Transaction. Deal activity in 2014 back at pre-financial crisis levels - Q1 '08 Q1 '09 Q1 '10 Q1 '11 Q1 '12 Q1 '13 Q1 '14

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1 No. of transactions Transaction Advisory Services Transactions by Sweden s largest companies Corporate Transaction Trends Deal activity in 2014 back at pre-financial crisis levels a quarterly publication that aims to identify trends in the level and direction of transactions completed by Sweden s largest companies reports that the number of completed transactions in 2014 reached its highest level since the start of the financial crisis in Overall, large Swedish companies completed 165 transactions in 2014 representing an 18% increase over 2013 (140 transactions). This is on a par with the number of transactions in 2008 and more than double the number completed in The increased activity was led by an increase in mid-size and larger deals. The number of acquisitions in 2014 (125) increased by 20% compared to the previous year and was the most active year for acquisitions since 2008 (131). increased by 11% year on year to 40 transactions in 2014 but this was still more than 20% below the level in After a consistently strong first nine months of 2014, full year deal numbers were boosted by 50 completed transactions in Q4 2014, making it the best quarter since Q Rolling last twelve months (LTM) transactions The 39% increase in Q compared to the previous quarter was driven by an unusually high number of divestments (19). It will be interesting to see whether this upturn in is a blip or whether it is the start of a long awaited increase in divestment activity to pre-crisis levels. As a result, the full year outturn for 2014 is 6% higher than our one year ago forecast that the number of transactions would reach or exceed the 155 deals completed in The positive momentum in transaction activity is continuing and, in the absence of an unexpected shock to the financial system, we anticipate further growth in In our view, the number of completed transactions in 2015 could increase by around 10% to 180 deals. This would approach the level seen in 2006, but would still be more than 10% below the 2007 peak when 203 transactions were completed. EY expects the next wave of global M&A growth will be driven by mid-market transactions with a focus on strengthening and expanding core business. We anticipate that large Swedish companies are well placed to exploit this trend Q1 '08 Q1 '09 Q1 '10 Q1 '11 Q1 '12 Q1 '13 Q1 '14 LTM no. of transactions LTM no. of aquisitions LTM no. of divestments

2 No. of transactions No. of transactions Year on year quarterly acquisitions Q1 Q2 Q3 Q4 FY14 FY13 FY12 FY11 Year on year quarterly divestments Q1 Q2 Q3 Q4 FY14 FY13 FY12 FY Ranked by Enterprise Value, Meda s acquisition of Rottapharm was the largest transaction completed in 2014, while Investor s sale of 58% of Lindorff was the largest completed divestment. Assa Abloy completed the most acquisitions (13) during 2014, including five in Q4. Notable other strategic transactions included SSAB s acquisition of Rautarukki, Alfa Laval s acquisition of Frank Mohn and AB Volvo s divestment of Volvo Rents. Surprisingly, there were no takeovers of large Swedish listed companies in However, private equity returned as a significant buyer of larger non-core assets. Compared to 2013, the acquisition focus shifted back to the region and Western Europe in 2014 and away from the which saw its share of total acquisitions fall to 16% in 2014 from 27% in the previous year. There were also 7 divestments of assets in 2014 compared with just one in each of the preceding two years. Eastern Europe s share of acquisitions also decreased by 5 percentage points to just 2% in Once again, Manufacturing and construction was the most active industry sector, representing 42% of all completed transactions in Finance and real estate was the next most active sector, accounting for one third of all divestments. Q largest transactions (ranked by Enterprise Value) Date Target Seller Buyer Enterprise Target Value ( 100% ) Turnover Acquisitions M M 2014/10 Rottapharm Fidim Meda 2, /11 Candelaria/Ojos del Salado copper mining operations Freeport-McMoRan Lundin Mining 1,793 n.a. 2014/11 Almirall respiratory franchise Almirall AstraZeneca /10 Lindorff (58%) Investor Capital 2, /12 Euroline SEB Capital /10 SB Seating (89%) Ratos Triton EV includes an unconditional deferred consideration of M 275 payable in EV including the maximum milestone related consideration and additional asset transfer payments would be M 3,154. Sources: Press releases and latest available financial reports. 2

3 2014 largest transactions (ranked by Enterprise Value) Date Target Seller Buyer Enterprise Target Value ( 100% ) Turnover Acquisitions M M 2014/10 Rottapharm Fidim Meda 2, /02 Diabetes business Bristol-Myers Squibb AstraZeneca 1,961 2 n.a. 2014/07 Rautarukki Solidum SSAB 1,858 2, /11 Candelaria/Ojos del Salado copper mining operations Freeport-McMoRan Lundin Mining 1,793 n.a. 2014/05 Frank Mohn Wimoh Alfa Laval 1, /01 Edwards Group CCMP Capital Advisors, Unitas Capital AtlasCopco 1, /08 UNE Empresas Públicas de Medellin Millicom 1,032 1, /11 Almirall respiratory franchise Almirall AstraZeneca /05 Varel International Arcapita Sandvik /05 Sparbanken Öresund Sparbanksstiftelsen Öresund & Sparbanksstiftelsen Gripen Swedbank /10 Lindorff (58%) Investor Capital 2, /01 Volvo Rents AB Volvo Platinum Equity /04 Nordea Bank Polska (Polish operations) Nordea PKO Bank Polski /09 Inwido (68.7%) Ratos IPO /08 Meyer Steel Structures ABB Trinity Industries /12 Euroline SEB Capital /10 SB Seating (89%) Ratos Triton /04 Commercial real estate assets AB Volvo Hemfosa Fastigheter 215 n.a. & Sagax 2014/05 Thomas & Betts (heating, ventilation and air condition business) ABB Nortek /02 Thiele Kaolin (40.2%) Stora Enso Thiele Kaolin 139 n.a. The above table includes only transactions for which an Enterprise Value has been reported 1 EV includes an unconditional deferred consideration of M 275 payable in EV including the maximum milestone related consideration and additional asset transfer payments would be M 3, EV including the maximum milestone related consideration would be M 931. Sources: Press releases and latest available financial reports. 3

