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KHD’s Management and Supervisory Board recommend acceptance of takeover bid from AVIC International Engineering Holdings Pte. Ltd

World Cement,

The Management Board and Supervisory Board of KHD Humboldt Wedag International AG, Germany, (KHD) has published a joint statement concerning the takeover bid of AVIC International Engineering Holdings Pte. Ltd, Europe Project Management Pte. Ltd, Europe Technology Investment Pte. Ltd and Europe Engineering Holdings Pte. Ltd. The Management Board and Supervisory Board recommend the shareholders of the company to accept the takeover bid at the offer price of €6.45 per share. The recommendation is supported by expert reports (fairness opinions) generated by public auditor KMPG, who was engaged by the Management Board, as well as Network Corporate Finance, a consulting company commissioned by the Supervisory Board. Independent of one another, both came to the conclusion that the shareholders are being offered appropriate compensation for the tender of their shares. The offer price corresponds to a premium of 34.9% on the average closing price of the KHD share over the three-month period prior to announcement of the offer on 10 October 2013. Furthermore, possible consequences of the takeover on the business, income and financial position of KHD were thoroughly examined by the Management Board and Supervisory Board. Additionally, the analysis did not reveal any reasons for not issuing a recommendation of acceptance of the offer to shareholders and employees of KHD.

AVIC International Engineering Holdings Pte. Ltd is part of the AVIC Group, which since 2010 is owner of a 20% stake, as an anchor shareholder and important cooperation partner of KHD in international plant engineering for the cement industry, in particular with respect to turnkey construction of large cement plants (EPC market). In its joint statement, the Management Board and Supervisory Board welcome AVIC’s aim to continue its support of KHD’s current growth strategy and to maintain the commercial identity of the KHD Group. The intended identification of potential for growth as well as cost savings and improvement, in addition to support from external acquisitions, can contribute to strengthening the competitive position of the KHD Group.

Upon successful takeover no significant consequences to the financial situation of the company are expected. Possible effects on the utilisation of tax-loss carry forwards due to the takeover are currently being evaluated. According to the bidder, employment contracts will remain unaffected in case of a takeover. The procedure will also not have any influence on the composition of the Management Board.

The joint statement, including further information by the Management Board and Supervisory Board, is available on the company’s website.

Adapted from press release by

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