PENSKE AUTOMOTIVE GROUP, INC.

Current report

Risks Relating to the Proposed Transaction

Current report

The Proposed Transaction and the pendency of the Proposed Transaction could have a material effect on our business, results of operations, financial condition and stock price.

Current report

On October 15, 2026, we entered into the Merger Agreement discussed in Note 1 to our Consolidated Condensed Financial Statements under the heading "– Proposed Take-Private Transaction." The consummation of the Merger is subject to certain conditions, including, among others, approval of certain regulatory authorities and the Company Stockholder Approval (as defined in the Merger Agreement). There are certain risks to our stockholders from the Proposed Transaction, including:

Current report

•the amount of cash to be paid under the Merger Agreement is fixed and will not be adjusted for changes in our business, assets, liabilities, prospects, outlook, financial condition or operating results or in the event of any change in the market price of, analyst estimates of, or projections relating to, our common stock;

Current report

•the fact that receipt of the all-cash per share Merger Consideration under the Merger Agreement is taxable to stockholders that are treated as U.S. holders for U.S. federal income tax purposes; and

Current report

•the fact that, if the Proposed Transaction is completed, our stockholders will forego the opportunity to realize the potential long-term value of the successful execution of our current strategy as an independent company.

Current report

During the period prior to the closing of the Proposed Transaction, our business is exposed to certain inherent risks due to the effect of the announcement or pendency of the Proposed Transaction on our business relationships, financial condition, operating results and business, including:

Current report

•the possibility of disruption to our business and operations, including significant diversion of management attention and resources as well as negative publicity and competitive responses to the Proposed Transaction;

Current report

•the inability to attract and retain key personnel, and the possibility that our current employees could be distracted, and their productivity decline as a result, due to uncertainty regarding the Proposed Transaction;

Current report

•the inability to pursue alternative business opportunities or make changes to our business pending the completion of the Proposed Transaction, and other restrictions on our ability to conduct our business;

Current report

•the impact of the substantial costs, fees, expenses and charges related to the Merger Agreement and the Proposed Transaction, which we have incurred and expect to continue to incur whether or not the Proposed Transaction is completed;

Current report

•unanticipated difficulties or expenditures relating to the Proposed Transaction;

Current report

•the pendency and outcome of the legal proceedings that may be instituted against us, our directors, executive officers and others relating to the Proposed Transaction; and

Current report

•other developments beyond our control, including, changes in domestic or global economic conditions that may affect the timing or success of the Proposed Transaction.

Current report

The Proposed Transaction may not be completed within the expected timeframe, or at all, and significant delay or the failure to complete the Proposed Transaction could adversely affect our business.

Current report

Our business, our relationships or our financial condition may be adversely affected if the Proposed Transaction is not consummated within the expected timeframe, or at all. The consummation of the Proposed Transaction is subject to certain conditions, including receipt of the Company Stockholder Approval and certain specified regulatory approvals. The necessary regulatory approvals may not be obtained on a timely basis or at all, or may be obtained subject to conditions that could delay completion of the Proposed Transaction or adversely affect our business. The Merger Agreement contains termination rights, including among others by either party if (i) consummation of the Merger has not occurred by October 15, 2027 (ii) the Company Stockholder Approval is not obtained, (iii) a final, non-appealable law or governmental order prohibits the Merger, and (iv) there are breaches by the other parties of certain representations, warranties, covenants or agreements. While it is currently anticipated that the Proposed Transaction will be consummated in the first quarter of 2027, these conditions may not be satisfied in a timely manner or at all. Failure to complete the Proposed Transaction within the expected timeframe, or at all, could adversely affect our business and the market price of our common stock in several ways, including to the extent that the current market price of our stock reflects an assumption that the Proposed Transaction will be completed. The price of our common stock may fluctuate during the pendency of the Proposed Transaction and could decrease significantly if the Proposed Transaction is not completed. Moreover, we may be required to pay Buyer a termination fee of $383.0 million if the Merger Agreement is terminated in certain circumstances, including if we terminate the Merger Agreement to enter into a definitive agreement providing for a Superior Proposal (as defined in the Merger Agreement), as noted above.

Current report

Buyer is owned by PC and Mitsui, which, together with certain of their affiliates, own approximately 72.6% of our outstanding common stock, and their ownership and the terms of the Merger Agreement and related agreements may discourage alternative transactions.

Current report

Buyer is an entity owned by PC and Mitsui. Concurrently with the execution of the Merger Agreement, the Investor Group Members and certain of their affiliates, who collectively own approximately 72.6% of the outstanding shares of our common stock, entered into voting and support agreements with us and Buyer (the “Support Agreements”) pursuant to which they agreed, among other things, to vote their shares in favor of the adoption of the Merger Agreement and the approval of the Merger and against any competing acquisition proposal (subject, in the case of PC and its affiliates, to certain limitations), and not to transfer their shares prior to the termination of the Support Agreements, subject to certain exceptions. In addition, the Merger Agreement restricts our ability to solicit competing acquisition proposals, subject to certain exceptions, and requires us to pay Buyer a termination fee of $383.0 million under specified circumstances. These factors could discourage a third party from making an alternative proposal, including a proposal that might be more favorable to the Unaffiliated Company Stockholders, or could cause a third party to propose a lower price than it might otherwise propose. If the Proposed Transaction is not completed, PC and Mitsui will continue to own a majority of our common stock and to have significant influence over us.

