Description of the stock repurchase program approved by May 16 2013 AGM

PR Newswire/Les Echos/ 
4 GENERAL LEGAL AND FINANCIAL INFORMATION 


                 Stock repurchase program

STOCK REPURCHASE PROGRAM

> Description of the stock repurchase program submitted for shareholders'
  approval at the Combined General Meeting of May 16, 2013

In accordance with Articles 241-1 et seq. of the General Regulation of the
Autorité des Marchés Financiers, as well as EC regulation 2273/2003 of
December 22, 2003, which entered force on October 13, 2004, this information
memorandum is intended to present the objectives, terms and conditions for the
renewal of the stock repurchase program, as well as its expected impact on the
Company's shareholders.

SUMMARY OF THE PRINCIPAL CHARACTERISTICS OF THE PROGRAM

Issuer: MERSEN.

Shares concerned: Mersen's ordinary shares, admitted for trading in Compartment
B of Eurolist by Euronext Paris (ISIN code: FR0000039620).

Maximum percentage of the capital authorized for repurchase by shareholders at
the General Meeting: 10%. Maximum acquisition price per share: EUR50.

Aims of the program in order of priority:
* enhance trading in and the liquidity of the Company's shares by engaging the
  services of an investment service provider under a liquidity agreement in
  accordance with the AFEI's charter;
* grant or transfer shares to employees in connection with the employee profit
  -sharing plan or the allotment of shares under the conditions provided for in
  Articles L. 225-197-1 to L. 225-197-3;
* allot shares in connection with the conversion or exchange of securities
 (including debt securities) conferring rights to the Company's share capital;
* purchase them for holding purposes and subsequently remit them as part of an
  exchange offer or in consideration for any acquisitions;
* cancel shares through a reduction in the share capital in accordance with
  the French Commercial Code.

Duration of the program: 18 months from the Combined General Meeting of May 16,
2013 until the date of the General Meeting convened to approve the financial
statements for fiscal 2013.

I - Outcome of the previous program

With the exception of the repurchases made under the liquidity agreement, the
Company did not make any use of the authorization granted by the Combined
General Meeting of May 23, 2012 in connection with the previous stock repurchase
program to stabilize the share price. At December 31, 2012, 49,571 shares were
held under this liquidity agreement.

The Company did not use any derivatives.

SUMMARY STATEMENT

ISSUER'S DECLARATION OF TRANSACTIONS IN ITS OWN SHARES BETWEEN MAY 23, 2012 AND
DECEMBER 31, 2012

Percentage of the share capital held directly and indirectly       0.2%
Number of shares canceled over the previous 24 months              None
Number of shares held in the portfolio                             None
Carrying amount of the portfolio                                   None
Market value of the portfolio                                      None
                 Total 
                 gross        Open interest on the filing date of the 
              cash flows              information memorandum    
                 Sales/ 
             Purchases   
             Transfers       Open interest, buy side  Open interest, sell side
                             Calls  Puts   Futures     sold       Puts Futures
                         purchased  sold    bought     Calls  purchased   sold

Number of 
instruments       0
Average 
maximum life                   None  None    None       None      None    None
Average 
transaction price -
Average 
exercise price                 None  None    None        None      None   None
Amounts           -            None  None    None        None      None   None

Since February 25, 2005, the Company has entrusted Exane-BNP Paribas
(independent services provider) with implementing a liquidity agreement in
accordance with the AFEI's charter approved by the Autorité des Marchés
Financiers for an automatically renewable period of one year. The funds and
shares made available pursuant to this agreement and credited to the liquidity
account on February 25, 2005 comprised EUR2,200,000 and no shares.

II - Objectives of the stock repurchase program

Mersen wants to be able to implement a program to repurchase its own shares
pursuant to the authorization submitted for approval by shareholders at the
Combined General Meeting on May 16, 2013.

Share purchases may be carried out, in decreasing order of priority, to:

* enhance trading in and the liquidity of the Company's shares by engaging the
  services of an investment service provider under a liquidity agreement in
  accordance with the AFEI's charter;
* grant or transfer shares to employees in connection with the employee
  profit-sharing plan or the allotment of shares under the conditions provided 
  for in Articles L. 225-197-1 to L. 225-197-3;
* allot shares in connection with the conversion or exchange of securities
 (including debt securities) conferring rights to the Company's share capital;
* purchase them for holding purposes and subsequently remit them as part of an
  exchange offer or in consideration for any acquisitions;
* cancel shares through a reduction in the share capital in accordance with the
  French Commercial Code.

