issued............ 939 1 ,294
Eliminate CarnaudMetalbox other shareholders'
equity........................................... (1,477) (1,477)
------ ------
(538) (183)
====== ======
</TABLE>
S-25
<PAGE>
10. The pro forma adjustments reflected on the pro forma consolidated
condensed statement of operations for the year ended December 31, 1994 and the
six month period ended June 30, 1995 were prepared on the basis of the
following principal assumptions:
<TABLE>
<CAPTION>
ASSUMING ASSUMING
51% TENDERED 100% TENDERED
SHARES SHARES
--------------------- ---------------------
DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30,
1994 1995 1994 1995
------------ -------- ------------ --------
<S> <C> <C> <C> <C>
Depreciation and Amortization:
Amortization of Crown purchase
price in excess of net assets
acquired......................... 49 24 111 55
CarnaudMetalbox historical
amortization..................... (38) (20) (38) (20)
--- --- --- ---
11 4 73 35
=== === === ===
</TABLE>
11. Crown Common Stock equivalents do not reduce primary earnings per share
by more than 3% and have been excluded from the earnings per share
calculation. Crown has determined that the Crown Acquisition Preferred Stock
is not a Crown Common Stock equivalent and is not assumed to be converted for
purposes of computing net income per common share.
EXPERTS
With respect to the unaudited historical consolidated financial information
of Crown Cork & Seal Company, Inc. for the six month period ended June 30,
1995 and the nine month period ended September 30, 1995 and the unaudited pro
forma consolidated condensed balance sheet as of June 30, 1995 and the
unaudited pro forma consolidated condensed statements of operations for the
six months ended June 30, 1995 and the year ended December 31, 1994, included
(or incorporated by reference) in this Prospectus Supplement, Price Waterhouse
LLP reported that they have applied limited procedures in accordance with
professional standards for a review of such information. However, their
separate reports dated October 20, 1995, December 4, 1995 and December 13,
1995 appearing (or incorporated by reference) herein, state that they did not
audit and they do not express an opinion on the unaudited historical
consolidated financial information or the unaudited pro forma consolidated
financial information. Price Waterhouse LLP has not carried out any
significant or additional audit tests beyond those which would have been
necessary if their reports had not been included. Accordingly, the degree of
reliance on their reports on such information should be restricted in light of
the limited nature of the review procedures applied. Price Waterhouse LLP is
not subject to the liability provisions of Section 11 of the Securities Act
for their reports on the unaudited historical consolidated financial
information and on the unaudited pro forma consolidated financial information
because such reports are not a "report" or a "part" of the Registration
Statement prepared or certified by Price Waterhouse LLP within the meaning of
Sections 7 and 11 of the Securities Act.
S-26
<PAGE>
ANNEX A
The data set forth below is derived from certain information included in
accordance with French custom and practice in the note d'information published
in France with respect to the Offer, and provides a comparison of the
following items on a per CarnaudMetalbox Share and per Unit basis for fiscal
years 1993 and 1994 and the first half of fiscal year 1995:
(1) operating income;
(2) current income before income taxes;
(3) net income (after minority interests), before non-recurring items;
and
(4) net tangible consolidated assets (after minority interests).
In addition, information with respect to average trading prices of shares of
Crown Common Stock and CarnaudMetalbox Shares prior to the announcement of the
Exchange Offer Agreement, also derived from the note d'information, is set
forth below.
For purposes of the calculations below involving Units, each share of Crown
Acquisition Preferred Stock was deemed to be equivalent to the number of
shares of Crown Common Stock into which it could be converted. Accordingly,
each share of Crown Acquisition Preferred Stock has been deemed to be
equivalent to 0.91 shares of Crown Common Stock, and one Unit has been deemed
to be equivalent to: 0.75 + (0.25 X 0.91) = 0.98 shares of Crown Common Stock.