Current report

While the Merger Agreement is in effect, we are generally required to conduct our business in the ordinary course consistent with past practice, and are restricted from taking certain actions without Buyer's prior consent. These limitations include, among other things, restrictions on our ability to amend our organizational documents, acquire other businesses and assets, dispose of our material assets, make investments, repurchase, reclassify or issue securities, including repurchases of our common stock, pay dividends (subject to certain exceptions, including with respect to our regular quarterly dividend), incur indebtedness, make capital expenditures, enter into, amend or terminate certain contracts, change accounting policies or procedures, settle certain litigation, or make or change tax elections or tax accounting methods. These restrictions, although subject to certain exceptions, could prevent us from pursuing strategic business opportunities and taking extraordinary actions with respect to our business during this period. We may find that these and other obligations in the Merger Agreement may delay or prevent us from responding, or limit our ability to respond, effectively to competitive pressures, industry developments and future business opportunities that may arise during such period, even if our management and Board think such responses may be advisable. Such limitations could adversely affect our business, operating results and our stock price and our perceived acquisition value, regardless of whether the Proposed Transaction is completed.

Current report

We will incur direct and indirect costs as a result of the Proposed Transaction, which may be more expensive to complete than anticipated.

Current report

We have incurred, and will continue to incur, substantial costs, expenses and fees for professional services and other transaction costs in connection with the Proposed Transaction, whether or not the Proposed Transaction is completed. The Proposed Transaction may be more expensive to complete than anticipated as a result of unexpected factors or events, including, but not limited to, delays in consents or approvals or transaction litigation.

Current report

We expect to incur substantial indebtedness to finance a portion of the aggregate Merger Consideration, and the financing for the Proposed Transaction may not be available.

Current report

Buyer expects to fund the aggregate Merger Consideration and related fees and expenses through the Equity Financing (as defined in the Merger Agreement) of up to $2.2 billion from PC and Mitsui pursuant to equity commitment letters, and debt financing of up to $1.8 billion pursuant to a debt commitment letter from JPMorgan, Bank of America and Wells Fargo, subject to customary conditions set forth therein, with borrowings under such debt commitment letter reduced by up to $1.8 billion of additional senior subordinated notes to be issued by Buyer and/or up to $1.1 billion of additional borrowings under our U.S. Credit Agreement. The Amendment provides us with a one-time option to increase the aggregate revolving commitment under our U.S. Credit Agreement from $1.5 billion to up to $2.4 billion, including up to $400.0 million of uncollateralized borrowings in excess of a defined borrowing base, and permits us to incur up to $1.8 billion of additional indebtedness to finance the Proposed Transaction in the form of a senior unsecured 364-day bridge facility and/or new senior subordinated notes. The increase in the revolving commitment is subject to conditions, including the funding of not less than $2.2 billion of Equity Financing, and will expire if it has not become effective on or before the fifth business day after the Outside Date (as defined in the Merger Agreement). Although the Merger Agreement does not contain a financing condition, if the committed debt financing or the Equity Financing is not available on the anticipated terms or at all, the Proposed Transaction may be delayed or may not be completed.

Current report

Litigation related to the Proposed Transaction could prevent or delay completion of the Proposed Transaction or otherwise negatively affect our business and operations.

Current report

Lawsuits may be filed against us, our Board, the other parties to the Merger Agreement, or others, in connection with the transactions contemplated by the Merger Agreement, that could delay or prevent the completion of the Proposed Transaction and otherwise adversely affect our business, results of operations and financial condition. The outcome of litigation is uncertain, and we may not be successful in defending against such future lawsuits. These lawsuits could result in significant costs to us, including any costs associated with the indemnification of directors and officers.

Previous report

We have received an unsolicited, preliminary and non-binding proposal from our largest stockholders to acquire the shares of our common stock they do not already own. The outcome of this proposal is uncertain, may result in significant costs, and may impact the trading price and volatility of our common stock.

Previous report

On July 22, 2026, our Board of Directors received an unsolicited, preliminary and non-binding proposal (the “Proposal”) from Penske Corporation, on behalf of itself and its wholly-owned subsidiary Penske Automotive Holdings Corp. (collectively, “PC”) and Mitsui & Co., Ltd., on behalf of itself and its wholly-owned subsidiary Mitsui & Co. (U.S.A.), Inc. (collectively, “Mitsui” and together with PC, the “PC-Mitsui Investors”), to acquire all outstanding shares of our common stock not already owned by them for cash consideration of $210.00 per share (the “Transaction”). The PC-Mitsui Investors currently beneficially own, collectively, approximately 72.6% of our outstanding common stock. In response to the Proposal, our Board established a special committee of disinterested and independent directors (the “Special Committee”), authorized to retain its own legal and financial advisors, to evaluate the Proposal. There can be no assurance as to whether any agreement relating to the proposed Transaction or any similar or other transaction will be reached, or that any Transaction or any similar or other transaction will be pursued, approved, or consummated, or as to its terms. The Proposal is an expression of interest only and may be withdrawn or modified at any time. The Special Committee may decline to recommend or may terminate its consideration of the Transaction or any transaction at any time, and any transaction remains subject to numerous factors beyond our control, including market conditions, industry trends, regulatory developments, and litigation. We may also incur significant costs in connection with the evaluation of, and response to, the Proposal, regardless of whether it results in any transaction. The outcome of the proposed Transaction may contribute to fluctuations in the trading price and trading volume of our common stock.