KlaraBo Sverige (KLARA) M&A announcement summary

Deal rationale and strategic fit

• Creates Sweden's largest listed residential platform with SEK 47 billion in assets and about 26,500 apartments, plus 7,000 in the project pipeline, significantly increasing scale and market presence.

• Enhances cash flow predictability, resilience, and operational efficiency through broader diversification and a higher share of income-generating residential assets.

• Strengthens position with capital markets, lenders, and rating agencies, improving access to funding and investor appeal.

• Increases free float and share liquidity, attracting broader domestic and international investor interest.

• Value realization for both parties, integrating KlaraBo into a stronger structure and leveraging best practices.

Financial terms and conditions

• All-equity statutory merger under Swedish law; exchange ratio of 9 Sveafastigheter shares for 22 KlaraBo shares, based on adjusted NRV per share.

• KlaraBo to pay an extraordinary dividend of SEK 1.40 per share to existing shareholders, conditional on merger completion.

• SBB portfolio acquisition valued at SEK 6.8 billion to SEK 7 billion, paid in newly issued shares, with SBB receiving merger consideration in Sveafastigheter shares.

• Combined company will have 302.9 million shares outstanding post-merger.

• No new financing required; waivers and a backstop facility secured to cover potential debt shortfalls.

Synergies and expected cost savings

• Annual operational and financial synergies estimated at SEK 120 million, including SEK 85 million from operations and SEK 35 million from financing.

• SEK 55 million in property cost savings and SEK 30 million from central administration.

• Synergies expected to be fully realized within 12 months post-merger.

• Integration costs estimated at SEK 5 million.

• Efficiencies from harmonized property management, consolidated administration, and improved financing terms.