Sulzer Rejects Takeover Approach

23.02.2001

The Sulzer Board of Directors recommends Sulzer shareholders not to accept the pre-announced public tender offer by InCentive Capital AG. The announced realignment of the Sulzer Corporation is already well underway and will create greater value for shareholders, employees and customers than the short-term oriented procedure of InCentive Capital. Sulzer and Sulzer Medica will be separated as planned, whereby Sulzer shareholders will be offered the Sulzer Medica shares currently held by Sulzer.

In connection with this separation, the Sulzer and Sulzer Medica Boards of Directors are to be reconstituted. Leonardo E. Vannotti is to be appointed Chairman of the Sulzer Board, while Ueli Roost will remain Chairman of the Sulzer Medica Board.

Sulzer will propose its own way of separating the Corporation into an industrial and a medical devices group to be resolved at the General Meeting of April 19, 2001. The Sulzer Medica shares currently held by Sulzer Ltd will be distributed directly to the Sulzer shareholders. The two companies will have independent boards of directors. The proposed membership of the Sulzer Board of Directors is as follows: Dr. Leonardo E. Vannotti (Chairman), Dr. Georges Blum, Dr. Reto R. Domeniconi, Jan Kleinewefers and Louis R. Hughes (new member, also on the boards of Electrolux and British Telecom). A further new member will be proposed at a later date. Fred Kindle, currently CEO Sulzer Industries, will be CEO of the new Sulzer Ltd.

Ueli Roost will remain Chairman of the Board Sulzer Medica Ltd. The other members of the Sulzer Medica Board of Directors will be disclosed in due course.

Offer clearly too low

The separation of Sulzer and Sulzer Medica, the complete realignment of Sulzer Industries now underway, and the measures taken for profitability enhancement, are expected to favorably affect the Sulzer share price without InCentive Capital AG as catalyst.

Evaluation of this public tender offer by Sulzer and its external advisers has shown that it is lacking strategy and does not offer sufficient value to shareholders. The Sulzer shareholders would receive significantly less value for their shares than potentially available after the corporate realignment and profitability enhancement measures now underway.

Chairman and CEO Ueli Roost's opinion of this takeover bid: "This offer is not attractive for our shareholders. In actual fact, InCentive Capital merely intend to continue the corporate realignment worked out by us to their own benefit. The InCentive Capital offer is

significantly lower than the value our shareholders can expect from us."

Sulzer has a clear strategy

Sulzer intends to continue to expand its industrial sector with the attractive businesses of Sulzer Metco, Sulzer Turbomachinery Services, Sulzer Chemtech and Sulzer Pumps. The positive development of operating income for the year 2000 and the successful integration of the Ahlstrom and Interturbine acquisitions demonstrates that the strategy followed for Sulzer Industries was already successful last year.

The realignment of Sulzer Industries is proceeding according to plan. Sulzer has already successfully divested Sulzer Turbo to MAN GHH Borsig, Germany. Divestiture processes are currently underway for both Sulzer Infra and Sulzer Textil, and the distraction created by InCentive Capital represents an obvious hindrance. There are interested parties for both businesses. The divestiture of Sulzer Burckhardt will commence as planned in the second half of this year.

Strategic plans for Sulzer Medica have likewise been implemented systematically, with two acquisitions in the strong growth areas of dental implants (Paragon) and peripheral vascular implants (IntraTherapeutics).

On the other hand, InCentive Capital AG has so far revealed no strategic intentions.

Details on the separation of Sulzer and Sulzer Medica, on the strategies of the two companies, and the consequences thereof will be presented by Sulzer at the Annual Press Conference of March 9, 2001.

The financial advisors of Sulzer are UBS Warburg and Morgan Stanley Dean Witter.

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