Aareal Bank AG

M&A Activity • Nov 23, 2021

Aareal Bank entered into an investment agreement Public tender offer for all outstanding Aareal Bank shares

Wiesbaden, 23 November 2021

Executive summary

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Aareal Bank concluded investment agreement with a bidder company¹ ("Bidder") indirectly held by PE funds managed and advised by Advent International, Centerbridge Partners and co-investors ("Investors") for terms of a voluntary public tender offer to acquire all outstanding Aareal Bank shares

2 Bidder highly supportive of "Aareal Next Level" strategy and existing Aareal Bank Group composition

Investments in growth set to be financed henceforth through retained profits² – proposal for dividend payment withdrawn from agenda for EGM on 9 December; Additional equity potentially available from Bidder if required to facilitate further growth beyond envisaged business plan, subject to customary approvals

Investors' sector expertise, experience and market access will support Aareal Bank Group's accelerated growth ambitions ⁵

Launch of public tender offer by Bidder following approval of offer document by BaFin expected by mid December ⁶ Cash consideration of €29.00 per Aareal Bank share represents a premium of c. 35% over 3 months VWAP³

7 Unanimous support by Aareal Bank's Management Board and Supervisory Board

• Offer considered highly beneficial for further development of Aareal Bank Group and its stakeholders⁴
• Two expert opinions commissioned from two investment banks confirm offer price as fair
• Aareal Bank provides shareholders with opportunity to decide in favor of this offer

3 VWAP = Volume weighted average share price for the 3 months period preceding the confirmation of talks between Aareal

and potential investors in the ad hoc disclosure of 7 October 2021

¹ Bidder to be renamed to Atlantic BidCo GmbH

² 'Retention of dividend' policy not applying to payments in context of AT1 instruments

Supporting and enhancing "Aareal Next Level" strategy

Aareal to leverage on expertise and global market access

Significant investments to drive organic and inorganic growth financed through retained profits
"ACTIVATE" Structured Property Financing	Increase portfolio volume over c. 5 years to up to €40bn respecting existing risk policy Growth fueled by Bank's traditional asset classes and property types, but also by tapping new and attractive property types and adjacent segments, maintaining conservative risk / return profiles; Continuing growth of lending volume in accordance with Bank's existing ESG criteria
"ELEVATE" Banking & Digital Solutions	Significantly grow commission income and asset light business Acceleration and support for execution of organic growth and implementation of an M&A roadmap, leveraging on significant M&A expertise, global market access through the network of the Investors
"ACCELERATE" Aareon	Support Value Creation Programme and enhance M&A roadmap developed with Advent Fund further growth by M&A activities through additional capital beyond envisaged initiatives already agreed with Advent
Funding and capital	Intention to maintain robust capital base and a long-term senior preferred rating of at least A by Fitch Ratings Intention to support organic and inorganic growth across all segments by waiving dividend payments1 in the years to come; Additional equity potentially available from Bidder if required to facilitate growth beyond envisaged business plan subject to customary approvals; Maintaining Aareal Bank's strong debt story
Organisation	Continuation of group wide efficiency measures in organisation, processes & infrastructure Sharing of best practices with regard to organisation, processes and use of technology and increase of size of the workforce in the relevant divisions

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Key transaction terms and structure

• Voluntary public tender offer to acquire all outstanding Aareal Bank shares for a cash consideration of €29.00 per share
  • Premium to unaffected 3M VWAP¹ : c. 35%
• Transaction implies an Equity Value of c. €1.736bn for Aareal Bank Group
  • Implied 2022 P/E² : ~16.1x
  • Implied P/B³ : ~0.65x
• Key offer conditions:
  • Minimum acceptance threshold of 70%
  • Anti-trust clearances and regulatory approvals
  • Other customary offer conditions
• In case of a successful voluntary public tender offer Bidder will hold a majority of all outstanding Aareal Bank shares

Key transaction terms Envisaged target transaction structure

1 VWAP = Volume weighted average share price for the 3 months period preceding the public announcement of talks between

Aareal and potential investors in the ad hoc disclosure of 7 October 2021

2 Based on VARA consensus as of 03rd November 2021 with a consensus EPS of €1.80 for FY 2022

3 Based on IFRS equity attributable to Aareal Bank shareholders of € ~2,673mn as of 30.09.2021

Envisaged timeline with regard to voluntary public tender offer

In case of successful voluntary public tender offer and receipt of required approvals closing envisaged around mid 2022

Corporate events Aareal Bank

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1 BaFin review period 10 – 15 working days

2 Minimum Acceptance Period of 5 weeks

3 In case of reaching minimum acceptance threshold, 2 weeks additional tender period

Summary of transaction

Public tender offer considered highly beneficial for further development of Aareal Bank Group and for its stakeholders¹

Shareholders	Realizing fair cash consideration of €29.00 per share with a c. 35% premium to 3 months VWAP2 ▪ ▪ Immediate monetization of substantial part of Aareal's future value upside
Debt investors	▪ Maintain or even improve robust capital base, even higher capital ratios compared to stand-alone by retention of profits3 plan despite accelerated growth to fund growth ▪ Intended preservation of a Fitch Ratings long-term senior preferred rating of at least A- ▪ Frequent debt issuance incl. benchmarks to fund the accelerated growth strategy enhancing market liquidity of issued debt instruments
Customers	▪ Expansion of product and service portfolio in all three segments to enhance client-centric offering ▪ Clients to benefit from broader product and service offering and enhanced innovative power – this is made possible by access to investors' additional expertise in all three segments ▪ Development into adjacent markets and leveraging existing partner network
Employees	▪ Increase size of workforce in relevant Aareal Bank Group's divisions ▪ Expansion and growth of Aareal Bank Group across all three divisions ensuring sustainable long term success of group ▪ Acceleration of Aareal Bank's growth strategy "Aareal Next Level"
Aareal Bank Group	▪ Leveraging Aareal Bank Group's platform ▪ Preservation of current composition of Aareal Bank Group

