SGSB Acquires Majority Stockholding in D¨¹rkopp Adler

FAG Transfers Stocks to Chinese Group Successful Conclusion of Two-and-a-Half Years¡¯ Negotiations SCHWEINFURT, July 10, 2005. The Chinese SGSB (ShangGong Group) has become the new majority stockholder of Bielefeld-based D¨¹rkopp Adler AG through a German subsidiary. On June 30 FAG Kugelfischer, Schweinfurt, transferred its block of stocks to the Chinese company, as had been agreed upon in a sales contract signed in October last year. FAG Kugelfischer GmbH, a member of the Schaeffler Group (Herzogenaurach), decided to sell its interest in D¨¹rkopp Adler for fundamental considerations. ¡°Being a traditional bearing manufacturer and automotive supplier, the fields of sewing technology and materials handling systems don¡¯t come under our core competences,¡± explained Dr. J¨¹rgen M. Geißinger, President and CEO of the Schaeffler Group. ¡°For this reason, we cannot offer D¨¹rkopp Adler adequate support in this particularly difficult industrial environment.¡± By contrast, both parties may significantly benefit from the new situation. SGSB gains knowhow, a brand with a high worldwide reputation and German quality workmanship. In return, D¨¹rkopp Adler can take advantage of ShangGong¡¯s infrastructure especially in Asia. ¡°This is the right strategic step to gain a rapid foothold in the future market of China,¡± underlined Geißinger. Negotiations with the Chinese company started more than two-and-a-half years ago. In October last year, the sales contract between FAG and SGSB was signed. Since then the deal underwent a series of formal and bureaucratic approval processes, both at a local and national level. This is because the case was a precedent: For the first time a foreign public company was acquired by a Chinese public company. FAG Kugelfischer GmbH held a 94.9 percent majority in D¨¹rkopp Adler AG, which offers solutions in sewing technology and materials handling systems with some 1,800 employees worldwide. SGSB employs a workforce of more than 3,200 and is one of the largest sewing machine manufacturers in China.