Project Wolf Planned OF2C concept – Baltics (after closing)

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.

Legal Disclaimer

business transfer from Walmark Czech to STADA Slovakia
Implications of liquidation of Walmark Slovakia

Legal
(general)

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

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?

IT

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)

Functions
(Finance, SC, HR
Regulatory, etc.

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

Labor
Law
(centrally by Kinstellar)

Key Things to look into [2/2]

Preferred Future Set-Up

Current Set-Up

Future Set-Up – Envisaged Structure

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

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