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APP Pharmaceuticals, Inc. – ‘DEFM14C’ on 8/20/08

On:  Wednesday, 8/20/08, at 9:05pm ET   ·   As of:  8/21/08   ·   Effective:  8/21/08   ·   Accession #:  1193125-8-181705   ·   File #:  0-33407

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 8/21/08  APP Pharmaceuticals, Inc.         DEFM14C     8/21/08    1:1.8M                                   RR Donnelley/FA

Document/Exhibit                   Description                      Pages   Size 

 1: DEFM14C     Definitive Information Statement                    HTML   1.79M 

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

SCHEDULE 14C INFORMATION

Information Statement Pursuant to Section 14(c)

of the Securities Exchange Act of 1934

APP PHARMACEUTICALS, INC.

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APP PHARMACEUTICALS, INC.

1501 East Woodfield Road, Suite 300 East

Schaumburg, Illinois 60173

NOTICE OF ACTION BY WRITTEN CONSENT AND APPRAISAL RIGHTS

WE ARE NOT ASKING YOU FOR A PROXY AND

YOU ARE REQUESTED NOT TO SEND US A PROXY

August 20, 2008

Dear Stockholder:

As previously announced, on July 6, 2008, APP Pharmaceuticals, Inc. entered into a merger agreement with Fresenius SE and certain of its subsidiaries under which APP will be acquired by, and become an indirect, wholly-owned subsidiary of, Fresenius.

In the merger, APP stockholders (other than stockholders who validly perfect appraisal rights under Delaware law) will be entitled to receive, for each share of APP common stock that they hold, (i) $23.00 per share in cash, without interest, and (ii) one contingent value right, or CVR, issued by Fresenius Kabi Pharmaceuticals Holding, Inc., or FK Holdings, the subsidiary of Fresenius that will own APP following the merger. Each CVR will entitle its holder to receive a cash payment, without interest, of up to $6.00 to the extent that the “Adjusted EBITDA” of APP and FK Holdings for the three years ending December 31, 2010, determined in accordance with the CVR agreement described in this information statement/prospectus, exceeds a threshold amount.

Our board of directors, after careful consideration and acting upon the unanimous recommendation of a special committee of our independent directors, has approved and declared advisable the merger and the merger agreement. A copy of the merger agreement is attached to this information statement/prospectus as Annex A.

Under Delaware law, the approval of holders of a majority of the outstanding shares of APP common stock is required to adopt the merger agreement. On July 6, 2008, Dr. Patrick Soon-Shiong and entities affiliated with him, who together owned approximately 81.1% of the outstanding shares of APP common stock as of the date of the merger agreement, executed a written consent approving and adopting the merger and the merger agreement pursuant to the terms of a written consent and voting agreement they entered into with Fresenius. Accordingly, your approval is not required and is not being requested.

Under Delaware law, if you comply with certain requirements of Delaware law described in this information statement/prospectus, you will have the right to seek an appraisal and to be paid the “fair value” of your shares of APP common stock as determined in accordance with Delaware law (exclusive of any element of value arising from the accomplishment or expectation of the merger) instead of the merger consideration. Your appraisal rights under Delaware law are more fully described in this information statement/prospectus under “Rights of Appraisal” beginning on page 95.

There is currently no public market for the CVRs. FK Holdings intends to apply to list the CVRs on the NASDAQ Global Market under the symbol “ACVR.”

THE CVRs INVOLVE VARIOUS RISKS, WHICH ARE DESCRIBED IN THIS INFORMATION STATEMENT/PROSPECTUS UNDER “RISK FACTORS” BEGINNING ON PAGE 19.

We urge you to read this information statement/prospectus carefully and in its entirety.

Neither APP nor Fresenius or FK Holdings is soliciting proxies from APP stockholders.

This notice and the accompanying information statement/prospectus shall constitute notice to you of the action by written consent contemplated by Section 228 of the Delaware General Corporation Law.

By order of the board of directors,

Patrick Soon-Shiong, M.D.

Chairman

The information statement/prospectus is dated August 20, 2008 and is first being mailed to APP’s stockholders on or about August 20, 2008.

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INFORMATION STATEMENT

OF

APP PHARMACEUTICALS, INC.

1501 East Woodfield Road, Suite 300 East

Schaumburg, Illinois 60173

PROSPECTUS

OF

FRESENIUS KABI PHARMACEUTICALS HOLDING, INC.

Else-Kroener-Strasse 1

61352 Bad Homburg v.d.H.

Germany

We Are Not Asking You for a Proxy and

You Are Requested Not to Send Us a Proxy

August 20, 2008

This information statement/prospectus is being furnished to the holders of common stock of APP Pharmaceuticals, Inc., or APP, by the board of directors of APP and by Fresenius Kabi Pharmaceuticals Holding, Inc. (formerly Fresenius Kabi Pharmaceuticals Holding, LLC), or FK Holdings, in connection with the Agreement and Plan of Merger, dated as of July 6, 2008, by and among Fresenius SE, a societas europaea organized under the laws of Germany, which we refer to as Fresenius, FK Holdings, an indirect, wholly-owned subsidiary of Fresenius, and Fresenius Kabi Pharmaceuticals, LLC, a Delaware limited liability company and a direct, wholly-owned subsidiary of FK Holdings, which we refer to as Merger Sub, and APP. Under the merger agreement, subject to the satisfaction or waiver of certain conditions, Merger Sub will merge with and into APP and APP will become a direct, wholly-owned subsidiary of FK Holdings and an indirect, wholly-owned subsidiary of Fresenius.

After careful consideration and acting upon the unanimous recommendation of a special committee of APP’s independent directors, APP’s board of directors approved the merger and the merger agreement. A copy of the merger agreement is attached to this information statement/prospectus as Annex A.

Under the merger agreement, when the merger is completed, APP stockholders (other than stockholders who validly perfect appraisal rights under Delaware law or Fresenius, FK Holdings or Merger Sub) will be entitled to receive, for each share of APP common stock they hold, (i) $23.00 in cash, without interest, and (ii) one contingent value right, or CVR, issued by FK Holdings and representing the right to receive an additional cash payment, without interest, of up to $6.00 per CVR, as determined in accordance with the terms of the Contingent Value Rights Agreement to be entered into in connection with the merger.

Each CVR will represent the right to receive a pro-rata portion of an amount equal to 2.5 times the excess of the cumulative net income before interest, taxes, depreciation and amortization, of APP and FK Holdings and their subsidiaries, on a consolidated basis, subject to certain adjustments, or Adjusted EBITDA, for the three years ending December 31, 2010, over $1.2677 billion. In the event that Adjusted EBITDA for this period does not exceed this threshold amount, no payment will be made on the CVRs. See “Description of the CVRs” beginning on page 80. A copy of the form of Contingent Value Rights Agreement, which we refer to as the CVR indenture, is attached hereto as Annex B.

THE CVRs INVOLVE RISKS. THESE RISKS ARE DISCUSSED IN GREATER DETAIL IN THIS INFORMATION STATEMENT/PROSPECTUS UNDER “RISK FACTORS” BEGINNING ON PAGE 19.

There is currently no public market for the CVRs. FK Holdings intends to apply to list the CVRs on the NASDAQ Global Market under the symbol “ACVR.”

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In accordance with Delaware law, the affirmative vote (or consent in writing in lieu thereof) of the holders of a majority of the outstanding shares of APP common stock, voting (or consenting in writing in lieu thereof) as a single class, is required to adopt the merger agreement. On July 6, 2008, immediately following execution of the merger agreement, Dr. Patrick Soon-Shiong and certain entities affiliated with him, which we refer to collectively in this information statement/prospectus as the principal stockholders and who together owned at that date approximately 81.1% of the outstanding shares of APP common stock, signed a Written Consent and Voting Agreement, which we refer to as the voting agreement, and delivered a written consent in accordance with Section 228 of the General Corporation Law of the State of Delaware, which we refer to as the DGCL, adopting the merger agreement and approving the merger and the other transactions contemplated by the merger agreement. A copy of the voting agreement executed by the principal stockholders is attached hereto as Annex C. Because the principal stockholders owned a majority of the outstanding shares of APP common stock entitled to vote on the adoption of the merger agreement, the principal stockholders’ action by written consent was sufficient to adopt the merger agreement and to approve the merger without any further action by any other APP stockholder. As a result, no other votes are necessary to adopt the merger agreement, and your approval is not required and is not being requested. Neither APP nor Fresenius is soliciting proxies from APP’s stockholders.

Under Section 262 of the DGCL, if you are not one of the principal stockholders and you comply with the requirements of Section 262 of the DGCL, you will have the right to seek an appraisal and to be paid the “fair value” of your shares of APP common stock at the effective time of the merger (exclusive of any element of value arising from the accomplishment or expectation of the merger) instead of the merger consideration. This information statement/prospectus constitutes notice to you of the availability of appraisal rights under Section 262 of the DGCL, a copy of which is attached as Annex F to this information statement/prospectus.

Under applicable law, the merger may not be completed until 20 calendar days after the date of mailing of this information statement/prospectus to APP stockholders. Under the merger agreement, the parties are not required to complete the merger for an additional four business days following completion of this 20 calendar day period and satisfaction of other closing conditions. Therefore, notwithstanding the execution and delivery of the written consent by the principal stockholders, the merger may not be completed until that time has elapsed, and therefore, the earliest possible date on which the merger can be completed is September 9.

Please read this information statement/prospectus carefully and in its entirety as it contains important information.

Please do not send any APP stock certificates at this time. If the merger is completed, you will receive detailed instructions regarding the surrender of your stock certificates and payment for your shares of APP common stock as promptly as practicable after the merger is completed.

This information statement/prospectus is first being mailed to APP stockholders on or about August 20, 2008. This information statement/prospectus also constitutes FK Holdings’ prospectus, filed with the Securities and Exchange Commission, which we refer to as the SEC, as part of a Registration Statement on Form S-4 filed under the Securities Act of 1933, which we refer to as the Securities Act, with respect to the CVRs to be issued in connection with the merger. APP has supplied all the information contained herein with respect to itself. FK Holdings has supplied all the information contained herein with respect to itself and Fresenius and their respective subsidiaries.

The CVRs have not been approved or disapproved by the Securities and Exchange Commission or any state securities commission nor has the Securities and Exchange Commission or any state securities commission passed upon the accuracy or adequacy of this information statement/prospectus. Any representation to the contrary is a criminal offense.

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ADDITIONAL INFORMATION

This information statement/prospectus incorporates important business and financial information about APP from documents that APP has filed with the SEC and which are included in this information statement/prospectus and can be found following the annexes. For a listing of documents incorporated by reference in this information statement/prospectus, please see the section entitled “Where You Can Find More Information” on page 109. APP will provide you with additional copies of this information relating to APP, without charge, upon written or oral request to:

APP Pharmaceuticals, Inc.

1501 East Woodfield Road, Suite 300 East

Schaumburg, Illinois 60173

Attention: Investor Relations

Telephone Number: (847) 969-2700

This information can also be obtained without charge from the “Investor Relations” section of APP’s website at http://www.apppharma.com and from the SEC’s website at www.sec.gov.

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QUESTIONS AND ANSWERS ABOUT THE MERGER

The following questions and answers are intended to address briefly some commonly asked questions regarding the merger. These questions and answers may not address all questions that may be important to you as an APP stockholder. To better understand these matters, and for a description of the legal terms governing the merger, you should carefully read this entire information statement/prospectus, including the annexes, as well as the documents that we have incorporated by reference into this document. See “Where You Can Find More Information.”

Unless otherwise indicated or the context requires otherwise, all references to “Fresenius” refer to Fresenius SE; all references to “Fresenius group” means Fresenius and its subsidiaries; all references to “FK Holdings” refer to Fresenius Kabi Pharmaceuticals Holding, Inc. (formerly Fresenius Kabi Pharmaceutical, Holdings LLC), an indirect, wholly-owned subsidiary of Fresenius; all references to “APP” refer to APP Pharmaceuticals, Inc. and its subsidiaries, including its operating subsidiary, APP Pharmaceuticals, LLC; all references to “Merger Sub” refer to Fresenius Kabi Pharmaceuticals, LLC, a direct, wholly-owned subsidiary of FK Holdings; all references to the “merger agreement” refer to the Agreement and Plan of Merger, dated as of July 6, 2008, by and among APP, Fresenius, FK Holdings and Merger Sub, a copy of which is attached as Annex A to this information statement/prospectus, as it may be amended from time to time; all references to the “merger” refer to the merger contemplated by the merger agreement; and all references to the “principal stockholders” refer to Dr. Patrick Soon-Shiong and certain entities affiliated with him, who together owned approximately 81.1% of the outstanding shares of APP common stock as of the date of the merger agreement.

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APP Pharmaceuticals, Inc.

