Recommended Public Tender

Offer for Shares in Vacon Plc by

Oy Danfoss Ab, a Wholly Owned
Subsidiary of Danfoss A/S
Danfoss A/S and Vacon Plc have on 11 September 2014 entered into a combination agreement,
according to which Danfoss A/S through its subsidiary Oy Danfoss Ab has made a voluntary public
tender offer to Vacons shareholders to purchase all the issued and outstanding shares in Vacon Plc

This is not the tender offer document

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This brochure has been prepared for the convenience of you as

a shareholder in Vacon Plc (Vacon) and contains relevant information on the tender offer and on Oy Danfoss Ab (the Offeror) as
well as practical instructions for participating in the tender offer.
This brochure is not the tender offer document and is not
meant to be a substitute for the information contained in
the tender offer document. The information contained in this
brochure should be read in conjunction with the tender offer
document. The information contained in this brochure is qualified
in its entirety by the more detailed descriptions and explanations
contained in the tender offer document. We urge you to read the
entire tender offer document before making any decision regarding whether to tender your shares.
This brochure has been prepared by Danfoss A/S (Danfoss)

THE TENDER OFFER IS NOT BEING MADE, DIRECTLY OR INDIRECTLY, IN ANY JURISDICTION WHERE
PROHIBITED BY APPLICABLE LAW, AND THE BROCHURE AND RELATED ACCEPTANCE FORMS ARE NOT
AND MAY NOT BE DISTRIBUTED, FORWARDED OR TRANSMITTED INTO OR FROM ANY JURISDICTION
WHERE PROHIBITED BY APPLICABLE LAW BY ANY MEANS WHATSOEVER INCLUDING, WITHOUT
LIMITATION, MAIL, FACSIMILE, E-MAIL OR TELEPHONE. IN PARTICULAR, THE TENDER OFFER IS NOT
MADE IN AND THIS BROCHURE AND RELATED ACCEPTANCE FORMS MUST UNDER NO CIRCUMSTANCES
BE DISTRIBUTED INTO CANADA, JAPAN, AUSTRALIA, SOUTH AFRICA OR HONG KONG OR ANY OTHER
JURISDICTION WHERE PROHIBITED BY APPLICABLE LAW.
SPECIAL NOTICE TO SHAREHOLDERS IN THE UNITED STATES
The Tender Offer described in this brochure is subject to the laws of Finland. It is important for US
holders of shares in Vacon to be aware that the Tender Offer is subject to disclosure and takeover
laws and regulations in Finland that are different from those in the United States. The Tender Offer
is made in the United States in compliance with Section 14(e) of, and Regulation 14E under the
Exchange Act, the US Securities Exchange Act of 1934, as amended (the Exchange Act), subject to
the exemptions provided by Rule 14d-1(d) under the Exchange Act and otherwise in accordance
with the requirements of Finnish law. Accordingly, the Tender Offer is subject to disclosure and other
procedural requirements, including with respect to withdrawal rights, the Tender Offer timetable,
settlement procedures and timing of payments that are different from those applicable under US
domestic tender offer procedures and laws. The Offeror has appointed Raymond James & Associates,
Inc. (telephone number: 727 567 6499) as the dealer manager for the purpose of the Tender Offer in
the United States.
Pursuant to an exemption from Rule 14e-5 under the Exchange Act, the Offeror and certain of its
representatives may, from time to time, purchase or make arrangements to purchase Shares outside
the Tender Offer from the time the Tender Offer was announced on 12 September 2014 until the
expiration of the acceptance period of the Tender Offer, including purchases in the open market at
prevailing prices or in private transactions at negotiated prices, in each case, outside of the United
States and to the extent permitted under, and in compliance with, the applicable Finnish laws and
regulations. Any such purchases will not be made at prices higher than the price of the Tender Offer
provided in this brochure unless the price of the Tender Offer is increased accordingly. Any such
purchases of Shares will be made in accordance with applicable laws, rules and regulations. Any such
purchase of Shares will be disclosed to the extent required by Finnish law or rules or regulations and,
if so disclosed, will also be disclosed in the US.

