Key Events During the Fiscal Year

Takeover of Victoria Park AB, Sweden

On May 3, 2018, Vonovia SE (subsequently Vonovia) announced its intention, as part of its internationalization strategy, to make a public cash offering via a subsidiary to the shareholders of Victoria Park AB (subsequently Victoria Park), a Swedish listed company, for the purchase of all shares at a price of 38.00 Swedish kronor (SEK) for each class A and class B share, and SEK 316.00 for each preference share.

Victoria Park is a leading residential real estate company in Sweden and operates in an environment that is very similar to the German housing market. As does Vonovia, Victoria Park pursues a long-term company strategy guided by social criteria with the aim of offering its tenants attractive homes and thereby creating value. The company owns and manages a high-quality real estate portfolio of approximately 14,000 apartments with a focus in the metropolitan regions of Stockholm, Malmö and Gothenburg. The shares of Victoria Park are listed in the mid-market segment of the Nasdaq Stockholm stock exchange.

As of June 18, 2018, the last day of the acceptance deadline, the shareholders of Victoria Park had accepted the offer for a total of 34,056,463 class A shares, 97,962,486 class B shares and 663,172 preference shares. This is equal to 54.4% of the share capital or 46.5% of the voting rights. Vonovia was furthermore granted two call options totaling 10.0% of the capital, or 12.4% of the voting rights. These call options can be exercised between May 15 and May 29, 2019. The offer was completed on June 28, 2018.

During the extended tender period until July 3, 2018, an additional 1.8% of the share capital or 2.0% of the voting rights were tendered to Vonovia. In addition, Vonovia acquired shares in the market at up to the offer price amounting to 0.6% of the share capital or 0.3% of the voting rights.

At the end of the extended tender period and the acquisitions on the market, Vonovia possessed 56.6% of the share capital and 48.9% of the voting rights. Including the two call options, the share of total equity equaled 66.7% or 61.2% of the voting rights. Although Vonovia had less than 50% of the voting rights as of June 28, 2018, in accordance with IFRS 10.B41–B43, de facto control had to be assumed, since it held a de facto majority of votes present at the Annual General Meeting.

By way of the agreement dated September 5, 2018, and with the execution of this agreement on September 7, 2018, Vonovia acquired a further 59,560,701 class A and B shares based on the same conditions as in the public takeover offer. This corresponds to a further 30.3 million voting rights. This means that, as of December 31, 2018, the percentage of the share capital comes to 81.4%, while the share of the voting rights amounts to 81.1%. Including the call options in the amount of 12.4%, the share of voting rights comes to 93.5%.

As a result of the completion of the transaction at the end of June 2018 and the resulting assumption of control, Victoria Park is included in the consolidated financial statements as of December 31, 2018, with an earnings contribution for the second half of 2018. The purchase price allocation and, as a result, the calculation of goodwill are still provisional.

Takeover of Austrian company BUWOG AG

On December 18, 2017, Vonovia published notice of its intention to make a voluntary public takeover offer, in accordance with the Austrian Takeover Act (ÜbG), to the shareholders of BUWOG AG (subsequently BUWOG), Vienna, Austria, for the acquisition of all shares in BUWOG. As part of this offer, all BUWOG shareholders were offered € 29.05 in cash for each share in BUWOG.

The stated goal of the BUWOG takeover is to consolidate the complementary real estate portfolios of both companies and merge Vonovia’s housing stock with that of BUWOG (around 48,300 apartments). The integration of BUWOG is expected to allow synergy potential to be harnessed, in particular by way of the joint administration and management of the German and Austrian residential units, the development process know-how, the expansion of the value chain and the optimization of cost structures.

The Vonovia and BUWOG portfolios are a good geographical fit for each other and also complement each other strategically. The successful takeover of conwert Immobilien Invest SE in March 2017 allowed Vonovia not only to expand its real estate portfolio in Germany, but also to add properties in Austria for the first time to what had, to date, been a purely German portfolio. The takeover of BUWOG allowed Vonovia to acquire further properties that not only complement the real estate portfolio in Germany, but also include intelligent additions to the real estate portfolio in Austria. The merger strengthened the joint German and Austrian real estate portfolio of Vonovia and BUWOG considerably.

At the end of the first tender phase on March 12, 2018, the majority of the shares in BUWOG, namely 82,844,967 shares or 73.8% of shares, had been tendered to Vonovia. The takeover of the shares from the first tender phase and, as a result, the assumption of control were completed on March 26, 2018, in return for payment of € 2,752.5 million.

The second obligatory tender phase, in accordance with the Austrian Takeover Act (ÜbG), started on March 16, 2018, and ended at 5 p.m. CEST on June 18, 2018. In addition, Vonovia acquired BUWOG shares on the market at up to the offer price. With the conclusion of this second mandatory tender period, a further 15,281,786 shares were tendered to Vonovia, meaning that, with the completion of the transaction and the purchases, as well as the exchange of convertible bonds, Vonovia possessed more than 90.7% of the share capital of BUWOG as of June 30, 2018. On June 20, 2018, Vonovia requested a squeeze-out according to the Austrian Act on the Squeeze-out of Minority Shareholders (Gesellschafterausschlussgesetz). A corresponding resolution was passed at the Annual General Meeting held on October 2, 2018.

Due to the assumption of control on March 26, 2018, BUWOG is included in Vonovia’s consolidated financial statements as of December 31, 2018, with an earnings contribution of nine months.

Investment in France

In October 2018, Vonovia acquired 80% of a portfolio of 4,000 residential units from the French state rail operator, SNCF, as part of a consortium comprising Ampere Gestion, SwissLife and French pension funds. Vonovia’s stake corresponds to the equivalent of 10% and represents another key step on the French residential property market.

Vonovia SE Carries Out Capital Increase Against Cash Contributions in the Form of Accelerated Bookbuilding

On May 3, 2018, with the agreement of the Supervisory Board’s Finance Committee, the Management Board of Vonovia SE passed a resolution on an increase in its share capital in return for a cash contribution, partially using the 2016 authorized capital and excluding a subscription right, by € 26,000,000.00 from € 485,100,826.00 to € 511,100,826.00.

The 26,000,000 new no-par-value registered shares were placed with institutional investors in the scope of a private placement by means of an accelerated bookbuilding procedure and carry dividend rights as of January 1, 2018.

The shares were granted at a placement price of € 38.30 per share, delivering issue proceeds to Vonovia SE in the amount of € 995.8 million before commission and expenses. The net issue proceeds from the capital increase were used, among other things, for the purchase price payments in connection with the takeover offer made to the shareholders of Victoria Park AB.