Attention: Investor Relations

1501 East Woodfield Road, Suite 300 East

Schaumburg, Illinois 60173

Phone: (847) 969-2700

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF APP

The following selected historical consolidated financial data of APP for the years ending December 31, 2007, 2006 and 2005 and as of December 31, 2007 and 2006, have been derived from APP’s historical audited consolidated financial statements incorporated by reference into this information statement/prospectus. The following selected historical consolidated financial data for the years ending December 31, 2004 and 2003 and as of December 31, 2005, 2004 and 2003, have been derived from APP’s historical audited consolidated financial statements not required to be incorporated by reference into this information statement/prospectus. The following selected historical consolidated financial data for APP as of and for the six months ending June 30, 2008 and 2007, has been derived from APP’s unaudited interim consolidated financial statements contained in APP’s Quarterly Report on Form 10-Q for the quarter ending June 30, 2008, which is incorporated by reference into this information statement/prospectus. In the opinion of APP’s management, the unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the financial position and results of operations at these dates and for these periods. Results of interim periods are not necessarily indicative of the results expected for a full year or for future periods. This information is only a summary and you should read this selected historical consolidated financial data together with APP’s “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the unaudited and audited consolidated financial statements and notes thereto incorporated by reference into this information statement/prospectus.

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SELECTED FINANCIAL DATA OF FK HOLDINGS

The following selected historical consolidated financial data for the periods presented has been derived from, and should be read in conjunction with, the audited consolidated financial statements of FK Holdings contained in this information statement/prospectus.

STATEMENT OF OPERATIONS DATA

BALANCE SHEET DATA

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SELECTED UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA

FOR FK HOLDINGS

The following selected unaudited pro forma consolidated financial data is presented as if the merger were completed on January 1, 2007, for statement of operations purposes, and on June 30, 2008, for balance sheet purposes. This data should be read in conjunction with the “Unaudited Pro Forma Consolidated Financial Statements” and other financial statements contained in, and incorporated by reference into, this information statement/prospectus. See the section entitled “Where You Can Find More Information.”

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This information statement/prospectus and the documents incorporated by reference herein contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934 that involve risks and uncertainties, as well as assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any projections of earnings, revenues, synergies, margins, EBITDA or Adjusted EBITDA or other financial items; any statements of the plans, strategies and objectives of management for future operations, including integration and any potential restructuring plans and the anticipated timing of filings and approvals relating to the merger; any statements concerning proposed new products, services, developments or industry rankings; any statements regarding future economic conditions or performance; any statements of belief and any statements of assumptions underlying any of the foregoing.

Such forward-looking statements, whether expressed or implied, are subject to risks and uncertainties which could cause the actual results of FK Holdings or APP and its consolidated subsidiaries to differ materially from those implied by such forward-looking statements, due to a number of factors, many of which are beyond either FK Holdings’ or APP’s control, which include, but are not limited to:

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If any of these risks or uncertainties materialize or any of these assumptions prove incorrect, results of FK Holdings and APP could differ materially from the expectations in these statements. FK Holdings and APP do not undertake any obligation to update these forward-looking statements, except as required by law.

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RISK FACTORS

In addition to the other information included in, incorporated by reference into, and found in the Annexes attached to this information statement/prospectus, including the matters addressed in “Cautionary Statement Regarding Forward-Looking Statements,” you should carefully consider the following risk factors. Please see the section entitled “Where You Can Find More Information.” The CVRs involve a high degree of risk and the risks and uncertainties described below are not the only ones faced by APP or FK Holdings. Additional risks and uncertainties not presently known, or that APP or FK Holdings currently deem immaterial, could negatively impact the business, results of operations or financial condition of APP or FK Holdings in the future. If any of the following risks and uncertainties develop into actual events, the business, results of operations or financial condition of APP could be adversely affected, which could adversely affect the likelihood of any payments being made under the CVRs and the amount of any such payments.

Risks Related to the Contingent Value Rights

You may not receive any payment on the CVRs.

Your right to receive any future payment on the CVRs will be contingent upon the achievement by APP and FK Holdings and their consolidated subsidiaries of cumulative Adjusted EBITDA (calculated in accordance with the CVR indenture) in excess of the threshold specified in the CVR indenture. If cumulative Adjusted EBITDA does not exceed this threshold for any reason, no payment will be made under the CVRs and the CVRs will expire valueless. Accordingly, the value, if any, of the CVRs is speculative, and the CVRs may ultimately have no value. See “Description of the CVRs.”

Regulatory agencies must approve the merger and could impose conditions that could affect the value of the CVRs you receive in the merger.

FK Holdings and APP intend to comply with antitrust laws of the United States and any other jurisdiction in which the merger is subject to review. The reviewing authorities may impose conditions on FK Holdings and APP as a condition to giving their approval or consent to the merger. Fresenius and APP have agreed to use reasonable best efforts to obtain the required regulatory approvals, including negotiating and committing to the sale, divestiture or disposition of such assets or businesses, subject to exceptions. The value of the CVR depends on the ability of APP and FK Holdings and their consolidated subsidiaries to generate Adjusted EBITDA (calculated in accordance with the CVR indenture) over and above the threshold level. Conditions imposed by regulatory authorities could reduce the scope or otherwise harm the operation of the APP business following the merger, which could adversely affect FK Holdings’ and APP’s ability to generate Adjusted EBITDA, which could reduce the amount of any CVR payment or could result in no payment being made on the CVRs.

You will not be able to determine the amount of cash to be received under the CVRs until 2011 which makes it difficult to value the CVRs.

If any payment is made on the CVR, it will not be made until June 2011 (except in certain cases of foreclosure of the APP shares pledged as security for the indebtedness of FK Holdings), and the amount of any payment will not be determined prior to the second quarter of 2011. FK Holdings will provide an interim statement of Adjusted EBITDA for each of 2008 and 2009, and a final statement of Adjusted EBITDA following the end of 2010. The final calculation of any CVR payment, however, will be provided to you no earlier than the second quarter of 2011. Because the amount of any payment on the CVRs will not be determined prior to the second quarter of 2011 and the CVR payment will be determined on the basis of cumulative Adjusted EBITDA for a three-year period, it may be difficult to value the CVRs, and accordingly it may be difficult or impossible for you to resell your CVRs.

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The management of FK Holdings may not follow the current business, financial and operational policies of APP.

The directors of FK Holdings elected by Fresenius will have significant authority to effect decisions affecting the capital structure of FK Holdings and APP. There can be no assurance that the business, financial and operational policies of APP in effect prior to the merger including, for example, APP’s business strategy, will continue after the merger. Different policies may adversely affect the value of the CVRs and any payment thereunder. Except in limited circumstances described in the CVR indenture, FK Holdings does not have any obligations to CVR holders regarding the operation of the APP business after the completion of the merger.

FK Holdings has no obligation to continue to research, develop or commercialize APP’s products.

FK Holdings has no obligation to initiate or continue research, development or commercialization activities with respect to any APP products and, in its sole discretion, FK Holdings may abandon efforts to research, develop or commercialize any product, whether or not such product is in development or commercialized as of the closing date of the merger. Changes or abandonment of APP’s current research, development or commercialization activities by FK Holdings may adversely affect the amount of Adjusted EBITDA generated by FK Holdings, APP and their consolidated subsidiaries, which would adversely affect the value of the CVR and any payment thereunder.

The U.S. federal income tax treatment of the CVRs is unclear.

Pursuant to the CVR indenture, FK Holdings will agree to report any CVR payment (excluding any imputed interest) as additional consideration for the sale of APP common stock. Assuming this method of reporting is correct, if a payment is made with respect to a CVR, the holder of the CVR generally should recognize capital gain or loss equal to the difference between the amount of such payment (less any imputed interest) and the holder’s adjusted tax basis in the CVR. FK Holdings will also agree that a portion of any CVR payment will be treated as interest income, in accordance with Section 483 of the Code. However, there is no legal authority directly addressing the U.S. federal income tax treatment of the CVRs and, therefore, there can be no assurance that the Internal Revenue Service would not assert, or that a court would not sustain, a position that any CVR payment or a sale or exchange of a CVR does not attract capital gain treatment, or that a different method should be used for purposes of calculating the amount of imputed interest. If such a position were sustained, all or any part of any CVR payment could be treated as ordinary income and could be required to be included in income prior to the receipt of any CVR payment. See “Certain Material U.S. Federal Income Tax Consequences” for a more detailed explanation of the U.S. federal income tax treatment of the CVRs.

Any payments in respect of the CVRs are subordinated to the right of payment of FK Holdings’ other indebtedness.

The CVRs are unsecured obligations of FK Holdings and the CVR payments, acceleration payments, all other obligations under the CVR indenture and the CVRs and any rights or claims relating thereto are subordinated in right of payment to the prior payment in full of all senior obligations of FK Holdings. Senior obligations of FK Holdings include all principal, interest, penalties, fees, indemnification, reimbursements, damages and other liabilities payable under, or with respect to, FK Holdings’ and APP’s senior credit facilities and, so long as the senior obligations are outstanding pursuant to the preceding clause, intercompany loans and other senior debt. With the financing arrangements expected to be entered into in connection with the merger, there would be approximately $3.8 billion outstanding under credit facilities of Fresenius and its subsidiaries that would be senior to the obligations under the CVRs. Substantially all such indebtedness would be considered senior obligations for the purposes of the subordination provisions of the CVR indenture. In addition, if a default on FK Holdings’ senior obligations would occur as a result of the CVR payment, there is an existing payment default on FK Holdings’ senior obligations, the maturity of FK Holdings’ senior obligations is accelerated or in other circumstances, no CVR payment will be payable, if any payment is due, until any such default is remedied. See “The Merger—Financing of the Merger.”

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An active public market for the CVRs may not develop, or the CVRs may trade at low volumes, both of which could have an adverse effect on the resale price, if any, of the CVRs.

The CVRs are a new security for which there is currently no public trading market. An active public trading market for the securities may not develop or be sustained. FK Holdings has agreed to use its reasonable best efforts to cause the CVRs to be approved for listing at the effective time of the merger on the NASDAQ Capital Market, or an exchange, electronic trading network or trading platform as agreed by Fresenius and APP. Notwithstanding its efforts, FK Holdings may be unable to have the CVRs listed for trading.

Even if an active public trading market develops, there may be little or no market demand for the CVRs, making it difficult or impossible to resell the CVRs, which would have an adverse effect on the resale price, if any, of the CVRs. In addition, holders of CVRs may incur brokerage charges in connection with the resale of the CVRs, which in some cases could exceed the proceeds realized by the holder from the resale of its CVRs. Neither FK Holdings nor APP can predict the price, if any, at which the CVRs will trade following the closing of the transaction.

Because there has not been any public market for the CVRs, the market price and trading volume of the CVRs may be volatile.

Neither APP nor FK Holdings can predict the extent to which investor interest will lead to a liquid trading market in the CVRs or whether the market price of the CVRs will be volatile following the merger. The market price of the CVRs could fluctuate significantly for many reasons, including, without limitation:

Risk Factors Related to the Business of APP and FK Holdings

If APP and FK Holdings are unable to develop and commercialize new products, their ability to generate revenue and Adjusted EBITDA will deteriorate.

Profit margins for a pharmaceutical product generally decline as new competitors enter the market. As a result, the future success of APP and FK Holdings will depend on their ability to commercialize the product candidates APP is currently developing, as well as develop new products in a timely and cost-effective manner. APP currently has over 25 abbreviated new drug applications, or ANDAs, pending with the U.S. Food and Drug Administration, or the FDA, and approximately 65 product candidates under development. Successful development and commercialization of product candidates will require significant investment in many areas, including research and development and sales and marketing, and APP and FK Holdings may not realize a return on those investments. In addition, development and commercialization of new products are subject to inherent risks, including:

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The timely and continuous introduction of new products is critical to the business of APP and FK Holdings. The ability of APP and FK Holdings to grow revenue will deteriorate if they are unable to successfully develop and commercialize new products, which could have an adverse effect on FK Holdings’ ability to achieve the Adjusted EBITDA threshold required to trigger a payment under the CVRs.

If sales of key products decline, the business of APP and FK Holdings may be adversely affected.

APP’s top ten products comprised approximately 57% of its total revenue for both the year ending December 31, 2007 and the six months ending June 30, 2008. APP’s key products could lose market share or revenue due to numerous factors, many of which are beyond the control of APP and FK Holdings, including:

Any factor adversely affecting the sale of the key products of APP and FK Holdings may cause their revenues to decline, which could have an adverse effect on FK Holdings’ ability to achieve the Adjusted EBITDA threshold required to trigger a payment under the CVRs.

If APP and FK Holdings or their suppliers are unable to comply with ongoing and changing regulatory standards, sales of their products could be delayed or prevented.

