DGAP-News: GSW Immobilien AG / Key word(s): Offer/Statement GSW Immobilien AG: GSW and Deutsche Wohnen agree on the principles for a business combination 14.10.2013 / 18:27 --------------------------------------------------------------------- GSW and Deutsche Wohnen agree on the principles for a business combination - The Management Board and the Supervisory Board of GSW recommend to the shareholders to accept the takeover offer of Deutsche Wohnen - A Business Combination Agreement creates the basis for a fair and socially acceptable integration - Retention of as many jobs as possible as common goal - From financial year 2014 onwards, the dividend of Deutsche Wohnen shall be increased to approximately 60 percent of the relevant earnings figure FFO (Funds from Operations before sales) Berlin, 14 October 2013. Today, GSW Immobilien AG and Deutsche Wohnen AG agreed on the principles for a business combination of the two companies. The Business Combination Agreement (BCA) creates the framework for a fair and socially acceptable integration. The Management Board and the Supervisory Board of GSW support the takeover offer of Deutsche Wohnen. In their joint statement issued pursuant to sec. 27 of the German Securities Acquisition and Takeover Act (WpÜG), the two corporate bodies of GSW recommend to the shareholders of the company to accept the exchange offer of Deutsche Wohnen. The Management Board and the Supervisory Board consider the exchange ratio of 2.55 Deutsche Wohnen shares for each GSW share as fair from a financial point of view. Goldman Sachs has provided the Management Board and the Supervisory Board with a fairness opinion supporting this assessment. 'We consider the business combination as a convincing opportunity to pool the strengths of the two companies and to develop them with the aim to create additional value. This step makes sense from an operational and industrial point of view,' explain the two Co-CEOs of GSW Immobilien AG, Jörg Schwagenscheidt and Andreas Segal. 'However, it was important for us to reach clarity regarding a robust integration strategy as well as regarding the effects of the transaction on employees and shareholders. This has been achieved through a constructive dialogue with the management of Deutsche Wohnen during the past weeks. The Business Combination Agreement forms a stable and robust foundation for the business combination of GSW and Deutsche Wohnen.' Employees as basis for future success In the Business Combination Agreement, GSW and Deutsche Wohnen have reaffirmed their common understanding that the dedicated workforce is the basis for the present and future success of the combined group. In the context of the business combination, redundancies shall only occur if ongoing personnel surpluses are identified despite the continuous dynamic growth by the company. Against this background, it will be reviewed whether functions that have been outsourced in the past can be insourced again in the future. Insofar as redundancies on operational grounds are inevitable, these shall take place under socially acceptable conditions. Joint integration committee will manage the business combination It is intended to appoint the two Board Members of Deutsche Wohnen, Michael Zahn and Lars Wittan, as Board Members of GSW. Michael Zahn will assume the position of CEO. At the same time, Jörg Schwagenscheidt as Chief Operating Officer (COO) and Andreas Segal as Chief Financial Officer (CFO) shall join the Management Board of Deutsche Wohnen. The four Board Members will form an integration committee which will jointly coordinate the combination of the businesses of GSW and Deutsche Wohnen taking into account the Business Combination Agreement. In particular, GSW and Deutsche Wohnen have agreed on an integration project starting with a six-month conception phase. Each subproject shall be led jointly by one employee from each of GSW and Deutsche Wohnen. The objective is to carry out an analysis of the relevant processes, operational procedures and organizational structures of both companies with an open outcome. The selection of employees shall be made in accordance with the 'best-in-class' principle. This ensures that for each function the best and most suitable employee will be identified. In case of a business combination, the new group will continue to pursue its previous growth strategy with a focus on Berlin but also in other dynamic regions. This also provides a clear signal of continuity to customers. GSW and Deutsche Wohnen already apply similar operational business models to carry out their activities and to rely on a long-term management of their properties. Following the business combination, Deutsche Wohnen shall increase its dividend payments from financial year 2014 onwards to approximately 60 percent of the relevant earnings figure FFO (Funds from Operations, before sales), which will be for the benefit of GSW shareholders accepting the offer as well. In connection with the transaction, the company is supported by Goldman Sachs AG, Citigroup Global Markets Deutschland AG and Kempen & Co Corporate Finance B.V. as financial advisers and Hengeler Mueller as legal adviser. The full text of the joint statement of the Management Board and the Supervisory Board of GSW Immobilien AG will be published on 15 October 2013. During the course of tomorrow, it will be available on the company's website at www.gsw.de under 'Investor Relations'. In addition, the statement will be available for distribution free of charge by contacting GSW Immobilien AG (Address: Charlottenstr. 4, 10969 Berlin, Germany, Fax: +49 30 2534 233 1960, E-Mail: [email protected]). An announcement to this effect will be published in the Federal Gazette (Bundesanzeiger) on Tuesday, 15 October 2013. Contact GSW Immobilien AG Charlottenstraße 4, D-10969 Berlin Germany Investor Relations René Bergmann Email: [email protected] [email protected] Tel.: +49. (0) 30. 25 34-1362 Fax: +49. (0) 30. 25 34-233 1960 Press Hans G. Nagl - FTI Consulting Email: [email protected] Tel.: +49. (0) 69. 92037-116 Mobile: +49. (0) 170 639 539 1 Thomas M. Krammer - FTI Consulting Email: [email protected] Tel.: +49. (0) 69. 92037-183 Mobile: +49. (0) 151 122 63834 About GSW With a portfolio of approximately 60,000 residential and commercial units, GSW Immobilien AG, founded in 1924, is a leading listed real estate company in Berlin. GSW's corporate strategy is targeted at the long-term management of rental properties, applying a systematic approach aimed at increasing both customer satisfaction and operating efficiency. As per 31 December 2012, the company's property portfolio was valued at around 3.3 billion Euros. End of Corporate News --------------------------------------------------------------------- 14.10.2013 Dissemination of a Corporate News, transmitted by DGAP - a company of EQS Group AG. The issuer is solely responsible for the content of this announcement. DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- Language: English Company: GSW Immobilien AG Charlottenstraße 4 10969 Berlin Germany Phone: 030 68 99 99 0 Fax: 030 68 99 99 999 E-mail: [email protected] Internet: www.gsw.de ISIN: DE000GSW1111 WKN: GSW111 Listed: Regulierter Markt in Berlin, Frankfurt (Prime Standard); Freiverkehr in Düsseldorf, Hamburg, Hannover, München, Stuttgart End of News DGAP News-Service --------------------------------------------------------------------- 234597 14.10.2013