High cash inflow following monetization of Vallourec shares

Salzgitter AG yesterday disposed of a c. 17% stake in the share capital of Vallourec S.A. Out of the c. 9 million shares held to date via Salzgitter Mannesmann GmbH, c. 3 million shares were placed in an accelerated bookbuilding and via a mandatory exchangeable respectively, each subject to market standard conditions precedent, with institutional investors via Deutsche Bank and Lehman Brothers. The mandatory exchangeable will be issued by a SPV unaffiliated with Salzgitter group. The remaining c. 3 million shares of the c. 17% stake have been purchased by the counterparty of the existing derivative hedging contracts.

Through the cash inflow achieved Salzgitter group has significantly increased its financial power and hence strategic flexibility with regard to short- to mid-term acquisition opportunities in the steel sector which is characterized by a continuous consolidation.

In order to be able to at least partially participate further in the performance of the Vallourec stock, despite the objective to achieve financial flexibility, Salzgitter AG decided to combine the share placement with the issuance of the mandatory exchangeable. The number of shares underlying this bond accounts for c. 3 million Vallourec shares.

Salzgitter group had initially acquired the majority of its Vallourec stake in 2000 through the acquisition of Mannesmannröhren-Werke from Mannesmann AG. Following that acquisition Salzgitter had bought further shares during the market downturn in 2002.

Disclaimer:

This press release contains certain forward-looking statements based on current assumptions and forecasts made by Salzgitter Group management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the Company and the estimates given here. Salzgitter AG assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or development. This announcement may not be distributed, directly or indirectly, in or into the United States, Canada, Australia or Japan.

This announcement does not constitute or form part of an offer to sell or issue, or any solicitation of an offer to buy or subscribe for, any securities referred to herein. The placement of securities and the distribution of this announcement and other information in connection with the placement in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

Any securities referred to in this announcement have not been and will not be registered under the US Securities Act of 1933 (the "Securities Act"), and may not be offered or sold in the United States unless they are registered under the Securities Act or pursuant to an available exemption therefrom. No public offering of securities of the Company is being made in the United States.

This announcement is not an offer of securities for sale in Germany and is not a prospectus within the meaning of the German Securities Prospectus Act (Wertpapierprospektgesetz) as amended, the Commission Regulation (EC) No 809/2004 of 29 April 2004 as amended, or any other laws applicable in Germany governing the issue, offering and sale of securities.

Press contact:
Bernd Gersdorff
Fon: +49 (0)5341 21 - 2300
Email: km@salzgitter-ag.de

Investor relations contact:
Bernhard Kleinermann
Fon: +49 (0)5341 21 - 1852
Email: ir@salzgitter-ag.de