ALD PROPOSED ACQUISITION OF LEASEPLAN Creation of a leading global player in mobility

Press Release

• 14-01-2022

• ALD   ANNOUNCES   THE   SIGNING   OF   A   MEMORANDUM   OF   UNDERSTANDING   TO ACQUIRE 100% OF LEASEPLAN FROM A CONSORTIUM LED BY TDR CAPITAL

• THE  PROPOSED  ACQUISITION  OF  LEASEPLAN  FOR  A  TOTAL  CONSIDERATION  OF EUR 4.9 BILLION1  WOULD BE MADE THROUGH A COMBINATION OF CASH AND SHARES

• AT  CLOSING,  EXPECTED  BY  END  2022,  SOCIETE GENERALE  WOULD  OWN  C. 53%  OF “NewALD”, LEASEPLAN SHAREHOLDERS HOLDING 30.75%2. THE VALUE OF NewALD’S FREE FLOAT WOULD BE SIGNIFICANTLY HIGHER THAN PRE-CLOSING

• SOCIETE   GENERALE   WOULD   COMMIT   TO   REMAIN   THE   LONG-TERM   MAJORITY SHAREHOLDER OF NewALD

• NewALD   WOULD   CREATE   A   LEADING   GLOBAL   MOBILITY   PLAYER,   STRONGLY POSITIONED  TO  LEAD  THE  DIGITAL  TRANSFORMATION  OF  THE  INDUSTRY  AND CAPTURE MOBILITY SECTOR GROWTH

• NewALD  WOULD  GENERATE SIGNIFICANT VALUE  FOR  SHAREHOLDERS,  THANKS  TO SCALE EFFECTS AND SYNERGIES

LeasePlan is one of the leading fleet management and mobility companies in the world by fleet size (total fleet of 1.8 million3  vehicles), with a global and extensive offering making it the perfect fit for ALD to shape the industry’s transformation.

The proposed combination of ALD and LeasePlan into NewALD is expected to be highly synergetic and create an opportunity to cross-leverage the two companies’ complementary capabilities. As a leading global player in mobility worldwide, NewALD would be able to benefit from a fast-growing market driven by strong underlying megatrends, including the:

-     Shift from ownership to usership on all fronts: B2B, B2C and even B2E4

-     Data-driven digital transformation of the mobility industry

-     Transition towards zero-emission and sustainable mobility

This transformative deal would be a step-change that would position NewALD for long term fleet growth of at least 6%  p.a. post integration.  NewALD  would  target an improvement in cost to income  ratio5   to  c. 45%  by  2025,  confirming  its  position  as  best-in-class  in  the  industry.  The transaction is expected to generate operational and procurement synergies of EUR 380 million p.a. before tax.

It is expected to provide attractive returns and significant value creation for investors. Considering the benefits of fully phased synergies and excluding restructuring costs, the pro-forma accretion of normalized earnings per share6  should be c.20% in 2023. Mid-term, NewALD’s dividend pay-out ratio is expected to remain between 50% and 60% until 2025.

Tim Albertsen, Chief Executive Officer of ALD, commented: “Today marks the beginning of a new chapter in our history as a first step towards creating NewALD. In the context of today’s transformation of the automotive and mobility sectors, which is proceeding at an unprecedented pace, this proposed transaction is instrumental in the creation of a leading global player in mobility. By combining the multiple strengths of ALD and LeasePlan, gaining size, joining forces in digital and creating a leading provider of sustainable mobility solutions, we would transform our industry and be best positioned to deliver even better solutions and value propositions to  our  enlarged  client  base.  This  transaction  would  create  multiple  opportunities  to  the  joint management  teams and  talents of  both companies,  across geographies,  underpin our focus on sustainability with a clear path to zero emissions mobility and not least deliver strong shareholder returns over the cycles. We are all very excited about the prospect of being part of this new venture.”

Delivering value to ALD shareholders:

The highly synergetic nature of this proposed combination and the complementary capabilities of ALD and LeasePlan would generate significant value for ALD’s shareholders.

NewALD would target a Cost/Income ratio8 of c. 45% by 2025, a strong improvement compared to the pro forma 53%9  level in 9M 2021 of the two companies, and also better than ALD’s Move 2025 target of 46-48% for 2025. This demonstrates the strong positive jaws effect from the step-change in size of the new company. This best-in-class efficiency in the industry would further boost the company’s resilience through the cycle.

