Negotiations for the takeover of the precision tube activities of Vallourec SA successfully concluded

Salzgitter AG and Vallourec SA, Paris, have signed the final agreements on the takeover of Vallourec Précision Etirage (VPE), France. All preconditions having been fulfilled, especially the approval by the EU antitrust authority. The transfer of the shares of the business is to take place on July 2, 2007. As from this date, the company will be included in the financial statements of Salzgitter AG.

The precision tubes business of VPE, with five plants in France, ideally supplements the current activities of the Salzgitter Group in this tubes segment which consist of the four plants of MHP Mannesmann Präzisrohr (MHP) in Germany and one of Mannesmann Robur (ROB) in the Netherlands.

To secure the extensive independence of VPE, MHP and ROB in respect of the supply of seamless tubes as a primary material, part of the transaction also includes the takeover of a mill for hot-rolled tubes for further processing in Zeithain (Saxony).

The combination of the companies will be named Salzgitter Mannesmann Precision GmbH and form the European market leader for seamless and welded precision tubes with annual sales of around € 500 million and a workforce of 2,700 employees. The most important customers include the automotive industry and its suppliers, the mechanical engineering and the energy producing sectors. The precision tube is a growth product for industrial applications where great forces and high pressures, temperatures or rotational speeds are to be absorbed while construction remains light weight.

The new group of companies enjoys an outstanding market position, especially in Germany and France, and is set to significantly strengthen its future potential by leveraging existing industrial and product-related synergies.