Joint Statement (Gemeinsame Stellungnahme) of the Executive Board (Vorstand) and the Supervisory Board (Aufsichtsrat)

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1 THIS DOCUMENT IS A NON-BINDING TRANSLATION OF A GERMAN REASONED STATEMENT PURSUANT TO THE GERMAN SECURITIES ACQUSITION AND TAKEOVER ACT (WPÜG). IN CASE OF ANY DISCREPANCY BETWEEN THE ENGLISH AND THE GERMAN VERSION, THE GERMAN VERSION PREVAILS. Mandatory publication pursuant to Sec. 27 para. 3, Sec. 14 para. 3 sentence 1 of the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz, WpÜG) Joint Statement (Gemeinsame Stellungnahme) of the Executive Board (Vorstand) and the Supervisory Board (Aufsichtsrat) by Vossloh Aktiengesellschaft Vosslohstraße Werdohl Germany on the voluntary public takeover offer (cash offer pursuant to Sec. 29 of the German Securities Acquisition and Takeover Act (WpÜG)) of KB Holding GmbH Schlehdornstraße Grünwald Germany to the shareholders of Vossloh Aktiengesellschaft to acquire their ordinary bearer shares in that company Vossloh Shares: ISIN DE Tendered Vossloh Shares: ISIN DE000A14KR84

2 I. GENERAL INFORMATION ABOUT THE STATEMENT LEGAL BASIS FACTUAL BASIS OF THE STATEMENT PUBLICATION OF THE STATEMENT AND OF ANY ADDITIONAL STATEMENTS ON AMENDMENTS OF THE OFFER OWN RESPONSIBILITY OF THE SHAREHOLDERS OF VOSSLOH AG...6 II. INFORMATION ABOUT THE TARGET COMPANY GENERAL COMPOSITION OF THE EXECUTIVE BOARD AND THE SUPERVISORY BOARD SHAREHOLDER STRUCTURE OVERVIEW OF THE BUSINESS OF THE VOSSLOH GROUP SUMMARY OF FINANCIAL INFORMATION AND OTHER COMPANY INFORMATION III. INFORMATION ABOUT THE BIDDER BASIC INFORMATION VOSSLOH SHARES HELD BY THE BIDDER OR BY PERSONS ACTING JOINTLY WITH THE BIDDER AND THEIR SUBSIDIARIES; ATTRIBUTION OF VOTING RIGHTS IV. INFORMATION ABOUT THE OFFER DECISIVENESS OF OFFER DOCUMENT IMPLEMENTATION OF THE OFFER CONSIDERATION ACCEPTANCE PERIOD AND ADDITIONAL ACCEPTANCE PERIOD COMPLETION CONDITIONS STATUS OF OFFICIAL PROCEDURES AND APPROVALS ACCEPTANCE AND SETTLEMENT OF THE OFFER V. FINANCING OF THE OFFER VI. TYPE AND AMOUNT OF THE CONSIDERATION OFFERED STATUTORY REQUIREMENTS AS TO THE AMOUNT OF THE CONSIDERATION Prior acquisitions Stock exchange price Interim conclusion Page 2

3 2. FAIRNESS OPINION OF ROTHSCHILD VII. 3. OWN ASSESSMENT OF THE FAIRNESS OF THE CONSIDERATION BY THE EXECUTIVE BOARD AND THE SUPERVISORY BOARD OBJECTIVES AND INTENTIONS OF THE BIDDER AND EXPECTED CONSEQUENCES FOR VOSSLOH AG BACKGROUND OF THE OFFER; ECONOMIC AND STRATEGIC MOTIVES VIII. IX. 2. INTENTIONS OF THE BIDDER AND THE BIDDER PARENT COMPANIES Future business activity, assets and future obligations of Vossloh AG The Executive Board and the Supervisory Board of Vossloh AG Employees, employment conditions, and employee representation Corporate seat of Vossloh, location of material parts of the business Potential structural measures ASSESSMENT OF THE OBJECTIVES AND INTENTIONS OF THE BIDDER Strategic background and intentions of the Bidder Future business activity, assets and future obligations of Vossloh AG The Executive Board and the Supervisory Board of Vossloh AG Corporate seat of Vossloh, location of material parts of the business Possible structural measures Financial consequences for Vossloh AG Consequences on existing business relationships of the Vossloh Group POSSIBLE CONSEQUENCES FOR EMPLOYEES AND EMPLOYEE REPRESENTATION IN THE VOSSLOH GROUP AS WELL AS EMPLOYMENT CONDITIONS INTERESTS OF THE MEMBERS OF THE SUPERVISORY BOARD AND THE EXECUTIVE BOARD INTENTION OF THE MEMBERS OF THE EXECUTIVE BOARD AND THE SUPERVISORY BOARD TO ACCEPT THE OFFER X. CONSEQUENCES FOR THE SHAREHOLDERS OF VOSSLOH AG POTENTIAL CONSEQUENCES IN CASE THE OFFER IS ACCEPTED POTENTIAL CONSEQUENCES IN CASE THE OFFER IS NOT ACCEPTED Page 3