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NEITHER THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION NOR ANY U.S. STATE
SECURITIES COMMISSION OR REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED OF THIS
BROCHURE, PASSED UPON THE FAIRNESS OR MERITS OF THE TENDER OFFER OR DETERMINED
WHETHER THE BROCHURE IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE IN THE UNITED STATES.

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Dear Vacon Shareholder

On 11 September 2014 Danfoss and Vacon entered into a combination agreement in which
Danfoss and Vacon have agreed to combine their AC drives business operations to form an
even stronger player within the AC drives market. By joining forces the managements of
Danfoss and Vacon believe that they will become a strong alternative to competitors and be
able to offer their customers a broader and more innovative product offering.
In order to effect such combination we have on 12 September 2014 announced a recommended tender offer to purchase all shares in Vacon. In the tender offer we offer to pay a
cash consideration of EUR 34.00 for each share in Vacon, which represents a premium of
approximately 19.0 percent to the volume-weighted average price during the last three
months prior to the announcement of the offer.
The background for the offer is our strategic focus on creating profitable growth and our
clear ambition to be one of the absolute top players in the businesses where we operate.
Vacon is a good match to achieve this ambition. Today, both Danfoss Power Electronics and
Vacon are significant players in the AC drives business, and together we will gain an even
stronger market position. Vacon is a very strong and innovative player and by creating this
new drives business we can ensure a strong long-term growth trajectory.
We are confident that combining the two companies will create a unique Nordic-based
drives business, strongly founded on the basis of globally leading power electronics centers
across the globe. We will become a strong alternative to competitors in the market and be
able to give customers a broader and more innovative offering of drives faster. Together the
entities will also get a base for enhancing growth from critical mass in mature and emerging
markets and be able to invest further in both R&D and sales force and gain scale, which is a
key success factor in the drives business.
We are very pleased by the support of Vacons Board of Directors, which has unanimously
recommended the shareholders to accept the tender offer. Pre-announcement, Vacons
largest shareholder was AC Invest Three B.V. who has already agreed to sell their entire shareholding of 10.56 percent in Vacon to Danfoss. Further, the tender offer is largely supported
by key investors and founders, representing 14.32 percent of shares outstanding, who have
given an irrevocable undertaking to accept the offer.
We believe the offer is attractive to all parties. Vacons shareholders will receive a significant
premium over the historical share price, Vacon and its employees will be provided a new
platform for further growth, and Vacons customers will be offered more innovative and
attractive AC drives.
We are very excited about the mutual benefits that this transaction will provide and we
hope that also you as Vacons shareholder will support us by accepting the offer.
Please find more information on the tender offer and instructions for participation in
the brochure.
Yours sincerely

Niels B. Christiansen
President & CEO
Danfoss A/S
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Vacon shareholders are being offered a cash consideration of EUR 34.00 for
each share in Vacon
EUR
40.0

Tender Offer:
EUR/share

34

Share price

35.0
30.0
25.0

19

percent
Premium of
to the 3 months volumeweighted average share
price

20.0
15.0
10.0
Sep-11

Sep-12

Sep-13

Sep-14

The chart shows the price development of the Vacon shares on Helsinki Stock Exchange for the three years prior to the
announcement, i.e. from 11 September 2011 to 11 September 2014, (Bloomberg)

Offer period for the tender offer

29 September 28 October 2014
Next steps
Most account operators and asset managers send instructions to their customers for accepting the tender offer
In case you do not receive instructions from your account operator or asset manager
the acceptance may be submitted to any branch office of Nordea Bank Finland Plc
The tender offer document is available in electronic form on www.danfoss.com/tender-offer
and on www.nordea.fi/equities. Hard copies of the tender offer document are available in
the branch offices of Nordea Bank Finland Plc, at the office of the Offeror (Niittytaival 13,
02200 Espoo) and at the Helsinki Stock Exchange (Fabianinkatu 14, 001000 Helsinki)

