Subject:Decidingon the submission of an offer in a potential transaction to acquire 100%of the shares in SAPEC - Agro, S.A. and in Trade CorporationInternational, S.A.Contentsof the report:TheManagement Board of CIECH S.A. with its registered office in Warsaw (the"Issuer") hereby informs that on 2 November 2016 theManagement Board of the Issuer decided to submit an offer(the"Offer") regarding potential acquisition of:1)100% of the shares of SAPEC - Agro, S.A., a company incorporated underPortuguese law with its registered seat in Setúbal, Portugal (the "Company1"); and2)100% of the shares of Trade Corporation International, S.A. a companyincorporated under Spanish law with its registered seat in Madrid, Spain(the "Company 2"; the Company 1, the Company 2 and theirsubsidiaries jointly -the "Companies")fromSAPEC - Portugal, SGPS, S.A.a company incorporated in Portugal with its registered seat in Lisbon,Portugal (the "Seller"), being subsidiary of SAPEC S.A.with its registered seat in Brussels, Belgium ("SAPEC"),and acquisition of the receivables of SAPEC Group (with the exception ofthe Companies) towards the Companies (the "Potential Transaction").Inaddition, on 2 November 2016 the Management Board of the Issuer decidedto sign a commitment letter with a consortium of banks in respect ofmaking available to the Issuer a debt financing to finance the PotentialTransaction (the "Commitment Letter").On2 November 2016 the Supervisory Board of the Issuer adopted theresolution accepting contents of the Offer and issued consent to submitthe Offer and consent to sign the Commitment Letter.TheManagement Board of the Issuer decided to submit the Offer in connectionwith development plans of CIECH S.A. capital group("CIECHGroup") concerning the AGRO area. According to the Issuer, if thePotential Transaction is carried out, it would allow for the businessdiversification and realisation of synergy with CIECH Group. PotentialTransaction will substantially increase CIECH Group share in theEuropean crop protection market and significantly expand its productportfolio. Potential Transaction will also allow CIECH Group to enter anew business segment - crop nutrition, including micronutrients andbiostimulants.TheManagement Board of the Issuer expects that if the Potential Transactionis carried out, it will be financed with new debt which will be madeavailable to the Issuer in accordance with the Commitment Letter andwith own funds. The Commitment Letter provides that the undertaking ofthe banks to finance the Potential Transaction is subject to agreementand execution of the finance documentation and satisfaction of marketstandard conditions precedent, including among others, the Sellerdeciding to proceed with completion of the Potential Transaction withthe Issuer following acceptance of the Issuer's Offer by the Seller. TheCommitment Letter provides also right of the Issuer to terminate it atany time.Asregards the estimated value of the Potential Transaction, the ManagementBoard of the Issuer estimates that if the Potential Transaction iscarried out and additional financial indebtedness referred to above isincurred, the ratios specified in the CIECH Group's Strategy for theperiod 2014-2019 may not be achieved, including, in particular, a netdebt to EBITDA ratio will exceed the level estimated in the Strategy(estimated in the strategy at below 1.00 in 2019) (Current Report No.70/2014 of 04.11.2014).Informationabout CompaniesCompaniesdeal with production and sale of generic crop protection and cropnutrition products. In crop protection segment Companies operateprimarily in Europe, with strong presence in Spain and Portugal, whilein crop nutrition globally.Inaccordance with the consolidated financial statement of SAPEC, the cropprotection and crop nutrition segments jointlygeneratedrevenue of EUR 223m in 2015.Termsof the Offer and the Auction ProcessShouldthe Seller accept the Issuer's Offer and parties reach an agreementconcerning the Potential Transaction, the Management Board of the Issuerexpects that the final terms of the Potential Transaction (including thefinal sale price), will be determined in the course of bilateralnegotiations.TheOffer is not legally binding, and in particular does not constitute anoffer in the meaning of the civil code nor applicable regulations inother jurisdictions. The Issuer reserved in the Offer the right towithdraw from the Potential Transaction at any time prior to executionof any legally binding agreements.Thedocumentation of the auction process stipulates the Seller's right toabandon the auction process at any time or to select a different bidder.TheManagement Board of the Issuer will inform in a separate report(s) aboutthe selection of the Issuer for the purpose of conducting bilateralnegotiations, about receiving any exclusivity in negotiations,conclusion of a legally binding agreement for the sale or aboutterminating the Issuer's participation in the auction process in anotherway.Legalbasis:Article 17 paragraph 1 of the MAR -inside information