4 XI. RECOMMENDATION APPENDIX 1 SUBSIDIARIES OF VOSSLOH AG APPENDIX 2 FAIRNESS OPINION ROTHSCHILD Page 4

5 On 16 February 2015, KB Holding GmbH ( KB Holding or Bidder ) submitted a voluntary public takeover offer ( Offer ) to the shareholders of Vossloh Aktiengesellschaft ( Vossloh AG or Target Company and together with its subsidiaries the Vossloh Group ) pursuant to Sec. 29, Sec. 14 paras. 2 and 3 of the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz, WpÜG ) by publication of the offer document within the meaning of Sec. 11 WpÜG ( Offer Document ). The subject of the Offer is the acquisition of all ordinary bearer shares with no par value of Vossloh AG (ISIN DE ), each share representing a proportionate amount of EUR 2.84 in the share capital (individually a Vossloh Share and collectively the Vossloh Shares ), against payment of a cash consideration in the amount of EUR (the Offer Price ) per Vossloh Share. The Offer Document was submitted to the executive board (Vorstand) of Vossloh AG ( Executive Board ) on 16 February The Executive Board forwarded the Offer Document to the Supervisory Board (Aufsichtsrat) of Vossloh AG ( Supervisory Board ) and the Group Works Council of the Vossloh Group on the same date. The Executive Board and the Supervisory Board have examined the Offer and issue the following joint statement ( Statement ): I. GENERAL INFORMATION ABOUT THE STATEMENT 1. Legal basis In accordance with Sec. 27 para. 1 sentence 1 WpÜG, the executive board and the supervisory board of a target company must issue a reasoned statement on a takeover offer and on all amendments of it. They can issue such statement jointly. On this basis, the Executive Board and the Supervisory Board issue the present Statement. 2. Factual basis of the Statement All information, expectations, forecasts, assessments, forward-looking statements and declarations of intent in this Statement are based on information available to the Executive Board and the Supervisory Board at the time of publication of this Statement and reflect the assessments and intentions of the Executive Board and the Supervisory Board at that time, which may change after the date of publication of this Statement. The Executive Board and the Supervisory Board will update this Statement only to the extent that they are obliged to do so under applicable law. Unless expressly stated otherwise, the information about the Bidder, the persons acting jointly with the Bidder and, in particular, the information on the intentions of the Bidder are exclusively based on the information contained in the Offer Document and other publicly available information. The Executive Board and the Supervisory Board are unable to verify this information. To the extent that any information in this Statement makes reference to, cites, or repeats the Offer Document, such information is a mere reference by which the Executive Board and the Supervisory Board neither approve the Offer Document nor assume any liability for the correctness or completeness of the Offer Document. Page 5

6 The Executive Board and the Supervisory Board are also not able to verify the intentions stated by the Bidder in the Offer Document, nor can they influence the implementation of such intentions. The Executive Board and the Supervisory Board point out that the intentions of the Bidder may change at a later point in time. 3. Publication of the Statement and of any additional statements on amendments of the Offer This Statement and all additional statements on amendments of the Offer, if any, will be published in accordance with Sec. 27 para. 3 sentence 1, Sec. 14 para. 3 sentence 1 WpÜG on the internet at under Investors and by making available copies thereof free of charge at Vossloh AG, Investor Relations, Vosslohstraße 4, Werdohl (telephone: +49 (0) ; fax: +49 (0) ; investor.relations@ag.vossloh.com) as well as by announcement in the Federal Gazette (Bundesanzeiger). This Statement as well as all additional statements on amendments of the Offer, if any, will be published in the German language in accordance with legal requirements and are the only authoritative versions. In addition to the German-language Statement, an English translation will soon be published, and no liability is assumed for the correctness of such translation. 4. Own responsibility of the shareholders of Vossloh AG The Executive Board and the Supervisory Board point out that the statements and assessments in this Statement are not binding on the shareholders of Vossloh AG and that the Statement does not purport to be complete. Rather, the shareholders of Vossloh AG must make their own decision on the acceptance or non-acceptance of the Offer on the basis of the Offer Document and all other sources of information available to them (including any individual advice obtained by them) and taking into account their individual tax and other situation. The shareholders of Vossloh AG should, in particular, carefully read the Offer Document because it contains information that is important for them. The Bidder points out in Section 1.6 of the Offer Document that the Offer may be accepted by all domestic and foreign shareholders of Vossloh AG in accordance with the terms outlined in the Offer Document and the applicable legal provisions. Further, the Bidder points out that acceptance of the Offer outside the Federal Republic of Germany, the Member States of the European Union and the European Economic Area and the United States of America ( United States ) may be subject to legal restrictions. Section 1.2 and Section 22 of the Offer Document provide further notes and information for Vossloh shareholders whose place of residence, seat or place of habitual abode is in the United States. All in all, each shareholder of Vossloh AG is responsible for making his own decision on whether or not, and to which extent such shareholder will accept the Offer, taking into consideration the overall circumstances, his individual situation (including his personal tax situation), the legal provisions applicable to him, and his personal assessment of the potential future development of the value and market price of the Page 6

