Gränges and Hydro Raufoss conclude agreement

Gränges and Norsk Hydro conclude agreement regarding merger within Autoplastics Gränges and Norsk Hydro ASA's division Hydro Raufoss Automotive (Hydro Raufoss) have today signed the agreements to merge Gränges Autoplastics and Hydro Raufoss Automotive Bumper Systems (Bumper Systems), a unit within Hydro Raufoss. "By strengthening the position as supplier of exterior plastic systems to the automotive industry, Autoplastics get the platform needed to meet international competition. This applies in particular to painted exterior components. At the same time, we enhance the possibilities to effectively work close to the customers in concept- and product development. Our customers and products complement each other very well and the merger is of major importance for our growth and future profitability. The combination creates a Pan- European production organisation with potential for further participation in industry restructuring," says Staffan Bohman, Gränges' President and Chief Executive Officer. Gränges and Hydro Raufoss will form a new, jointly owned company, Autoplastics, in which Gränges will have a 60-percent ownership interest, with Hydro Raufoss holding the remaining 40 percent. The merged entity, reached sales for 1998 over SEK 2,5 billion. The Board of the new company will consist of five persons, three appointed by Gränges and two appointed by Hydro Raufoss. Exit clauses have been established whereby Hydro Raufoss holds a put option that can be exercised within 2 years at the earliest and 5 years at the latest. Gränges holds a call option that can be exercised within 3,5 years at the earliest and 5 years at the latest. The conditions are based on a combination of equity and profitability. Bumper Systems, with a turnover in 1998 of nearly MSEK 700, manufactures exterior plastic systems for the automotive industry and supplies bumpers, among other products, to all Volvo models produced in Gothenburg, Uddevalla (Sweden) and Gent, plus spare parts. The company has manufacturing and development units in Gothenburg, Raufoss (Norway) and Gent and has a total of approximately 450 employees. Gränges Autoplastics, with a turnover in 1998 of more than SEK 1,8 billion, focuses on the production of interior and exterior plastic components and systems, with a high degree of value-added, for the automotive industry. The business area's operations are located in Sweden, Italy, Poland and Finland. Autoplastics' customers include several major European automakers, of which the largest are Audi, BMW, Iveco, Saab, Scania The merger means that Gränges and Hydro Raufoss put their respective businesses into the new company. Some effects: * Gränges will consolidate the new company retroactively from May 1,1999. * Initially the merger increases Gränges' net debt somewhat. * A new plant is under construction in Gent, Belgium. This investment will amount to approximately SEK 100 million. * The impact on profit per share for 1999 will be marginal. * From year 2000 the impact on growth as well as profit per share is expected to be considerably positive. The merger will now be subject of approval from the EU Commission as well as the Norwegian Ministry of Industry. These authorities are expected to leave their opinions during summer. For further information please contact Cecilia Lager, Vice President Gränges Investor Relations & Communication, tel +46 8 459 5941. Gränges is an international industrial group focused on value-added products based on aluminium and plastics. The products range from extrusions, heat transfer material and foil to components and systems in plastics to the transport industry. The group is one of Europe leading companies within its field with customers in the transport, engineering, construction and packaging industries. Gränges is quoted on the OM Stockholm Exchange "O-list". Visit Gränges web site on the Internet: www.graenges.se ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/05/28/19990528BIT00050/bit0001.doc http://www.bit.se/bitonline/1999/05/28/19990528BIT00050/bit0002.pdf