4 2014 and by size Acquisitions Target Turnover Q1'14 Q2'14 Q3'14 Q4' under M M over M Total Target Turnover Q1'14 Q2'14 Q3'14 Q4' under M M over M Total Q and 2014 by industry sector and size Target Turnover Q4' Industry sector Band Acquisitions Acquisitions Basic industries under M M over M Manufacturing and construction under M M over M Retail and consumer goods under M M over M Finance and real estate under M M over M Healthcare under M M over M TMT under M M over M Services under M M over M Total under M M over M Total

5 Q by geographic region Acquisitions 2014 by geographic region Acquisitions Asia (excl Japan) 10% Americas (excl ) 13% 13% 3% 26% 35% Asia (excl Japan) 5% Americas (excl ) 9% 16% E Europe 2% 4% 30% 34% 10% 11% 18% 5% E Europe 5% 16% 58% E Europe 8% 17% 52% Hot Topic Middle market growth Pär-Ola Hansson Deputy leader EMEIA Transaction Advisory Services Tel Mobile par-ola.hansson@se.ey.com EY s 11 th bi-annual Capital Confidence barometer in October 2014 predicted that mid-market M&A is coming into its own and will be the engine that accelerates global M&A growth in In line with their growing confidence in global economic stability, both organic and acquisition growth are at the top of the strategic agenda for middle market companies. Some 60% intend to create jobs and hire talent while the appetite for M&A is at a three-year high, with 30% of executives expecting to pursue acquisitions in the next 12 months in order to gain market share, enter new geographies or acquire new technologies. Although few middle market companies are still preoccupied with survival, the focus on growth is tempered by a disciplined approach to operational efficiency. More than 75% are looking to acquire in their core sector and 45% cite reducing costs and improving margins, especially through improvements in the supply chain, as the main driver of M&A. This increased discipline in deal-making as well as fierce competition for quality assets is forcing companies to thoroughly examine many more investment opportunities to find the best strategic fit. More than a quarter of middle market companies report they have five or more deals in the pipeline. As they search for quality assets to fuel their growth, middle market companies will also find themselves becoming the targets of larger peers. In a market whose deal fundamentals are strong ready availability of cash and credit, low interest rates and attractive share prices larger companies are seizing opportunities to add more deals to their own pipeline, and the middle market offers a wealth of potential targets. In emerging economies, smaller businesses drive growth and these will also become attractive assets to acquire as both large and middle market companies expand into these markets. 5

6 Transaction Advisory Services Contacts Jesper Almström Head of Transaction Advisory Services, Transaction Support Jens Dellensjö Transaction Support Staffan Ekström M&A Advisory Staffan Folin M&A Advisory Björn Gustafsson Valuation & Business Modelling Kristoffer Ståhlbröst Restructuring Henrik Eriksson Operational Transaction Services Kristin Ringland Commercial Advisory Services Carsten Kuhlmann Transaction Tax Transaction Advisory Services provides professional advice in connection with acquisitions, divestments, financing, restructuring and other transactions. Our services include M&A advice, restructuring advice (including advice on working capital management), valuations and business modelling, transaction support (including financial due diligence), operational transaction services (including operational due diligence and integration services) and transaction tax services. EY Assurance Tax Transactions Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organisation and / or one or more of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. About EY s Transaction Advisory Services How you manage your capital agenda today will define your competitive position tomorrow. We work with clients to create social and economic value by helping them make better, more informed decisions about strategically managing capital and transactions in fast-changing markets. Whether you re preserving, optimising, raising or investing capital, EY s Transaction Advisory Services combine a unique set of skills, insight and experience to deliver focused advice. We help you drive competitive advantage and increased returns through improved decisions across all aspects of your capital agenda. For more information about our organisation and our services, please visit Transactions covered in this publication are transactions completed by large Swedish companies, defined to mean (i) companies which are listed on the Stockholm Stock Exchange and have a market capitalization over MSEK 5,000; and (ii) other Swedish companies with a turnover of more than MSEK 10,000. Swedish companies that are controlled by foreign groups have been excluded, unless they are headquartered in Sweden. Only transactions completed or declared unconditional in the period with an estimated deal value over approximately 50 MSEK and which have resulted in a change of control or significant change of influence have been included. If large Swedish companies are present on both sides of the same transaction, the transaction is recorded as an acquisition. Public takeovers by third parties and demergers are recorded as divestments. This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax or other professional advice. Please refer to your advisors for specific advice. Ernst & Young AB accepts no responsibility for any loss arising from any action taken or not taken by anyone using the material in this publication. For further enquiries, or to add your name to the mailing list for this publication, please send an to transactions@se.ey.com Ernst & Young AB. All Rights Reserved.