Fredensborg AS agreed to acquire Heimstaden ehf. from Heimstaden AB (publ) (OM:HEIM PREF) for ISK 30.8 billion on September 30, 2023. Under the terms of consideration, the purchase price paid upon closing of the transaction amounts to ISK 18.7 billion (appr. SEK 1.5 billion*). A further deferred purchase price in the range ISK 10.9 -12.1 billion (appr. SEK 0.87-0.97 billion*) will be paid when Fredensborg AS has completed the exit strategy of Heimstaden ehf., as initiated by Heimstaden AB. In detail, The Purchase Price is to be settled as follows: ISK 18.89bn (SEK ~ 1.5bn) is paid in cash by Fredensborg AS to Heimstaden AB upon closing. The remaining amount of ISK 11.94 billion (SEK ~ [0.95] billion ) will be paid in accordance with the following: Option 1: successful resale to third party -ISK 3.15 billion (SEK ~ 0.25 billion) to be distributed to Heimstaden AB from Heimstadenas dividend pre-closing of sale to Fredensborg - ISK 8.79 billion (SEK ~ 0.70 billion ) conditional payment payable at the time of completion of the transaction to third party, less: -Risk premium of ISK 1.23 billion (SEK ~ 0.10 billion ) collected by Fredensborg to cover the transaction and credit risk undertaken by Fredensborgin relation to a successful divestment to third party. Furthermore, the share transfer agreement includes additional mechanism that entitles Heimstaden AB all proceeds received in excess of 100% of the initial purchase price. Option 2: Disposal of assets -ISK 3.15 bn (SEK ~ 0.25bn) to be distributed to Heimstaden AB from Heimstadenas dividend pre-closing of sale to Fredensborg. The remaining amount is to be settled when the ongoing liquidation of Heimstaden has been executed in full based on the following mechanism: If the liquidation net proceeds exceed ISK 18.89 billion (SEK ~ 1.5 billion ) and up to ISK 35.75 billion (SEK ~ 2.84 billion ), Heimstaden AB receives 2/3 of the excess proceeds and Fredensborg1/3. If the liquidation net proceeds exceed ISK 35.75bn (SEK ~ 2.84bn), the excess will be distributed equally between the parties. In addition, the purchase price mechanism includes a performance based earn out element based on the total consideration received by Fredensborg AS at an exit from Heimstaden ehf. If the exit strategy isn't completed within 36 months after closing and the deferred purchase price remains unsettled, Heimstaden AB can, under specific conditions, request a transaction reversal. The valuation is sensitive to both timing and sales prices of Heimstaden?s portfolio, as buyer and seller share the risk of successful liquidation. SEK prices are furthermore subject to FX risk. In the event that the asset sale has not been completed or Fredensborg has not otherwise paid the full purchase price within three years of completion of the transaction, Heimstaden AB will have a unilateral right to demand that the transaction is reversed upon (a) full repayment of amount received from Fredensborg plus interest of 10%, less (b) any value transferred out of Heimstaden (Leakage) since completion of the transaction, and when applicable, interest of 10%.Interest on Leakage will accrue if LTV level has not been maintained compared to pre-closing of sale to Fredensborg.

The transaction is subject to receive approval from Swedish Securities Council. The transaction will close in October 2023. The divestment follows the communicated strategy to continue the deleveraging of Heimstaden AB and the proceeds will be used for liability management purposes. Magnús Gunnar Erlendsson of KPMG has provided fairness opinion to the Directors of Heimstaden AB.