Sveafastigheter (SVEAF) M&A announcement summary

Deal rationale and strategic fit

• Creates Sweden's largest listed residential platform with SEK 47 billion in property value and about 26,500 apartments, enhancing scale, geographic diversification, and market leadership.

• Strengthens credit profile, improves cash flow predictability, and attracts broader domestic and international investor interest.

• Enhances free float and share liquidity, supporting improved access to capital markets and lower funding costs.

• Combined company will operate under the Sveafastigheter brand, integrating Sveafastigheter, KlaraBo, and the SBB Portfolio.

• More than twice the size of the next largest listed residential player in Sweden.

Financial terms and conditions

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

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

• SBB portfolio acquired for SEK 6.8 billion, paid in newly issued shares, with SBB receiving Sveafastigheter shares as part of the merger.

• Implied equity value for KlaraBo is SEK 2,035 million, reflecting a 0.6% premium to closing price and 4.9% to 30-day VWAP.

• No new financing required; waivers and backstop facility secured for lender provisions.

Synergies and expected cost savings

• Annual operational cost synergies of SEK 85 million and financial synergies of SEK 35 million, totaling SEK 120 million per year.

• SEK 55 million from property management and SEK 30 million from central administration.

• Synergies to be fully realized within 12 months post-merger; financial synergies realized gradually as refinancing occurs.

• Integration costs estimated at SEK 5 million.