Siemens is expanding its business in industrial drive technology by acquiring Flender Holding GmbH, Bocholt, one of the world's leading suppliers for gear systems. The deal was closed by Siemens and the seller, Citigroup Venture Capital Equity Partners (CVC Equity Partners), London. The purchase price amounts to 1.2 billion EUR. The transaction is subject to the approval by the responsible anti-trust authorities. The activities of Flender Holding GmbH are to be integrated into the Siemens Automation and Drives Group (A&D) as its eleventh division. The aim is to expand the Siemens drive technology portfolio by gear systems and thus continually enhance the customer benefit offered by drive solutions.

With 6700 employees at 80 locations world-wide and sales of 1.012 billion EUR (fiscal 2003/4), the Flender Group is a successful supplier of mechanical and electrical drive equipment, such as is typically used in mechanical engineering, basic materials processing, transport and conveying systems and also in power generation. Flender's product portfolio particularly concentrates on gear technology, ranging from couplings and industrial gear units to gear motors and large gears for ships and wind power stations. The regional activities of the Flender Group are mainly concentrated in Germany, France, China, India and the U.S.

Worldwide, gears are an integral component of many applications and systems in production and logistics. With the purchase of Flender, Siemens is expanding its know how within its comprising automation portfolio toward complete drive systems. Thus, Siemens will be able to optimize the installations of its customers over the whole drive train. Integrated development and engineering will lead to smaller, lighter, long-living and high-performing drive systems, contributing to the productivity and competitiveness of industrial customers in all industries.

Helmut Gierse, Group President of A&D: "This acquisition is an important step which ideally rounds off our drive systems portfolio. With gear technology, we will not only be in a position to serve a rapidly growing part of the market but will also be able to tailor our whole range of products and systems even better to the requirements of our customers in all sales industries and regions. This will enable us to expand our position as the world's leading supplier in the field of industrial automation."

Dr. Winfried Walzer, CEO of Flender AG: "This transaction is an excellent strategic combination for the Flender Group and promises to accelerate the increasingly global nature of Flender's business activities. Since the beginning of CVC Equity Partners' association with Flender in 1999, Flender has achieved significant improvements in efficiency, productivity, and cash flow generation, while extending its global reach. We view the acquisition of Flender by Siemens as an exciting step which will further develop the company's activities to the benefit of our customers, suppliers and employees."

The world market for industrial drive technology has a volume of approximately 25 billion EUR and yearly growth rates of around 2.5 per cent. From a technological point of view, it will be influenced by the coalescence of electric motors and converters with gears and gear components in many segments. The previous range of products in manufacturing automation and process automation is increasingly being transformed into integrated systems business. This provides complete-solution suppliers with higher growth rates, greater value added and possibilities for differentiation from competitors. This especially applies to conveyance and handling systems, the oil & gas, chemicals and cement industries, cellulose processing and metalworking, as well as transport, power stations and the food industry.

The offer of Siemens A&D is based on a comprehensive, technologically consistent product portfolio ('Totally Integrated Automation'), enabling to provide every customer with an efficient, coordinated package of automation systems. Thus, companies from the most varied sectors of industry are able to optimize their production processes, shorten their product launching times and reduce their production costs.

The Siemens Automation and Drives (A&D) Group, Nuremberg, is the world's leading manufacturer in the field of automation and drives. 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), as well as for optimizing production processes. A&D employs 51,800 people worldwide and in fiscal year 2004 (to September 30) earned a provisional pre-tax profit of 1.077 billion EUR on sales of 8.829 billion EUR and orders of 8.98 billion EUR. More information is available at www.siemens.com/automation.