Lear Enters Into Definitive Agreement to Transfer Its North American Interior Business to Joint Venture

SOUTHFIELD, Mich., Dec. 1, 2006 -- Lear Corporation today announced it has reached a definitive agreement with WL Ross & Co. LLC ("WL Ross") and Franklin Mutual Advisers, LLC ("Franklin") to transfer substantially all of the assets of its North American Interior business and $25 million of cash to a newly-formed joint venture, International Automotive Components Group North America, LLC ("IAC North America"). Lear will hold a 25% equity interest in IAC North America and warrants for an additional 7% equity interest in IAC North America. This transaction completes a series of strategic initiatives intended to improve the Company's ongoing operating results, strengthen its balance sheet and increase operating flexibility.

Separately, Lear successfully completed a private offering of $900 million in new senior notes on November 24th and has commenced a tender offer for its outstanding 2008 and 2009 senior notes. Also, on November 8th, Lear completed a $200 million sale of common stock in a private placement to affiliates of, and funds managed by, Carl C. Icahn.

"We are very pleased to have reached a definitive agreement to transfer our North American Interior business to IAC North America. This transaction combined with our recent financing initiatives have significantly strengthened the Company's financial and competitive position," said Bob Rossiter, Lear's chairman and chief executive officer. "Our focus going forward is to concentrate on delivering superior quality and service to our customers and to invest in further strengthening and growing our core businesses to increase value for our shareholders."

Under the terms of the agreement with respect to the Company's North American Interior business, WL Ross and Franklin would make aggregate cash contributions of $75 million to IAC North America, in exchange for the remaining equity, and extend a $50 million term loan. Lear's North American Interior business has annual sales of approximately $2.5 billion. Lear expects to record a charge of about $675 million related to the divestiture of the North American Interior business in the Fourth Quarter of 2006, and recognize its investment in IAC North America under the equity method of accounting. The closing of the transaction is subject to various conditions, such as the receipt of required third-party consents and other closing conditions customary for transactions of this type. Citigroup Corporate and Investment Banking and UBS Investment Bank acted as financial advisors to Lear in connection with this transaction.

In October, Lear announced that it had completed the contribution of substantially all of its European Interior business to International Automotive Components Group, LLC ("IAC Europe"), another joint venture with WL Ross and Franklin, in exchange for a one-third equity interest in IAC Europe. IAC Europe also owns the European Interior business formerly held by Collins & Aikman Corporation.