Schaeffler : Joint Merger Report of the Boards of Managing Directors of Schaeffler AG and Vitesco Technologies Group Aktiengesellschaft

Convenience Translation

Please note that this translation of the German Joint Merger Report is for convenience purposes only.

Only the German Joint Merger Report is valid and legally binding.

Joint Merger Report

pursuant to Section 8 German Transformation Act (UmwG)

Report of the Executive Boards of

Schaeffler AG, Herzogenaurach

and

Vitesco Technologies Group Aktiengesellschaft, Regensburg

on the Merger of

Vitesco Technologies Group Aktiengesellschaft

into

Schaeffler AG

of March 13, 2024

		TABLE OF CONTENTS
			Page
A.	Introduction	4
B.	Description of the Companies involved in the Merger	7
	I.	Information about Schaeffler	7
	II.	Information about Vitesco Technologies	20
	III.	Overall Group Structure	30
C.	Main Reasons for the Merger	32
	I.	Simplification of the Corporate Structure	32

1. Cost Savings, Flexibility and Efficient Integration of the Vitesco Group into the

		Schaeffler Group	32
	III.	Discontinuation of the Stock Exchange Listing	33
	IV.	Increasing attractiveness on the capital market	33
D.	Alternatives to the Merger	35
	I.	Merger by Way of a New Formation	35
	II.	Capital Increase in Kind with an Exchange Offer	35
	III.	Merger of Schaeffler into Vitesco Technologies	36
	IV.	Control and Profit and Loss Transfer Agreement	36
	V.	Squeeze-out or Integration	36
E.	Merger Control	38
F.	Implementation of the Merger	39
	I.	Merger of Vitesco Technologies into Schaeffler by Way of Absorption	39
	II.	Key Steps of the Merger	39
	III.	Costs of the Merger	40
G.	Accounting, Corporate law and Tax Consequences of the Merger	41
	I.	Accounting Consequences of the Merger	41
	II.	Consequences of the Merger under Corporate Law	52
	III.	Tax Implications of the Merger	58
H.	Description of the Merger Agreement	67
	I.	Transfer of Assets, Merger Date (Section 1)	67
	II.	Consideration, Capital Increase (Section 2)	67
	III.	Escrow Agent (Section 3)	70
	IV.	Special Rights and Advantages (Section 4)	70

1. Consequences of the Merger for Employees and their Representative Bodies

(Section 5)

72

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	VI.	Rights of Withdrawal (Section 6)	75
	VII.	Change of Merger Date (Section 7)	75
	VIII.	Conditions Precedent, Effectiveness (Section 8)	76
	IX.	Branch Offices, Procuration / Powers of Attorney (Section 9)	76
	X.	Final Provisions (Section 10)	76
I.	Effects of the Merger on Securities and Stock Exchange Trading	77
	I.	Effects of the Merger on Shares of Vitesco Technologies	77
	II.	Effects of the Merger on the Shares of Schaeffler	78
	III.	Effects of the Merger on the Stock Exchange Trading of the Shares	79
J.	Explanation and Rationale for the Exchange Ratio	81
	I.	Preliminary Note	81
	II.	Valuation Principles and Valuation Method	81
	III.	Exchange Ratio	85
Annex 1: Copy of the Merger Agreement	89
Annex 2: Valuation Report by ValueTrust	90

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DEFINED TERMS

ADKL	6
ADRs	22
AktG	9
BetrVG	73
BewG	62
BGB	12
BofA	4
Business Combination Agreement	4
Change of Classes of Shares	6
Combined Group	4
Continental	20
DCF Method	82
Escrow Agent	70
EStG	60
GCGC	71
GewStG	60
GrEStG	62
GVG	5
GWB	38
GZVJu	6
HGB	41
IFRS	16
IHO	4
IHO Beteiligungs	4
IHO Verwaltungs	4
KStG	60
Merger Agreement	4
Merger Auditor	6
Merger Date	67
Merger Report	5
Merger Resolutions	40
MitbestG	12
Registration Conditions of the Change of

Classes of Shares	9
Resolution on the Change of Classes of
Shares	9
Schaeffler	4
Schaeffler Group	7
Schaeffler Merger Resolution	40
Schaeffler Non-voting Common Share	8
Schaeffler Non-voting Common
Shareholders	9
Schaeffler Non-voting Common Shares	8
Schaeffler Share	8
Schaeffler Shareholders	9
Schaeffler Shares	8
Schaeffler Voting Common Share	8
Schaeffler Voting Common Shareholders ...	9
Schaeffler Voting Common Shares	8
SpruchG	57
Tender Offer	4
TRS	4
TRS Acquisition	4
UmwG	4
UmwStG	59
Valuation Date	81
Valuation Expert	5
Valuation Report	5
ValueTrust	5
Vitesco Group	20
Vitesco Merger Resolution	40
Vitesco Share	21
Vitesco Shareholders	4
Vitesco Shares	21
Vitesco Technologies	4

