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Ad Hoc Releases, 2000-03-31, 02:00 AM

Supervisory Board submission of offer to buy Atecs Mannesmann

At its meeting today the Supervisory Board of Thyssen Krupp AG adopted the plan of the Executive Board to submit an offer to buy 100% of Atecs Mannesmann AG. After the Supervisory Board meeting this offer, as agreed and previously announced, was presented to the executive board of Mannesmann AG.

The offer covers the following main points:

・ Object
ThyssenKrupp submits an offer to buy 100% of the shares in Atecs Mannesmann AG including the entire worldwide business of VDO, Sachs, Rexroth, Dematic and Demag Krauss-Maffei. The offer does not extend to the areas clocks, tubes and other investments, including the investment in Ruhrgas AG.

・ Siemens / VDO joint venture
Clear strategic considerations militate in favor of a collaboration between Siemens and VDO in the planned joint venture. ThyssenKrupp assumes that even after an acquisition of Atecs Mannesmann the joint venture will be carried out jointly.

・ Partnership-based tie-up
Based on the talks held between ThyssenKrupp and Mannesmann the following key points will be part of an integration plan:

- Atecs Mannesmann remains as a unit with its own executive board and supervisory board for 2 to 3 years.

- During this time ThyssenKrupp intends to continue the concentration on the core businesses automotive supply activities, elevators and the machinery businesses resolved by ThyssenKrupp and to further develop the services business. In parallel with this, the flotation of ThyssenKrupp Steel will be implemented.

- As a result of the flotation of Steel and the intended sale of non-core activities of ThyssenKrupp the purchase price for Atecs Mannesmann will be substantially reduced after 2 to 3 years.

- In this time Atecs Mannesmann can generally continue the strategies resolved for all five activities. A sale of activities of Atecs Mannesmann to finance the purchase price is neither planned nor necessary. Industrially motivated changes to the portfolio overall will not be affected.

- The compensation systems currently practiced at ThyssenKrupp and Mannesmann, e.g. stock options and phantom stocks, are to remain, in harmonized form, part of a compensation system in the future.

- The chairman of the supervisory board and the chairman of the executive board of Atecs Mannesmann are to be members of the Executive Board of Thyssen Krupp AG. Through this, transparency, motivation and integration of Atecs Mannesmann are to be ensured.

The aim of this plan is to motivate the employees of Atecs Mannesmann as equal-ranking partners.
・ Purchase price
On the basis of the documents received from Mannesmann ThyssenKrupp has calculated for Atecs Mannesmann an enterprise value of 8.75 billion.

The purchase price to be paid by ThyssenKrupp is derived from this enterprise value less the pension accruals assignable to Atecs Mannesmann at December 31, 1999 (calculated under US GAAP) and the net financial payables of Atecs Mannesmann at the closing date.
・ Financing
ThyssenKrupp is in possession of a binding financing commitment.

ThyssenKrupp has a range of refinancing possibilities with regard to the acquisition financing, including through the planned flotation of ThyssenKrupp Steel in the year 2000. Other divestitures are planned within the framework of ThyssenKrupp´s strategic realignment. The cash inflow is to be used to reduce the acquisition financing.

The sale of companies and parts of Atecs Mannesmann is not part of our financing plan.

A sound financing plan to purchase 100% of Atecs Mannesmann is thus in place.

ThyssenKrupp is convinced that combining Atecs Mannesmann with the ThyssenKrupp Group makes industrial sense against the background of increasing competitive pressure and that compared with other strategies the tie-up of Atecs Mannesmann and associated companies with the ThyssenKrupp Group will open up and secure on a long-term basis significantly better growth opportunities for all companies involved.

The tie-up of ThyssenKrupp and Atecs Mannesmann offers the unique opportunity to achieve a quantum leap in the activities of both companies and to implement the growth strategies of the two faster than would be possible on a stand-alone basis. The tie-up will create a new Group of world standing based in Germany.

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