1 Subject to reasoned opinion of Management Board / Supervisory Board

2 VWAP = Volume weighted average share price for the 3 months period preceding the confirmation of talks between Aareal

and potential investors in the ad hoc disclosure of 7 October 2021

3 'Retention of dividend' policy will not apply to payments in context of AT1 instruments

Contacts

Jürgen Junginger

Managing Director Investor Relations Phone: +49 611 348 2636 juergen.junginger@aareal-bank.com

Sebastian Götzken

Director Investor Relations Phone: +49 611 348 3337 sebastian.goetzken@aareal-bank.com

Carsten Schäfer

Director Investor Relations Phone: +49 611 348 3616 carsten.schaefer@aareal-bank.com

Karin Desczka

Manager Investor Relations Phone: +49 611 348 3009 karin.desczka@aareal-bank.com

Disclaimer

This presentation has been prepared by Aareal Bank AG (together, "Aareal Bank") for informational purposes only. Consequently, it may not be sufficient or appropriate for the purpose for which a third party might use it. This presentation shall be used only in accordance with applicable law and must not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by the recipient to any other person except in compliance with applicable law.

This presentation includes statements, estimates, opinions and projections with respect to anticipated future performance ("forward-looking statements") of Aareal Bank which reflect various assumptions concerning anticipated results and developments taken from Aareal Bank's current business plan, the intentions pursued by the Bidder in this transaction and other internal Aareal Bank data and sources or from public sources which have not been independently verified or assessed by Aareal Bank and which may or may not prove to be correct, particularly given global developments following the global Covid-19 pandemic. Any forward-looking statements reflect current expectations based on current business plans and assessments, the intentions of the Bidder and market data and various other assumptions. All of these forward-looking statements involve significant risks and uncertainties and should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such results will be achieved. Any forward-looking statements only speak as at the date the presentation is provided to the recipient. It is up to the recipient of this presentation to make its own assessment of the validity of any forwardlooking statements and assumptions and the value attributed to historical information or whether any impact of the global Covid-19 pandemic is to be factored in and no liability is accepted by Aareal Bank in respect of the achievement of such forward-looking statements and assumptions.

Aareal Bank accepts no liability whatsoever to the extent permitted by applicable law for any direct, indirect or consequential loss or penalty arising from any use of this presentation, its contents or preparation or otherwise in connection with it. No representation or warranty (whether express or implied) is given in respect of any information in this presentation or that this presentation is suitable for the recipient's purposes. The delivery of this presentation does not imply that the information herein is correct as at any time subsequent to the date hereof. Aareal Bank has no obligation whatsoever to update or revise any of the information, forward-looking statements or the conclusions contained herein or to reflect new events or circumstances or to correct any inaccuracies which may become apparent subsequent to the date hereof.

This presentation does not, and is not intended to, constitute or form part of, and should not be construed as, an offer to purchase or sell, or a solicitation of an offer to purchase, subscribe for or otherwise acquire or sell, any securities of Aareal Bank nor shall it or any part of it form the basis of or be relied upon in connection with or act as any inducement to enter into any contract or commitment or investment decision whatsoever. Any decision by investors to sell their Aareal Bank shares should be based on the public tender offer documentation to be published in due course by the Bidder.

This presentation is neither an advertisement nor a prospectus and is made available on the express understanding that it does not contain all information that may be required to evaluate, and will not be used by the attendees/recipients in connection with, an investment in or divestment of any securities of Aareal Bank. This presentation is selective in nature and does not purport to contain all information that may be required to evaluate Aareal Bank and/or its securities. No reliance may or should be placed for any purpose whatsoever on the information contained in this presentation, or on its completeness, accuracy or fairness.

This presentation is not directed to or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction.

The transaction described in this presentation contemplates a public offer for the securities of a German company which, if submitted, will be subject to German tender offer and disclosure requirements, which are different from those of the United States. The offer will be made in the United States pursuant to the applicable US tender offer rules and otherwise in accordance with the requirements of German law. Accordingly, the offer will be subject to disclosure and other procedural requirements, including with respect to withdrawal rights, offer timetable, settlement procedures and timing of payments, that are different from those applicable under US domestic tender offer procedures and law.

The receipt of cash pursuant to the offer by a US holder of Aareal Bank shares may be a taxable transaction for US federal income tax purposes and under applicable state and local, as well as foreign and other tax laws. Each holder of Aareal Bank shares is urged to consult his independent professional advisor immediately regarding the tax consequences of acceptance of the offer.

It may be difficult for US holders of Aareal Bank shares to enforce their rights and claims arising out of the US federal securities laws, since Aareal Bank is located in a country other than the United States, and their officers and directors are residents of a country other than the United States. US holders of Aareal Bank shares may not be able to sue a non-US company or its officers or directors in a non-US court for violations of the US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgement.

To the extent permissible under applicable law or regulation, and in accordance with German market practice, the Bidder or its brokers may purchase, or conclude agreements to purchase, Aareal Bank shares, directly or indirectly, outside of, if made, the scope of the public takeover offer, before, during or after the acceptance period. This applies to other securities that are directly convertible into, exchangeable for, or exercisable for Aareal Bank shares. These purchases may be completed via the stock exchange at market prices or outside the stock exchange at negotiated conditions. Any information on such purchases will be disclosed as required by law or regulation in Germany or any other relevant jurisdiction.