Prospectus for the initial public offering in the Federal Republic of Germany and in the Grand Duchy of Luxembourg of 35,043,479 bearer shares with no par value from the holdings of the Selling Shareholder, of 8,060,000 bearer shares with no par value from the holdings of the Selling Shareholder, with the number of shares to be actually placed with investors subject to the exercise of an Upsize Option upon decision of the Selling Shareholder, in consultation with the Joint Global Coordinators on the date of pricing, and of up to 5,256,521 bearer shares with no par value from the holdings of the Selling Shareholder to cover potential over-allotments, and at the same time for the admission to trading on the regulated market segment (regulierter Markt) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) with simultaneous admission to the sub-segment of the regulated market with additional post-admission obligations (Prime Standard) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) of 161,200,000 bearer shares with no par value (existing share capital) — each such share with a notional value of EUR 1.00 in the share capital and with full dividend rights as from January 1, 2018 — of Knorr-Bremse Aktiengesellschaft Munich, Germany Price Range: EUR 72.00 — EUR 87.00 International Securities Identification Number (ISIN): DE000KBX1006 German Securities Code (Wertpapier-Kenn-Nummer) (WKN): KBX100 Common Code: 186559398 Trading Symbol: KBX Joint Global Coordinators and Joint Bookrunners Deutsche Bank J.P. Morgan Morgan Stanley Joint Bookrunners Berenberg COMMERZBANK UBS Investment Bank UniCredit Bank AG The date of the Prospectus is September 28, 2018 (This page has been left blank intentionally) TABLE OF CONTENTS I. SUMMARY OF THE PROSPECTUS ......................................................................................... 1 A. Introduction and Warnings....................................................................................... 1 B. The Issuer .............................................................................................................. 2 C. Securities ............................................................................................................... 18 D. Risks ..................................................................................................................... 19 E. Offer ..................................................................................................................... 23 II. ZUSAMMENFASSUNG DES PROSPEKTS.............................................................................. 30 A. Einleitung und Warnhinweise .................................................................................. 30 B. Emittent................................................................................................................. 31 C. Wertpapiere ........................................................................................................... 49 D. Risiken .................................................................................................................. 51 E. Angebot................................................................................................................. 55 1. RISK FACTORS........................................................................................................................ 63 1.1. Risks Related to Our Market Environment and Business............................................. 63 1.2. Legal, Regulatory and Tax Risks .............................................................................. 84 1.3. Risks Related to the Offering, the Listing and the Shareholder Structure ...................... 92 2. GENERAL INFORMATION ..................................................................................................... 96 2.1. Responsibility for the Contents of the Prospectus ....................................................... 96 2.2. Subject Matter of the Prospectus .............................................................................. 96 2.3. Forward-Looking Statements ................................................................................... 97 2.4. Information from Third Parties................................................................................. 98 2.5. Documents Available for Inspection ......................................................................... 100 2.6. Note on Currency ................................................................................................... 100 2.7. Note Regarding the Presentation of Certain Financial Information ............................... 101 2.8. Non-IFRS Measures/Alternative Performance Measures............................................. 102 2.9. Note Regarding Figures and Technical Terms............................................................ 103 3. THE OFFERING ....................................................................................................................... 104 3.1. Subject Matter of the Offering.................................................................................. 104 3.2. Selling Shareholders ............................................................................................... 104 3.3. Price Range, Offer Period, Offer Price and Allotment................................................. 104 3.4. Expected Timetable for the Offering......................................................................... 105 3.5. Allotment Criteria................................................................................................... 106 3.6. Preferential Allocation ............................................................................................ 106 3.7. Stock Exchange Admission and Commencement of Trading ....................................... 107 3.8. Delivery and Payment ............................................................................................. 107 3.9. Stabilization Measures, Over-Allotments and Greenshoe Option ................................. 107 3.10. Lock-Up Agreements .............................................................................................. 108 3.11. Designated Sponsors ............................................................................................... 109 3.12. Information on the Offer Shares ............................................................................... 109 3.13. ISIN, WKN, Common Code and Trading Symbol ...................................................... 110 3.14. Transferability of the Shares .................................................................................... 110 3.15. Interests of Parties Participating in the Offering ......................................................... 110 3.16. MiFID II Product Governance Requirements ............................................................. 111 4. PROCEEDS AND COSTS OF THE OFFERING AND THE LISTING; REASONS FOR THE OFFERING AND THE LISTING............................................................................................... 112 4.1. Proceeds and Costs of the Offering and the Listing..................................................... 112 4.2. Reasons for the Offering and the Listing ................................................................... 112 5. DIVIDEND POLICY.................................................................................................................. 113 5.1. General Rules on Allocation of Profits and Dividend Payments................................... 113 5.2. Dividend Policy and Earnings per Share.................................................................... 113 i 6. CAPITALIZATION AND INDEBTEDNESS .............................................................................. 115 6.1. Capitalization ......................................................................................................... 115 6.2. Net Financial Indebtedness ...................................................................................... 116 6.3. Off-Balance Sheet Commitments / Contingent Liabilities ........................................... 116 6.4. Working Capital Statement ...................................................................................... 117 6.5. No Significant Change ............................................................................................ 117 7. DILUTION ................................................................................................................................ 118 8. SELECTED FINANCIAL AND BUSINESS INFORMATION .................................................... 119 8.1. Selected Financial Information from the Consolidated Statement of Profit or Loss ........ 120 8.2. Selected Financial Information from the Consolidated Statement of Financial Position ................................................................................................................. 120 8.3. Selected Financial Information from the Consolidated Statement of Cash Flow ............ 121 8.4. Selected Other Key Financial and Operating Data ...................................................... 121 9. MANAGEMENT’S DISCUSSION AND ANALYSIS OF NET ASSETS, FINANCIAL POSITION AND RESULTS OF OPERATIONS ......................................................................... 124 9.1. Overview of the Business Activities of Knorr-Bremse ................................................ 124 9.2. Selected Factors Affecting Results of Operations and Financial Position ...................... 126 9.3. Presentation