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1. INTRODUCTION
   The planned merger of Vitesco Technologies Group Aktiengesellschaft, Regensburg ("Vitesco Technologies"), into Schaeffler AG, Herzogenaurach ("Schaeffler"), is carried out with the aim of creating a combined group (the "Combined Group"). On November 27, 2023 Schaeffler and Vitesco Technologies entered into an agreement on the planned business combination (the "Business Combination Agreement").
   Schaeffler already currently holds 15,557,631 and thus approximately 38.87% of the share capital of Vitesco Technologies. This is mainly due to a voluntary public tender offer in the form of a cash offer by Schaeffler to all shareholders of Vitesco Technologies (the "Vitesco Shareholders"), which was completed on January 5, 2024 (the "Tender Offer"), as a result of which Schaeffler acquired 11,957,629 shares in and thus approximately 29.88% of the share capital of Vitesco Technologies. Furthermore, in particular on January 23, 2024 Schaeffler acquired 3,600,000 shares in Vitesco Technologies from BofA SECURITIES EUROPE SA ("BofA"), which BofA had previously acquired under a Total Return Swap ("TRS") concluded in connection with the Tender Offer, and thus acquired approximately 9% of the share capital of Vitesco Technologies (the "TRS Acquisition"). IHO Verwaltungs GmbH ("IHO Verwaltungs"), which currently holds approximately 75.08% of the share capital and 100% of the voting rights of Schaeffler, and IHO Beteiligungs GmbH ("IHO Beteiligungs", and together with IHO Verwaltungs, "IHO"), also directly and indirectly hold a further 19,986,597 shares and thus approximately 49.94% of the share capital of Vitesco Technologies. In total, Schaeffler holds, together with IHO, 35,544,228 shares in and thus approximately 88,81% of the share capital of Vitesco Technologies. The voting rights of IHO in Vitesco Technologies are attributed to Ms. Maria-ElisabethSchaeffler-Thumann and Mr. Georg F.W. Schaeffler.
   To implement the merger of Vitesco Technologies into Schaeffler, Schaeffler and Vitesco Technologies entered into a notarized agreement on March 13, 2024 (the "Merger Agreement") for the merger of Vitesco Technologies into Schaeffler.
   The Merger Agreement requires the approval of the general meeting of Schaeffler and Vitesco Technologies (Section 13 para. 1 German Transformation Act (Umwandlungsgesetz, "UmwG")), which must be passed with a majority of at least three quarters of the share capital represented at the time of the resolution and a simple majority of the votes cast. The approval from Schaeffler's non-voting common shareholders for the Merger Agreement is not required pursuant to Section 65 para. 2 sentence 1 UmwG. The Merger Agreement will be submitted for approval to Vitesco

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Technologies' general meeting on April 24, 2024 and to Schaeffler's general meeting on April 25, 2024.

Pursuant to the Merger Agreement, Vitesco Technologies shall transfer its assets as a whole to Schaeffler by way of dissolution without liquidation in accordance with the German Transformation Act (Sections 2 no. 1, 4 et seq., 60 et seq. UmwG). All Vitesco Shareholders, except Schaeffler, which is involved in the Merger Agreement as acquiring entity and therefore as party, will receive new voting common shares in Schaeffler to be issued as part of a capital increase in return for the transfer of Vitesco Technologies' assets to Schaeffler in accordance with the exchange ratio stipulated in the Merger Agreement when the merger takes effect. A copy of the Merger Agreement is attached to this Merger Report (as defined below) as Annex 1. All voting shares of Schaeffler are to be admitted to trading in the sub-segment of the regulated market with additional post-admission obligations (Prime Standard) at the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) at the same time as the merger takes effect (see also the information under Section I.III.2.b).

