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November 12, 2009

Boskalis and Smit agree to merge

Dredging giant Royal Boskalis Westminster N.V. and salvage giant Smit Internationale N.V. (Smit) have reached an agreement in principle on a full merger of the two companies. A joint statement issued today says that "all the activities of Smit will be continued in the combined company (the Group)."

Last December, Boskalis announced that it had dropped plans to make a public offer for Smit saying it could not reach agreement with Smit after meetings that discussed "various break-up scenarios" for Smit.

This time around Boskalis and Smit aim to reach a transaction through a public offer of EUR 60 in cash by Boskalis for all outstanding shares in Smit.

They say the business combination will create a world class maritime service provider offering an excellent platform for further growth.

And there's no talk of "break-up scenarios." Boskalis and Smit have agreed that the existing business plans will serve as the basis for the further expansion of the Group and that further growth and development of all current activities will be supported.

Smit activities will be continued under the Smit name operating out of the current head office in Rotterdam.

The terminals activities of Smit and Boskalis' associate Lamnalco will be integrated, creating synergies in the area of exchanges, procurement and crewing of vessels.

Peter Berdowski, CEO of Boskalis said: "I am very enthusiastic about this merger. Combining our companies creates a Dutch maritime player of a global scale. The merger fits excellently with our strategy aimed at reinforcing and expanding our maritime services. I see significant opportunities for synergies between our companies complemented with a close competence and cultural fit. I support the strategy of Smit, which aligns and complements well with our strategy. Moreover, the merger offers an excellent platform for the further growth of our combined activities."

Ben Vree, CEO of Smit, said: "Our discussions and shared vision have also made me enthusiastic for this merger. We are very thrilled with the support from Boskalis for the Smit strategy and its four divisions. This is a good basis for the further development of our combined activities. We have a clear agreement regarding the continuity of Smit's identity and its strategy thereby securing the continuity of Smit's activities. This merger offers an excellent opportunity for Smit."

Two large shareholders in Smit, Delta Lloyd Groep and Janivo Beleggingen have already confirmed an irrevocable undertaking to support and accept the intended offer, subject to customary offer conditions. Together with Boskalis' own shareholding in Smit, this accounts for approximately 44% of the outstanding shares in Smit.

Ben Vree, CEO of Smit will become a member of the Board of Management of the Group. Smit will also have a representative within the Supervisory Board of the new combination.

The transaction is expected to be fully completed in the first half of 2010. The financing of the Offer will consist of a combination of senior debt and approximately EUR 300 million of equity / junior debt. Part of the financing is expected to include the issuance of EUR 200 million in new Boskalis shares. HAL Investments, a major shareholder in Boskalis, has indicated it will partake in the share issue.

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