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On November 6, 2022, the Busch Group, a major shareholder of Pfeiffer Vacuum Technology AG (Pfeiffer Vacuum), announced through its fully owned subsidiary, Pangea GmbH, that it is seeking a Domination and Profit and Loss Transfer Agreement (DPLTA) with Pfeiffer Vacuum. to the adhoc announcement

The Annual General Meeting approved the agreement on 2 May 2023 with a majority of 86.58% of the share capital represented at the time of the resolution. to the news release

Please find further information in the following FAQs:

Why is the Busch Group pursuing a DPLTA?

Through a DPLTA with Pfeiffer Vacuum, the coordination and decision-making processes between Pfeiffer Vacuum and the Busch Group as a family-owned company will be significantly simplified and accelerated. Fast decision-making channels enable an even more customer-centric and agile way of working. This will enable Pfeiffer Vacuum and the Busch Group to work together even more sustainably and effectively in a challenging market environment going forward.

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Would additional synergies be created by a DPLTA?

The existing relationship agreement between Pfeiffer Vacuum and the Busch Group has already leveraged the apparent potential for synergies. The DPLTA is intended to further simplify collaboration and accelerate decision-making processes in order to be able to collaborate even more sustainably and effectively in a challenging market environment.

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What impact would a DPLTA have on product brands and operational structures?

The products of both the Busch Group and Pfeiffer Vacuum will continue to be represented with independent names in the market. The existing terms and conditions of employment and the structures under works constitution law are also to be retained on both sides.

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What are the requirements for a DPLTA?

The conclusion of a DPLTA requires in particular the consent of the Annual General Meeting of Pfeiffer Vacuum (approval of at least 75% of the share capital represented at the time of the resolution required). It will become effective upon registration with the commercial register at the registered office of Pfeiffer Vacuum.

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What does a DPLTA mean for shareholders?

The shareholders of Pfeiffer Vacuum will be given the opportunity to transfer their shares to Pangea GmbH in exchange for a cash compensation as of the date when the DPLTA becomes effective. Alternatively, a recurring compensation payment – a so-called annual guaranteed dividend – will be granted. The compensation is granted for the duration of the DPLTA and ends with its termination. The annually recurring compensation payment is defined in section 304 of the German Stock Corporation Act (AktiengesetzAktG), the compensation in section 305 AktG.

The shares of shareholders who decide to tender their shares in exchange for cash compensation will be transferred to Pangea GmbH. 

With the registration of the DPLTA with the commercial register at the registered office of Pfeiffer Vacuum, the right to tender for the outside shareholders emerges. The compensation offer can subsequently be accepted within a period of two months following the announcement of the registration with the commercial register. If a so-called appraisal proceeding (Spruchverfahren) is initiated in which the recurring compensation payment and/or compensation would be subject to judicial review, the period for acceptance of the compensation offer will end no earlier than two months after the date on which the decision on the most recently decided application has been published in the German Federal Gazette (Bundesanzeiger).

Shareholders who decide not to tender their shares receive the predefined recurring compensation payment each year from Pangea GmbH. Therefore, there will no longer be a dividend payment by Pfeiffer Vacuum in the future. The recurring compensation payment is granted initially for the financial year in which the DPLTA becomes effective by registration with the commercial register. The recurring compensation payment will be made on the first banking day after the Annual General Meeting for the previous financial year. Since the DPLTA was registered with the commercial register on 16 May 2023 and correspondingly in the financial year 2023, the compensation will therefore be paid out for the first time after the Annual General Meeting in 2024.

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How was the value of the cash compensation or the recurring compensation payment determined? How is the value of the cash compensation of around €133 calculated?

The value of the compensation and the recurring compensation payment was determined by an expert valuation through the auditing firm Ebner Stolz jointly selected by Pfeiffer Vacuum and Pangea and subsequently reviewed for appropriateness by the auditing firm I-Advise, as the court-appointed auditor, and published in accordance with the legal requirements. The amount of the appropriate compensation and annual recurring compensation payment was, as usual in practice, determined on the basis of the capitalized earnings value method (Ertragswertverfahren), in accordance with IDW S1 2008, a recognized guideline of the Institut der Wirtschaftsprüfer in Deutschland e.V. (Institute of Public Auditors in Germany). 

In determining the compensation, a legal minimum consideration recognized by case law was considered. This is derived from the so-called volume-weighted average price (“VWAP”) of the last three months prior to the announcement of the definite intention to enter into the DPLTA, which in the case of Pangea GmbH was published on November 6, 2022. For Pfeiffer Vacuum, this minimum amount was €133.07 per share. This figure has been confirmed by the German Federal Financial Supervisory Authority (BaFin). The expert opinion of Ebner Stolz came to the conclusion that the value per share derived from the enterprise value is below this minimum consideration, so that the minimum value of €133.07 per share was determined as the compensation. The amount of the compensation was confirmed as appropriate by I-Advise.

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Is it possible that the cash compensation or the recurring compensation payment will be changed retrospectively?

An adjustment of the previously defined recurring compensation payment and/or compensation can result from a judicial review within a so-called appraisal proceeding. The appraisal proceedings can be initiated within three months after the registration of the DPLTA with the commercial register.

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When will the value of the compensation and recurring compensation payment be published?

The publication of the values of the compensation and recurring compensation payment was done on 14 March 2023 by an ad hoc announcement of Pfeiffer Vacuum.

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When was the DPLTA voted on?

The DPLTA was submitted to the Annual General Meeting of Pfeiffer Vacuum on May 2, 2023 for resolution. The shareholders approved the agreement with a majority of 86.58% of the share capital represented at the time of the resolution. The shareholders' meeting of Pangea GmbH had already approved the agreement in advance on 28 April 2023.

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What steps will follow the positive DPLTA decision?

After the positive resolution in the Annual General Meeting on 2 May 2023, the application to register the DPLTA was transmitted on 8 May 2023. It was registered with the commercial register at the registered office of Pfeiffer Vacuum on 16 May 2023. Hence, the DPLTA has become effective and in force.

Since this date, the outside shareholders have the opportunity to tender their shares to Pangea GmbH in exchange for a compensation (for details on this and on the due date of the recurring compensation payment to be granted, see FAQ No. 5 above).

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