Schaeffler and Vitesco Technologies have appointed ValueTrust Financial Advisors Deutschland GmbH, Munich ("ValueTrust" or the "Valuation Expert") as the joint valuation expert for the purpose of providing expert support in determining an appropriate exchange ratio within the meaning of the UmwG. The procedures and assumptions on which ValueTrust's respective company valuations are specifically based on and the way in which the appropriate exchange ratio was derived are described in Section J of this report and in the "Expert opinion on the determination of the appropriate exchange ratio for the shares of Schaeffler AG and Vitesco Technologies Group Aktiengesellschaft" dated March 11, 2024 (the "Valuation Report") prepared by ValueTrust as the valuation expert. The Valuation Report is attached to this report as Annex 2.

In this report pursuant to Section 8 UmwG (the "Merger Report"), the executive boards (Vorstände) of Schaeffler and Vitesco Technologies, representing the legal entities involved in the merger, explain the merger and the Merger Agreement in legal and economic terms. The executive boards of Schaeffler and Vitesco Technologies make use of the option provided by Section 8 para. 1 sentence 2 UmwG to prepare the Merger Report jointly.

Furthermore, the Merger Agreement has been examined by an expert auditor appointed by court pursuant to Sections 60, 9 para. 1 UmwG. By order of December 14, 2023, the Regional Court (Landgericht) of Nuernberg-Fuerth, pursuant to Sections 60, 10 UmwG, in conjunction with Section 71 para. 2 no. 4 lit. d, para. 4 of the Courts Constitution Act (Gerichtsverfassungsgesetz, "GVG"), Section 28

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para. 1 no. 2 of the Judicial Jurisdiction Ordinance on Justice (Gerichtliche Zuständigkeitsverordnung Justiz, "GZVJu") at the joint request and proposal of Vitesco Technologies and Schaeffler, ADKL AG Wirtschaftsprüfungsgesellschaft, Breite Straße 29-31, 40213 Düsseldorf ("ADKL" or the "Merger Auditor"), was selected and appointed as the expert auditor for the audit of the merger. ADKL will prepare a separate audit report for the merger, which will be available for inspection by the shareholders on the companies' respective websites from the date on which the general meetings of Schaeffler and Vitesco Technologies are convened.

As part of the planned business combination, on February 2, 2024, the shareholders of Schaeffler resolved at an extraordinary general meeting and at a separate meeting of the non-voting common shareholders to convert Schaeffler's non-voting common shares into common shares of Schaeffler with voting rights at a ratio of 1:1 (the "Change of Classes of Shares") (see also the information under Section B.I.3)

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1. DESCRIPTION OF THE COMPANIES INVOLVED IN THE MERGER

1. Information about Schaeffler

1. History of the Company
   The Schaeffler Group (as defined below in B.I.2) was founded by brothers Wilhelm and Georg Schaeffler in 1946. The first partnership agreement dates back to November 30, 1946. Since the 1950s, new subsidiaries have been established through the founding of factories and joint ventures. Already in the mid-1960s, a stake was acquired in the Lamellen und Kupplungsbau August Häussermann, the company from which LuK GmbH emerged. In 1999, LuK GmbH was fully acquired. The takeover of FAG Kugelfischer Georg Schäfer AG in Schweinfurt in 2001 led to the group becoming the second largest rolling bearing manufacturer in the world. In 2009, a stake in Continental AG was acquired. On October 2, 2014, Schaeffler emerged from the change of the legal form of INA Beteiligungsgesellschaft mit beschränkter Haftung. Since the initial public offering in October 2015, Schaeffler's non-voting common shares have been listed on the regulated market (Prime Standard) of the Frankfurt Stock Exchange. This was followed by various company acquisitions, particularly in the areas of e-mobility, robotics and lifetime solutions. In 2022, the 50:50 joint venture "Innoplate SAS" with the Symbio SAS was founded for the production of bipolar plates for fuel cell systems. Symbio is a joint venture company of Faurecia, Michelin and Stellantis. In 2023, Schaeffler acquired the Ewellix Group, a supplier of electromechanical industrial actuators and lifting columns, as well as roller screws.
2. Firm, Registered Office, Financial Year and Corporate Purpose
   Schaeffler (together with the subsidiaries and holdings of Schaeffler, but excluding Vitesco Technologies and the subsidiaries and holdings of Vitesco Technologies, the "Schaeffler Group") is a listed stock corporation (Aktiengesellschaft) existing under the laws of Germany, with its registered office in Herzogenaurach, Germany, registered under the firm "Schaeffler AG" with the commercial register (Handelsregister) of the local court (Amtsgerichts) of Fuerth, Germany, under HRB 14738. The business address of Schaeffler is Industriestraße 1-3, 91074 Herzogenaurach. The financial year of Schaeffler is the calendar year. Schaeffler does not have any branch offices.
   Pursuant to Section 2.1 of Schaeffler's articles of association, the corporate purpose of the company is
3. 1. the development, manufacturing and distribution of components, parts, systems and software, as well as the development and provision of analog and

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digital services for automotive manufacturers, other industrial customers and other customers;

1. the trading in such products, and;
2. the manufacture or procurement of components, raw materials or parts required for the manufacturing of the products referred to in (a).