7 Vossloh Share. The Executive Board and the Supervisory Board recommend that shareholders seek individual tax and legal advice where necessary. The Executive Board and the Supervisory Board do not assume any liability in the event that an acceptance or non-acceptance of the Offer subsequently proves to be economically disadvantageous. II. INFORMATION ABOUT THE TARGET COMPANY 1. General Vossloh AG is a German stock corporation (Aktiengesellschaft) with its corporate seat in Werdohl, registered in the commercial register of the local court (Amtsgericht) of Iserlohn under HRB Vossloh AG is the parent company of a group that operates worldwide in the rail technology market. The share capital (Grundkapital) of Vossloh AG as of 25 February 2015 amounts to EUR 37,825, The share capital is divided into 13,325,290 ordinary bearer shares with no par value, each representing a proportionate amount in the share capital of EUR At the time of publication of this Statement, Vossloh AG holds no own shares. The Vossloh Shares are admitted to trading on the Regulated Market of the Frankfurt Stock Exchange (Prime Standard) and the Düsseldorf Stock Exchange. The Vossloh Shares are also traded on the XETRA electronic trading system and on the regulated unofficial market (Freiverkehr) on the regional stock exchanges in Berlin, Hamburg, Hannover, Stuttgart and Munich. The Shares have been included in the SDAX (since 18 March 2013, previously MDAX) and in other indices. For information on the existing authorized capital and conditional capitals of Vossloh AG, reference is made to the description made by the Bidder in Section 7.2 and Section 7.3 of the Offer Document. At the time of publication of this Statement, no subscription rights to Vossloh Shares exist which could lead to a possible increase of the conditional capitals set forth in the articles of association of Vossloh AG. A list of the subsidiaries of Vossloh AG which are considered as persons acting jointly with Vossloh AG in accordance with Sec. 2 para. 5 sentence 3 WpÜG is attached hereto as Appendix Composition of the Executive Board and the Supervisory Board The Executive Board currently consists of three members: Dipl.-Ing. (FH) Dr. h.c. Hans M. Schabert (Chairman of the Executive Board), Dipl.-Betriebswirt (FH) Oliver Schuster and Dipl.-Ing. Volker Schenk. The Supervisory Board consists of six members pursuant to the articles of association. Currently, the supervisory board has the following five members: Mr. Heinz Hermann Thiele (Chairman of the Supervisory Board), Ms. Silvia Maisch (employee representative), Dr.-Ing. Wolfgang Schlosser, Mr. Michael Ulrich (employee representative) and Mr. Ursus Zinsli. The Page 7

8 sixth member of the Supervisory Board, Dr. Alexander Selent, resigned from his office with effect as from 14 September A successor is expected to be elected at the next annual general meeting of Vossloh AG. 3. Shareholder structure According to the notifications of voting rights received by Vossloh AG in accordance with Sec. 21 seq. of the German Securities Trading Act (Wertpapierhandelsgesetz, WpHG ), its ownership surveys and the statements made by the Bidder in Section 6.5 of the Offer Document, the following shareholders directly or indirectly hold 3.00% or more of the voting rights in Vossloh AG: KB Holding (approx %); pursuant to Sec. 30 para. 1 sentence 1 no. 1, sentence 3 WpÜG or Sec. 22 para. 1 sentence 1 no. 1, sentence 3 WpHG, those voting rights are attributed to TIB Vermögens- und Beteiligungsholding GmbH, Stella Vermögensverwaltungs GmbH, and Mr. Heinz Hermann Thiele. Franklin Mutual Advisers, LLC, Wilmington, Delaware, USA (5.68%) ETHENEA Independent Investors S.A., Munsbach, Luxembourg (4.88%) Iskander Makhmudov, Russian Federation (3.08%) Franklin Templeton Investment Funds, Luxembourg (3.05%) Lazard Frères Gestion S.A.S., Paris, France (3.01%) 4. Overview of the business of the Vossloh Group Vossloh AG is the management and finance holding company that heads the Vossloh Group and controls and monitors all material activities within the Group. The Vossloh Group operates world-wide in the market for rail technology, with products and services for rail infrastructure, rail vehicles and components for rail vehicles and buses forming the group s core business. The Vossloh Group had revenues of EUR 1,321.2 million in the fiscal year 2013 (2012: EUR 1,243.0 million) and of EUR million during the first three quarters of 2014 (2013: EUR million). Earnings before interest and income taxes (EBIT) were EUR 54.2 million in the fiscal year 2013 (2012: EUR 97.5 million) and minus EUR million during the first three quarters of 2014 (2013: EUR 34.6 million). The return on capital employed (ROCE) was 6.1% in the fiscal year 2013 (2012: 11.5%) and minus 24.3% during the first three quarters of 2013 (2013: 5.2%). Figures for the prior year were in some cases adjusted in the annual report 2013 and in the interim group financial report as of 30 September 2014 due to changes in the accounting of joint ventures (see page 153 of the Vossloh AG annual report 2013 and page 9 of the Vossloh AG interim group financial report as of 30 September 2014). Until the end of the fiscal year 2014, the business operations of the Vossloh Group were divided into two divisions, Rail Infrastructure und Transportation. Towards the end of 2014, Vossloh AG agreed the key points of a new group strategy, which came into force from the beginning of the fiscal year As a result, the previous Rail Infrastructure division will be divided into three new business units: Page 8

