ad hoc

SKW Metallurgie acquires Brazilian Tecnosulfur S/A – Capital increase intended

Unterneukirchen (Germany), October 29, 2009. SKW Metallurgie, a specialty chemicals Group listed in Germany’s SDAX index, has signed the acquisition agreement for a two-thirds interest in the non-listed Brazilian company Tecnosulfur S/A, headquartered in Belo Horizonte.

Tecnosulfur is the market leader in the hot metal desulphurization sector in Brazil. The Tecnosulfur revenue totaled around BRL 95 million (ca. EUR 35 mill.) in 2008. Confidentiality about the purchase price was agreed. The purchase price is based on an EBITDA multiple attractive for SKW Metallurgie, and includes an earn-out component.

In order to finance the Tecnosulfur acquisition and to optimize the finance structure of current BRIC countries investment projects, SKW Metallurgie intends to implement a capital increase to be placed with existing shareholders.

Tecnosulfur will be consolidated for the first time after the transaction is closed – this is expected for December 2009 or January 2010. As a result, Tecnosulfur will not make any significant contribution to the SKW Metallurgie Group’s income statement for 2009. However, the new subsidiary will be included in consolidated figures for 2010 for almost the entire year.