The number of shares used in the calculations below corresponds to the
average number of shares outstanding for the relevant period, except that for
the calculations based on net tangible consolidated assets, period end figures
were used:
<TABLE>
<CAPTION>
CARNAUDMETALBOX
SHARES SHARES OF CROWN COMMON STOCK
--------------------- -----------------------------
END OF
AVERAGE PERIOD AVERAGE END OF PERIOD
---------- ---------- -------------- --------------
<S> <C> <C> <C> <C>
First Half of Fiscal Year 1995 84,605,561 85,841,476 89,920,245 90,316,796
Fiscal Year 1994 82,048,458 82,296,751 89,086,999 89,360,040
Fiscal Year 1993 81,119,881 81,248,145 87,086,553 88,814,533
</TABLE>
Unless otherwise indicated, the Crown data used in the calculations were
taken from Crown's consolidated audited annual financial statements and
consolidated unaudited six-month financial statements. The financial
statements of Crown are prepared in accordance with U.S. GAAP while those of
CarnaudMetalbox are prepared in accordance with French law. CarnaudMetalbox
net income and shareholders' equity for and as of June 30, 1994 and 1995 and
December 31, 1993 and 1994 has been reconciled from the accounting standards
used by CarnaudMetalbox (which comply with French law) to U.S. GAAP and, to
provide consistency, the CarnaudMetalbox data provided below have been
restated under U.S. GAAP on the basis of such reconciliation. See Note 2 to
the CarnaudMetalbox consolidated financial statements for and as of June 30,
1994 and 1995 and December 31, 1993 and 1994, included in the Prospectus. In
addition, the necessary adjustments to present CarnaudMetalbox's income
statement and shareholders' equity in accordance with U.S. GAAP have been
applied to the appropriate line items of the income statement and the balance
sheet.
Crown French franc data were obtained by using the average Noon Buying Rate
during the relevant period, except that with respect to the calculations for
net tangible consolidated assets the exchange rate used was the Noon Buying
Rate on the last day of the relevant period. The translation into French
francs of trading prices of Crown Common Stock was obtained by applying the
Noon Buying Rate on the relevant date.
A-1
<PAGE>
<TABLE>
<CAPTION>
1ST HALF 1995 1994 1993
OPERATING INCOME(1) ------------- ---- ----
(IN FF, EXCEPT FOR
RATIOS)
<S> <C> <C> <C>
CarnaudMetalbox (per CarnaudMetalbox Share) 10.5 24.4 22.6
Crown (per Unit) 13.1 25.9 25.4
CarnaudMetalbox/Crown Ratio 0.81 0.94 0.89
<CAPTION>
1ST HALF 1995 1994 1993
CURRENT INCOME BEFORE INCOME TAXES(2) ------------- ---- ----
(IN FF, EXCEPT FOR
RATIOS)
<S> <C> <C> <C>
CarnaudMetalbox (per CarnaudMetalbox Share) 8.0 18.3 15.2
Crown (per Unit) 9.4 19.8 19.7
CarnaudMetalbox/Crown Ratio 0.85 0.92 0.77
<CAPTION>
1ST HALF 1995 1994 1993
NET INCOME BEFORE NON-RECURRING ITEMS(3) ------------- ---- ----
(IN FF, EXCEPT FOR
RATIOS)
<S> <C> <C> <C>
CarnaudMetalbox (per CarnaudMetalbox Share) 5.8 12.8 9.3
Crown (per Unit) 5.5 12.4 11.5
CarnaudMetalbox/Crown Ratio(4) 1.05 1.04 0.81
<CAPTION>
1ST HALF 1995 1994 1993
NET TANGIBLE CONSOLIDATED ASSETS(5) ------------- ---- ----
(IN FF, EXCEPT FOR
RATIOS)
<S> <C> <C> <C>
CarnaudMetalbox (per CarnaudMetalbox Share) 45.7 48.9 40.4
Crown (per Unit) 18.8 14.2 8.7
CarnaudMetalbox/Crown Ratio 2.43 3.44 4.64
</TABLE>
- --------
(1) Income from operations before goodwill amortization expense, restructuring
expense, interest income and expense, translation and exchange adjustments
and income taxes pursuant to U.S. GAAP (see amounts in tables below).
(2) Income from operations before goodwill amortization expense, restructuring
expense and income taxes pursuant to U.S. GAAP (see amounts in tables
below).
