GEA Group AG

Otto Happel disposing of a stake of approx 20% in GEA Group AG through accelerated bookbuild

    - Happel: "The restructuring of the former mg technologies is
        bearing fruits. GEA Group is today a focused and profitable
        company."
    - Happel will not be available for re-election to the supervisory
        board in May
    - Shares will be offered to international institutional investors
        (including in the US) through an accelerated bookbuild led by
        Dresdner Kleinwort Wasserstein (DrKW)

    Frankfurt (ots) - Successful German entrepreneur Otto Happel is disposing of a stake of around 20% in GEA Group. To that effect, DrKW is this morning offering around 40 mln. GEA Group shares to international institutional investors including the US via an accelerated bookbuild. Advisors to the seller are JP Morgan and Georgieff Capital Advisors.

    Otto Happel: "The restructuring and strategic repositioning of the former mg technologies is bearing fruits. The recently renamed GEA Group AG has since been transformed not only into a focused and also profitable company. Investors recognise this impressive turnaround, as has been demonstrated by GEA Group's recent strong share price performance."

    Otto Happel's 30-year involvement with the company is hereby coming to a close. Following the 1999 merger of his former GEA into Metallgesellschaft (subsequently renamed to mg technologies) Happel became a member of the supervisory board of the merged company in 2003. Due to the critical situation of the company, he had to show much more commitment than initially intended. Happel's contribution over recent years was driven by his responsibility towards the company, its employees and its shareholders.

    For personal reasons, Happel has today decided to implement his complete exit of the company which was initially planned for 1999. Happel will now be able to devote more time to other personal priorities, albeit seven years later than initially planned. He is leaving the company much strengthened.

    "The balance sheet is now very strong. With fast growing order intake, GEA Group's capacity is being fully utilised. Cost structures are lean and efficient, all operating entities are profitable," Otto Happel said.

    Since its appointment at the end of 2004, the company's new top management with CEO Jürg Oleas has made excellent progress in completing the restructuring of the former Metallgesellschaft during 2005. In less than two years, massive indebtedness of approx Euro 1.5 bln has been transformed into a net cash position of approx Euro 350 mln. Since mid 2005, the group's plant engineering division has become profitable again.

    The successful restructuring has led to a sustainable growth in earnings followed by a recovery of the share price. In recent months the share's performance has been very strong. However, there is still more upside potential. The company now has significant acquisition capability which management intends to actively pursue in the near future.

    The General Shareholders meeting in May 2006 is due to appoint a new supervisory board for the next 5 years. Otto Happel will not be available for re-election. "I wish the management continued success for the future. Also, I will remain an active investor in Germany," Happel said.

    Background

    Otto Happel already sold his majority stake in the former GEA to Metallgesellschaft in 1999. For purely financial reasons - i.e. not for strategic considerations - he received  cash and a 10% stake in the company which then was to change its name into mg technologies.

    During the subsequent four years, the share price of mg technologies collapsed by some 80% as the state of affairs in the company worsened substantially. At this stage, Otto Happel acted promptly and doubled his stake in mg technologies to 20%. Through his increased influence, he paved the way to the election of a new supervisory board in June 2003 as well as the appointment of a new management shortly thereafter.

    This was followed by a fundamental strategic repositioning of the company, including the disposal of Dynamit Nobel as well as various other subsidiaries. The successful implementation of far-reaching restructuring measures were key in eliminating the burden of high indebtedness. In addition, legacy items of more than Euro 500 mln were sorted out. The plant engineering division was successfully turned around.

    The group structure was drastically simplified when the company's six holdings were merged into one single entity, thereby reducing yearly headquarter costs from approx Euro 170 mlo Euro 45mlo per annum.

    The end of 2004 saw a further change in management. Whilst not the smoothest of transitions, this unavoidable change was in the best interest of the company. In the course of this transition Otto Happel was an active and outspoken member of the supervisory board member, representing the shareholders' interests in particular.

    In early 2005, the new management moved its headquarters from Frankfurt to Bochum. The change of name from mg technologies to GEA Group symbolises the company's new  focus on its core strengths.

    This document does not constitute an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the "US Securities Act").  These securities have not been and will not be registered under the US Securities Act. This communication is directed only at persons (I) who are outside the United Kingdom or (II) who have professional experience in matters relating to investments falling within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the "Order") or (III) who fall within article 49(2)(a) to (d) ("high net worth companies, unincorporated associations etc.") of the Order (all such persons together being referred to as "Relevant Persons").  Any person who is not a Relevant Person must not act or rely on this communication or any of its contents. Any investment or investment activity to which this communication relates is available only to Relevant Persons and will be engaged in only with Relevant Persons.

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BEING ISSUED IN THE UNITED STATES OF AMERICA (THE "UNITED STATES")
AND MAY NOT BE DISTRIBUTED IN THE UNITED STATES  
    
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ISIN:                          DE0005857007

ots Originaltext: GEA Group AG
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Contact:
Mirko Wollrab
CNC - Communications & Network Consulting AG
Eschenheimer Anlage 1  
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