Virtually all aspects of APP’s business, including the development, testing, manufacturing, processing, quality, safety, efficacy, packaging, labeling, record-keeping, distribution, storage and advertising and promotion of APP’s products and disposal of waste products arising from these activities, are subject to extensive regulation by federal, state and local governmental authorities in the United States, including the FDA and the Department of Health and Human Services Office of Inspector General (OIG). APP’s business is also subject to regulation in foreign countries. Compliance with these regulations is costly and time-consuming.

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APP’s manufacturing facilities and procedures and those of its suppliers are subject to ongoing regulation, including periodic inspection by the FDA and foreign regulatory agencies. For example, manufacturers of pharmaceutical products must comply with detailed regulations governing current good manufacturing practices, including requirements relating to quality control and quality assurance. APP must spend funds, time and effort in the areas of production, safety, quality control and quality assurance to ensure compliance with these regulations. APP and FK Holdings cannot assure that their manufacturing facilities or those of their suppliers will not be subject to regulatory action in the future.

APP’s products must receive appropriate regulatory clearance before they can be sold in a particular country, including the United States. APP and FK Holdings may encounter delays in the introduction of a product as a result of, among other things, failure of clinical trials to show safety or efficacy, undesirable side effects, insufficient or incomplete submissions to the FDA for approval of a product, objections by another company to submissions for approval, patent protection covering brand name products, patent challenges by other companies which result in a 180-day exclusivity period awarded to the challenger, and changes in regulatory policy during the period of product development or during the regulatory approval process. The FDA has the authority to revoke drug approvals previously granted and remove from the market previously approved products for various reasons, including issues related to current good manufacturing practices for that particular product or in general. APP and FK Holdings may be subject from time to time to product recalls initiated by them or by the FDA. Delays in obtaining regulatory approvals, the revocation of a prior approval or product recalls could impose significant costs on APP and FK Holdings and adversely affect their ability to generate revenue.

The inability of APP and FK Holdings or the inability of their suppliers to comply with applicable FDA and other regulatory requirements can result in, among other things, warning letters, fines, consent decrees restricting or suspending their manufacturing operations, delay of approvals for new products, injunctions, civil penalties, recall or seizure of products, total or partial suspension of sales and criminal prosecution. Any of these regulatory actions could materially and adversely affect their ability to generate and receive revenue and result in the incurrence of significant expenses, which could have an adverse effect on FK Holdings’ ability to achieve the Adjusted EBITDA threshold required to trigger a payment under the CVRs.

State pharmaceutical marketing compliance and reporting requirements may expose APP and FK Holdings to regulatory and legal action by state governments or other government authorities.

In recent years, several states, including California, Vermont, Maine, Minnesota, New Mexico, West Virginia and Nevada in addition to the District of Columbia, have enacted legislation requiring pharmaceutical companies to establish marketing compliance programs and file periodic reports on sales, marketing, pricing and other activities. Similar legislation is being considered in other states. Many of these requirements are new and uncertain, and available guidance is limited. APP has received notice regarding possible non-compliance with these state laws and certain licensing requirements. However, APP is continuing to assess and address its compliance obligations under these state laws. Unless APP and FK Holdings are in full compliance with these laws, they could face enforcement action and fines and other penalties and could receive adverse publicity, all of which could harm their business.

If side effects or manufacturing problems are identified after the products are on the market, APP and FK Holdings may be subject to additional regulatory requirements or enforcement.

If side effects are identified after any products of APP and FK Holdings are on the market, or if manufacturing problems occur, regulatory approval may be withdrawn and reformulation of products, additional clinical trials, changes in labeling of products, and changes to or re-approvals of their manufacturing facilities may be required, any of which could have a material adverse effect on sales of the affected products.

After any of the products of APP and FK Holdings are approved for commercial use, APP and FK Holdings or regulatory bodies could decide that changes to the product labeling are needed to ensure the safety and

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effectiveness of the products. Label changes may be necessary for a number of reasons, including the identification of actual or theoretical safety or efficacy concerns by regulatory agencies or the discovery of significant problems with a similar product that implicates an entire class of products. Any significant concerns raised about the safety or efficacy of the products could also result in the need to reformulate those products, to conduct additional clinical trials, to make changes to the manufacturing processes, or to seek re-approval of the relevant manufacturing facilities. Significant concerns about the safety and effectiveness of a product could ultimately lead to the revocation of its marketing approval. The revision of product labeling or the regulatory actions described above could be required even if there is no clearly established connection between the product and the safety or efficacy concerns that have been raised. The revision of product labeling or the regulatory actions described above could have a material adverse effect on sales of the affected products and on their business and results of operations, which could have an adverse effect on FK Holdings’ ability to achieve the Adjusted EBITDA threshold required to trigger a payment under the CVRs.

The manufacture of APP’s products is highly exacting and complex, and if APP and FK Holdings or their suppliers encounter production problems, their business may suffer.

Almost all of the pharmaceutical products APP makes are sterile, injectable drugs. APP also purchases some such products from other companies. The manufacture of all the products is highly exacting and complex, due in part to strict regulatory requirements and standards which govern both the manufacture of a particular product and the manufacture of these types of products in general. Problems may arise during their manufacture due to a variety of reasons including equipment malfunction, failure to follow specific protocols and procedures and environmental factors. If problems arise during the production of a batch of product, that batch of product may have to be discarded. This could, among other things, lead to loss of the cost of raw materials and components used, lost revenue, time and expense spent in investigating the cause and, depending on the cause, similar losses with respect to other batches or products. If such problems are not discovered before the product is released to the market, recall costs may also be incurred. To the extent APP and FK Holdings experience problems in the production of their pharmaceutical products, this may be detrimental to their business, operating results and reputation.

APP’s market is highly competitive, and if APP and FK Holdings are unable to compete successfully, their revenue will decline and their business will be harmed.

The markets for injectable pharmaceutical products are highly competitive, rapidly changing and undergoing consolidation. Most of APP’s products are generic injectable versions of brand name products that are still being marketed by proprietary pharmaceutical companies. The first company to market a generic product is often initially able to achieve high sales, profitability and market share with respect to that product. Prices, revenue and market size for a product typically decline, however, as additional generic manufacturers enter the market.

APP faces, and FK Holdings will face, competition from major, brand-name pharmaceutical companies as well as generic manufacturers such as Hospira, Inc., Bedford Laboratories, Baxter Laboratories (including Elkin-Sinn), SICOR Inc. (acquired by Teva Pharmaceuticals USA) and Mayne Pharma (acquired by Hospira, Inc.) and, in the future, increased competition from new, foreign competitors. Smaller and foreign companies may also prove to be significant competitors, particularly through collaboration arrangements with large and established companies. Some of APP’s competitors have significantly greater research and development, financial, sales and marketing, manufacturing, regulatory and other resources than APP and FK Holdings. As a result, they may be able to devote greater resources to the development, manufacture, marketing or sale of their products, receive greater resources and support for their products, initiate or withstand substantial price competition, more readily take advantage of acquisition or other opportunities, or otherwise more successfully market their products.

Any reduction in demand for the products of APP and FK Holdings could lead to a decrease in prices, fewer customer orders, reduced revenues, reduced margins, reduced levels of profitability or loss of market share.

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These competitive pressures could adversely affect their business and operating results, which could have an adverse effect on FK Holdings’ ability to achieve the Adjusted EBITDA threshold required to trigger a payment under the CVRs.

APP and FK Holdings face uncertainty related to pricing and reimbursement and health care reform.

In both domestic and foreign markets, sales of the products of APP and FK Holdings will depend, in part, on the availability of reimbursement from third-party payors such as government health administration authorities, private health insurers, health maintenance organizations and other health care-related organizations. However, reimbursement by such payors is presently undergoing reform, and there is significant uncertainty at this time how this will affect sales of certain pharmaceutical products. There is possible U.S. legislation or regulatory action affecting, among other things, pharmaceutical pricing and reimbursement, including under Medicaid and Medicare, and the importation of prescription drugs that are marketed outside the U.S. and sold at prices that are regulated by governments of various foreign countries.

Medicare, Medicaid and other governmental reimbursement legislation or programs govern drug coverage and reimbursement levels in the United States. Federal law requires all pharmaceutical manufacturers to rebate a percentage of their revenue arising from Medicaid-reimbursed drug sales to individual states. Generic drug manufacturers’ agreements with federal and state governments provide that the manufacturer will remit to each state Medicaid agency, on a quarterly basis, 11% of the average manufacturer price for generic products marketed and sold under abbreviated new drug applications covered by the state’s Medicaid program. For proprietary products, which are marketed and sold under new drug applications, manufacturers are required to rebate the greater of (a) 15.1% of the average manufacturer price or (b) the difference between the average manufacturer price and the manufacturer’s best price to any customer for products sold during a specified period. The Medicaid program also requires pharmaceutical manufacturers to report certain information to the Centers for Medicare & Medicaid Services (CMS) on a periodic basis, including average manufacturer price and best price. The Medicare program requires manufacturers of Part B drugs, generally injectables, to report average sales price to CMS on a quarterly basis. If a pharmaceutical manufacturer is found to have knowingly submitted false information to the government, it may be liable for civil monetary penalties per item of false information.

Both the federal and state governments in the United States and foreign governments continue to propose and pass new legislation, rules and regulations designed to contain or reduce the cost of health care. Existing regulations that affect the price of pharmaceutical and other medical products may also change before any of the products of APP and FK Holdings are approved for marketing. Cost control initiatives could decrease the price that APP and FK Holdings receive for any product they develop in the future. In addition, third-party payors are increasingly challenging the price and cost-effectiveness of medical products and services and litigation has been filed against a number of pharmaceutical companies in relation to these issues. Additionally, significant uncertainty exists as to the reimbursement status of newly approved injectable pharmaceutical products. The products of APP and FK Holdings may not be considered cost effective or adequate third-party reimbursement may not be available to enable APP and FK Holdings to maintain price levels sufficient to realize an adequate return on their investment.

If APP and FK Holdings are unable to maintain APP’s key customer arrangements, sales of their products and revenue would decline.

Almost all injectable pharmaceutical products are sold to customers through arrangements with group purchasing organizations, or GPOs, and distributors. The majority of hospitals contract with the GPO of their choice for their purchasing needs. APP currently derives, and APP and FK Holdings expect to continue to derive, a large percentage of its and their revenue through a small number of GPOs. Currently, fewer than ten GPOs control a large majority of sales to hospital customers.

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APP has purchasing arrangements with the major GPOs in the United States, including AmeriNet, Inc., Broadlane Healthcare Corporation, Consorta, Inc., MedAssets Inc., Novation, LLC, Owen Healthcare, Inc., PACT, LLC, Premier Purchasing Partners, LP, International Oncology Network, National Oncology Alliance, and U.S. Oncology, Inc. In order to maintain these relationships, APP and FK Holdings believe they need to be a reliable supplier, offer a broad product line, remain price competitive, comply with FDA regulations and provide high-quality products. The GPOs through which APP sells its products also have purchasing agreements with other manufacturers that sell competing products and the bid process for products such as those of APP and FK Holdings is highly competitive. Most of APP’s GPO agreements may be terminated on short notice. If APP and FK Holdings are unable to maintain these arrangements with GPOs and key customers, revenue of the products of APP and FK Holdings would decline, which could have an adverse effect on FK Holdings’ ability to achieve the Adjusted EBITDA threshold required to trigger a payment under the CVRs.

The strategy to license rights to or acquire and commercialize proprietary or other specialty injectable products may not be successful, and APP and FK Holdings may never receive any return on their investment in these product candidates.

APP and FK Holdings may license rights to or acquire or commercialize proprietary or other specialty injectable products or technologies. Other companies, including those with substantially greater financial and sales and marketing resources, will compete with APP and FK Holdings to license rights to or acquire or commercialize these products. APP and FK Holdings may not be able to license rights to or acquire these proprietary or other products or technologies on acceptable terms, if at all. Even if APP and FK Holdings obtain rights to a pharmaceutical product and commit to payment terms, including, in some cases, up-front license payments, APP and FK Holdings may not be able to generate product sales sufficient to create a profit or otherwise avoid a loss.

A product candidate may fail to result in a commercially successful drug for other reasons, including the possibility that the product candidate may:

The marketing strategy, distribution channels and levels of competition with respect to any licensed or acquired product may be different from those of APP’s current products, and APP and FK Holdings may not be able to compete favorably in any new product category.

APP depends and FK Holdings will depend heavily on the principal members of APP’s management team, the loss of whom could harm their business.

APP depends and FK Holdings will depend heavily on the principal members of APP’s executive management team. Each of the members of APP’s executive management team is employed “at will.” The loss of the services of any member of APP’s executive management team may significantly delay or prevent the achievement of product development or business objectives of APP and FK Holdings.

