Project Wolf Planned OF2C concept – Baltics (after closing)

1. Project Wolf Planned OF2C concept – Baltics (after closing)

11th February 2020

2. Legal Disclaimer

LEGAL WARNING:
Until closing, STADA and Walmark must continue to operate their respective businesses separately
as independent companies in competition with each other. The transfer of elements of control of
Walmark to STADA prior to all competition clearances by the relevant competition authorities having
been obtained is strictly prohibited, as is the exchange of competitively sensitive information. These
strict rules shall apply until the deal closes. Accordingly, prior to closing, STADA and Walmark should
avoid coordinating their competitive behavior, and must take particular care to avoid effectively
implementing the transaction (or giving the appearance to the outside world of having done so); and
avoid sharing competitively sensitive information. The information exchange and cooperation
contained in these slides is for integration planning only, and not implementation until post closing.
Whilst such limited cooperation is allowed, it is imperative that no competitively sensitive information
is either requested or disclosed. For further information, please always refer to Project Wolf:
Guidelines on integration planning and pre-closing information exchange or in case of doubt, obtain
legal advice.
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3.

Key Things to look into [1/2]
Tax
Legal
(general)
Preferred option
- TP and VAT implications of business transfer from Walmark Czech to STADA Slovakia
- Implications of liquidation of Walmark Slovakia
Licenses/regulatory requirements
Does proposed concept require application / amendments to currently existing licenses
(wholesale, narcotic, …), certifications (GDP), transfer of marketing authorizations) & timing of
activities
Contracts
In general, transfer of contracts requires 3rd party consent. Assess whether consent is already
given in contracts or whether consent is not required due to statutory provisions?
Claims/Liabilities
Assignment of claims against third parties possible without consent, unless explicitly excluded
or in special situations
- Debt positions can only be transferred with creditor‘s consent (sometimes already given for
intra-group transfers and in case of distress / covenant breaches)
IT Systems / Data
- Rights to use/exploit licenses of self-developed software after closing must be transferred
- Group licenses (e.g. SAP R/2, R/3) typically contain clauses that make license fees more
expensive when business units are transferred
IP / Knowhow
- Generally, inbound licenses and other IP rights can not be transferred without licensor‘s
consent
- Risk of cost increase / re-negotiation with IP holders
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4.

Key Things to look into [2/2]
Labor
Law
(centrally by
Kinstellar)
IT
Functions
(Finance,
SC, HR
Regulatory,
etc.
The key practical issues in workforce restructuring include:
Legal justification
Works council and employee representatives’ process
Labor administration process
Costs and timing
Litigation risk
Does preferred option (merger, business transfer, new entity etc.) have an impact on planned
workforce reduction?
If yes,what is the solution to mitigate?
Based on current set-up and implications of legal/tax assessment, what is strategy and
roadmap meeting business requirements regarding preferred OF2C concept covering:
Master Data Transfer
ERP system
CRM system
BI tools
Network
Infrastructure
Service (helpdesk)
Comment and agree on proposed OF2C driven by tax, legal, IT
Evaluate whether proposed approach is in line with business requirements from functional
workstream perspective, e.g. reporting requirements, supply chain set up etc.
Provide key milestones for your workstream
Identify key showstopper
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5.

BLT – Current Situation & Preferred Future Set-Up
To be updated
based on Tax
assessment
Current Set-Up
UAB STADA Nizhpharm Baltija,
Lithuania (STADA LT) set up as
fully fledged distributor
– Distribution entity in Lithuania
• UAB Walmark JSC Ltd. (WM LT)
– Distribution entity for
Lithuania, Estonia and Latvia
• Walmark Estonia OU (WM EE)
– Sales & marketing service
provider for WM LT in Estonia
• SIA Walmark, Latvia (WM LV)
– Sales & marketing service
provider for WM LT in Latvia
Future Set-Up – Envisaged Structure
• Use STADA LT as single distributor
• Merger of WM LT into STADA LT
• Set-up of representative offices with (comparably) extensive functions in Estonia and
Latvia
• Liquidation of WM EE and WM LV
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6. Functional Feedback & Sign-Off

To be updated
based on
functional
feedback
Functional Feedback & Sign-Off
Key considerations
Function
+
-
Tax
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Legal
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HR
(incl.
Labor Law)
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IT
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Supply Chain
(Portfolio)
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Regulatory (incl. Lorem ipsum
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QA)
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Sign Off
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7. Implementation Planning

To be updated
based on
functional
feedback
Implementation Planning
2020
Function
Feb
Mar
Apr
May
Juni
Juli
Aug.
Sept.
xxx
xxx
Tax
xxx
xxx
Legal
xxx
xxx
xxx
xxx
IT
xxx
...
Supply
Chain
…
…
…
Regulatory
…
…
…
Other
…
…
Key
Milestones
Sign off WS Closing
with functions 18-Feb
in BV
Milestones at risk
xxx
Critical path items (interdependencies)
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