Salzgitter AG

euro adhoc: Salzgitter AG
Strategic management decisions
NOT FOR DISTRIBUTION IN THE U.S., CANADA, AUSTRALIA OR JAPAN: Salzgitter AG to sell shareholding in Vallourec S.A.

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07.08.2006

Salzgitter, 7 August 2006 - In order to increase its financial flexibility for forthcoming opportunities in its core business Salzgitter AG has decided to dispose of a stake of c. 17% in the share capital of Vallourec S.A.

Existing derivative contracts hedging c.1/3 of Salzgitter’s current holding will be unwound at the same time as the disposal which is anticipated to result in the counterparty to the derivatives purchasing c.30% of the shares being sold by Salzgitter group in the monetisation.

Deutsche Bank and Lehman Brothers have been jointly mandated to carry out the monetisation of the remaining c.70% which will comprise of a stock placement exclusively to institutional investors through an accelerated bookbuilding of shares and the issue of a mandatory exchangeable, each subject to market standard conditions precedent.

The mandatory exchangeable will be issued through an SPV unaffiliated with Salzgitter group.

In addition, Salzgitter AG will be entering into a contract on the same number of Vallourec shares as underlying the mandatory exchangeable which shall give it the opportunity to partially participate in further share price appreciation over the next 3 years.

Disclaimer:  This press release contains certain forward-looking statements based on current assumptions and forecasts made by Salzgitter Group management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the Company and the estimates given here. Salzgitter AG assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.

This announcement may not be distributed, directly or indirectly, in or into the United States, Canada, Australia or Japan. This announcement does not constitute or form part of an offer to sell or issue, or any solicitation of an offer to buy or subscribe for, any securities referred to herein. The placement of securities and the distribution of this announcement and other information in connection with the placement in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

Any securities referred to in this announcement have not been and will not be registered under the US Securities Act of 1933 (the "Securities Act"), and may not be offered or sold in the United States unless they are registered under the Securities Act or pursuant to an available exemption therefrom. No public offering of securities of the Company is being made in the United States. This announcement is not an offer of securities for sale in Germany and is not a prospectus within the meaning of the German Securities Prospectus Act (Wertpapierprospektgesetz) as amended, the Commission Regulation (EC) No 809/2004 of 29 April 2004 as amended, or any other laws applicable in Germany governing the issue, offering and sale of securities.

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original announcement:

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DISTRIBUTION IN THE U.S., CANADA, AUSTRALIA OR JAPAN: Salzgitter AG to sell shareholding in Vallourec S.A. 07.08.2006

Salzgitter, 7 August 2006 - In order to increase its financial flexibility for forthcoming opportunities in its core business Salzgitter AG has decided to dispose of a stake of c. 17% in the share capital of Vallourec S.A.

Existing derivative contracts hedging c.1/3 of Salzgitter’s current holding will be unwound at the same time as the disposal which is anticipated to result in the counterparty to the derivatives purchasing c.30% of the shares being sold by Salzgitter group in the monetisation.

Deutsche Bank and Lehman Brothers have been jointly mandated to carry out the monetisation of the remaining c.70% which will comprise of a stock placement exclusively to institutional investors through an accelerated bookbuilding of shares and the issue of a mandatory exchangeable, each subject to market standard conditions precedent.

The mandatory exchangeable will be issued through an SPV unaffiliated with Salzgitter group.

In addition, Salzgitter AG will be entering into a contract on the same number of Vallourec shares as underlying the mandatory exchangeable which shall give it the opportunity to partially participate in further share price appreciation over the next 3 years.

Disclaimer:  This press release contains certain forward-looking statements based on current assumptions and forecasts made by Salzgitter Group management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the Company and the estimates given here. Salzgitter AG assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.

This announcement may not be distributed, directly or indirectly, in or into the United States, Canada, Australia or Japan. This announcement does not constitute or form part of an offer to sell or issue, or any solicitation of an offer to buy or subscribe for, any securities referred to herein. The placement of securities and the distribution of this announcement and other information in connection with the placement in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

Any securities referred to in this announcement have not been and will not be registered under the US Securities Act of 1933 (the "Securities Act"), and may not be offered or sold in the United States unless they are registered under the Securities Act or pursuant to an available exemption therefrom. No public offering of securities of the Company is being made in the United States. This announcement is not an offer of securities for sale in Germany and is not a prospectus within the meaning of the German Securities Prospectus Act (Wertpapierprospektgesetz) as amended, the Commission Regulation (EC) No 809/2004 of 29 April 2004 as amended, or any other laws applicable in Germany governing the issue, offering and sale of securities.

further inquiry note: Bernhard Kleinermann Tel.: +49 (0) 5341-21-3783 E-Mail: kleinermann.b@salzgitter-ag.de Tel.:49 (0) 5341-21-01 FAX: +49 (0) 5341-21-2727 Email: gersdorff.b@salzgitter-ag.de

end of announcement                                                 euro adhoc
07.08.2006 17:29:54

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sector publicity: Not yet available

ots Originaltext: Salzgitter AG
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:
Bernhard Kleinermann
Tel.: +49 (0) 5341-21-3783
E-Mail: kleinermann.b@salzgitter-ag.de
Tel.:49 (0) 5341-21-01
FAX: +49 (0) 5341-21-2727
Email: gersdorff.b@salzgitter-ag.de

Branche: Iron & Steel
ISIN:      DE0006202005
WKN:        620200
Index:    MDAX, CDAX, HDAX
Börsen:  Frankfurter Wertpapierbörse / official dealing/prime standard
              Börse Berlin-Bremen / free trade
              Hamburger Wertpapierbörse / free trade
              Baden-Württembergische Wertpapierbörse / free trade
              Börse Düsseldorf / free trade
              Bayerische Börse / free trade
              Niedersächsische Börse zu Hannover / official dealing



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