To be successful, APP and FK Holdings must attract, retain and motivate key employees, and the inability to do so could seriously harm their operations.

To be successful, APP and FK Holdings must attract, retain and motivate executives and other key employees. APP and FK Holdings face competition for qualified scientific, technical and other personnel, which may adversely affect their ability to attract and retain key personnel. APP and FK Holdings also must attract and motivate employees and keep them focused on their strategies and goals.

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APP depends on third parties to supply raw materials and other components and APP and FK Holdings may not be able to obtain sufficient quantities of these materials, which will limit their ability to manufacture their products on a timely basis and harm their operating results.

The manufacture of APP’s products requires raw materials and other components that must meet stringent FDA requirements. Some of these raw materials and other components are available only from a limited number of sources. Additionally, APP’s regulatory approvals for each particular product specify the raw materials and components, and the suppliers for such materials, that APP and FK Holdings may use for that product. Obtaining approval to change, substitute or add a raw material or component, or the supplier of a raw material or component, can be time consuming and expensive, as testing and regulatory approval is necessary. If their suppliers are unable to deliver sufficient quantities of these materials on a timely basis or they encounter difficulties in their relationships with these suppliers, the manufacture and sale of their products may be disrupted, and their business, operating results and reputation could be adversely affected.

Other companies may claim that APP and FK Holdings infringe their intellectual property or proprietary rights, which could cause APP and FK Holdings to incur significant expenses or prevent them from selling their products.

The success of APP and FK Holdings depends in part on their ability to operate their business without infringing the patents and proprietary rights of third parties. The manufacture, use, offer for sale and sale of pharmaceutical products have been subject to substantial litigation in the pharmaceutical industry. These lawsuits relate to the enforceability, validity and infringement of patents or proprietary rights of third parties. Infringement litigation is prevalent with respect to generic versions of products for which the patent covering the brand name product is expiring, particularly since many companies which market generic products focus their development efforts on products with expiring patents. A number of pharmaceutical companies, biotechnology companies, universities and research institutions may have filed patent applications or may have been granted patents that cover aspects of APP’s and FK Holdings’ products or their licensors’ products, product candidates or other technologies.

Future or existing patents issued to third parties may contain claims that conflict with the products of APP and FK Holdings. APP and FK Holdings are subject to infringement claims from time to time in the ordinary course of their business, and third parties could assert infringement claims against APP and FK Holdings in the future with respect to APP’s current products, products APP and FK Holdings may develop or products APP and FK Holdings may license. In addition, APP’s patents and patent applications, or those of the licensors of APP and FK Holdings, could face other challenges, such as interference, opposition and reexamination proceedings. Any such challenge, if successful, could result in the invalidation of, or a narrowing of scope of, any such patents and patent applications. Litigation or other proceedings could force APP and FK Holdings to:

Any litigation or interference proceedings, regardless of their outcome, would likely delay the regulatory approval process, be costly and require significant time and attention of key management and technical personnel.

APP’s and FK Holdings’ inability to protect their intellectual property rights in the United States and foreign countries could limit their ability to manufacture or sell their products.

APP relies and FK Holdings will rely on trade secrets, unpatented proprietary know-how, continuing technological innovation and patent protection to preserve their competitive position. The patents of APP and

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those for which it has or will license rights, may be challenged, invalidated, infringed or circumvented, and the rights granted in those for which APP and FK Holdings hold patents may not provide proprietary protection or competitive advantages to APP and FK Holdings. APP and FK Holdings and their licensors may not be able to develop patentable products. Even if patent claims are allowed, the claims may not issue, or in the event of issuance, may not be sufficient to protect the technology owned by or licensed to APP and FK Holdings. Third-party patents could reduce the coverage of the patents licensed, or that may be licensed to or owned by APP and FK Holdings. If patents containing competitive or conflicting claims are issued to third parties, APP and FK Holdings may be prevented from commercializing the products covered by such patents, or may be required to obtain or develop alternate technology. In addition, other parties may duplicate, design around or independently develop similar or alternative technologies.

APP and FK Holdings may not be able to prevent third parties from infringing or using their intellectual property. APP generally controls and limits access to, and the distribution of, its product documentation and other proprietary information. Despite these efforts to protect this proprietary information, however, unauthorized parties may obtain and use information that APP and FK Holdings regard as proprietary. Other parties may independently develop similar know-how or may even obtain access to the technologies of APP and FK Holdings.

The laws of some foreign countries do not protect proprietary information to the same extent as the laws of the United States, and many companies have encountered significant problems and costs in protecting their proprietary information in these foreign countries.

The U.S. Patent and Trademark Office and the courts have not established a consistent policy regarding the breadth of claims allowed in pharmaceutical patents. The allowance of broader claims may increase the incidence and cost of patent interference proceedings and the risk of infringement litigation. On the other hand, the allowance of narrower claims may limit the value of the proprietary rights of APP and FK Holdings.

APP and FK Holdings may become subject to federal and state false claims or other similar litigation brought by private individuals and the government.

The Federal False Claims Act allows persons meeting specified requirements to bring suit alleging false or fraudulent Medicare or Medicaid claims and to share in any amounts paid to the government in fines or settlement. These suits, known as qui tam actions, have increased significantly in recent years and have increased the risk that a health care company will have to defend a false claim action, pay fines and/or be excluded from Medicare and Medicaid programs. Federal false claims litigation can lead to civil monetary penalties, criminal fines and imprisonment and/or exclusion from participation in Medicare, Medicaid and other federally-funded health programs. Other alternate theories of liability may also be available to private parties seeking redress for such claims. A number of parties have brought claims against numerous pharmaceutical manufacturers, and APP and FK Holdings cannot be certain that such claims will not be brought against APP and FK Holdings, or if they are brought, that such claims might not be successful. A majority of states have enacted their own false claim act statutes and have used them to bring similar suits against pharmaceutical manufacturers.

APP and FK Holdings may need to change APP’s business practices to comply with changes to, or may be subject to charges under, the fraud and abuse laws.

APP is, and FK Holdings will be, subject to various federal and state laws pertaining to health care fraud and abuse, including the federal Anti-Kickback Statute and its various state analogues, the federal False Claims Act and marketing and pricing laws. Violations of these laws are punishable by criminal and/or civil sanctions, including, in some instances, imprisonment and exclusion from participation in federal and state health care programs such as Medicare and Medicaid. APP believes that it is in substantial compliance with these laws, but the government could disagree and challenge APP’s practices, which could materially and adversely affect APP’s and FK Holdings’ business. APP and FK Holdings may have to change APP’s advertising and promotional

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business practices, or APP’s existing business practices could be challenged as unlawful due to changes in laws, regulations or rules or due to administrative or judicial findings, which could materially adversely affect their business.

APP and FK Holdings may be required to defend lawsuits or pay damages for product liability claims.

Product liability is a major risk in testing and marketing pharmaceutical products. APP and FK Holdings may face substantial product liability exposure for products that they sell after regulatory approval. Historically, APP has carried product liability insurance and APP and FK Holdings expect to continue to carry such policies. Product liability claims, regardless of their merits, could exceed policy limits, divert management’s attention and adversely affect the reputation of APP and FK Holdings and the demand for their products.

APP and FK Holdings are subject to risks associated with international expansion, which could harm both domestic and international operations.

The business strategy of APP and FK Holdings includes international expansion. This could impose substantial burdens on the resources of APP and FK Holdings, divert management’s attention from domestic operations or otherwise harm their business, thereby having an adverse effect on FK Holdings’ ability to achieve the Adjusted EBITDA threshold required to trigger a payment under the CVR. Moreover, under the CVR indenture, revenue derived from the sale of products outside North America is excluded in calculating Adjusted EBITDA.

APP may be required to indemnify Abraxis BioScience, Inc. and may not be able to collect on indemnification rights from Abraxis BioScience.

Under the terms of the separation and distribution agreement relating to the separation of Abraxis BioScience, Inc. from APP in November 2007, Abraxis BioScience agreed to indemnify APP from and after the spin-off with respect to all liabilities of the pre-separation company not related to APP’s business and the use by APP of any trademarks or other source identifiers owned by Abraxis BioScience. Similarly, APP agreed to indemnify Abraxis BioScience from and after the spin-off with respect to all liabilities of the pre-separation company related to APP’s business and the use by Abraxis BioScience of any trademarks or other source identifiers owned by APP. Under the terms of a tax allocation agreement relating to the separation of Abraxis BioScience from APP, Abraxis BioScience agreed to indemnify APP against all tax liabilities to the extent they relate to the proprietary products business, and APP agreed to indemnify Abraxis BioScience against all tax liabilities to the extent they relate to the hospital-based products business. In addition, Abraxis BioScience agreed to indemnify APP against any tax liability arising as a result of the spin-off failing to qualify as a tax-free distribution unless such tax liability is imposed as a result of an acquisition of APP, including the merger, or certain other specified acts of APP. Under the terms of a manufacturing agreement relating to the separation of Abraxis BioScience from APP, Abraxis BioScience agreed to indemnify APP from any damages resulting from a third-party claim caused by or alleged to be caused by (i) Abraxis BioScience’s failure to perform its obligations under the manufacturing agreement; (ii) any product liability claim arising from the negligence, fraud or intentional misconduct of Abraxis BioScience or any of its affiliates or any product liability claim arising from Abraxis BioScience’s manufacturing obligations (or any failure or deficiency in Abraxis BioScience’s manufacturing obligations) under the manufacturing agreement; (iii) any claim that the manufacture, use or sale of APP’s pipeline products infringes a patent or any other proprietary right of a third party; or (iv) any recall, product liability claim or other third-party claim not arising from the gross negligence or bad faith of, or intentional misconduct or intentional breach of the manufacturing agreement by, APP by reason of the $100 million limitation of liability described below. Abraxis BioScience also agreed to indemnify APP for liabilities that Abraxis BioScience becomes subject to as a result of Abraxis BioScience’s activities under the manufacturing agreement and for which Abraxis BioScience is not responsible under the terms of the manufacturing agreement. APP agreed to indemnify Abraxis BioScience from any damages resulting from a third-party claim caused by or alleged to be caused by (i) APP’s gross negligence, bad faith, intentional

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misconduct or intentional failure to perform its obligations under the manufacturing agreement; or (ii) any product liability claim arising from the gross negligence or bad faith of, or intentional misconduct or intentional breach of the manufacturing agreement by APP. APP generally will not have any liability for monetary damages to Abraxis BioScience or third parties in connection with the manufacturing agreement for damages in excess of $100 million in the aggregate. There are no time limits on when an indemnification claim must be brought and no other monetary limits on the amount of indemnification that may be provided. In addition, indemnification obligations could be significant. APP’s ability to satisfy any of these indemnification obligations will depend upon the future financial strength of APP. APP cannot determine whether it will have to indemnify Abraxis BioScience for any substantial obligations after the separation. In addition, APP and FK Holdings also cannot assure you that, if Abraxis BioScience becomes obligated to indemnify APP for any substantial obligations, Abraxis BioScience will have the ability to satisfy those obligations.

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THE PARTIES TO THE MERGER

APP Pharmaceuticals, Inc.

1501 East Woodfield Road, Suite 300 East

Schaumburg, IL 60173

Telephone: (847) 969-2700

APP is a fully-integrated pharmaceutical company that develops, manufactures and markets injectable pharmaceutical products with a primary focus on the oncology, anti-infective, anesthetic/analgesic and critical care markets. APP offers one of the most comprehensive product portfolios used in hospitals, long-term care facilities, alternate care sites and clinics within North America and manufactures a comprehensive range of dosage formulations.

For more information about APP, please visit its website at http://www.apppharma.com. APP’s website address is provided as an inactive textual reference only. The information provided on APP’s website is not part of this information statement/prospectus and is not incorporated by reference. APP common stock is publicly traded on the NASDAQ Global Select Market under the symbol “APPX.” For more information on APP, see the section entitled “Where You Can Find More Information.”

Fresenius SE

Else-Kroener-Strasse 1

61352 Bad Homburg v.d.H.

Germany

Telephone: +49 (6172) 608 0

Fresenius is a healthcare group with products and services for dialysis, hospital and medical care of patients at home. In addition, Fresenius focuses on hospital operations as well as on engineering and services for hospitals. The Fresenius group consists of Fresenius Medical Care, Fresenius Kabi, Fresenius Helios and Fresenius Vamed. The Fresenius group had total assets of €15,324 million as of December 31, 2007, and sales of €11,358 million for the year ending December 31, 2007, in each case determined in accordance with U.S. GAAP.

