New partnership for MAN Ferrostaal

07.10.2008 -

Effective from January 1, 2008, MAN AG is selling 70% of its shares of MAN Ferrostaal AG, Essen, to International Petroleum Investment Company (IPIC) of Abu Dhabi. MAN remains a shareholder maintaining 30%. A letter of intent was signed accordingly. The governing bodies of MAN and IPIC have agreed to this step. It has been consented not to disclose details of the agreement prior to the close of the contract. The objective of the partnership is to realise potential for growth with MAN Ferrostaal and to open up market potential in the area of future technologies. IPIC intends to award contracts for large industrial projects to MAN Ferrostaal and is in the position to open up market access for the company in the field of new technologies. With this step, MAN is now sustainably concentrating on the manufacturing industries in the field of transport related engineering. This focus improves the conditions for sustainable growth in all areas.

IPIC pursues a strategy of long-term investment in the petrochemical sector and related industries outside Abu Dhabi. Up to now, IPIC has invested predominantly in the Middle East, North Africa, Europe and Asia. The concept of IPIC is to act as a long term investor. From 1984, when the company was founded until today, IPIC has kept all its industrial participations. The company operates mainly in the areas of oil processing, petrochemicals, pipelines, power stations and energy-intensive industries – all sectors in which MAN Ferrostaal excels. Solar energy and biofuels are also an important sector of the partnership. Besides this, IPIC can open doors to numerous large projects in Abu Dhabi. MAN Ferrostaal will be run as an independent concern, keeping its present portfolio with the management of MAN Ferrostaal retaining control.

The Chief Executive Officer at MAN AG, Håkan Samuelsson, sees the prospect of IPIC involvement in MAN Ferrostaal as a growth driver for the subgroup: “The proposed partnership with IPIC will open up new opportunities for growth for MAN Ferrostaal in plant construction and important markets of the future such as solar energy and biofuels. IPIC is the ideal partner to make full use of the outstanding expertise and worldwide network of MAN Ferrostaal for joint projects. Additionally, we are pursuing further partnerships in the economically important region Middle East. MAN will sustainably be concentrating its efforts on the production side of our business in transport-related engineering. The MAN Group has reached a future oriented and stable structure and is focused enough to develop all subgroups as core businesses With this step, the focusing process of the MAN Group, initiated in 2005 has been finalized.”

His Excellency Khadem Abdulla Al Qubaisi, Managing Director of IPIC, expressed his satisfaction concerning the perfect fit that MAN Ferrostaal provides for IPIC’s strategic goals: “We wish to invest in MAN Ferrostaal because we expect to derive considerable benefit from the technical and industrial expertise they will bring to our core sectors. By taking a major shareholding in MAN Ferrostaal, we would continue to build up our own portfolio in a logical fashion. An important component of this portfolio is renewables in which MAN Ferrostaal can play a key role and through which we intend to strengthen our hand in technologies of the future. Besides, there are many commonalities with other member companies in our portfolio. This too considerably boosts our business potential.”

Dr. Matthias Mitscherlich, CEO at MAN Ferrostaal AG and Member of the Executive Board at MAN AG, welcomes the prospect of new ownership and cooperation with IPIC with great expectations: “IPIC’s involvement as main shareholder of our company permits us to move forward towards new horizons, because our main shareholder would also to a great extent be our customer. We are able not only to support IPIC in the development and implementation of their projects but also to bring to bear our considerable expertise as a general contractor in EPC projects (Engineering – Procurement – Construction).”

IPIC is in a position to support MAN Ferrostaal over the long term in its strategic development. The German company would be able to enhance its presence in the MENA region, avail itself of IPIC sureties for the implementation of large-scale projects and to realise opportunities for growth with appropriate capital. MAN Ferrostaal sees good prospects for the creation of new jobs to cope with all the projects that are likely to flow from this acquisition. In addition, having an owner based in the United Arab Emirates has the potential to increase the attraction of MAN Ferrostaal for German and European companies that wish to establish themselves in the markets of the Middle East and North Africa. MAN Ferrostaal could thus acquire a ‘bridging’ role to the Emirates and the whole of the Gulf region.

About MAN Ferrostaal AG:

MAN Ferrostaal is a worldwide supplier of industrial services for the construction of large-scale industrial plants and machine supply. As a general contractor for plant construction, the company offers project development, project management and financing solutions for turnkey plants in the areas of solar thermal power plants as well as biofuels, petrochemical and industrial plants. In ccoperation with manufacturers of machines and production lines, MAN Ferrostaal offers sales and services in the areas of automotive industries, print and packaging, piping, ships and transport solutions. With 4,200 employees MAN Ferrostaal is represented in more than 60 countries. The company achieved a turnover of EUR 1.4 billion in 2007.

MAN Ferrostaal is a subsidiary of MAN Aktiengesellschaft, Munich. The MAN Group is one of Europe’s leading manufacturers of engineering equipment and vehicles, generating annual sales of around EUR 16 billion. MAN supplies products, systems and services to the capital goods industry and employs approx. 55,000 people worldwide. The core areas operated by the MAN Group, Commercial Vehicles, Industrial Services, Diesel Engines and Turbomachines, all hold leading positions in their markets. MAN is a member of the DAX German Share Index, Germany’s top 30 public limited companies.