After a careful examination of Danfoss offer, the

Board of Directors of Vacon has unanimously
decided to recommend that the shareholders
accept it. Vacon is truly one of the great industrial
success stories, even globally speaking. By joining
forces, the two companies will create a Nordicbased global player a new AC drives business
with the clear ambition to build a leading position
in the AC drives market
Panu Routila, Chairman of the Board at Vacon

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Key dates
12 September
2014
29 September
2014
28 October
2014
30 October
2014
31 October
2014
3 November
2014
5 November
2014
5 November
2014

The Offerors announcement of the

tender offer

Offer period commences

Offer period expires (unless extended)*

Announcement of the preliminary result of

the tender offer (on or about)
Announcement of the final result of the
tender offer (on or about)
Completion trades of the tender offer
(on or about)
Clearing and settlement of trades carried
out in connection with the tender offer
(on or about)
Payment of the offer price (on or about)

* If the offer period is extended in accordance with the terms and conditions of the tender offer, the key dates will be amended accordingly.
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Danfoss in brief
Danfoss is a privately owned Danish company founded in 1933 with a turnover of
approximately EUR 4.5bn in 2013.
Danfoss engineers technologies that enable the world of tomorrow to do more
with less. Danfoss meets the growing need for infrastructure, food supply, energy
efficiency and climate-friendly solutions. Products and services are used in areas
such as refrigeration, air conditioning, heating, motor control and mobile machinery,
but Danfoss is also active in the field of renewable energy as well as district heating
infrastructure for cities and urban communities. Today Danfoss is a world-leader,
employing 22,500 employees and serving customers in more than 100 countries.
Danfoss is headquartered in Nordborg, Denmark and is still held by the founding
family.
Danfoss Power Electronics Division
Drives is the largest product business within Danfoss group
Global presence with approximately 3,300 employees
Production, R&D and centers of excellence in Denmark, USA, China, Germany
and India
Sales and service through fully owned sales companies and independent
partners
Product oriented AC drives company
Strong position in low power applications
Strong position in Food & Beverage and Building Automation applications
Strong position in direct sales to OEMs and contractors

For more information visit: www.danfoss.com

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Tender offer in brief

Danfoss and Vacon have on 11 September 2014 entered into a combination agreement,
according to which the Offeror has made a voluntary public tender offer to purchase all
issued and outstanding shares in Vacon. Danfoss has transferred its rights and obligations
to the Offeror on 15 September 2014 in accordance with the provisions of the combination
agreement.
Vacon shareholders are being offered a cash consideration of EUR 34.00 for each share in
Vacon representing an aggregate equity purchase price of approximately EUR 1,038 million.
The price of EUR 34.00 per share, announced on 12 September 2014, represents a premium
of approximately:
13.1 percent to the closing price of the shares (EUR 30.06) on the Helsinki Stock
Exchange on 11 September 2014; and
19.0 percent to the volume-weighted average price on the Helsinki Stock Exchange
during the last three months prior to the announcement of the tender offer; and
20.3 percent to the volume-weighted average price on the Helsinki Stock Exchange
during the last twelve months prior to the announcement of the tender offer
The offer period for the tender offer will commence on 29 September 2014 and expire on
28 October 2014 unless extended in accordance with the terms and conditions of the tender
offer.
The Board of Directors of Vacon has unanimously decided to recommend the shareholders
to accept the tender offer and considers that the tender offer is a favorable alternative for