9 Core Components, Customized Modules, and Lifecycle Solutions. These three new infrastructure units will form the future core business of the Vossloh Group. The previous Transportation division will no longer be defined as a core business, but will nevertheless initially remain as a fourth division of the group. However, the goal is to sell the Transportation division in whole or in part by 2017 at the latest or to transfer it into a partnership that will no longer be controlled by Vossloh, depending on the progress of the restructuring and repositioning of the Vossloh Group. These measures initiate the longer-term transformation of the Vossloh Group into a new company in the rail infrastructure segment. It is also planned to strengthen the three core divisions (Core Components, Customized Modules, and Lifecycle Solutions) through acquisitions where appropriate. This was announced by Vossloh AG in an ad hoc announcement of 2 December In the following, however, the previous names of the divisions will be used for the description of the business due to the reference to the business figures from previous fiscal years. Rail Infrastructure: The Rail Infrastructure division offers products and services for rail infrastructure and includes three business units: Fastening Systems, Switch Systems, and Rail Services. The Fastening Systems business unit develops, produces and distributes world-wide rail fastening systems for all applications from local transport to heavy goods traffic to high-speed lines. The Switch Systems business unit supplies, installs and maintains switching, command and control systems for rail networks ranging from commuter rail lines to high-speed lines. The Rail Services business unit offers rail-related services, such as welding, shipping, maintenance and preventive care as well as reconditioning and recycling of rails. In the fiscal year 2013, the Fastening Systems business unit had revenues of EUR million (2012: EUR million, first three quarters of 2014: EUR million), the Switch Systems business unit had revenues of EUR million (2012: EUR million; first three quarters of 2014: EUR million) and the Rail Services business unit had revenues of EUR 62.1 million (2012: EUR 54.6 million; first three quarters of 2014: EUR 52.9 million). The revenues for the entire Rail Infrastructure division were EUR million in the fiscal year 2013 (2012: EUR million; first three quarters of 2014: EUR million), corresponding to 67.8% of total revenue in the fiscal year 2013 (first three quarters of 2014: 66.1%). Operating earnings (EBIT) for the Rail Infrastructure division were EUR 94.1 million in the fiscal year 2013 (2012: EUR 81.7 million; first three quarters of 2014: minus EUR 5.7 million). The Rail Infrastructure division employed an average of 3,414 people in the fiscal year 2013 (first three quarters of 2014: 3,525). Transportation: The Transportation division includes activities in the area of rail vehicles and systems/components for vehicles, including the associated services. The Transportation division includes two business units: Transportation Systems and Electrical Systems. The Transportation Systems business unit, which has two manufacturing locations, one in Valencia (Vossloh Rail Vehicles) and one in Kiel (Vossloh Locomotives), builds diesel locomotives, offers maintenance services and develops and produces vehicles for urban trains. The Electrical Systems business unit Page 9

10 develops and produces key electrical components and systems for local transport rail vehicles and locomotives. In addition to complete equipment for vehicles, the business activity also includes air conditioning systems for rail vehicles, supply of individual components and parts of equipment, as well as modernization, service and maintenance. In the fiscal year 2013, the Transportation Systems business unit had revenues of EUR million (2012: EUR million; first three quarters of 2014: EUR million) and the Electrical Systems business unit had revenues of EUR million (2012: EUR million; first three quarters of 2014: EUR million). The revenues of the Transportation business unit totaled EUR million in the fiscal year 2013 (2012: EUR million; first three quarters of 2014: EUR million), which corresponds to a 32.2% share of total revenues (first three quarters of 2014: 33.9%). Operating earnings (EBIT) for the Transportation business unit were minus EUR 21.2 million in the fiscal year 2013 (2012: EUR 35.5 million; first three quarters of 2014: minus EUR million). The Transportation business unit employed an average of 1,916 people in the fiscal year 2013 (first three quarters of 2014: 2,138). 5. Summary of financial information and other company information In the following, some selected financial information of Vossloh AG and the Vossloh Group will be shown Income statement data Net sales million 1, , , , , ,212.7 Cost of sales million 1, , Gross profit million EBIT million Net interest expense million EBT million Group net income million Earnings per share For further information on Vossloh AG and the development of the business of the Vossloh Group reference is made to the financial reports of Vossloh AG which are published on the internet at under Investors. Page 10

11 III. INFORMATION ABOUT THE BIDDER 1. Basic information According to the Offer Document, the Bidder is a limited liability company (GmbH) formed under the laws of Germany, with its corporate seat in Grünwald, Germany, registered in the commercial register of the local court (Amtsgericht) of Munich under HRB The Bidder s sole managing director is Mr. Heinz Hermann Thiele, the chairman of the Supervisory Board of Vossloh AG. According to the Offer Document, at the time of publication of the Offer Document the Bidder is controlled by Mr. Heinz Hermann Thiele, Stella Vermögensverwaltungs GmbH ( Stella ) and TIB Vermögens- und Beteiligungsholding GmbH ( TIB ; together with Mr. Heinz Hermann Thiele and Stella the Bidder Parent Companies ). As described in Section 6.2 of the Offer Document and in Appendix 1 to the Offer Document, TIB is the sole direct shareholder of the Bidder. The shareholders of TIB are Mr. Heinz Hermann Thiele, who holds 19.30% of the share capital, and Stella, which holds 80.70% of the share capital. Further, it is stated in the Offer Document that Mr. Heinz Hermann Thiele holds 26.82% of the share capital in Stella and, according to its articles of association, 75.00% of the voting rights in Stella. According to the Offer Document, the Bidder holds 94.99% of the shares in Knorr- Bremse Aktiengesellschaft, the parent company of the Knorr-Bremse Group. The Knorr-Bremse Group manufactures braking systems for rail and commercial vehicles. For further information on the Bidder, in particular on its business, reference is made to the description in Section 6 of the Offer Document. 2. Vossloh Shares held by the Bidder or by persons acting jointly with the Bidder and their subsidiaries; attribution of voting rights According to the Offer Document, the Bidder directly holds 3,996,383 Vossloh Shares at the time of publication of the Offer Document, which corresponds to approximately 29.99% of the share capital and voting rights in Vossloh AG. Further, the Bidder states that, pursuant to Sec. 30 para. 1 sentence 1 no. 1, sentence 3 WpÜG, those voting rights are attributed to TIB, Stella and Mr. Heinz Hermann Thiele. In addition, according to the Offer Document, neither the Bidder nor persons acting jointly with it nor their subsidiaries currently hold any Vossloh Shares or financial instruments or other instruments pursuant to Sec. 25, 25a WpHG, and no voting rights based on Vossloh Shares are attributed to them. Information on the persons acting jointly with the Bidder within the meaning of Sec. 2 para. 5 WpÜG are set out in Section 6.4 as well as in Appendix 2 and Appendix 3 to the Offer Document. IV. INFORMATION ABOUT THE OFFER 1. Decisiveness of Offer Document The following is a summary of certain selected information contained in the Offer Document. The Executive Board and the Supervisory Board point out that the description of the Offer in this Statement does not claim to be exhaustive and that, as Page 11

