Neinor Homes S A : will absorb Quabit through a merger agreement

• Neinor Homes approves the joint merger plan to absorb Quabit. After Quabit's absorption, Neinor Homes will own a land bank with capacity to build more than 16,000 housing units and increase its exposure to Madrid and Malaga/Costa del Sol.

• Consequently, Neinor Homes will incorporate joint assets for a value of approximately €2,000mn.

• Class A shareholders of Quabit will hold a 7% stake in Neinor and Grupo Quabit's debt position will be restructured.

11th January 2021.- Today, the board of directors of Neinor Homes and Quabit Inmobiliaria have approved the joint merger plan for the absorption of Quabit by Neinor. The transaction will be structured through an exchange of shares. Neinor will issue new shares and deliver those to the owners of class A shares of Quabit. As a result, Neinor Homes will continue to be listed on the continuous market (mercado continuo) and will incorporate joint assets for a value of approximately €2,000mn.

Through this merger by absorption, Neinor Homes consolidates itself as the largest national developer and reinforces its footprint in the Centre (Madrid and Corredor del Henares) and the Malaga/ Costa del Sol regions.

The merger process will be submitted for approval at the General Shareholders' Meetings of both companies, expected to be held by late March/early April. If approved, Neinor will own a joint land bank with capacity to build more than 16,000 housing units.

The existing shareholders of Neinor will control 93% of the company, while Quabit holders of class A shares will hold 7.00% (through an exchange ratio of one share of Neinor for every 25.9650 class A shares of Quabit). In addition, a debt restructuring already underway will be carried out.

Neinor's Board of directors will not suffer any changes with regard to the current one, and the company will continue to be led by the current CEO, Borja García-Egotxeaga and the Deputy CEO/CFO, Jordi Argemi. Felix Abanades, the current CEO and Chairman of Quabit, will become a Senior Advisor to Neinor.

The CEO of Neinor Homes, Borja García-Egotxeaga, commented: 'With Quabit's absorption, Neinor reinforces its leading housebuilder position in Spain. Our increased scale and robust financial position following this transaction allows us to face in a better position the existing market challenges and strengthens our commitment to offer the best product possible to our clients'.

The Deputy CEO and CFO of Neinor Homes, Jordi Argemi, added: 'One year ago we anticipated that consolidation process in the Spanish housebuilder sector would occur, and this transaction shows that Neinor has not only been able to lead the sector with outstanding operational results in the last years, but also to lead this process of sector consolidation. We are pleased and highly convinced that this transaction will add significant value to our shareholders'. neinorhomes.com | ([phone] | Paseo de la Castellana, 20, 6ª | 28046, Madrid

Félix Abánades, CEO and Chairman of Quabit, commented: 'In the current context, the merger between Quabit and Neinor is the best possible news for the shareholders, debtholders, and employees of Quabit. This represents an opportunity for Quabit to integrate a leading residential development platform with high visibility of cash flow generation and a strong share price revaluation potential.'

Significant Synergies

Fulfilling its financial guidance for the second year in a row allows Neinor to take advantage of sector consolidation opportunities and its robust financial position is what makes it possible to realise value in the absorption of Quabit. Following the merger, Neinor will be in an even stronger position from a financial and operational perspective and well positioned to add additional value to its shareholders.

Following the merger, Neinor Homes will have a land bank with capacity to build more than 16,000 housing units. The two land banks are highly complementary from a geographical perspective sharing exposure to the Top 6 regions of Spain by housing demand: (Centre, East, Levante, North, West and East Andalucia). On a stand-alone basis, Quabit's land bank has a 56% exposure to the Centre region (Madrid and Corredor del Henares) and 16% to Malaga, the two most important regions for Neinor Homes.

This merger increases Neinor's penetration in the above mentioned markets and adds a new product type in the affordable housing segment, allowing the company to address a wider spectrum of Spanish housing demand. At the same time Neinor integrates Quabit's construction company with the objective to improve efficiency and cost control.

J.P. Morgan has acted as lead financial advisor and Deutsche Bank as joint financial advisor to Neinor Homes, both entities have participated in the transaction funding. Uria Menéndez and PWC have collaborated with Neinor in the legal aspects. On Quabit's side, Arcano and Cuatrecasas have acted as financial and legal advisors.