SCHEDULE: KfW Backs BioNTech's Tender Offer for CureVac, Committing 50.1% Stake

Germany's state-owned KfW bank has agreed to tender its significant stake in CureVac N.V. to BioNTech SE, supporting an exchange offer that aims to acquire all outstanding shares and facilitate a post-offer reorganization.

Summary

• KfW, mandated by the Federal Republic of Germany, has entered into a Tender and Support Agreement with BioNTech SE to facilitate the disposition of its Common Shares in CureVac N.V. through an Exchange Offer.
• KfW beneficially owns 112,841,355 Common Shares of CureVac N.V., representing 50.1% of the class of securities.
• KfW directly holds 29,871,441 Common Shares, while 82,969,914 Common Shares are subject to a Shareholders' Agreement with dievini and Dietmar Hopp.
• A group of shareholders, including KfW, dievini, and members of CureVac's boards, representing 50.08% of CureVac shares, have committed to tender their shares into the Offer.
• The transaction involves BioNTech SE commencing an Exchange Offer to acquire all outstanding ordinary shares of CureVac N.V., followed by a post-offer reorganization of CureVac.
• KfW is fully covered by the Federal Republic of Germany against any economic risks resulting from its investment in CureVac.

Sentiment

Score: 8

Explanation: The filing indicates strong support from a major shareholder (KfW, backed by the German government) for BioNTech's tender offer, significantly increasing the certainty of the transaction's success and providing a clear path for CureVac's future under new ownership.

Positives

• The Federal Republic of Germany has confirmed a generally positive view of the transaction, providing strong governmental backing.
• KfW is fully covered by the German government against any economic risks from its investment, mitigating potential downside for the state-owned bank.
• A significant portion of CureVac's shares (50.08%) are contractually committed to be tendered, increasing the certainty of the Exchange Offer's success.
• BioNTech has agreed not to impose additional Offer Conditions, amend existing conditions adversely, or decrease the Offer Consideration without KfW's consent, providing protection for KfW's interests.
• A 'Most Favored Nation' clause ensures that KfW will receive terms no less favorable than those offered to other shareholders in similar agreements, promoting fairness.

Negatives

• The transaction will lead to a post-offer reorganization of CureVac, potentially resulting in significant changes to its operational structure and strategic direction.
• Existing shareholder agreements, including the Shareholders' Agreement, Relationship Agreement, and Investment and Shareholders' Agreement, will be terminated upon the closing of the Exchange Offer, altering previous governance structures and rights.

Risks

• The Exchange Offer is subject to a minimum condition described in the Purchase Agreement, which must be satisfied for the offer to proceed.
• KfW's obligation to tender shares is subject to transfer restrictions set forth in the KfW-dievini Shareholders' Agreement being lifted.
• KfW's voting obligations are subject to restrictions in the KfW-dievini Shareholders' Agreement being lifted.
• There is a risk of an Alternative Acquisition Proposal, though KfW is committed to voting against any such proposal.
• The transaction could be prevented or materially delayed by actions or proposals inconsistent with the Purchase Agreement or the Exchange Offer.

Future Outlook

BioNTech SE is set to commence an Exchange Offer to acquire any and all outstanding ordinary shares of CureVac N.V. Following the consummation of this offer, a post-offer reorganization of CureVac N.V. is planned.

Management Comments

• The German Federal Government has confirmed to generally have a positive view of the Transaction.

Industry Context

This transaction represents a significant consolidation in the biotechnology sector, particularly within the mRNA space, as BioNTech, a leader in mRNA technology, seeks to acquire CureVac, another prominent player. It could lead to increased market concentration and potentially streamline research and development efforts in vaccine and therapeutic development by combining resources and intellectual property.

Comparison to Industry Standards

• The acquisition of a significant stake (50.1% beneficial ownership by KfW, with 50.08% committed to tender) by a major industry player like BioNTech is a common strategy for market consolidation and technology integration in the biotech sector.
• This move is comparable to other large pharmaceutical or biotech companies acquiring smaller, innovative firms to expand their pipeline or intellectual property, such as Pfizer's acquisition of Biohaven Pharmaceuticals for neuroscience assets or Merck's acquisition of Acceleron Pharma for pulmonary hypertension treatments.
• The 'Most Favored Nation' clause in the Tender and Support Agreement is a standard protective measure for key shareholders, ensuring they receive terms no less favorable than other major parties in similar agreements, which is common in complex M&A transactions involving multiple large stakeholders.
• The post-offer reorganization and changes to board composition (BioNTech designating management board members, controlling supervisory board majority) are typical outcomes of successful tender offers leading to full or majority control, aligning with corporate governance practices seen in similar acquisitions where the acquirer seeks to integrate the target fully.

Management Changes

Corporate Governance

Related Party Transactions

• KfW's investment in CureVac is a 'Zuweisungsgeschäft' mandated by the Federal Republic of Germany, which fully covers KfW against any economic risks from this investment.
• The Shareholders' Agreement involves KfW, dievini Hopp BioTech holding GmbH & Co. KG, and Dietmar Hopp, who are significant shareholders and have historically exercised certain rights and restrictions over CureVac shares.

Stakeholder Impact

• Shareholders: KfW and other major shareholders (dievini, CureVac boards) have committed to tender shares, providing high certainty for the Exchange Offer. Other shareholders will have the opportunity to tender their shares into the offer.
• Management and Board: Significant changes are expected in CureVac's management and supervisory boards, with BioNTech designating key roles, indicating a shift in leadership and strategic direction.
• Employees: While not explicitly detailed, a post-offer reorganization could lead to operational changes that may impact employees.

Next Steps

• BioNTech SE is to commence the Exchange Offer to acquire outstanding shares of CureVac N.V.
• Following the consummation of the Exchange Offer, a post-offer reorganization of CureVac N.V. will occur.
• The Shareholders' Agreement, Relationship Agreement, and Investment and Shareholders' Agreement will be terminated upon the closing of the Exchange Offer.

Key Dates

Recommendation

The filing indicates a high probability of the tender offer succeeding due to significant shareholder commitments (over 50% of shares). For existing shareholders, holding their shares and tendering them into the offer is the most logical action, as the terms of the offer are expected to be consistent and the transaction is moving forward. There is no information to suggest selling before the offer or buying more shares at this stage, as the offer price and terms are set by the Purchase Agreement.

Keywords

CureVac, BioNTech, KfW, Tender Offer, Exchange Offer, Acquisition, Biotechnology, Pharmaceuticals, mRNA, Shareholder Agreement, Corporate Governance, Germany, Netherlands, SEC Filing, Schedule 13D