12 for the content and settlement of the Offer, solely the provisions of the Offer Document are relevant. It is the own responsibility of each shareholder of Vossloh AG to consider the Offer Document and to take the measures appropriate for such shareholder. 2. Implementation of the Offer The Offer is submitted by KB Holding as the Bidder in the form of a voluntary public takeover offer (freiwilliges öffentliches Übernahmeangebot) (cash offer) for the acquisition of all Vossloh Shares under the laws of the Federal Republic of Germany, in particular, the provisions of the WpÜG and the German Regulation on the Content of the Offer Document, the Consideration in the case of Takeover Offers and Mandatory Offers and the Exemption from the Obligation to Publish and to Make an Offer (Verordnung über den Inhalt der Angebotsunterlage, die Gegenleistung bei Übernahmeangeboten und Pflichtangeboten und die Befreiung von der Verpflichtung zur Veröffentlichung und zur Abgabe eines Angebots) ( WpÜG Offer Regulation ) as well as under certain applicable securities law provisions of the United States. The Executive Board and the Supervisory Board have not carried out an independent review of the Offer for compliance with the relevant provisions of law. 3. Consideration The Bidder offers to acquire all Vossloh Shares at the Offer Price of EUR per Vossloh Share in accordance with the provisions of the Offer Document. The Offer Price of EUR per Vossloh Share applies to Vossloh Shares including all ancillary rights, in particular the right to share in profits, existing at the time of settlement of the Offer. 4. Acceptance Period and Additional Acceptance Period a) Acceptance Period The period for acceptance of the Offer began upon publication of the Offer Document on 16 February 2015 and will end on 16 March 2015, 24:00 hrs (Frankfurt am Main local time) / 18:00 hrs (New York local time) ( Acceptance Period ). The Acceptance Period will be extended automatically in the following events: In the event the Bidder amends the Offer pursuant to Sec. 21 WpÜG within the last two weeks before expiry of the Acceptance Period, the Acceptance Period will be extended by two weeks (Sec. 21 para. 5 WpÜG), i.e. until 30 March 2015, 24:00 hrs (local time Frankfurt am Main) / 18:00 hrs (local time New York). This shall apply even if the amended Offer contravenes legal provisions. If a competing offer within the meaning of Sec. 22 para. 1 WpÜG is made by a third party during the Acceptance Period, and if the Acceptance Period for the Offer expires prior to expiry of the acceptance period for the competing offer, the expiry of the Acceptance Period for the Offer shall be determined by reference to the expiry of the acceptance period for the competing offer Page 12

13 (Sec. 22 para. 2 WpÜG). This applies even if the competing offer is amended or prohibited or contravenes legal provisions. If a general meeting (Hauptversammlung) of Vossloh AG is convened in connection with the Offer following publication of the Offer Document, the Acceptance Period in accordance with Sec. 16 para. 3 WpÜG will be ten weeks from publication of the Offer Document. The Acceptance Period would then run until 27 April 2015, 24:00 hrs (local time Frankfurt am Main) / 18:00 hrs (local time New York). With regard to the right of withdrawal (Rücktrittsrecht) in the event of an amendment of the Offer or the launching of a competing offer, reference is made to the statements in Section 16 of the Offer Document. b) Additional Acceptance Period Shareholders of Vossloh AG which have not accepted the Offer within the Acceptance Period can still accept it within two weeks after publication of the results of the Offer by the Bidder according to Sec. 23 para. 1 sentence 1 no. 2 WpÜG (the Additional Acceptance Period ) unless one of the completion conditions presented in Section 13.1 of the Offer Document has definitively not been met by the end of the Acceptance Period and has not been effectively waived. Subject to an extension of the Acceptance Period as described above under a) and in Section 5.2 of the Offer Document, the Additional Acceptance Period will, as stated by the Bidder in the Offer Document, presumably begin on 20 March 2015 and end on 2 April 2015, 24:00 hrs (local time Frankfurt am Main) / 18:00 hrs (local time New York). 5. Completion conditions The Offer and the agreements concluded by its acceptance will be completed only if the completion conditions set forth in detail in Sections (merger control approvals) and (no material decrease of the DAX) of the Offer Document have been satisfied. The Executive Board and the Supervisory Board believe that these completion conditions are in line with customary practice in transactions of that kind and have due regard to legitimate interests of the Bidder and the Target Company. As described in Section 13.2 of the Offer Document, the Bidder can as far as admissible waive all or individual completion conditions up to one business day prior to expiry of the Acceptance Period pursuant to Sec. 21 para. 1 sentence 1 no. 4 WpÜG. Completion conditions which the Bidder has effectively waived shall be deemed to be satisfied for the purposes of the Offer. In so far as (i) the completion condition named in Section (no material decrease of the DAX) of the Offer Document is not satisfied at the end of the Acceptance Period or (ii) the completion conditions named in Section (merger control approvals) of the Offer Document have not been satisfied by 29 January 2016 and the Bidder has not effectively waived the relevant completion conditions beforehand pursuant to Sec. 21 para. 1 sentence 1 no. 4 WpÜG, the Offer will expire. Further details regarding any non-satisfaction of the completion conditions are set forth in more detail in Section 13.3 of the Offer Document. Page 13

