Acquisition of Flender by Siemens Approved

According to schedule, the new 'Mechanical Drives' Division will start work on July 1, 2005. The total purchase price agreed with the previous owner Citigroup Venture Capital Equity Partners (CVC Equity Partners) amounts to EUR1.2 billion.

"This acquisition will allow us to offer our customers integrated solutions and systems across the entire drives range from a single source: We have a globally unique range of products and services, from the controller, through converters and motors, right up to gear systems", says Helmut Gierse, President of Siemens A&D. "By integrating mechanical drives engineering into our systems, we will not only gain a share in the fast-growing market sector for gear systems, but we will also further expand our position as the leading global vendor of systems and solutions in industrial automation overall."

With 6,700 employees, the Flender Group posted sales of EUR1.012 billion in fiscal year 2003/2004. The takeover will incorporate all the companies and business units of the group into the Siemens Automation and Drives Group. The former Flender subsidiaries Winergy AG, Loher GmbH and Graffenstaden S.A., France, will remain legally autonomous units. Siemens plans to integrate all companies and business units of the Flender Group into the new Mechanical Drives Division of A&D – with the exception of Loher that will be assigned to the A&D Large Drives Division, and the Drives & Automation business unit that will be integrated into the A&D Standard Drives Division.

Heading the Mechanical Drives Division will be Dr. Winfried Walzer, previously CEO of Flender Holding GmbH, with technical responsibilities, and Jürgen Glasemann, responsible for the commercial side. Glasemann was previously Head of Business Administration in the Systems Engineering (SE) Division of Automation and Drives. He also led the preparations for integrating Flender into Siemens A&D, and will continue to be responsible for this.

The Siemens Automation and Drives Group (A&D), Nuremberg, Germany, is the leading manufacturer in this field worldwide. Products supplied by A&D include standard products for the manufacturing and process industries and for the electrical installation industry as well as system solutions, for example for machine tools, and solutions for whole industries such as the automation of entire automobile factories or chemical plants. Supplementing this range of products and services, A&D also offers software for linking production and management (horizontal and vertical IT integration) and for optimizing production processes. A&D employs 51,800 people worldwide and in fiscal year 2004 (to September 30) earned a group profit of €1,007 billion on sales of €8.8 billion and orders of €8.98 billion.