c) the Surviving Company shall allot class B shares in its capital, having a nominal value of EUR 0.60 each (the "Class B Shares"), to the Founders as Merger compensation in accordance with the terms stipulated by the draft joint cross-border merger plan (the "Merger Plan"); and
d) the Disappearing Company will be dissolved without the requirement of a liquidation.
B. The Merger is intended to be treated for German corporate income tax and trade tax purposes as a tax neutral transaction in accordance with § 11 para. 2 of the German Reorganization Tax Act ("UmwStG") to the maximum extent legally possible.
C. On June 12, 2017, the Merger Plan was filed by the Disappearing Company with the commercial register of the local court of Düsseldorf, Germany. The publication pursuant to § 122d sentence 2 UmwG in connection with § 10 German Commercial Code ("HGB") occurred on June 19, 2017.
Reasons for the Merger
1.1 The Merging Companies wish to optimize the Surviving Company's corporate structure by entering into the Merger.
1.2 By notarial deed dated December 15/16, 2016 (deed roll no. Z 2820/2016 of notary public Prof. Dr. Norbert Zimmermann, Düsseldorf, Germany) the shareholders of the Disappearing Company at such time, the Founders and Expedia Lodging Partner Services S.à r.l., agreed to pursue an initial public offering of American Depositary Shares representing class A shares ("Class A Shares") in the capital of the Surviving Company (the "IPO"). The Surviving Company has been incorporated as a Dutch company because Dutch corporate law provides the parties the flexibility to implement their desired governance structure. However, all material business activities of the Merging Companies have been and are currently carried out by the Disappearing Company and its subsidiaries.
1.3 The participation in the Disappearing Company is the only asset, other than a certain cash amount, directly held by the Surviving Company. In order to avoid duplication of maintenance and administrative costs, the Merging Companies wish to concentrate the relevant business activities at the level of the Surviving Company. Also, as a result of the Merger, the corporate structure and corporate governance of the Merging Companies will be simplified and public shareholders will hold a direct stake in the legal entity that owns the operating business.