14 6. Status of official procedures and approvals In Section 12.1 of the Offer Document, the Bidder states that, in its view, the intended takeover of the Vossloh Group by the Bidder according to the Offer (the Transaction ) is subject to several merger control approvals or the expiration of certain waiting periods. First of all, according to the Offer Document, the Transaction is subject to approval by the European Commission according to Council Regulation (EC) No. 139/2004 of 30 January 2004 on the control of concentrations between undertakings (EC Merger Regulation) unless the case is submitted to the German Federal Cartel Office (Bundeskartellamt, FCO). In addition, in view of the Bidder, the Transaction is subject to merger control filing obligations in the People s Republic of China, in Russia, in South Africa, in Turkey and in the United States. According to Section 12.2 of the Offer Document, the Bidder is currently involved in the informal preliminary procedure with the European Commission. The Bidder aims to submit the notification to the European Commission by mid-march The Bidder further aims to submit the necessary notifications and applications to the competent merger control authorities outside of the European Union by the end of March Vossloh AG co-operates with the Bidder in the preparation of the required merger control notifications. 7. Acceptance and settlement of the Offer Section 11 of the Offer Document describes the acceptance and settlement of the Offer, including the legal consequences of its acceptance (Section 11.4 of the Offer Document). The Bidder states in the Offer Document that, as a result of the merger control procedures which need to be completed (see also Section IV.6 of this Statement and Section 12.1 of the Offer Document), settlement of the Offer and payment of the purchase price to the shareholders of Vossloh AG accepting the Offer may be delayed until 10 February 2016 or may not take place at all. According to the Offer Document, however, the Bidder expects that the merger control procedures will presumably be completed by the end of the fourth quarter of However, it is not possible to make a binding statement about this. V. FINANCING OF THE OFFER Pursuant to Sec. 13 para. 1 sentence 1 WpÜG, the Bidder must, prior to the publication of the Offer Document, take the measures necessary to ensure that at the time at which the claim for the consideration falls due it has at its disposal the means necessary for full performance of the Offer. According to the Bidder s statements in Section 14 of the Offer Document, the Bidder has complied with this obligation. According to the calculations of the Bidder, the total amount that the Bidder would need for settlement of the Offer will presumably be a maximum of EUR 459,451, (the Maximum Transaction Amount ). The Maximum Transaction Amount, first of all, comprises the total amount that would be necessary if all shareholders of Vossloh AG accepted the Offer. This total amount would be EUR 452,451,989.50, i.e. the Offer Price of EUR multiplied by 9,328,907, Page 14

15 which is the number of all Vossloh Shares not already held by the Bidder at the time of publication of the Offer Document. In addition, the Maximum Transaction Amount comprises additional costs in the amount of EUR 7 million which are expected to be incurred by the Bidder for settling the Offer. The Bidder states in Section of the Offer Document that, under a credit agreement entered into with Deutsche Bank AG, Deutsche Asset & Wealth Management, Taunusanlage 12, Frankfurt, on 20 January 2015, the Bidder is provided with a credit line in the amount of EUR 465,000,000 to finance fulfillment of the consideration in connection with the takeover of Vossloh AG through 20 March 2016 (the Acquisition Credit Facility ). The Bidder further states that the funds from the Acquisition Credit Facility will be provided to the Bidder as soon as certain conditions precedent and documentation requirements have been fulfilled (or Deutsche Bank has waived them) and if certain other conditions have been fulfilled and certain warranties and assurances are fulfilled at the time of drawing the credit line. The Bidder states in the Offer Document that it has no reason to assume that the conditions for drawing the Acquisition Credit Facility will not be fulfilled. According to the Offer Document, the Bidder furthermore has at its disposal liquid assets in the amount of approximately EUR 60 million at the time of publication of the Offer Document. VI. TYPE AND AMOUNT OF THE CONSIDERATION OFFERED Pursuant to Sec. 31 para. 1 WpÜG, the Bidder must offer the shareholders of the target company a fair consideration. KB Holding offers an Offer Price in the amount of EUR per Vossloh Share in cash. A consideration in the form of Shares is not offered. 1. Statutory requirements as to the amount of the consideration The statutory minimum price to be offered by KB Holding must be determined in accordance with Sec. 31 para. 1 WpÜG in conjunction with Sec. 3 et seq. of the WpÜG Offer Regulation. The consideration must not be less than the higher of the following two amounts: 1.1 Prior acquisitions Pursuant to Sec. 4 para. 1 sentence 1 of the WpÜG Offer Regulation, the consideration for the Shares in the Target Company must be at least equivalent to the highest consideration provided or agreed for the acquisition of Shares of the Target Company by the Bidder, a person acting jointly with the Bidder or their subsidiaries within the last six months prior to the publication of the Offer Document. According to the Offer Document, the Bidder, any persons acting jointly with it and their subsidiaries have not made any acquisitions during that six-month period and have not concluded any agreements regarding the acquisition of Vossloh Shares. Page 15