For more information about Fresenius, please visit its website at www.fresenius.com. Fresenius’ website address is provided as an inactive textual reference only. The information provided on Fresenius’ website is not part of this information statement/prospectus and is not incorporated by reference. Fresenius’ ordinary shares are publicly traded on the Official Market at the stock exchanges in Frankfurt, Düsseldorf and Munich under the symbol “FRE.”

Fresenius Kabi Pharmaceuticals Holding, Inc.

Else-Kroener-Strasse 1

61352 Bad Homburg v.d.H.

Germany

Telephone: +49 (6172) 608 0

FK Holdings is an indirect, wholly-owned subsidiary of Fresenius. FK Holdings was formed solely for the purpose of executing the merger, to act as the holding company of APP and to issue the CVRs. FK Holdings has not carried on any activities or operations to date, except for those activities incidental to its formation and undertaken in connection with the transactions contemplated by the merger agreement, and has no material assets, liabilities or operating history. Upon completion of the merger, APP will be a direct, wholly-owned subsidiary of FK Holdings.

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Fresenius Kabi Pharmaceuticals, LLC

Else-Kroener-Strasse 1

61352 Bad Homburg v.d.H.

Germany

Telephone: +49 (6172) 608 0

Merger Sub was formed solely for the purpose of facilitating the merger. Merger Sub has not carried on any activities or operations to date, except for those activities incidental to its formation and undertaken in connection with the transactions contemplated by the merger agreement. By operation of the merger, Merger Sub will be merged into APP, Merger Sub’s separate existence will cease and APP will be a direct, wholly-owned subsidiary of FK Holdings.

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THE MERGER

The following is a description of the material aspects of the merger. While we believe that the following description covers the material terms of the merger, the description may not contain all of the information that may be important to you. The discussion of the merger in this information statement/prospectus is qualified in its entirety by reference to the merger agreement, which is attached to this information statement/prospectus as Annex A and incorporated by reference into this document. We encourage you to read carefully this entire information statement/prospectus, including the merger agreement, for a more complete understanding of the merger.

Background of the Merger

On February 19, 2008, Dr. Soon-Shiong, APP’s Chairman and then-CEO, received an unsolicited telephone call from a senior executive of a company we refer to as potential acquiror A, inviting Dr. Soon-Shiong to a meeting on February 26, 2008. Dr. Soon-Shiong met with executives of potential acquiror A in New York on February 26, 2008. At the meeting, the executives of potential acquiror A expressed interest in exploring a potential acquisition of APP, and Dr. Soon-Shiong and potential acquiror A’s executives discussed general industry trends and the potential strategic fit of their two companies. Following this meeting, APP sent a draft confidentiality agreement to potential acquiror A on February 28, 2008.

On February 29, 2008, Dr. Soon-Shiong received an unsolicited telephone call from a senior executive of a company we refer to as potential acquiror B expressing interest in exploring strategic opportunities with APP. This telephone call was followed up by a call on March 7, 2008, from the senior executive of potential acquiror B to Dr. Soon-Shiong to invite him to meet with potential acquiror B’s CEO and other members of potential acquiror B’s leadership team to discuss strategic opportunities.

On March 11, 2008, Dr. Soon-Shiong met with potential acquiror B’s CEO and other members of potential acquiror B’s leadership team in Boston to discuss strategic opportunities. A representative of Lazard also attended this meeting. At the meeting, the leadership team of potential acquiror B informed Dr. Soon-Shiong that APP had been under their internal review for some time and the parties discussed general industry trends and the potential strategic fit of their two companies.

On March 19, 2008, Dr. Soon-Shiong, Mr. Richard Maroun, general counsel of APP, and representatives of Lazard, Goldman Sachs, and Fried, Frank, Harris, Shriver & Jacobson LLP, counsel to APP, which we refer to as Fried Frank, and executives of potential acquiror B and its advisors participated in a telephone conference regarding potential acquiror B’s interest in exploring strategic opportunities with APP and various due diligence matters. On March 28, 2008, Dr. Soon-Shiong met in Los Angeles with potential acquiror B’s CEO and another member of potential acquiror B’s leadership team. At the meeting, potential acquiror B’s CEO reiterated potential acquiror B’s interest in exploring a transaction with APP and the parties discussed generally potential strategic opportunities and the strategic fit of their two companies.

On March 31, 2008, a member of potential acquiror B’s management sent a letter to Dr. Soon-Shiong stating that potential acquiror B had been internally discussing a potential transaction with APP for several months and that potential acquiror B was very interested in further exploring the opportunity for a potential transaction with APP. The letter requested that APP execute and return to potential acquiror B a draft confidentiality agreement. On the same date, a representative of potential acquiror B sent an email to a representative of Lazard regarding initial diligence items that potential acquiror B would require to evaluate the possibility of a potential acquisition of APP.

During the week of March 31, 2008, a representative of Lazard received an unsolicited telephone call from a private equity firm we refer to as potential acquiror C, expressing its interest in exploring a potential transaction with APP.

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On April 2, 2008, at a special meeting of APP’s board of directors, Dr. Soon-Shiong described to the board of directors the unsolicited expressions of interest that APP had received from potential acquirors A and B. At the meeting, the board of directors authorized Dr. Soon-Shiong and APP management to undertake further discussions with the potential acquirors regarding strategic opportunities and execute confidentiality agreements if necessary and subsequently share confidential information with potential acquirors. APP’s board of directors also authorized the engagement of Lazard and Goldman Sachs as financial advisors to assist APP in evaluating potential acquirors’ expressions of interest. That same day, potential acquiror A sent Dr. Soon-Shiong a letter indicating its interest in evaluating a possible business transaction with APP. The letter was accompanied by an executed confidentiality agreement.

On April 8, 2008, APP’s board of directors held a special meeting to discuss the unsolicited expressions of interest that APP had received from potential acquirors. Representatives of Goldman Sachs, Lazard and Fried Frank were present at the meeting. At the meeting, representatives of Fried Frank discussed with the APP directors their fiduciary duties in evaluating a potential business combination involving APP. Also, at the meeting, Goldman Sachs and Lazard identified other companies that might be interested in acquiring APP, including Fresenius, and discussed making these other companies aware that APP was currently reviewing indications of interest which it had received and that they should contact APP if they were interested in pursuing a potential transaction.

During the week of April 8, 2008, after discussions with its financial advisors, APP concluded that potential acquiror C, as a financial acquiror, was unlikely to be able to realize meaningful synergies or other strategic benefits from an acquisition of APP. In light of the foregoing and the difficult financing market faced by private equity firms, APP, together with its financial advisors, determined that potential acquiror C was unlikely to be able to make an attractive proposal to acquire APP and declined to pursue discussions with potential acquiror C.

On April 11, 2008, potential acquiror B’s legal counsel and Fried Frank met to discuss various due diligence matters.

On April 14, 2008, Goldman Sachs and Lazard delivered a confidential information memorandum containing non-public information regarding APP’s financial condition to potential acquirors A and B, respectively.

On April 16, 2008, Dr. Soon-Shiong and representatives of Goldman Sachs and Lazard met with representatives of potential acquiror B in Los Angeles to discuss APP’s business and future prospects and to respond to due diligence questions from potential acquiror B. Beginning on April 18, 2008, APP granted potential acquiror B and its legal and financial advisors access to due diligence materials in APP’s on-line data room.

In mid-April 2008, representatives of Lazard and Goldman Sachs informed the other companies viewed as potentially having an interest in pursuing a transaction with APP and discussed at the April 8 board meeting, including Fresenius, on a confidential basis that APP had received indications of interest regarding a potential acquisition of APP. In the case of Fresenius, a Lazard representative advised Fresenius that it should inform a representative of Lazard or APP if it was interested in exploring a potential business combination with APP. On April 21, 2008, a representative of Fresenius contacted a representative of Lazard to indicate Fresenius’s interest in a potential transaction with APP. On the same day, Dr. Ulf M. Schneider, Chief Executive Officer of Fresenius, sent a letter to Dr. Soon-Shiong requesting a meeting to discuss the possibility of business cooperation between Fresenius and APP. Thereafter, APP sent a draft confidentiality agreement to Fresenius.

On April 22, 2008, Dr. Soon-Shiong and representatives of Goldman Sachs and Lazard met with representatives of potential acquiror A in Los Angeles to discuss APP’s business and future prospects and to respond to due diligence questions from potential acquiror A. Beginning on April 23, 2008, APP granted potential acquiror A and its legal and financial advisors access to the due diligence materials maintained in APP’s on-line data room.

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On April 25, 2008, APP received an executed confidentiality agreement from Fresenius and on April 26, 2008 Lazard delivered the confidential information memorandum to Fresenius.

During the week of April 28, 2008, a representative of Lazard received an unsolicited telephone call from a company we refer to as potential acquiror D, expressing interest in exploring a potential acquisition of APP. On May 1, 2008, APP sent a draft confidentiality agreement to potential acquiror D. Beginning on May 1, 2008, APP granted Fresenius access to the due diligence materials maintained in APP’s online data room.

On May 2, 2008, Dr. Soon-Shiong and representatives of Goldman Sachs and Lazard met with representatives of Fresenius in Los Angeles to discuss APP’s business and future prospects and to respond to due diligence questions from Fresenius.

During the week of May 5, 2008, Goldman Sachs and Lazard distributed a letter to Fresenius and potential acquirors A and B indicating to each that APP had received multiple expressions of interest in a transaction with APP and, if those parties remained interested in a potential transaction with APP, instructions for delivering a non-binding acquisition proposal to APP.

On May 9, 2008, Mr. Maroun of APP and representatives of Fried Frank, Goldman Sachs and Lazard participated in a due diligence telephone conference with representatives of potential acquiror A.

On May 13, 2008, Mr. Maroun of APP and representatives of Fried Frank, Goldman Sachs and Lazard participated in a due diligence telephone conference with representatives of Fresenius.

On May 16, 2008, Fresenius submitted a letter to Goldman Sachs and Lazard in which it outlined a non-binding, preliminary proposal, subject to further due diligence, to acquire the outstanding shares of APP common stock. The letter indicated that Fresenius had retained Deutsche Bank AG, which we refer to as Deutsche Bank, as its financial advisor and Skadden, Arps, Slate, Meagher & Flom (UK) LLP, which we refer to as Skadden Arps, as its legal counsel. This initial proposal contemplated the acquisition by Fresenius of 90% of the outstanding shares of APP common stock at a price per share of $20 in cash plus a CVR with a maximum payout of $6.66 per share based on APP achieving certain Adjusted EBITDA targets over an unspecified period. This proposal also required that Dr. Soon-Shiong and entities affiliated with him, who collectively hold approximately 81.1% of the outstanding shares of APP common stock and who we refer to as the “principal stockholders,” agree to “rollover” shares of APP representing 10% of the outstanding shares of APP common stock into equity interests of a subsidiary of Fresenius that would own 100% of the outstanding shares of APP after the proposed transaction. That same day, potential acquiror B also submitted a letter to Dr. Soon-Shiong in which it outlined a non-binding, preliminary proposal, subject to further due diligence, to acquire 100% of the outstanding shares of APP common stock.

On May 23, 2008, potential acquiror A submitted a letter to Dr. Soon-Shiong in which it outlined a non-binding, preliminary proposal, subject to further due diligence, to acquire 100% of the outstanding shares of APP common stock.

In the morning of May 26, 2008, Dr. Schneider and Mr. Stefan Sturm, Chief Financial Officer of Fresenius, met Dr. Soon-Shiong in Los Angeles to explain the Fresenius non-binding proposal in more detail.

During the week of May 26, 2008, representatives of Fresenius attended management presentations with the senior management of APP in Schaumburg, Illinois and visited the Melrose Park, Illinois facilities.

Also during the week of May 26, 2008, a representative of Lazard received a telephone call from a representative of potential acquiror D reiterating potential acquiror D’s interest in exploring a potential acquisition of APP. On May 27, 2008, potential acquiror D delivered an executed confidentiality agreement to

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APP. APP, through its advisors, provided potential acquiror D a copy of the confidential information memorandum and asked potential acquiror D to provide an indication of the value it attributed to APP’s business within one week. Potential acquiror D did not submit a formal indication of interest, but orally provided to APP’s advisors a range of the value it ascribed to APP’s business.

On May 28, 2008, at a special meeting of the board of directors of APP, Dr. Soon-Shiong provided the board an update regarding the proposals that APP received from Fresenius and potential acquirors A and B. After discussion, the board of directors of APP authorized management together with APP’s financial advisors to more fully analyze the indications of interest.

During the week of June 2, 2008, representatives of Fresenius visited APP’s Grand Island, New York and Puerto Rico manufacturing facilities.

Also, during the week of June 2, 2008, after discussions with its advisors, and on the basis of potential acquiror D’s proposed range of values for APP’s business as well as perceived potential regulatory barriers, APP, together with its advisors, concluded that it should discontinue discussions with potential acquiror D. Accordingly, Goldman Sachs, on behalf of APP, informed potential acquiror D that APP would not explore a potential transaction with potential acquiror D.

