IWKA decides to sell the packaging division

The company's Executive Board has completed the analysis announced on September 22, 2006 of the options for the divestiture of the Packaging division

March 27, 2007

The analysis process contained a particularly comprehensive and critical appraisal of the division's development potential and was aimed at exploring the best possibilities and the best owner that would further strengthen the competitiveness of the companies in the division.

On the basis of the completed analysis, the Executive Board has decided to sell the Packaging division's companies. The Supervisory Board approved this decision on March 27, 2007. The Executive Board then decided that, subject to approval by the relevant trust authorities, the companies would be sold to funds of the Berlin-based investment company Odewald & Compagnie.

The sale of the companies to Odewald & Compagnie also takes the Packaging division's employees into consideration, offering the employees of the German companies, for example, a location guarantee over several years and a promise that there will be no operationally based contract terminations.

The sale will generate a book profit. As a result, the IWKA Group expects an earnings contribution from discontinued operations of at least about EUR 50 million for the 2007 business year. The enterprise value of the Packaging division on which the sale is based is approx. EUR 240 million. In addition, a substantially utilized property belonging to the Packaging division will be sold at a price of EUR 17 million. The total amount of the transaction is therefore approx. EUR 255 million.

Gerhard Wiedemann, CEO of IWKA, commented on the decision as follows: "Our strategic considerations are focused on developing growth potential in the systems and robotics segments of our Group. That is to say, the sale will release resources and strengths that we need and will use for the development of innovative robot applications and system technologies."

The Packaging division comprises more than 20 companies in Europe, North and South America and Asia. It had sales of over EUR 400 million and more than 2,500 employees in 2006.

After selling the Packaging division, the group will consist of the two KUKA divisions Systems and Robotics. The Executive and Supervisory Boards will therefore table a resolution at the Annual General Meeting on May 16, 2007, proposing that the name "IWKA Aktiengesellschaft" be changed to "KUKA Aktiengesellschaft" and the headquarters be relocated to Augsburg.

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