16 1.2 Stock exchange price If the Shares of the Target Company are admitted to trading on a German stock exchange, the consideration must, pursuant to Sec. 5 para. 1 sentence 1 of the WpÜG Offer Regulation, be at least equivalent to the weighted average domestic stock exchange price of these Shares during the last three months prior to the publication of the decision to launch the Offer. According to information provided by the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht) as stated by the Bidder in the Offer Document, the weighted average stock exchange price as of 19 January 2015 of the Vossloh Shares during the last three months prior to the publication of KB Holding s decision to launch the Offer on 20 January 2015 amounted to EUR The Offer Price corresponds to this amount. 1.3 Interim conclusion As far as the Supervisory Board and the Executive Board are able to judge on the basis of the information available to them, the Offer Price meets the requirements of the WpÜG and the WpÜG Offer Regulation for the minimum price. The Bidder has not made any acquisitions during the relevant reference period prior to the publication of the Offer Document. Accordingly, the statutory minimum price must be determined with reference to the average domestic stock exchange price of the Vossloh Shares during the last three months prior to the publication of the decision to launch the Offer. The Offer Price of EUR corresponds to this amount. 2. Fairness Opinion of Rothschild Vossloh AG has retained Rothschild GmbH (Rothschild) to issue an opinion assessing whether the consideration offered by KB Holding is fair from a financial point of view (Fairness Opinion). Vossloh AG shall pay remuneration to Rothschild for its work as advisor with regard to the Offer; such remuneration shall be due and payable upon delivery of the Fairness Opinion. Moreover, Vossloh AG undertook to reimburse certain expenses and to indemnify Rothschild and hold it harmless from and against certain liability risks associated with taking on this engagement. It is pointed out that Rothschild and Rothschild s affiliated companies as set out in the Fairness Opinion in the past, currently or in the future may have maintained, are maintaining or will maintain business relationships with Vossloh AG, KB Holding or their affiliated companies that may have been, are or could be remunerated. Rothschild and/or Rothschild s affiliated companies are also active in securities trading, and they may purchase, hold and sell securities of any type of Vossloh AG for their own account or for the account of any third party. Rothschild submitted its Fairness Opinion to the Executive Board and to the Supervisory Board on 25 February In the Fairness Opinion, Rothschild comes to the conclusion that, subject to the assumptions included in the Fairness Opinion, the consideration offered by KB Holding is, as of the date of submission of the Fairness Opinion (i.e. 25 February 2015), not fair to the shareholders of Vossloh AG Page 16

17 from a financial point of view. The Fairness Opinion is attached to this Statement with its full content as Appendix 2. The Executive Board and the Supervisory Board expressly point out that the Fairness Opinion was provided solely for the information and assistance of the Executive Board and the Supervisory Board in connection with their review of the Offer. It is not addressed to third parties and does not create any third-party rights. In particular, the Fairness Opinion is not addressed to the shareholders of Vossloh AG and does not represent a recommendation by Rothschild as to whether or not any shareholder of Vossloh AG should accept the Offer. No contractual relationship is created between Rothschild and those who read the Fairness Opinion. Neither the Fairness Opinion nor the engagement agreement underlying the Fairness Opinion entered into by Vossloh AG and Rothschild shall protect or form a basis of reliance for any third party, or lead to an inclusion of any third party in the scope of protection with respect to the matters addressed therein. The consent by Rothschild to attach the Fairness Opinion to this Statement does not represent an expansion or addition to the group of persons to whom this Fairness Opinion is addressed, or who may rely on this Fairness Opinion, and also does not lead to an inclusion of third parties in the scope of protection. The Fairness Opinion also does not address the relative merits and disadvantages of the Offer as compared with other business strategies or transactions that could be open to the Bidder or to Vossloh AG. For preparing the Fairness Opinion, Rothschild analysed (i) the Offer Document, (ii) selected publicly available commercial, business and financial information about Vossloh AG and the markets in which Vossloh AG operates, as well as (iii) selected publicly available business and financial reports and presentations of Vossloh AG and its competitors, (iv) selected reports published by equity research analysts and which contain, inter alia, information, forecasts and analyses with regard to Vossloh AG, its competitors and the markets in which Vossloh AG and its competitors operate, (v) selected capital market information made available by common data vendors, (vi) the current business plan of Vossloh AG, and (vii) the preliminary financial information for the fiscal year 2014, and (viii) to a limited extent, interviewed the senior management of Vossloh AG on the performance of the business of Vossloh AG, the financial framework conditions and the short-term, medium-term and long-term outlook (in particular with regard to the improvement measures). Furthermore, Rothschild performed certain analyses, which have been undertaken in comparable capital market transactions and that appeared appropriate, in order to provide the Executive Board and the Supervisory Board with a sound basis for an assessment of the amount of the consideration offered by KB Holding from a financial point of view. The Executive Board and the Supervisory Board point out that the Fairness Opinion provided by Rothschild is subject to certain assumptions and qualifications and that, in order to understand the conclusions of the Fairness Opinion, it must be read in its entirety. The Fairness Opinion of Rothschild is based on the general economic conditions and market conditions as of the date of submission of the Fairness Opinion. The Fairness Opinion assumes, in particular, that the operative improvement and portfolio measures provided for in the business plan of Vossloh AG will be Page 17

