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Pechiney Today Announces the Signing of an Agreement in Principle for the Acquisition of the Aluminium Conversion Activities of Corus

    PARIS--Oct. 23, 2002--
    Pechiney (PY)(PECH.PA)(PCHO)(SICOVAM:13290)

-- The Acquisition Will Total an Expected Amount (At the Date of the Closing) of 750 Million Euros, Financed by Debt
-- The Transaction Will be Strongly EPS Enhancing as of the First Year (7% in 2003 and 12% in 2004, Before Goodwill Amortization)
-- Pechiney Thus Strengthens Its Positions in the Key Markets of Its Aluminium Conversion Business, in Particular in the Aerospace and Automotive Sectors

    Pechiney announces that it has reached an agreement in principle with the Anglo-Dutch group Corus for the proposed acquisition of its aluminium conversion activities. The operation will total approximately 750 million euros, including the absorption of existing debt. Pechiney will take over pension liabilities amounting to EUR 48m in Dutch GAAP accounts. This acquisition price represents approximately 6.5 times the EBITDA reported in 2001 by the activities acquired, which totaled EUR 116m (excluding central costs allocated by Corus to its subsidiaries and including pensions charges).
    This acquisition will be exclusively financed by debt, leading to a pro forma debt-to-equity ratio (as of 30/06/2002) of 0.62.
    The entities to be acquired reported net sales of 1,549 million euros in 2001 with slightly more than 4,600 employees. The industrial sites involved are Koblenz, Bonn, Bitterfeld and Vogt in Germany, Duffel in Belgium, as well as a 60% interest in the activities of Cap de la Madeleine in Canada and of Tianjin in China.
    This acquisition will allow Pechiney to implement its profitable growth strategy in its key aerospace ant automotive markets. The Group will thus increase its manufacturing capacity through the integration of high-quality assets, like the Koblenz plant, recognized for its service in the aerospace market. It will also acquire resources that will allow it to bolster its research and development effort, broaden its customer base and expand its product range.
    The integration of these activities into Pechiney will contribute major synergies, in particular through the industrial optimization of production programs between plants working to serve the same markets, through purchasing and capital expenditure optimization and through the dissemination of best practices allowed by Pechiney's Continuous Improvement system. These synergies are estimated at approximately EUR 40m in the three years following the acquisition, i.e. over 60% of 2001 earnings from operations of the acquired activities, and are expected to rise to more than EUR 60m by 2007.
    In light of all these factors, this transaction satisfies the strategic and financial criteria that Pechiney has defined for its acquisitions and, in particular, the requirement of an internal rate of return of more than 13% after taxes.
    The acquisition will be earnings enhancing as of the first year, and is expected to represent a contribution to Pechiney's net income of 0.24 euro per share in 2003 and of 0.52 euro per share in 2004, or 7% in 2003 (on a full year basis) and 12% in 2004, on the basis of the most recent analysts consensus on Pechiney's results and before goodwill amortization (respectively 6% and 12% after goodwill).
    The definitive agreement will be signed after the end of Corus' works councils' consultation process. The transaction, which is subject to the approval of anti-trust authorities, should be finalized in the first half of 2003.
    "This transaction provides Pechiney with a unique opportunity to develop in the aluminium conversion business, especially in our two key markets -- aerospace and automotive," declared Jean-Pierre Rodier, Pechiney's Chairman and Chief Executive Officer. "The high quality of Corus' teams, who will join us through this acquisition, is clearly one of the reasons which led Pechiney to conclude this transaction."

    Pechiney is an international group listed on the Paris and New York stock exchanges. Its two core businesses are aluminum and packaging. With bases in 51 countries, Pechiney achieved sales of EUR 11 billion in 2001. It employs 34,500 employees.

    Certain statements in this press release that describe Pechiney's intentions, expectations or projections may constitute forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Pechiney's actual results, performance or achievement to be materially different from its intentions, expectations or projections. The forward-looking statements in this press release speak only as of its date and Pechiney undertakes no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.