Joint Report
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JOINT REPORT of the Management Board of GSW Immobilien AG and of the Management Board of Deutsche Wohnen AG on the Domination Agreement between GSW Immobilien AG and Deutsche Wohnen AG pursuant to Section 293a of the German Stock Corporation Act April 30, 2014 Please note that this translation of the German Joint Report is for convenience purposes only. Only the German original version of the Joint Report is legally valid and binding. No responsibility is assumed for misunderstandings or misinterpretations that may arise from this translation or any mistakes or inaccuracies contained herein. In cases of doubt, only the German original version shall form the basis for interpretation. - Convenience Translation; in case of inconsistencies, the German original version prevails - TABLE OF CONTENTS Page (A) Preliminary notes .........................................................................................................1 (B) The Parties to the Agreement .....................................................................................3 1. GSW Immobilien AG ..................................................................................................3 1.1 Overview ........................................................................................................................3 1.2 Company history ............................................................................................................3 1.3 Headquarters, financial year and company purpose ......................................................3 1.4 Corporate bodies and employees ...................................................................................4 1.4.1 Management Board ............................................................................................4 1.4.2 Supervisory Board .............................................................................................5 1.4.3 Employees and co-determination .......................................................................5 1.5 Share capital, exchange trading, shareholders ...............................................................5 1.5.1 Share capital .......................................................................................................5 1.5.2 Authorized capital ..............................................................................................5 1.5.3 Contingent capital and authorization to issue bonds..........................................8 1.6 Convertible Bond 2012 of GSW Immobilien AG .......................................................11 1.7 Shareholders .................................................................................................................12 1.8 Exchange trading .........................................................................................................12 1.9 Structure of the GSW Group........................................................................................12 1.9.1 Operational and legal structure ........................................................................12 1.9.2 Participations....................................................................................................12 1.10 Overview of business activities ...................................................................................13 1.11 Business development, earnings situation and assets, key financial data ....................13 1.11.1 Business development in the 2013 financial year ............................................14 1.11.2 Key figures for the financial years 2011 to 2013 .............................................17 1.11.3 Outlook ............................................................................................................19 2. Deutsche Wohnen AG ...............................................................................................19 2.1 Overview ......................................................................................................................19 2.2 Company history ..........................................................................................................20 2.3 Headquarters, financial year and company purpose ....................................................21 2.4 Corporate bodies and employees .................................................................................21 i - Convenience Translation; in case of inconsistencies, the German original version prevails - 2.4.1 Management Board ..........................................................................................21 2.4.2 Supervisory Board ...........................................................................................22 2.4.3 Employees and co-determination .....................................................................22 2.5 Share capital, exchange trading, shareholders .............................................................23 2.5.1 Share capital .....................................................................................................23 2.5.2 Authorized capital ............................................................................................23 2.5.3 Contingent capital and authorization to issue bonds........................................25 2.6 Convertible Bond 2013 of Deutsche Wohnen AG ......................................................29 2.7 Shareholders .................................................................................................................30 2.8 Exchange trading .........................................................................................................30 2.9 Structure of the Deutsche Wohnen Group ...................................................................30 2.9.1 Operational and legal structure ........................................................................30 2.9.2 Participations....................................................................................................31 2.10 Overview of business activities ...................................................................................31 2.11 Business development, income and asset position, key financial data ........................32 2.11.1 Business development in the 2013 financial year ............................................32 2.11.2 Key figures for the financial years 2011 to 2013 .............................................36 2.11.3 Outlook ............................................................................................................37 3. Voluntary Takeover Offer of Deutsche Wohnen AG concerning the acquisition of the GSW Shares .................................................................................38 3.1 Voluntary Takeover Offer ............................................................................................38 3.2 Business Combination Agreement ...............................................................................39 3.3 Further share acquisitions following the execution of the public Takeover Offer ......40 (C) Domination Agreement .............................................................................................40 1. Reasons for the conclusion of the Domination Agreement ....................................40 1.1 Financial, legal and tax reasons ...................................................................................40 1.1.1 Financial reasons ..............................................................................................40 1.1.2 Legal reasons ...................................................................................................41 1.1.3 Tax reasons ......................................................................................................44 1.2 Alternatives to the conclusion of a Domination Agreement ........................................44 1.2.1 Squeeze-out of minority shareholders .............................................................44 1.2.2 Integration or merger .......................................................................................45 1.2.3 Conclusion .......................................................................................................45 1.3 Costs of the Domination Agreement ............................................................................46 ii - Convenience Translation; in case of inconsistencies, the German original version prevails - 2. Content and ramifications of the Domination Agreement .....................................47 2.1 Description of the content of the Agreement ...............................................................47 2.1.1 Management control and issuing of instructions (Article 1 of the Domination Agreement) ..................................................................................47 2.1.2 Right to information (Article 2 of the Domination Agreement) ......................48 2.1.3 Assumption of losses (Article 3 of the Domination Agreement) ....................48 2.1.4 Compensation (Article 4 of the Domination Agreement) ................................49 2.1.5 Settlement (Article 5 of the Domination Agreement) ......................................55 2.1.6 Effectiveness (Article 6 of the Domination Agreement) .................................59 2.1.7 Duration of contract, termination (Article 7 of the Domination Agreement) ..60 2.1.8 Miscellaneous provisions (Article 8 of the Domination Agreement) ..............61 2.2 Settlement shares in Deutsche Wohnen AG and bank processing of the settlement and compensation amounts ..........................................................................................61