Schaeffler may realize its corporate purpose on its own or through its subsidiaries or holding companies. Schaeffler has the right to conduct all transactions and take all measures that are deemed appropriate and directly or indirectly serve to realize its corporate purpose.

Schaeffler may also establish branch offices within Germany or abroad, establish and acquire other companies of any type, invest in such companies as well as manage companies or limit itself to serving in an administrative function for the company. Schaeffler may sell each of its holding companies or split off its operations or assets in full or part or transfer them to other companies. Schaeffler may enter into corporate agreements of any type as well as spin off or transfer its operations in full or part to other companies in which it holds a majority stake.

Schaeffler can limit itself to only partially fulfilling the corporate purpose pursuant to Section 2.1 of Schaeffler's articles of association.

3. Capital Structure, Shareholder Structure and Stock Exchange Trading

1. Capital Structure

1. Share Capital and Treasury Shares
   Schaeffler's share capital currently amounts to EUR 666,000,000.00 and is divided into 500,000,000 voting common shares (each a "Schaeffler Voting Common Share" and all together, the "Schaeffler Voting Common Shares") and 166,000,000 non-voting common shares (each a "Schaeffler Non-votingCommon Share" and all together, the "Schaeffler Non-votingCommon Shares"). Each Schaeffler Voting Common Share and Schaeffler Non-voting Common Share has a notional value in the share capital of EUR 1.00 (the Schaeffler Voting Common Shares and the Schaeffler Non-voting Common Shares each a "Schaeffler Share" and together, the "Schaeffler Shares"). The Schaeffler Shares are fully paid up.
   Schaeffler currently holds no treasury shares.
   Each Schaeffler Voting Common Share entitles the holder to one vote at the general meeting. The non-voting common shareholders of Schaeffler (the "Schaeffler Non-

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voting Common Shareholders") are not entitled to voting rights, except in the legally regulated special cases described below. Voting rights at the general meeting of Schaeffler are granted to the Schaeffler Non-voting Common Shares if the preferred amount attributable to the Schaeffler Non-voting Common Share is not paid or is not paid in full in one year and will not, in addition to the full preference for that year, be paid in the following year (Section 141 para. 2 sentence 1 German Stock Corporation Act (Aktiengesetz, "AktG"). Insofar as the Schaeffler Non-voting Common Shareholders are entitled to voting rights by way of exception under the law, each non-voting common share grants the holder one vote (Section 19 of Schaeffler's articles of association). The Schaeffler Non-voting Common Shares are entitled to a preferred dividend of EUR 0.01 per Schaeffler Non-voting Common Share upon the distribution of profits.

On February 2, 2024, the voting common shareholders of Schaeffler (the "Schaeffler Voting Common Shareholders" and together with the Schaeffler Non-voting Common Shareholders, the "Schaeffler Shareholders") in an extraordinary general meeting and the Schaeffler Non-voting Common Shareholders in a separate meeting of the Schaeffler Non-voting Common Shareholders resolved on the Change of Classes of Shares, i.e. to convert the no-par value non-voting common shares into no- par value voting common shares by canceling the preferential dividend rights (the "Resolution on the Change of Classes of Shares"). In connection with the Resolution on the Change of Classes of Shares, the executive board (Vorstand) of Schaeffler was instructed, among other things, to prepare and enter into a Merger Agreement with Vitesco Technologies and to submit it to the general meeting of Schaeffler for approval. The executive board of Schaeffler, in connection with the Resolution on the Change of Classes of Shares, was instructed to file the amendments to the articles of association resolving to change the class of shares with the commercial register (Handelsregister) only after a separate general meeting of Schaeffler's Voting Common Shareholders has approved the Merger Agreement between Schaeffler as the acquiring entity and Vitesco Technologies as the transferring entity, and to condition the registration of the resolved amendments to the articles of association on the prior or simultaneous registration of the merger of Vitesco Technologies into Schaeffler in the commercial register (Handelsregister) of Schaeffler (the "Registration Conditions of the Change of Classes of Shares"). Therefore, the amendments to the articles of association resolving the Change of Classes of Shares have not yet been filed for entry in the commercial register (Handelsregister).

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