III - Legal framework
This program conforms to the provisions of Articles L. 225-209 et seq. of the
French Commercial Code, as well as EC Regulation no. 2273/2003 of December 22,
2003, implementing the Market Abuse Directive 2003/6/EC of January 28, 2003,
which entered force on October 13, 2004. It will be submitted for shareholders'
approval at the Combined General Meeting of May 16, 2013, deliberating in
accordance with the quorum and majority voting requirements for Ordinary General
Meetings. The corresponding resolution to be proposed by the Management Board is
worded as follows:

Purchase of Mersen shares
After hearing the Management Board's report and having familiarized itself with
the description of the stock repurchase program, the General Meeting authorizes
the Management Board under the conditions stipulated in Article L. 225-209 et
seq. of the French Commercial Code to acquire, on one or more occasions and by
any means, a number of the Company's shares representing up to 10% of the shares
comprising the Company's share capital, or 2,035,096 shares.

The General Meeting resolves that purchases of the Company's shares may be made
to:

* enhance trading in and the liquidity of the Company's shares by engaging the
  services of an investment service provider under a liquidity agreement in
  accordance with the AFEI's charter;
* grant or transfer shares to employees in connection with the employee
  profit-sharing plan or the allotment of shares under the conditions provided 
  for in Articles L. 225-197-1 to L. 225-197-3;
* allot shares in connection with the conversion or exchange of securities
 (including debt securities) conferring rights to the Company's share capital;
* purchase them for holding purposes and subsequently remit them as part of an
  exchange offer or in consideration for any acquisitions;
* cancel shares through a reduction in the share capital in accordance with the
  French Commercial Code.

The maximum purchase price is set at EUR50 per share. This price is set subject
to adjustments related to any transactions affecting the Company's share
capital. In view of the maximum purchase price set, the aggregate amount of
share purchases may not exceed EUR101,754,800.

These share purchases, grants or sales may be entered into and paid for by any
means, including as part of a liquidity agreement entered into by the Company
with an investment services provider.

This authorization is valid until the General Meeting called to vote on the
financial statements for fiscal 2013. In no case whatsoever will this
authorization remain valid for more than 18 months. It replaces and supersedes
the previous authorization granted by the Combined General Meeting of May 23,
2012.

The General Meeting grants full powers to the Management Board, with the option
of delegating them to the Chairman of the Management Board, to place all stock
market orders, enter any into agreements, carry out all formalities and,
generally speaking, do whatever is required to apply this authorization.

IV - Terms and conditions

1) Maximum percentage of the share capital to be acquired and maximum
   amount payable by Mersen

Mersen will have the option of acquiring up to 10% of the share capital at the
date of the General Meeting, i.e. 2,035,096 shares. The Company reserves the
right to make full use of the authorized program. Accordingly, the maximum
amount that Mersen may pay assuming that it acquires shares at the maximum price
set by the General Meeting, i.e. EUR50 per share, would be EUR101,754,800.

The Company's discretionary reserves, as stated under liabilities in the most
recent annual financial statements prepared and certified at December 31, 2012,
amounted to EUR267,398,551. Pursuant to law, the size of the stock repurchase
program may not exceed this figure ahead of the end of fiscal 2013.

Mersen undertakes to stay below the direct and indirect ownership threshold of
10% of the share capital at all times.

2) Conditions governing repurchases

Stock repurchases, sales and transfers may take place at any time within the
restrictions laid down in the stock market regulations and by any means, through
trading in the market, through the use of option instruments or through block
share purchases, provided that the General Meeting does not place any special
restrictions on acquisitions of blocks of shares.

The Company will be careful not to increase the volatility of its shares when
using options instruments.

3) Schedule for the program

These stock repurchases may take place only after the approval of the
corresponding resolution to be presented to the Combined General Meeting of May
16, 2013 and until the date of the General Meeting convened to approve the
financial statements for 2013. In no case whatsoever will this authorization
remain valid for more than 18 months.

4) Financing for the stock repurchase program 
Stock repurchases will be financed using the Company's cash funds or using debt
finance. The Company will adjust its credit lines to cover these stock 
repurchases.

As a guide, net cash from operating activities before capital expenditures came
to EUR101.8 million at December 31, 2012. Equity attributable to the Group's
shareholders stood at EUR517.1 million, and net debt at EUR241.5 million.

V - Presentation of the likely impact of the stock repurchase program on
    Mersen's financial situation

Calculations of the impact of the program on the Group's financial statements
were made assuming the repurchase of 10% of the share capital based on Mersen's
share capital at December 31, 2012.

The other key assumptions used were as follows:

* interest expense estimated at the gross annual rate of 3.5%;
* a unit repurchase price of EUR217.2, the average closing price for trading
  sessions between January 23 and February 20, 2013;
* theoretical tax rate: 33%.

