Tognum sells its Rotorion propeller shaft unit to IFA

• Tognum to maintain a 25 per cent shareholding in the IFA holding company for five years

Friedrichshafen/Haldensleben, 9 October 2009. The specialist for propulsion and power solutions Tognum AG and the IFA Group, Haldensleben, have today signed contracts for the announced combination of their propeller shaft operations. The German Cartel Office has granted approval for this transaction.

IFA Maschinenbau Verwaltungsgesellschaft GmbH will serve as a holding company and combine the current propeller shaft operations of IFA with those of Rotorion at its locations in Friedrichshafen and Charleston/USA. Tognum will take a 25 per cent shareholding in the IFA holding company and for a period of five years, after which it will withdraw completely from its involvement in the company.

“As we have already communicated on several occasions, by taking this step, Tognum will be able to focus fully on its core business in propulsion and decentralised energy systems“, explained Christof von Branconi, member of the Tognum executive board with responsibility for the business unit Onsite Energy & Components.

IFA intends to relocate its propeller shaft operations gradually from its Friedrichshafen location to Haldensleben commencing at the end of 2009. At the appropriate time, Rotorion employees at the Friedrichshafen location will be given the opportunity to move to the Haldensleben location, or to remain within the Tognum Group. The current Rotorion production facilities in Charleston/USA will be retained as the US location of the new propeller shaft group.

As soon as the transaction closes, Tognum will deconsolidate the Rotorion Group from its balance sheet. This is expected to take place before the end of the year 2009. Further details regarding the transaction and its financial impact on Tognum will be announced after the closing. No significant impact on revenues, adjusted EBIT or free cash flow is expected for the 2009 financial year.