On June 6, 2008, drafts prepared by Fried Frank of a merger agreement and voting agreement to be executed by the principal stockholders were circulated to Fresenius and potential acquirors A and B.

On June 9, 2008, Fresenius submitted a letter to Goldman Sachs and Lazard in which it outlined a revised non-binding proposal to acquire the outstanding shares of APP common stock. The proposal was conditioned upon Fresenius being granted an exclusivity period to negotiate a potential transaction with APP until June 30, 2008. Fresenius subsequently revoked this non-binding proposal when APP declined to grant Fresenius the negotiating exclusivity within the time period specified in Fresenius’ June 9 letter.

From June 9 to June 13, 2008, potential acquiror A attended management presentations with APP’s senior management in Schaumburg, Illinois and conducted site visits at APP’s facilities. From June 10 to June 17, 2008, potential acquiror B attended management presentations with APP’s senior management in Schaumburg, Illinois and conducted site visits at APP’s facilities.

On June 11, 2008, potential acquiror A’s legal counsel and Fried Frank met to discuss various due diligence matters.

On June 16, 2008, at a special meeting of the APP board, representatives of Goldman Sachs and Lazard discussed with the board the terms of the non-binding proposals received from Fresenius and potential acquirors A and B, including the terms of Fresenius’ proposed CVR and rollover. Goldman Sachs and Lazard also reviewed with the board preliminary financial analyses of APP.

At this meeting, the board determined that, in light of the non-binding proposals, and in particular, the fact that the Fresenius proposal contemplated a “rollover” that was potentially beneficial to the principal stockholders and which was not being offered to other APP stockholders, it was appropriate to establish a special committee of independent directors, comprised of Michael Blaszyk and Stuart DePina, to assist the board in evaluating the proposals and any other alternatives that reasonably might be available to APP, including continuing to conduct business as a stand-alone company, and to make a recommendation to the board as to whether any of these proposals or any available alternatives should be approved and pursued. Each member of the special committee will receive a one-time fee of $50,000 for his service on the special committee.

On June 17, 2008, Goldman and Lazard provided Fresenius and potential acquirors A and B with a request for these parties to submit their final acquisition proposals by the end of the week of June 23, 2008.

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On June 20, 2008, representatives of Fresenius, Skadden Arps and Deutsche Bank met with representatives of APP, Fried Frank, Bingham McCutchen LLP, which we refer to as Bingham McCutchen (as legal advisors to the special committee), Goldman Sachs and Lazard at the New York offices of Fried Frank to discuss the draft merger agreement and aspects of Fresenius’ earlier non-binding proposal. Also, on June 20, 2008, representatives of Fried Frank, Goldman Sachs and Lazard participated in a conference call with legal and financial advisors of potential acquiror B to discuss possible terms of a transaction with potential acquiror B.

In the evening of June 20, 2008, Dr. Soon-Shiong met Dr. Schneider in New York to explain the expected next steps in the proposed process.

On June 23, 2008, Skadden Arps delivered to Fried Frank a markup of the draft merger agreement and voting agreement as well as draft term sheets and agreements for the CVRs and the proposed rollover for the principal stockholders. The draft agreements provided for the execution by the principal stockholders of an action by written consent approving and adopting the merger agreement immediately after its execution, thereby approving the merger without the necessity of a subsequent vote of APP’s stockholders, provided for a 15-business day period after signing (extendable by up to 3 additional business days in certain circumstances) during which APP’s board of directors could terminate the agreement to accept a superior acquisition proposal, and prohibited the principal stockholders from engaging in discussions with a third party that made an unsolicited proposal even in circumstances where APP would be permitted under the merger agreement to engage in those discussions. The draft term sheet for the CVRs provided that the CVRs would not be transferable and would not be listed. Skadden Arps also delivered a draft non-competition agreement that Fresenius requested be executed by Dr. Soon-Shiong.

On June 24, 2008, the special committee held a telephonic meeting that was attended by representatives of Bingham McCutchen, Goldman Sachs and Lazard. The special committee reviewed and discussed with Bingham McCutchen, Goldman Sachs and Lazard the terms of the non-binding proposals received from Fresenius and potential acquirors A and B and other relevant matters. Among other things, the meeting participants reviewed and discussed the value of consideration proposed to be paid by Fresenius and the other potential acquirors, the restrictions on APP’s ability to solicit or respond to other transaction proposals that would likely be included in any definitive merger agreement, the differences between the consideration proposed to be paid under the Fresenius proposal for 90% of APP’s outstanding shares and the terms of Fresenius’ proposed rollover by the principal stockholders, and whether other strategic or financial buyers might be willing or able to consummate a transaction at a higher value than the indicative value reflected in the proposals. At this meeting, the special committee formally approved the retention of Bingham McCutchen to act as its legal advisors. In light of Goldman Sachs and Lazard’s involvement with the process and familiarity with APP, the special committee requested that Goldman Sachs and Lazard be engaged to act as financial advisors to the special committee.

At the June 24th meeting, the special committee also discussed with representatives of Goldman Sachs and Lazard the potential risks and implications of continuing to conduct APP’s business on a stand-alone basis. Representatives of Goldman Sachs and Lazard also reviewed with the special committee the financial analyses previously presented by Goldman Sachs and Lazard at a June 16th meeting of the full board. The special committee also discussed with representatives of Goldman Sachs, Lazard and Bingham McCutchen the structure, terms and payout schedule of the CVRs and the rollover contemplated by the Fresenius proposal. At this meeting, representatives of Bingham McCutchen reviewed with the special committee the general fiduciary obligations of directors of a Delaware corporation and the specific fiduciary duties and standards implicated in the context of a sale transaction. In particular, Bingham McCutchen reviewed and discussed with the special committee the board’s obligation to pay particular attention to the interests of APP’s minority stockholders, should a sale of APP be deemed appropriate to pursue, given the voting control of the principal stockholders over APP. The special committee determined that, notwithstanding that at this time no decision had been made to sell APP or to pursue any specific transaction, it would be beneficial and consistent with maximizing value for the minority stockholders if the terms of any definitive sale transaction, should one be pursued, did not contain a materially different mix of consideration for the principal stockholders than would be paid to the other APP stockholders.

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On June 24, 2008, representatives of Fried Frank and Bingham McCutchen participated in a telephone conference with representatives of Skadden Arps to provide comments to Skadden Arps on the draft agreements and the CVR and rollover terms sheets furnished by Skadden Arps. On the conference call, representatives of Fried Frank and Bingham McCutchen communicated to Skadden Arps, among other things, that the special committee thought it would be advisable for Fresenius to either eliminate the rollover feature or make it available to all stockholders of APP and for APP’s board of directors to have a period longer than the 15 business days proposed to terminate the merger agreement to accept a superior proposal. On June 25, 2008, Fried Frank distributed to Skadden Arps a revised term sheet for the proposed rollover providing, among other things, that all APP stockholders would have the right to elect to participate in the rollover and that the principal stockholders would elect to participate for a sufficient number of APP shares to ensure that no less than 10% of the outstanding shares of APP common stock would participate in the rollover.

On June 25, 2008, representatives of Fried Frank, Bingham McCutchen, Goldman Sachs and Lazard held a telephone conference with representatives of potential acquiror B to discuss the draft merger agreement previously provided by Fried Frank as well as other possible terms of a transaction with potential acquiror B.

On June 26, 2008, Fresenius submitted a letter to Goldman Sachs and Lazard proposing to acquire 90% of the outstanding shares of APP common stock at a price per share of (i) $23 in cash and (ii) a CVR with a maximum payout of up to an additional $6.00 per share to the extent that the Adjusted EBITDA of APP’s business for the three years ending December 31, 2010, exceeds $1.2677 billion. The proposal contemplated the rollover by the principal stockholders of shares representing 10% of the outstanding shares of APP common stock, but did not provide an opportunity for APP’s other stockholders to participate in the rollover. The proposal letter was accompanied by a revised markup of the merger agreement and voting agreement and written consent as well as revised term sheets and agreements for the CVRs and the proposed rollover. The revised markup of the merger agreement provided for a 20-business day period after signing (extendable by up to 10 additional business days in certain circumstances) during which APP’s board of directors could terminate the agreement to accept a superior proposal, and included a proposal for a break-up fee of $185 million in the event that APP terminated the merger agreement under those circumstances. The revised term sheet for the CVRs provided that the CVRs would be registered with the SEC and listed for trading on an exchange. The proposal was also accompanied by commitment letters from Deutsche Bank to raise or arrange the equity and debt financing for the transaction. The proposal reiterated a request for exclusivity, and indicated that the offer would expire at 11:59 p.m. Eastern Daylight Time on June 28, 2008, if Fresenius were not by then granted negotiating exclusivity until July 11, 2008.

On June 26, 2008, a special meeting of the board of directors of APP was held to discuss the proposal submitted by Fresenius at which representatives of Goldman Sachs, Lazard, Fried Frank and Bingham McCutchen were present. At the meeting, representatives of Goldman Sachs, Lazard, Fried Frank and Bingham McCutchen discussed with the board the terms of the proposal submitted by Fresenius.

On June 27, 2008, potential acquiror A submitted a proposal to acquire all of the outstanding shares of APP common stock for a combination of shares of stock of potential acquiror A and cash. On the same day, potential acquiror B, through potential acquiror B’s financial advisors, orally requested the ability to delay submitting a proposal for two to three weeks in order to complete additional due diligence. Potential acquiror B had not previously indicated to APP or its advisors that it would not submit a proposal on June 27, 2008.

On June 27, 2008, a special meeting of the board of directors of APP was held to discuss the proposal submitted by Fresenius and potential acquiror A at which representatives of Goldman Sachs, Lazard, Fried Frank and Bingham McCutchen were present. At the meeting, representatives of Goldman Sachs, Lazard, Fried Frank and Bingham McCutchen discussed with the board the terms of the proposals submitted by Fresenius and potential acquiror A and the request by potential acquiror B for an additional two to three weeks to submit an acquisition proposal. The APP board determined, after consultations with its advisors, that the Fresenius proposal was more attractive than the proposal submitted by potential acquiror A because the Fresenius proposal provided

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APP stockholders with greater value and the opportunity to participate in the upside of the APP business through the CVR. Also at this meeting, Goldman and Lazard noted that they believed they had contacted or been contacted by the most likely acquirors for APP. The board then discussed the exclusivity request submitted by Fresenius in connection with its proposal and instructed Goldman Sachs, Lazard and Fried Frank to communicate to Deutsche Bank and Skadden Arps that APP’s board of directors would be willing to enter into an exclusivity agreement with Fresenius if, among other things, Fresenius would agree to eliminate the proposed rollover by the principal stockholders, provide APP’s board of directors a longer period in which to terminate the merger agreement to accept a superior proposal and reduce the amount of its proposed break-up fee. Later that evening, Goldman Sachs, Lazard and Fried Frank communicated the board’s position to Deutsche Bank and Skadden Arps.

Also on June 27, 2008, special committee member Mr. Blaszyk, who was unable to participate in the earlier board meeting, held a telephonic discussion with representatives of Bingham McCutchen, Goldman Sachs and Lazard to discuss the terms and status of the bid process, including the proposal submitted by Fresenius. During this discussion, representatives of Goldman Sachs and Lazard reviewed with Mr. Blaszyk the matters discussed at the board meeting earlier that day. Representatives of Bingham McCutchen also relayed that the Fresenius proposal included a requirement that APP agree to negotiate exclusively with Fresenius. The participants in the meeting discussed further the indicative value and other terms and conditions of the Fresenius proposal as compared to the proposal received from potential acquiror A and the non-binding proposal previously received from potential acquiror B, including the risks that the Fresenius proposal might be withdrawn if the requested exclusive negotiating rights were not granted.

In the morning of June 28, 2008, Deutsche Bank communicated to Goldman Sachs and Lazard that Fresenius had agreed to eliminate the rollover feature and would be flexible on the other points communicated on behalf of APP’s board of directors. Deutsche Bank reiterated Fresenius’ insistence on an exclusivity period extending through July 11, 2008.

Later that morning, the special committee held a telephonic meeting with representatives of Bingham McCutchen, Goldman Sachs and Lazard to discuss Deutsche Bank’s communication that morning. It was noted that Fresenius had agreed to eliminate the rollover feature. In light of this concession and the other terms and conditions of the proposal submitted by Fresenius, the special committee resolved to recommend to the board of directors that Fresenius be granted exclusivity through July 11, 2008.