On this basis, the impact of the stock repurchase program on the Group's
consolidated financial statements would be as follows:
                     Consolidated   Impact of the  Proforma after    Impact
                        financial      repurchase  the repurchase    of the


                   statements   of 10% of the   of 10% of the   repurchase
(in millions     at Dec. 31, 2012   share capital   share capital      (%)
of euros)            
Equity attributable 
to Group shareholders       515.1          (45.2)           471.9        -8.7%
Total equity                527.6          (45.2)           482.4        -8.6%
Net debt                    241.5           44.2            285.7        18.3%
Total number of 
shares outstanding 
at Dec. 31              20,350,969     2,035,097       18,315,872       -10.0%
Weighted average 
number of shares
used to compute 
Earnings per share       20,268,873    2,026,887        18,241,986      -10.0%
Net income 
attributable to 
Mersen's shareholders           5.6        (1.0)              4. 6      -18.5%
Earnings per share             0.28                           0.25      -10.7%
Net income from 
continuing operations,
attributable to Group 
shareholders                   33.3         (1.0)              32.3      -3.1%
Net income from 
continuing operations 
per share                      1.64                            1.77       7.8%   
VI - Tax treatment of stock repurchases 
1) For Mersen 
The repurchase by Mersen of its own shares as part of this program without
cancellation of the shares would have an impact on its taxable income if the
shares were sold or transferred at a price other than their repurchase price.
Taxable income would then be affected by the capital gain or loss arising. 
2) For shareholders selling their shares
Capital gains tax applies to this repurchase program (Article 112-6 of the
French General Tax Code). Gains realized by legal entities subject to French
corporate income tax incur corporate income tax at the standard rate pursuant to
Articles 209 and 210 of the French General Tax Code. Gains realized by
individuals in France are subject to the disposal gains on securities or
corporate rights regime provided for in Article 150-0-A of the French General
Tax Code. Under this regime, capital gains are taxable at the marginal income
rate, plus social security contributions amounting to 15.5%. Gains are not
liable to this tax in France when realized by individuals not domiciled in
France for tax purposes or by entities having a head office located outside
France (and with no permanent establishment in France holding the shares on its
balance sheet), without the former at any time having owned directly or
indirectly, alone or with family members, a shareholding of over 25% in rights
to the Company's corporate profits at any time whatsoever during the five years
preceding the sale (Article 244 bis B and C of the French General Tax Code). 
VII - Intervention by the person(s) controlling the issuer alone or in concert 


      No individual or legal entity controls Mersen either alone or in concert.

VIII - Breakdown of ownership of Mersen's share capital at December 31, 2012
       Mersen's share capital is divided into 20,350,969 shares, each with a 
       par value of EUR2, ownership of which at December 31, 2012 was as 
       follows based on the information received by Mersen:

OWNERSHIP OF THE SHARE CAPITAL AT DECEMBER 31, 2012

Shareholders                   Number of       % of the    % of voting
                                  shares   share capital        rights

Free float, comprising:        20,350,969          99.8%        100.0%
- Employee shareholders           268,073           1.3%          1.3%
- Individual shareholders       3,638,218          17.9%         17.9%
- French institutional 
  investors                     9,953,609          48.9%         49.0%
- International institutional 
  investors                     6,441,498          31.7%         31.8%
Treasury shares 
(liquidity agreement)              49,571           0.2%
TOTAL                          20,350,969           100%          100%

To the best of the Company's knowledge, the following shareholders own over 5%
of the Company's share capital and voting rights:

Shareholder                                  Number of shares     Percentage

ACF I Investment (AXA Private Equity group)         3,521,922         17.31%
Fonds Stratégique d'Investissement/
Caisse des Dépôts et Consignations                  3,138,987         15.42%
Sofina                                              1,632,398          8.02%
Mondrian Investment Partners                        1,367,800          6.72%

To the best of the Company's knowledge, no other shareholders hold over 5% of
the Company's share capital and voting rights.

No shareholders' agreement is in place.

As a result of the stock options granted under the 1999 to 2010 plans still
outstanding at December 31, 2012, 500,364 new shares (following the adjustment
after the capital increase carried out in October 2009) may potentially be
issued. The information concerning Mersen's stock subscription options is shown
on page 51 of this reference document.

The number of BSAR warrants outstanding at December 31, 2012 entitle their
holders to acquire 103,331 new shares, each with a par value of EUR2. These BSAR
warrants were not exercisable prior to July 17, 2012, barring the occurrence of
specific events.

The total number of bonus shares that may be granted definitively at December
31, 2012 was 248,388 new shares each with a par value of EUR2 after the
adjustment resulting from the October 2009 capital increase.

IX - Persons responsible for the information memorandum

To the best of the Company's knowledge, the information provided in this
information memorandum is true and accurate. It provides all the information
required for investors to make an informed judgment of Mersen's stock repurchase
program. There are no omissions liable to impair its significance.

MERSEN | REFERENCE DOCUMENT 2012


                  
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-0- May/17/2013 10:01 GMT
 
 
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