Salzgitter AG and Vallourec sign preliminary agreement regarding a possible acquisition of Vallourec's precision tubes activities

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Salzgitter (euro adhoc) - Salzgitter AG, Salzgitter and Vallourec SA,
Paris, signed a preliminary agreement regarding the intended
acquisition of Vallourec Précision Etirage (VPE), France, a 100%
subsidiary of Vallourec.

VPE is specialised in the manufacture of cold drawn precision tubes.
The expected sales for 2006 will reach approximately EUR 220 million,
two thirds being dedicated to the automotive industry and one third
to other specific industrial applications. The VPE operations include
five production plants in France and employ 1,230 people.

VPE's cold finishing operations shall complement Salzgitter's
existing precision tubes activities operated by its German subsidiary
MHP Mannesmann Präzisrohr (MHP) and its Dutch subsidiary, Mannesmann
Robur (ROB). The combined entity is supposed to take a leading role
in the respective European market.

As part of the project, Salzgitter also intends to acquire the German
hot- rolling tube mill in Zeithain (Saxony) from Vallourec, thus
enabling the newly combined business of MHP, ROB and VPE to be
largely autonomous regarding its supply of seamless tubes hollows as
feed stock. Zeithain already supplies the three entities with semi
finished material. The mill employs 350 people, the envisaged output
exceeds 200.000 tons of products per year in the mid term.

Both Partners are convinced of the need for consolidation in the
European precision tube market, which is mainly driven by the
necessity to meet the increasingly demanding requirements of the
relevant customer sectors.

The envisaged integration of VPE into Salzgitter's existing precision
tubes activities will expand the future potential for the combined
entities. Whilst MHP has a strong German client base, VPE enjoys an
excellent market position in France. Additionally, the contemplated
transaction shall generate considerable industrial and R&D synergies.

As a contribution to external growth, the expansion of Salzgitter's
tubes activities through the acquisition of VPE and Zeithain would
represent a perfect match within the guidelines of the Group's
strategy.

The project will be subject to the approval of the Salzgitter AG and
Vallourec respective supervisory boards. It will be presented to the
relevant employee representative bodies both in France and Germany.
Completion of the transaction is conditional upon a clearance
decision by the competent competition authorities.

end of announcement euro adhoc 13.12.2006 07:58:00
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ots Originaltext: Salzgitter AG
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:
Bernhard Kleinermann
Tel.: +49 (0) 5341-21-3783
E-Mail: kleinermann.b@salzgitter-ag.de

Branche: Iron & Steel
ISIN: DE0006202005
WKN: 620200
Index: MDAX, CDAX, HDAX, Midcap Market Index, Classic All Share,
Prime All Share
Börsen: Frankfurter Wertpapierbörse / official dealing/prime standard
Börse Berlin-Bremen / free trade
Hamburger Wertpapierbörse / free trade
Baden-Württembergische Wertpapierbörse / free trade
Börse Düsseldorf / free trade
Bayerische Börse / free trade
Niedersächsische Börse zu Hannover / official dealing


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