Sandvik divests Saws and Tools business area

Sandvik divests Saws and Tools business area Sandvik has reached an agreement with the American company Snap-on Incorporated, Kenosha, Wisconsin, covering the sale of the Sandvik Saws and Tools business area for about SEK 3,300 M, cash and debt-free. The capital gain is estimated at SEK 1,600 M. The sale is conditional upon a decision by a General Meeting of shareholders in Sandvik and the relative authorities approving the transaction. Sandvik Saws and Tools develops, manufactures and markets hand tools for professional users and has strong market positions in many areas. The business area reported sales of SEK 2,694 M in 1998. The number of employees is approximately 2,700, of which about 1,000 in Sweden. Products are manufactured at 12 plants in Sweden, Germany, Portugal, France, England, the United States and Argentina. Snap-on is a leading global manufacturer of mechanics tools, diagnostics and shop equipment, machinery and other items for automotive repair shops, the automotive industry and specialty repair centers and holds a strong position in the North American market. Snap-on's total sales in 1998 amounted to about SEK 14,000 M, of which approximately SEK 10,000 M in North America and SEK 3,000 M in Europe. The number of employees is about 12,000. "A comprehensive change in structure is required in order to develop the operations within Sandvik Saws and Tools long term and to achieve global leadership. Most of all, this requires a substantially greater sales volume which is not possible with own organic growth but requires a merger with another company," says Clas Åke Hedström, President and CEO of Sandvik. "Accordingly, the sale of Saws and Tools to Snap-on is a logical and favorable transaction for both companies worldwide. Snap-on, which is a well- established company with quality products and services, and with a strong reputation in the industry, will offer highly favorable opportunities for Saws and Tools' continued development", says Clas Åke Hedström. "As a result of the sale, Sandvik's operations are concentrated to our three core areas: Tooling, Mining and Construction, and Specialty Steels, where the technology content is large and where we are world leaders in selected niches. We assess that we can best apply our R&D competence, among other assets, through investing our resources for expansion within these areas", says Clas Åke Hedström. "I am excited about the opportunities this transaction presents. Together with Snap-on, we will offer customers a full-range of high quality professional tools and equipment by building upon the combined company's strong brands and long-standing distribution relationships. We will provide superior products, services and value to our customers. I am confident our customers and employees will be delighted with this combination", says Göran Gezelius, President of Sandvik Saws and Tools. In a number of smaller markets, Sandvik will continue to sell Saws and Tools' products until further notice. Lehman Brothers is acting as financial advisor to Sandvik in this matter. Sandviken, 22 April 1999 Sandvik AB; (publ) For additional information, please call: Sandvik +46 (0)26-26 10 01. Snap-on: +1 414-656-5561 (Media), +1 414-656-5421 (Investor Relations) ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/04/22/19990422BIT00510/bit0001.doc http://www.bit.se/bitonline/1999/04/22/19990422BIT00510/bit0002.pdf