(3) Net income before cumulative effect of changes in accounting methods and
restructuring expense (net of tax) pursuant to U.S. GAAP. The cumulative
effect of changes in accounting methods amounts to $81.8 million for Crown
in 1993 (see amounts in tables below).
(4) The ratios would have been 1.24, 1.54 and 0.76 for the first half of 1995,
1994 and 1993, respectively, if computed on the basis of reported net
income (after minority interests and non-recurring items) and pursuant to
U.S. GAAP.
(5) Net of goodwill (see amounts in tables below).
The tables below set forth certain amounts used in the foregoing calculations:
<TABLE>
<CAPTION>
CARNAUDMETALBOX 1ST HALF 1995 1994 1993
--------------- ------------- ----- -----
(MILLIONS OF FF)
<S> <C> <C> <C>
Restructuring charges (pre tax) 90 211 306
Restructuring charges (after tax) 66 163 236
Gains on disposals (pre tax) 82 242 193
Gains on disposal (after tax) 82 110 193
Goodwill amortization 86 179 168
Total goodwill(1) 6,148 6,153 6,222
</TABLE>
<TABLE>
<CAPTION>
CROWN 1ST HALF 1995 1994 1993 1ST HALF 1995 1994 1993
------- ------------- ------- ------- ------------- ----- -----
(MILLIONS OF $) (MILLIONS OF FF)
<S> <C> <C> <C> <C> <C> <C>
Restructuring charges
(pre tax) 20.2 114.6 0 100.8 631.6 0
Restructuring charges
(after tax) 12.8 73.2 0 63.9 403.4 0
Gains on disposals (pre
tax) -- -- -- -- -- --
Gains on disposal (after
tax) -- -- -- -- -- --
Goodwill amortization 15.2 29.6 28.1 75.9 163.1 159.7
Total goodwill(1) 1,112.1 1,122.4 1,119.1 5,397 5,999 6,624
</TABLE>
- --------
(1) For CarnaudMetalbox, the figures correspond to the sum of the amount
reported in the balance sheet as goodwill and of the amount reported as
intangible assets. Such intangible assets principally include goodwill
created upon the merger of Carnaud and Metal Box.
A-2
<PAGE>
TRADING PRICES(1)
<TABLE>
<CAPTION>
CARNAUDMETALBOX
FOR 1 CARNAUDMETALBOX CROWN
(FF) SHARE FOR 1 UNIT CARNAUDMETALBOX/CROWN
---- --------------------- ---------- ---------------------
<S> <C> <C> <C>
High 1995 192.2 222.1 0.87
Low 1995 167.0 192.2 0.87
Last (May 22, 1995) 189.7 208.4 0.91
Average 1 month 183.6 206.7 0.89
Average 3 months 177.9 207.4 0.86
Average 6 months 180.9 205.7 0.88
Average 1 year 178.5 200.0 0.89
</TABLE>
- --------
(1) For periods ending May 22, 1995. The announcement of the Exchange Offer
Agreement between CGIP and Crown was made after the close of trading on
such date. On the basis of the closing prices of Crown and CarnaudMetalbox
as of December 18, 1995 and of the average of such stock prices for the 1
and 6 months periods ending on December 18, 1995, the ratio of stock
market prices would have been 1.14, 1.08 and 1.04, respectively.
The Cash Election Price of FF 225 per share values CarnaudMetalbox at 19,380
million French francs (not including stock options) and represents 23.2x 1993
consolidated net income and 20.4x 1994 consolidated net income of
CarnaudMetalbox.
With respect to the trading price of CarnaudMetalbox Shares, the Cash
Election Price represents a premium of
--17.1% over the 1995 highest trading price prior to the date of the
announcement of the Offer;
--18.6% over the latest trading price prior to the date of the announcement
of the Offer;
--22.5% over the average trading price for the month preceding the date of
the announcement of the Offer;
--26.5% over the average trading price for the three month period preceding
the date of the announcement of the Offer;
--24.4% over the average trading price for the six month period preceding
the date of the announcement of the Offer; and
--26.1% over the average trading price for the year preceding the date of
the announcement of the Offer.
A-3