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the shareholders. The Board of Directors of Vacon has received a fairness opinion from its
financial adviser Aventum Partners according to which the consideration to be offered to
the shareholders in the tender offer is fair.
The Offeror has on 11 September 2014 entered into an agreement with Vacons largest shareholder AC Invest Three B.V. (AC Invest) pursuant to which the Offeror agreed to acquire all
shares in Vacon held by AC Invest, in aggregate 10.56 percent of all issued shares in Vacon.
Prior to the announcement of the tender offer Danfoss already purchased a stake corresponding to 9.98 percent while the purchase of the remaining 0.58 percent is subject to
authority approvals and will be purchased as soon as such approval is received. Further,
certain large shareholders, together representing approximately 14.32 percent of the shares
in Vacon, have subject to certain customary conditions undertaken to accept the tender
offer.
The obligation of the Offeror to complete the tender offer and purchase the outstanding
shares, which have been validly tendered and not withdrawn, is subject to certain conditions being met or the Offeror waiving (to the extent permitted under applicable legislation)
the fulfilment of these conditions. These conditions include, among others: the Offeror
gaining control of more than 90 percent of the outstanding shares, receipt of the relevant
regulatory approvals, the recommendation of the Board of Directors of Vacon is in force and
has not been amended and in the event that a competing offer is made, the Board of Directors of Vacon having confirmed to the Offeror within two business days their intention to
uphold the recommendation for the tender offer.
The tender offer will not have any immediate impact on the business operations or assets of
Vacon. Provided that the tender offer is completed, the businesses of Vacon and Danfoss will
be combined based on a joint plan between Vacon and Danfoss. The combination process
will, however, start only upon receipt of all necessary authority approvals and the completion of the tender offer.
The detailed terms and conditions of the tender offer are included in the tender offer
document.

I believe that customers will benefit significantly

from the two entities joining forces as they will
bring even more competitive, innovative and
attractive AC drives to the market. Today Vacon is
stronger than ever, and it has a great future ahead
together with Danfoss
Vesa Laisi
President & CEO at Vacon

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Summary of the terms

of the tender offer
Share offer price
EUR 34.00 in cash for each company share tendered (subject to the adjustments below).
Share offer price adjustment related to dividends
In the event that Vacon resolves to distribute dividends or other assets, and a shareholder
who has accepted the tender offer is entitled to such distribution, the distribution may
result in an equal reduction in the share offer price in accordance with the terms and
conditions of the tender offer.
Key transaction conditions
The tender offer is conditional upon e.g. the valid tender of outstanding shares representing
(together with any Vacon shares that may be held by the Offeror) more than 90 percent of
the issued and outstanding shares and votes of Vacon, to the receipt of the relevant regulatory approvals (including approvals by competition authorities and the Finnish Ministry of
Employment and Economy), the recommendation of the Board of Directors of Vacon is in
force and has not been amended and in the event that a competing offer is made, the
Board of Directors of Vacon having confirmed to the Offeror within two business days
their intention to uphold the recommendation for the tender offer. For an exhaustive list of
conditions to complete the tender offer please refer to section terms and conditions of the
tender offer in the tender offer document.
Offer period
The offer period commences on 29 September 2014 at 9:30 Finnish time and is expected to
expire on 28 October 2014 at 16:00 Finnish time, unless extended as described below.
Extension of the offer period
The Offeror may extend the offer period from time to time in accordance with the terms
and conditions of the tender offer. The Offeror will announce a possible extension of the
offer period in a release on the first Finnish banking day following the expiration of the offer
period, i.e. on 29 October 2014, at the latest.
Discontinuation of the offer period
Should the offer period be extended, the extended offer period may be discontinued if
all conditions to completion are satisfied or waived by the Offeror, and the Offeror will
complete the tender offer. The offer period will continue at least two weeks after the
announcement of any such discontinuation.
Acceptance of the tender offer
Most account operators will send a notification of the tender offer, including instructions
and the relevant acceptance form, to their customers who are registered as shareholders in
Vacons shareholders register, maintained by Euroclear Finland Ltd. Shareholders who do
not receive such notification from their account operator or asset manager can contact any