In the afternoon of June 28, 2008, a special meeting of the board of directors of APP was held to discuss the communications between Deutsche Bank and Goldman Sachs and Lazard. After discussion, the board, with the unanimous recommendation of the special committee, authorized APP to execute an exclusivity agreement with Fresenius extending through July 11, 2008. Also in the afternoon of June 28, 2008, Lazard, at the direction of APP, informed potential acquiror B and its financial advisors that APP had elected to pursue exclusive negotiations with another party and consequently would not entertain potential acquiror B’s request for additional time to complete due diligence. That same afternoon, potential acquiror A was also notified by Goldman Sachs that APP had elected to pursue exclusive negotiations with another party. In the morning of June 29, 2008, Dr. Schneider met Dr. Soon-Shiong in Los Angeles to explain Fresenius’ position on its binding proposal. At this meeting, Dr. Soon-Shiong explained the position of APP’s board of directors. On June 29, 2008, APP executed the requested exclusivity agreement.

On June 30, 2008, the special committee held a telephonic meeting to review with senior management of APP their views as to the prospects of, and risks to, APP continuing to operate on a stand-alone basis. At that meeting, the special committee discussed with APP management APP’s business and future prospects, including historic experiences in obtaining regulatory approvals for new product launches, management’s current views as to APP’s future position in therapeutic heparin in the United States, the principal competitive pressures that APP currently faces and that management believed could be reasonably anticipated to face in the next few years.

During the week of June 30, 2008, representatives of Fried Frank, Skadden Arps and Bingham McCutchen exchanged numerous drafts of the merger agreement and related disclosure schedules, the CVR indenture and

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other related documents, including a consulting agreement with Dr. Soon-Shiong proposed by Fresenius, and made substantial progress toward finalizing the definitive documentation for the transaction. Among the key issues subject to negotiation were the period after signing of the merger agreement during which APP’s board of directors would be permitted to terminate the merger agreement to accept a superior proposal (with the parties agreeing to a period of 25 business days, subject to extension for an additional 15 business days) and the size of break-up fee payable by APP in the event of such a termination (with the parties agreeing to a $140 million fee). In addition, APP insisted on including an obligation of Fresenius to execute definitive financing agreements as soon as reasonably practicable following the signing of the merger agreement and to use commercially reasonable efforts to extend the term of the debt portion of the financing through June 30, 2009. Furthermore, APP negotiated an optional extension of the termination date specified in the merger agreement from March 31, 2009 to June 30, 2009, if certain conditions are met. Fresenius, Deutsche Bank (in its capacity as Fresenius’ financing arranger) and its advisors also completed their due diligence review, which included telephonic due diligence meetings with representatives of APP management, Goldman Sachs and Lazard.

On July 5, 2008, the special committee held a telephonic meeting to discuss the status of negotiations of the transaction documentation, to review the transaction timeline and certain financial analyses of the Fresenius proposal, and to discuss and consider potential advantages and disadvantages of entering into a transaction with Fresenius. In particular, the special committee and representatives of Bingham McCutchen, Goldman Sachs and Lazard discussed the size of the proposed termination fee, which had decreased from $185 million to $140 million in the course of the negotiations, and the length of the proposed period during which APP’s board of directors could terminate the merger agreement to accept a superior proposal, which had increased from a 15-business day period (extendable by up to 3 additional business days) to a 25-business day period (extendable by up to 15 additional business days). The participants in the meeting also discussed the fact that the Fresenius proposal no longer included the requirement for a rollover by the principal stockholders, that the principal stockholders and the other stockholders of APP would all receive the same consideration in the merger, including CVRs, which would be registered securities that would be publicly tradable. The meeting participants also discussed that under the Fresenius proposal, Dr. Soon-Shiong, unlike the other stockholders of APP, would be required to enter into non-competition and consulting agreements with Fresenius, and that at the request of Fresenius he would sit on the board of directors of the company owning the surviving entity. It was noted, however, that the non-competition agreement represented a restriction on Dr. Soon-Shiong (and therefore was not a material benefit to him not shared by the minority stockholders), that payments to be received by Dr. Soon-Shiong under the consulting agreement were customary, would be for consulting services to be provided by Dr. Soon-Shiong following the merger and would not be a material inducement to Dr. Soon-Shiong, when compared to the total consideration to be received by the principal stockholders, as stockholders, under the merger agreement, and that the consulting arrangement and his board seat was proposed by Fresenius, not having been sought by Dr. Soon-Shiong. At this meeting, representatives of Bingham McCutchen reviewed again with the special committee the general fiduciary obligations of directors of a Delaware corporation, and those specific duties implicated in a sale transaction that involves a majority stockholder. The special committee also discussed further with representatives of Bingham McCutchen the current terms and conditions of the Fresenius proposal, including specific deal protection provisions which would prohibit APP from soliciting other acquisition proposals, and would require APP to pay a termination fee to Fresenius if APP were to terminate the merger agreement to accept a superior proposal.

On July 6, 2008, the special committee held a telephonic meeting with representatives of Bingham McCutchen, Goldman Sachs, Lazard and Fried Frank to discuss and consider the negotiated terms of the transaction documents, to complete the special committee’s review and consideration of the proposed merger agreement, and to seek to reach a final determination of the special committee’s views on the merger agreement and the proposed merger as well as the special committee’s recommendation that APP’s board of directors either approve or reject the merger agreement and the proposed merger. Representatives of Goldman Sachs and Lazard discussed and responded to additional questions and requests for clarification from the special committee regarding the financial analyses previously presented to and discussed with the special committee, as well as the views of Goldman Sachs and Lazard on the relative risks and benefits of entering into a sale transaction at this

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time. Following further discussion, Goldman Sachs and Lazard orally rendered their respective fairness opinions, which subsequently were confirmed in writing as described below in “The Merger—Opinions of Financial Advisors to APP,” to the effect that, as of July 6, 2008, subject to the qualifications, limitations and assumptions reflected in their respective written opinions, the merger consideration proposed to be received by the stockholders of APP (other than the principal stockholders) pursuant to the merger agreement was fair, from a financial point of view, to such stockholders.

Following additional discussion, after considering, among other things, the factors described below under “The Merger—Reasons for the Merger—Recommendation of the Special Committee of Independent Directors of the APP Board of Directors” the members of the special committee unanimously determined the terms of the definitive merger agreement and the merger contemplated thereby to be advisable, fair to and in the best interests of APP and its stockholders, and further unanimously resolved to recommend that APP’s full board of directors approve the merger agreement and the merger.

Following the special committee meeting, a meeting of APP’s board of directors was convened. At the meeting, representatives of Fried Frank reviewed the fiduciary duties of APP’s directors in considering whether to approve the transaction with Fresenius. Representatives of Goldman Sachs and Lazard then presented their financial analyses of APP and orally rendered their respective fairness opinions, which subsequently were confirmed in writing as described below under “The Merger—Opinions of Financial Advisors to APP,” to the effect that, as of July 6, 2008, subject to the qualifications, limitations and assumptions reflected in their respective written opinions, the merger consideration proposed to be received by the stockholders of APP (other than the principal stockholders) pursuant to the merger agreement was fair, from a financial point of view, to such stockholders. Representatives of Fried Frank then reviewed the terms of the merger agreement and related documents. The special committee then reported on its recommendation of the merger agreement and the merger to the full board of directors and the reasons for its recommendation. After considering, among other things, the factors described below under “The Merger—Reasons for the Merger—The APP Board of Directors’ Reasons for the Merger,” the financial analyses and opinions of Goldman Sachs and Lazard and the recommendation of the special committee, APP’s board of directors adopted resolutions reflecting that the proposed terms of the merger agreement and other transaction documents, and the merger and other transactions contemplated thereby, are advisable, fair to and in the best interests of APP and its stockholders, adopting the merger agreement and other transaction documents, approving the merger and the other transactions contemplated thereby, and recommending that APP’s stockholders adopt the merger agreement and approve the merger and the other transactions contemplated thereby.

After the board meeting adjourned, Fried Frank and Skadden Arps finalized the definitive documentation for the transaction, and the merger agreement and related agreements were executed later that evening. The transaction was publicly announced in a press release issued on July 7, 2008.

Reasons for the Merger

APP Pharmaceuticals, Inc.

Recommendation of the Special Committee of Independent Directors of the APP Board of Directors

In making their determination and recommendation of the merger agreement and the merger, the members of the special committee relied upon, among other things, their personal knowledge of APP and its business and the industry in which APP operates, and consulted with APP’s management with respect to strategic and operational matters pertaining to APP deemed relevant to the members of the special committee for purposes of their determination and recommendation. The special committee also consulted with Bingham McCutchen, Goldman Sachs and Lazard with respect to matters the special committee determined to be reasonably within the experience and expertise of Bingham McCutchen, Goldman Sachs and Lazard, respectively. The special committee also reviewed the financial analyses prepared by Goldman Sachs and Lazard and the assumptions, sensitivities and applicable variables reflected in those analyses and discussed such matters with Goldman Sachs and Lazard.

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In determining to recommend that APP’s board of directors adopt a resolution approving the merger agreement and the merger, the special committee reviewed and considered a number of factors, including the following material considerations:

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The special committee also specifically considered the following terms of the merger agreement:

In addition to the merger agreement, the special committee also reviewed, considered and discussed the terms and potential ramifications of the other transaction documents proposed to be executed in connection with the merger agreement, including the voting agreement and written consent pursuant to which the principal stockholders would approve the merger agreement (unless the merger agreement were subsequently terminated in accordance with its terms), the form of CVR indenture, the equity commitment letter pursuant to which Fresenius would agree to make an equity commitment to FK Holdings to support the payment obligations on the CVRs, the non-competition agreement pursuant to which Dr. Soon-Shiong would agree to certain restrictions on his ability to take specified actions that would compete with APP’s business after the merger, and the consulting agreement pursuant to which Dr. Soon-Shiong would agree to provide certain consulting services to APP as the surviving corporation following the merger and serve as a board member of FK Holdings.

The special committee also considered and balanced against the generally favorable factors considered above, a variety of potential risks and other potentially unfavorable factors, including the following material considerations:

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The special committee weighed the potential benefits, advantages and opportunities presented by the proposed merger against the potential risks and other negative factors described above, and after considering such matters unanimously determined the merger agreement and the merger to be advisable, fair to and in the best interests of APP and its stockholders, and unanimously determined to recommend that APP’s board of directors adopt a resolution approving the merger agreement and the merger. The foregoing discussion of the information and factors considered by the special committee in making their determination and recommendation as to the merger agreement and the merger is not intended to be exhaustive, but addresses the principal information and factors considered by the special committee in its review, evaluation and recommendation of the merger agreement and the merger. In reaching its conclusion, and in making its recommendation to the members of APP’s board of directors, the special committee did not find it practicable to assign, and did not assign, any relative or specific weight to the range of information and the many positive and negative factors that were considered, and individual members of the special committee may have given different weight to different factors.

The APP Board of Directors’ Reasons for the Merger

In reaching its decision to approve the merger agreement and approve the merger, the APP board of directors consulted with APP’s management and APP’s legal and financial advisors. In reaching its conclusion that the merger is advisable, fair to and in the best interests of the stockholders of APP, the APP board of directors considered a variety of factors, including the following:

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In the course of its deliberations, the APP board of directors also considered a variety of risks and other potentially negative factors, including the following:

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The foregoing discussion of the information and factors considered by the APP board of directors is not exhaustive but is intended to reflect the material factors considered by the APP board of directors. The APP board of directors did not quantify or assign any relative or specific weight to the various factors that it considered. Rather, the APP board of directors based its recommendation on the totality of the information presented to and considered by it. In addition, individual members of the APP board of directors may have given different weights to different factors.

After careful consideration and acting upon the unanimous recommendation of the special committee of APP’s independent directors, at a special meeting held on July 6, 2008, the APP board of directors determined that the merger and the other transactions contemplated by the merger agreement are advisable, fair to and in the best interests of the APP stockholders and approved the merger agreement.

Fresenius/FK Holdings

The merger represents an important step in Fresenius’ growth strategy. Through the acquisition of APP, Fresenius will gain entry into the U.S. pharmaceuticals market and will achieve a leading position in the global I.V. generics market. The North American platform provides further attractive growth opportunities for Fresenius’ existing product portfolio. Additionally, Fresenius will be able to market APP’s product range through its international marketing and sales network, enabling Fresenius to sell APP’s products globally.

Opinions of Financial Advisors to APP

Goldman, Sachs & Co.

Goldman Sachs rendered its opinion to the board of directors of APP and the special committee that, as of July 6, 2008, and based upon and subject to the factors and assumptions set forth therein, the merger consideration, taken in the aggregate, to be received by the holders (other than the principal stockholders) of shares of APP common stock pursuant to the merger agreement was fair from a financial point of view to such holders. Goldman Sachs subsequently confirmed its earlier opinion by delivery of a written opinion dated as of July 6, 2008.