18 successfully completed and that the valuation achieved for the sale of the Transportation division will be in accordance with the present business plan. Subsequent developments could have effects on the assumptions made when preparing the Fairness Opinion and on its conclusions. Rothschild is under no obligation to update or reconfirm the Fairness Opinion with regard to events occurring after the date of submission of the Fairness Opinion. The Fairness Opinion of Rothschild is not based on a company valuation, such as usually carried out by certified public accountants or auditors in accordance with the requirements of German corporate law, and Rothschild in particular did not prepare a valuation report (Wertgutachten) on the basis of the guidelines published by the Institut der Wirtschaftsprüfer in Deutschland e.v. (IDW) (IDW S1); neither does the Fairness Opinion follow the Principles for the Preparation of Fairness Opinions (IDW S8). A Fairness Opinion of the kind as submitted by Rothschild differs in a number of important respects from a valuation report prepared by certified public accountants or auditors. The Executive Board and the Supervisory Board point out that they did not carry out a company valuation of Vossloh AG on the basis of IDW S1, either. 3. Own assessment of the fairness of the consideration by the Executive Board and the Supervisory Board The Executive Board and the Supervisory Board have reviewed in detail the fairness of the consideration offered by KB Holding. In this connection, the Executive Board and the Supervisory Board have, in particular, reviewed the Fairness Opinion issued by Rothschild, the conclusion of which was intensively discussed between the Executive Board and the Supervisory Board and representatives of Rothschild on 25 February 2015, and was the subject of an independent, critical assessment. The Supervisory Board and the Executive Board came to the conclusion that the Offer Price of EUR per Vossloh Share is not fair from a financial point of view. This assessment is essentially based on the following considerations: The valuation on the basis of the Discounted Cash Flow method performed by Rothschild, when taking into account a sensitivity analysis of key influencing parameters, results in share prices which, in their majority, exceed the Offer Price. After presentation of the more specifically defined medium-term strategy on 3 December 2014, fifteen of the financial analysts covering Vossloh AG have published the following price targets for the stock exchange price of the Shares of Vossloh: Broker/Bank Most recent publication Recommendation Price target (EUR) Equinet 16-Feb-15 Buy 70,0 Kepler Cheuvreux 29-Jan-15 Hold 44.6 Page 18

19 Nord LB 27-Jan-15 Sell 50.0 HSBC 21-Jan-15 Buy 64.0 Independent Research GmbH 21-Jan-15 Buy 67.0 Hauck & Aufhäuser 21-Jan-15 Sell 50.0 Oddo Seydler 21-Jan-15 Hold 50.0 Natixis 21-Jan-15 Sell 48.0 Warburg Research 21-Jan-15 Buy 65.0 UBS 20-Jan-15 Hold 54.0 Commerzbank 20-Jan-15 Hold 48.0 Berenberg 20-Jan-15 Buy 60.0 Close Brothers 04-Dec-14 Hold 50.0 S&P Capital IQ 03-Dec-14 Hold 47.0 Deutsche Bank 03-Dec-14 Hold 45.0 The majority of the price targets exceed the Offer Price. The Offer Price represents a discount of approximately 10.5% to the closing price of the Vossloh Share in XETRA trading on the Frankfurt Stock Exchange on 19 January 2015, the last trading day prior to the publication of the Bidder s decision to launch the Offer, and a discount of approximately 15.3% to the closing price of the Vossloh Share in XETRA trading on the Frankfurt Stock Exchange on 16 February 2015, the date of publication of the Offer. The Offer Price includes a discount of approximately 13% to the closing price of the Vossloh Share in XETRA trading on the Frankfurt Stock Exchange on 24 February 2015, the last trading day prior to the resolution of the Executive Board and the Supervisory Board on this Statement. The Supervisory Board and the Executive Board recommend that shareholders of Vossloh AG, prior to their decision on whether or not to accept the Offer, should examine on what terms they could sell the Vossloh Shares on the exchange instead of accepting the Offer. VII. OBJECTIVES AND INTENTIONS OF THE BIDDER AND EXPECTED CONSEQUENCES FOR VOSSLOH AG The Bidder explains the background of the Offer and the economic and strategic motives in Section 8 of the Offer Document. Section 9 of the Offer Document describes the intentions of the Bidder and the Bidder Parent Companies with regard to Vossloh AG. The shareholders of Vossloh AG are recommended to carefully read these sections of the Offer Document as well. The following summary description is Page 19

20 intended to provide an overview of the background of the Offer stated in the Offer Document (see Section VII.1) and of the intentions of the Bidder and the Bidder Parent Companies (see Section VII.2) and does not purport to be complete. It is followed by an assessment by the Executive Board and the Supervisory Board (see Section VII.3 and Section VII.4). 1. Background of the Offer; economic and strategic motives The Bidder states in Section 8 of the Offer Document that, by making the Offer, it is taking a consistent step to moderately expand and secure its long-term entrepreneurial investment in Vossloh AG. The Bidder considers that the moderate increase of its investment offers advantages for both partners without threatening Vossloh AG s identity or independence. The Bidder supports the strategy published by Vossloh AG in December 2014 and announces that it will accompany Vossloh AG as an entrepreneurial investor in the upcoming restructuring and transformation processes. According to the Offer Document, the Bidder does not intend to acquire all shares in Vossloh AG or to take Vossloh AG private after completion of the Offer Document. Instead, Vossloh AG is to continue operating as an independent company. A merger with the Bidder or a company of the Knorr-Bremse Group is not planned. The Bidder does also not intend to realize any synergies. It is the Bidder s objective to continue to use its influence as an anchor investor to work toward a strategy that is viable over the long term and to continue sustainable business operations. 2. Intentions of the Bidder and the Bidder Parent Companies Section 9 of the Offer Document contains a description of the Bidder's intentions which are described as uniform intentions of the Bidder and the Bidder Parent Companies. According to the Offer Document, the Bidder Parent Companies do not have any intentions deviating from those described. 2.1 Future business activity, assets and future obligations of Vossloh AG The Bidder has no specific intentions with regard to the future business activity of Vossloh AG that exceed the intended support for the strategy published by the Executive Board and the Supervisory Board in December In particular, the Bidder has no intention to change the use of assets or the financing structure of Vossloh AG or to establish future obligations for Vossloh AG outside of the usual business activity. However, the Bidder reserves the right, after completion of the Offer, to review the corporate structure, business activities and financing of the companies in the Vossloh Group together with the Executive Board of Vossloh AG within the limits of the law. 2.2 The Executive Board and the Supervisory Board of Vossloh AG The Bidder states that without prejudice to the competence in personnel matters that the Supervisory Board has insofar it intends that the current members of the Page 20