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branch office of Nordea Bank Finland Plc where such shareholders can receive necessary
information and give their acceptance. Note that the acceptance of the tender offer must
be provided separately for each book-entry account.
Withdrawal rights
Tendered shares may be withdrawn at any time before the expiration of the offer period.
The proper withdrawal requires a written notice is submitted to the same account operator
to whom the acceptance form was submitted.
The account operator or asset manager may charge a fee for withdrawals based on an agreement between the shareholder and the account operator or asset manager.
Payment of the offer price
The trades of the tendered shares will be executed no later than on the fourth Finnish banking day following the expiry of the offer period, i.e. on 4 November 2014 unless the offer
period is extended. The payment of the offer price for each share tendered will take place on
the second or third Finnish banking day following the execution of the trades.
For complete terms and conditions, please refer to the tender offer document, that is available
at the office of the Offeror (Niittytaival 13, 02200 Espoo), at any branch office of Nordea Bank
Finland Plc, on www.nordea.fi/equities, at the Helsinki Stock Exchange (Fabianinkatu 14,
001000 Helsinki) and on www.danfoss.com/tender-offer.

The tender offer is subject to the following customary conditions: (1) the acceptance of the offer by more
than 90 percent of outstanding shares (together with any Vacon shares that may be held by Danfoss or
the Offeror) (2) receipt of the relevant regulatory approvals (3) no order or regulatory action by a
regulatory authority of competent jurisdiction preventing, postponing or materially challenging the
completion of the tender offer (4) no information made public or disclosed by Vacon being materially inaccurate, incomplete or misleading (5) no fact or circumstance having arisen after the date of
publication of the tender offer that constitutes a material adverse change (6) the external financing
committed to Danfoss or the Offeror for purchasing the shares pursuant to the tender offer still being
available (7) the combination agreement still being in force (8) the recommendation of the Board of
Directors of Vacon is in force and has not been amended and (9) in the event that a competing offer
is made, the Board of Directors of Vacon having confirmed to the Offer or within two business days
their intention to uphold the recommendation for the tender offer.

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Questions and answers

relating to the tender offer
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Why is the tender offer carried out?

It is Danfosss clear view that the best way to meet the future AC Drives market challenges
is to combine the AC Drives businesses of Vacon and Danfoss. A combination will secure
a strong player in the AC Drives market with unique capabilities and an extensive product
offering that will secure continued profitable growth and innovation. Danfoss believes that
a combination of the businesses of Vacon and Danfoss will build a very strong foundation.
How does the offer price of EUR 34.00 compare to the recent trading price
of Vacon shares?
The offer price represents a premium of approximately:
13.1 percent to the closing price of the shares (EUR 30.06) on the Helsinki Stock
Exchange on 11 September 2014; and
19.0 percent to the volume-weighted average price on the Helsinki Stock Exchange
during the last three months prior to the announcement of the tender offer; and
20.3 percent to the volume-weighted average price on the Helsinki Stock Exchange
during the last twelve months prior to the announcement of the tender offer.
Does Vacons Board of Directors recommend the offer and did they consider
strategic alternatives other than Danfoss offer?
The Board of Directors of Vacon has unanimously decided to recommend the shareholders
to accept the tender offer. The assessment of the offer is based on, amongst others, these
factors:
the premium being offered
the information and assumptions on the business operations and finances of Vacon, the
date of the boards statement and their expected future development
the valuation multiples of Vacon shares before the announcement of the tender offer
the support for the tender offer by certain large shareholders of Vacon
valuations and analysis made and commissioned by the Board of Directors
Aventum Partners' Fairness Opinion
The Board of Directors of Vacon has further concluded that the tender offer is in the best
interests of Vacon's shareholders and a more favorable alternative for the shareholders of
Vacon compared to continuing the business operations of Vacon as an independent
company, and other potential strategic alternatives reviewed by the Board of Directors.
How and when can I tender my shares in the tender offer?
Your book-entry account operator or asset manager will send you an acceptance form with
instructions for tendering your shares in the tender offer if so agreed between the book-entry
account operator or the asset manager and you. Sufficient time should be allowed for delivery
of the documents, and the instructions given by the respective book-entry account operator
or asset manager should be followed. Any acceptance must be delivered so that it will be
received within the offer period taking into account, however, the instructions given by the
relevant account operator. In the event your book-entry account operator or asset manager
does not send you instructions or does not accept acceptances, the acceptance may be
submitted to any branch office of Nordea Bank Finland Plc.
Can I tender only a part of my shares?
You may only accept the tender offer unconditionally and for all of your shares registered on
one book-entry account at the time of the execution of the tender offer. If new shares are
purchased and registered on a separate book-entry account, these shares must be tendered
separately.
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What happens if I have tendered my shares but would like to withdraw?