The full text of the written opinion of Goldman Sachs, dated July 6, 2008, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex D. Goldman Sachs provided its opinion for the information and assistance of the special committee in connection with their consideration of the merger. The Goldman Sachs opinion is not a recommendation as to any action that an APP stockholder should take with respect to the merger.

In connection with rendering the opinion described above and performing its related financial analyses, Goldman Sachs reviewed, among other things:

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Goldman Sachs also held discussions with members of the senior management of APP regarding their assessment of the past and current business operations, financial condition and future prospects of APP. In addition, Goldman Sachs reviewed the reported price and trading activity for shares of APP common stock, compared certain financial and stock market information of APP with similar information for certain other companies the securities of which are publicly traded, and reviewed the financial terms of certain recent business combinations in the generic pharmaceutical industry specifically and in other industries generally and performed such other studies and analyses, and considered such other factors, as it considered appropriate.

Goldman Sachs relied upon and assumed, without assuming any responsibility for independent verification, the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by it. In that regard, Goldman Sachs assumed with APP’s consent that the forecasts have been reasonably prepared on a basis reflecting the best then available estimates and judgments of the management of APP. In addition, Goldman Sachs did not make any independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or off-balance-sheet assets and liabilities) of APP and was not furnished with any such evaluation or appraisal. Goldman Sachs also assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the merger would be obtained without any adverse effect on APP or Fresenius or on the expected benefits of the transaction in any way meaningful to its analysis. Goldman Sachs’ opinion did not address any legal, regulatory, tax or accounting matters.

As described above, Goldman Sachs’ opinion to the board of directors of APP and the special committee was one of many factors taken into consideration by the board of directors of APP and the special committee in making their determination to approve the merger agreement. Goldman Sachs’ opinion addressed only the fairness from a financial point of view, as of the date of its opinion, of the merger consideration, taken in the aggregate, to be received by the holders (other than the principal stockholders ) of shares of APP common stock pursuant to the merger agreement. Goldman Sachs did not express any view on, and its opinion did not address, any other term or aspect of the merger agreement or the merger, including, without limitation, the fairness of the merger to, or any consideration received in connection therewith by, the principal stockholders, the holders of any other class of securities, creditors or other constituencies of APP or Fresenius; nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of APP or Fresenius, or class of such persons in connection with the merger, whether relative to the merger consideration, taken in the aggregate, to be received by the holders pursuant to the merger agreement or otherwise. In addition, Goldman Sachs expressed no opinion as to the prices at which the CVRs would trade at any time. Goldman Sachs’ opinion was necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to Goldman Sachs as of, the date of its opinion and Goldman Sachs assumed no responsibility for updating, revising or reaffirming its opinion based on circumstances, developments or events occurring after the date of its opinion. Goldman Sachs’ advisory services and the opinion expressed in its opinion were provided for the information and assistance of the special committee in connection with their consideration of the merger and such opinion did not constitute a recommendation as to how any holder of shares of APP common stock should vote with respect to, or whether such holder should consent to, the merger or any other matter. Goldman Sachs’ opinion was approved by a fairness committee of Goldman Sachs.

Goldman Sachs and its affiliates are engaged in investment banking and financial advisory services, securities trading, investment management, principal investment, financial planning, benefits counseling, risk management, hedging, financing, brokerage activities and other financial and non-financial activities and services for various persons and entities. In the ordinary course of these activities and services, Goldman Sachs and its affiliates may at any time make or hold long or short positions and investments, as well as actively trade or effect transactions, in the equity, debt and other securities (or related derivative securities) and financial instruments (including bank loans and other obligations) of APP, Fresenius, FK Holdings and Merger Sub and any of their respective affiliates or any currency or commodity that may be involved in the merger for their own account and for the accounts of their customers. Goldman Sachs acted as financial advisor to the special committee in connection with, and participated in certain of the negotiations leading to, the merger. Goldman Sachs has provided certain investment banking and other financial services to APP and its affiliates from time to

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time, including acting as the advisor to the special committee of American Pharmaceutical Partners, a predecessor to Abraxis BioScience, Inc., in connection with the merger of APP and Abraxis in 2006. Goldman Sachs also extended a margin loan to APP’s chairman, Dr. Soon-Shiong, which is secured by certain of the principal stockholders’ shares of APP common stock (aggregate principal amount of $10,000,000, of which approximately $1,400,000 had been drawn as of the date of Goldman Sachs’ opinion), in June 2008, and Goldman Sachs may loan additional amounts to Dr. Soon-Shiong pursuant to a similar credit facility in the future. Goldman Sachs also may provide investment banking and other financial services to APP, Fresenius, FK Holdings and Merger Sub, Dr. Soon-Shiong and their respective affiliates in the future. In connection with the above-described services, Goldman Sachs has received, and may receive, compensation.

The special committee selected Goldman Sachs as one of its financial co-advisors because it is an internationally recognized investment banking firm that has substantial experience in transactions similar to the merger. Pursuant to a letter agreement dated April 3, 2008, the special committee engaged Goldman Sachs to act as its financial advisor in connection with the contemplated transaction(s) and agreed to pay Goldman Sachs a transaction fee equal to 0.4% of the aggregate consideration paid in such transaction, all of which is payable upon consummation of the transaction. In addition, the special committee has agreed to reimburse Goldman Sachs for its reasonable expenses and any expenses associated with Goldman Sachs’ working on the potential public offering of the APP common stock, arising in connection with this transaction, including attorneys’ fees and disbursements, plus any sales, use or similar taxes arising in connection with the engagement, and to indemnify Goldman Sachs and related persons against various liabilities, including certain liabilities under the federal securities laws.

Lazard Frères & Co. LLC

Lazard rendered its opinion to the board of directors of APP and the special committee that, as of July 6, 2008, and based upon and subject to the factors and assumptions set forth therein, the merger consideration, taken in the aggregate, to be received by the holders (other than the principal stockholders) of shares of APP common stock pursuant to the merger agreement was fair from a financial point of view to such holders. Lazard subsequently confirmed its earlier opinion by delivery of a written opinion dated July 7, 2008.

The full text of the written opinion of Lazard, dated July 7, 2008, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex E. Lazard provided its opinion for the information and assistance of the board of directors of APP and the special committee in connection with their consideration of the merger. The Lazard opinion is not a recommendation as to any action that an APP stockholder should take with respect to the merger.

Lazard’s opinion was necessarily based on economic, monetary, market and other conditions as in effect on, and the information available to Lazard as of, the date of Lazard’s opinion. Lazard assumed no responsibility for updating or revising its opinion based on circumstances or events occurring after the date of Lazard’s opinion. Lazard did not express any opinion as to the price at which shares of APP common stock or CVRs may trade at any time subsequent to the announcement of the merger. The following is a summary of Lazard’s opinion. You are urged to read Lazard’s written opinion carefully in its entirety.

In connection with its opinion, Lazard:

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Lazard assumed and relied upon the accuracy and completeness of the foregoing information, without independent verification of such information. Lazard did not conduct any independent valuation or appraisal of any of the assets or liabilities (contingent or otherwise) of APP or concerning the solvency or fair value of APP, and Lazard was not furnished with such valuation or appraisal. With respect to the financial forecasts it reviewed, Lazard assumed, with the consent of APP, that they have been reasonably prepared on bases reflecting the best then currently available estimates and judgments of the management of APP as to the future financial performance of APP. Lazard assumed no responsibility for and expressed no view as to such forecasts or the assumptions on which they were based.

In rendering its opinion, Lazard assumed, with APP’s consent, that the merger would be consummated on the terms described in the merger agreement and certain related agreements, without any waiver or modification of any material terms or conditions. Lazard further assumed, with APP’s consent, that obtaining the necessary regulatory or third party approvals and consents for the merger would not have an adverse effect on APP or FK Holdings. Lazard did not express any opinion as to any tax or other consequences that might result from the merger, nor did Lazard’s opinion address any legal, tax, regulatory or accounting matters, as to which Lazard understood that APP obtained such advice as it deemed necessary from qualified professionals. Lazard expressed no view or opinion as to any terms or other aspects of the merger (other than the merger consideration to the extent expressly specified in Lazard’s opinion), including the related agreements. In addition, Lazard expressed no view or opinion as to the fairness of the amount or nature of, or any other aspects relating to, the compensation to any officers, directors or employees of any parties to the merger, or class of such persons, relative to the merger consideration or otherwise.

Lazard’s engagement and the opinion are for the benefit of the board of directors of APP and the special committee and Lazard’s opinion was rendered to the board of directors of APP and the special committee in connection with its evaluation of the merger. Lazard’s opinion was not intended to and did not constitute a recommendation to any holder of shares of APP common stock as to any action that an APP stockholder should take with respect to the merger or any matter relating thereto.

In connection with Lazard’s services as APP’s financial advisor, APP agreed to pay Lazard an aggregate fee of 0.4% of the aggregate consideration paid in the merger which is contingent upon the consummation of the merger. APP has also agreed to reimburse Lazard for all expenses incurred in connection with the engagement and to indemnify Lazard and certain related parties against certain liabilities under certain circumstances that may arise out of the rendering of its advice, including certain liabilities under U.S. federal securities laws. Lazard in the past provided investment banking services to APP and other entities controlled by Dr. Soon-Shiong, for which Lazard received compensation. In 2006, Lazard advised Abraxis BioScience, Inc. in connection with its co-promotion agreement with AstraZeneca plc and the merger of American BioScience, Inc. with and into American Pharmaceutical Partners, Inc. In addition, in the ordinary course of their respective businesses, affiliates of Lazard and LFCM Holdings LLC (an entity indirectly owned in large part by managing directors of Lazard) may actively trade securities of APP and/or the securities of Fresenius and certain of its affiliates for their own accounts and for the accounts of their customers and, accordingly, may at any time hold a long or short position in such securities. Lazard also may provide investment banking and other financial services to APP, Fresenius, FK Holdings and Merger Sub, Dr. Soon-Shiong and their respective affiliates in the future. The issuance of Lazard’s opinion was approved by the Opinion Committee of Lazard.

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Lazard is an internationally recognized investment banking firm providing a full range of financial advisory and other services. Lazard was selected to act as a financial advisor to APP because of its qualifications, expertise and reputation in investment banking and mergers and acquisitions, as well as its familiarity with the business of APP.

Lazard prepared analyses for the purpose of providing an opinion to APP’s board of directors and the special committee as to the fairness, from a financial point of view, of the merger consideration to be received by the holders (other than the principal stockholders) of shares of APP common stock pursuant to the merger agreement. The merger consideration to be received by the holders of shares of APP common stock pursuant to the merger agreement was determined through arm’s-length negotiations between APP and Fresenius and was approved by the board of directors of APP. Lazard did not recommend any specific merger consideration to the board of directors of APP (including the special committee) or to APP or that any given merger consideration constituted the only appropriate consideration for the merger.

The opinion of Lazard was one of many factors taken into consideration by the special committee and the board of directors of APP. Consequently, the analyses described below should not be viewed as determinative of the opinion of the special committee or the board of directors of APP with respect to the merger consideration or of whether the special committee or the board of directors of APP would have been willing to determine that a different merger consideration was fair. Additionally, Lazard’s opinion is not intended to confer any rights or remedies upon any employee or creditor of APP.

Financial Analyses by Financial Co-Advisors

The following is a summary of the material financial analyses delivered by Goldman Sachs and Lazard, which we refer to collectively as the “financial co-advisors,” to the board of directors of APP and the special committee in connection with rendering their respective opinions described above. The following summary, however, does not purport to be a complete description of the financial analyses performed by the financial co-advisors, nor does the order of analyses described represent relative importance or weight given to those analyses by the financial co-advisors. Some of the summaries of the financial analyses include information presented in tabular format. The tables must be read together with the full text of each summary and are alone not a complete description of the financial co-advisors’ financial analyses. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before July 3, 2008, and is not necessarily indicative of current market conditions.

The preparation of fairness opinions is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying the financial co-advisors’ opinions. In arriving at their respective fairness determination, the financial co-advisors considered the results of all of their analyses and did not attribute any particular weight to any factor or analysis considered by them. Rather, the financial co-advisors made their determination as to fairness on the basis of their experience and professional judgment after considering the results of all of their analyses. No company or transaction used in the analyses below as a comparison is directly comparable to APP or the merger.

The financial co-advisors prepared these analyses for purposes of their provision of their respective opinions to the board of directors of APP and the special committee as to the fairness from a financial point of view of the merger consideration, taken in the aggregate, to be received by the holders (other than the principal stockholders) of shares of APP common stock pursuant to the merger agreement to such holders. These analyses do not purport to be appraisals nor do they necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of APP, Goldman Sachs, Lazard or any other person assumes responsibility if future results are materially different from those forecast.

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