Scale effects and cost synergies would underpin this improvement in efficiency. Annual run-rate procurement and cost synergies are estimated at c. EUR 380 million before tax and would be expected to fully materialize by 2025. Procurement optimisation would contribute a substantial part of this, through synergies on vehicles & tyres spend  and  savings in services and indirect expenditure. The remainder would come from other cost synergies. Restructuring costs, estimated at c. 1.25 times the annual run-rate synergies before tax, are expected to be incurred in 2023 and

2024.

As a result, this proposed transaction is expected to be highly accretive for ALD shareholders. Calculated on a pro forma basis, NewALD’s EPS10  for 2023 should improve by c.20%. NewALD is expected to deliver highly compelling value to investors in the mid-term due to strong long-term fleet growth and operating leverage coupled with attractive returns, supported by a high dividend pay-out ratio.

Delivering value to ALD shareholders:

The highly synergetic nature of this proposed combination and the complementary capabilities of ALD and LeasePlan would generate significant value for ALD’s shareholders.

NewALD would target a Cost/Income ratio8 of c. 45% by 2025, a strong improvement compared to the pro forma 53%9  level in 9M 2021 of the two companies, and also better than ALD’s Move 2025 target of 46-48% for 2025. This demonstrates the strong positive jaws effect from the step-change in size of the new company. This best-in-class efficiency in the industry would further boost the company’s resilience through the cycle.

Scale effects and cost synergies would underpin this improvement in efficiency. Annual run-rate procurement and cost synergies are estimated at c. EUR 380 million before tax and would be expected to fully materialize by 2025. Procurement optimisation would contribute a substantial part of this, through synergies on vehicles & tyres spend  and  savings in services and indirect expenditure. The remainder would come from other cost synergies. Restructuring costs, estimated at c. 1.25 times the annual run-rate synergies before tax, are expected to be incurred in 2023 and

2024.

As a result, this proposed transaction is expected to be highly accretive for ALD shareholders. Calculated on a pro forma basis, NewALD’s EPS10  for 2023 should improve by c.20%. NewALD is expected to deliver highly compelling value to investors in the mid-term due to strong long-term fleet growth and operating leverage coupled with attractive returns, supported by a high dividend pay-out ratio.

Key transaction terms:

1. Price: Acquisition of 100% of LeasePlan for a total consideration of EUR 4.9 billion13

• Transaction based on LP Group B.V.  book value of EUR 3.514 billion at closing

1. Cash component: EUR 2.0 billion to be financed via a rights issue of EUR 1.3 billion and EUR 0.7 billion of surplus capital14

• Rights issue underwritten by Societe Generale to occur before the completion of the proposed transaction
• Take up enabling Societe Generale to hold c. 53%15 in the combined entity at closing and ownership of c. 51% in case of warrants exercise

1. Share component: 30.75% of combined entity share capital (12 months lock-up, followed by a 24 month period with orderly sale provision)

• LeasePlan’s selling shareholders would together hold 30.75% of NewALD after rights issue completion and combination

1. ALD to issue warrants to the benefit of the LeasePlan’s shareholders (total stake of 32.9% in case of warrants exercise)

• Warrant  characteristics:  EUR  2.00  strike  price  per  share,  1  NewALD  share  for  1 warrant
• Exercise:  between  1  to  3  years  after  closing,  warrants  become  exercisable  if NewALD’s fully undisturbed share price (adjusted for the contemplated rights issue) increases by at least 30%

1. Execution  of  a  shareholders’  agreement  between  certain  LeasePlan  shareholders  and Societe Generale (and lock-up agreements with other LeasePlan shareholders)

1. Post-closing, the free float of NewALD would exceed 15%, implying a significant increase in free float market value.

The proposed transaction has received the support of Societe Generale’s, ALD’s and LeasePlan’s Boards of Directors, as well as LeasePlan’s Supervisory Board, and is subject to information and consultation of relevant works councils. The closing of the transaction is subject to customary closing conditions. The main closing conditions are (i) the regulatory and antitrust approvals, (ii) the waiver by the AMF to the obligation to file a tender offer on ALD granted to the LeasePlan’ shareholders (iii) the shareholders meeting of ALD, (iv) the distribution by LeasePlan of its excess capital and (v)

Previous News