Tendered shares may be withdrawn at any time before the expiration of the offer period. The
proper withdrawal of the shares requires that a written notice of withdrawal is submitted to the
same account operator to whom the acceptance form was submitted. In case the acceptance
form with respect to shares was submitted to a branch office of Nordea Bank Finland Plc, the
notice of withdrawal must be submitted to the same branch office.
In case of holdings that are registered in the name of a nominee, the shareholder shall instruct
the nominee to submit the notice of withdrawal.
What happens if I dont tender my shares?
The tender offer is subject to more than 90 percent acceptance threshold. If the Offeror obtains
90 percent of the shares without you tendering your shares, the Offeror has the right to
redeem the remaining shares, including yours, in accordance with the Finnish Companies Act.
When and how will the result of the tender offer be announced?
The preliminary result of the tender offer will be announced by a release on or about
the second banking day following the expiration of the offer period, preliminary on
30 October 2014. The final result of the tender offer will be announced on or about the third
banking day following the applicable expiration of the offer period, preliminary on
31 October 2014. The announcement will confirm the percentage of outstanding shares
which have been validly tendered in the tender offer.
When and how will I receive payment for the tendered shares?
The share offer price will be paid on or about 5 November 2014 to each shareholder of Vacon,
who has validly accepted the tender offer. The share offer price will be paid into
the management account of the shareholders book-entry account. If the management
account of a shareholder is with a different financial institution than the shareholders
book-entry account, the share offer price will be paid into such management account
approximately two banking days later in accordance with the schedule for payment
transactions between financial institutions.
Will any fees or commissions be charged in relation to the tender offer?
You will not be charged any fees or commissions relating to book-entry registrations
required for the purpose of the tender offer, sales and purchases of tendered shares or
payment of the offer price. The book-entry account operators or asset managers may,
however, charge a fee for e.g.:
registration of release of pledges or removal of other possible restrictions preventing

the tender of the relevant shares
withdrawal of the tender in accordance with the terms and conditions
What happens after the tender offer?
If the Offeror gains control of more than 90 percent of the shares in Vacon, the Offeror
will have the right to redeem all the remaining shares in Vacon according to the Finnish
Companies Act. It is the intention of the Offeror to seek delisting of Vacon shares from
NASDAQ OMX Helsinki Ltd at the latest when all shares have been acquired.
Will I realize a taxable gain or loss under Finnish tax law if I accept the tender offer?
The tax consequences in connection with an acceptance of the tender offer depend

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on your individual circumstances. As a Finnish resident shareholder, gains and losses derived
from the sale of your Vacon shares for cash constitute a disposal of your Vacon shares for
Finnish tax purposes, which means that gains and losses will be treated in accordance with
the applicable Finnish income tax act.
As a shareholder not resident in Finland, gains and losses derived from the sale of your Vacon
shares will not have Finnish tax implications, provided that the shares do not relate to practice
of business operations in Finland.
You should consult your own tax advisors as to the tax consequences of accepting the tender
offer.
Where can I get additional information?
For more information, please see the tender offer document, that is available at the office of
the Offeror (Niittytaival 13, 02200 Espoo), at any branch office of Nordea Bank Finland Plc, on
www.nordea.fi/equities, at the Helsinki Stock Exchange (Fabianinkatu 14, 001000 Helsinki) and
on www.danfoss.com/tender-offer.
For questions with regard to tendering your shares please contact your own account operator
or custodian.

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The Tender Agent

Nordea Bank Finland Plc
Aleksanterinkatu 36
00020 Nordea
Helsinki, Finland

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