Schuler AG will shortly be taking over Mueller Weingarten AG

 

 

Schuler AG will shortly be taking over Mueller Weingarten AG and merging the two firms. The Board of Management and Supervisory Board of Schuler decided on this course today. The management of Mueller Weingarten will play a supportive and constructive role in this process. In the first step towards the merger, under a contract dated March 27, 2007, Schuler acquired 64.49% of the share capital of Mueller Weingarten AG from Metzler Beteiligungsgesellschaft mbH in Frankfurt. The acquisition is expected to complete by the end of the year. In accordance with 35 paragraph 2 of the German WpUEG, Schuler AG will now submit a mandatory offer to the shareholders of Mueller Weingarten AG for the acquisition of their shares at the minimum price prescribed by law.

 

The new company shall operate under the name Schuler Weingarten AG and shall have its headquarters in Goeppingen. The new company, Schuler Weingarten AG, will be the world leader in the field of forming technology for the metalworking industry, with a global market share of around 35%. The new Schuler Weingarten AG will be represented as a technological and world market leader in more than 20 countries, generate turnover in excess of EUR 900 million, and have global market coverage in temps of distribution, production and service.

 

The permissibility of the transaction under merger control law has been affirmed.

 

The merger will allow Schuler Weingarten AG to exploit new growth opportunities. The drivers of this growth will be innovative products resulting from considerably enhanced engineering potential, a stronger presence in the growth markets- in particular Asia and Eastern Europe- and the expansion of the successful services business. Juergen Tonn, CEO of Schuler AG, stated: The ability of our company to adapt to future needs will secure jobs in Germany for years to come. Today we are proceeding on the assumption that we will exceed the billion mark in turnover in the next three years and substantially improve our profit situation.

 

Rolf Zimmermann, CEO of Mueller Weingarten AG, said: We had originally planned for a stand-alone solution and had developed a restructuring programme to this end, the implementation of which is currently successfully under way. Nonetheless, the merger solution makes sense from a strategic and economic perspective, as the arguments for it outweigh those against. We will therefore lend constructive support to this enterprise in order to position the strengths of Mueller Weingarten AG in the best way possible within Schuler Weingarten AG.

 

The strengths, structures and worldwide locations of Schuler and Mueller Weingarten complement each other perfectly. The merging of the two companies will create a global corporation headquartered in Germany which will have the opportunity, to:

l         further develop its ability to handle future competition;

l         further expand its market position and thus further improve its ability to overcome the upcoming challenges of operations in the global markets;

l         offer its customers even better service and innovation; and, at the same time

l         create more secure jobs for years to come.

 

Together, the two firms will now be able to improve production processes, standardise products, shorten lead times and thus boost productivity. These advances, together with heightened innovative strength, will considerably hone our competitive edge. Synergy effects on the cost side will come mainly from more efficient usage of production sites, the pooling of purchasing activities and the elimination of duplication in corporate functions.

 

Current estimates suggest that the merger will result in downsizing of 400 to 450 positions altogether over the course of the next three years. Juergen Tonn stated: We will be looking to achieve this via natural turnover to the greatest possible extent, and will do everything we can to avoid layoffs for operational reasons.

 

In the medium term, the merger will bring cost savings of more than EUR 40 million a year. This is set against restructuring costs of up to EUR 45 million, which will probably result in a negative EBIT for the current year.

 

Before the actual merger to form Schuler Weingarten AG, the Boards of the two firms will have created the legal and structural conditions needed for it to take place. To this end, they have adopted an integration plan focused on the following central elements:

l         Development of an integration master plan

l         Establishment of management structures

l         Definition of organizational and operational structures

l         Initiation of a development programme with a view to optimizing intra-group cooperation and developing a common corporate culture

l         Development of a new market profile

 

The integration plan will be implemented by year-end 2007.

 

Juergen Tonn said: We are consciously striving towards a merger of equals here, and are forming a consolidated company which will work under the best in class principle and trust its future specifically to the strengths of the two companies and their employees. With an intelligent integration process, we will be able to build on these strengths and tap additional potential.