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Mannesmann Strengthens Automotive Sector, Purchase of Philips Car Systems

23 October 1997

Mannesmann Strengthens Automotive Sector, Purchase of Philips Car Systems

    DUSSELDORF, Germany, Oct. 23 -- Mannesmann VDO and Philips
Electronics N.V. have signed a letter of intent whereby Mannesmann
VDO will acquire a 65% share of Philips Car Systems (PCS).  Under the
agreement Philips will transfer the remaining shares to Mannesmann VDO after a
period of two years.  The respective final agreements are to be signed by the
end of this year, subject to corporate and regulatory requirements.  The
agreed value of the PCS business is approximately hfl 1.5 billion on a debt
free basis.
    PCS is a leading supplier of in-car navigation and related
communication/telematics systems and audio entertainment products.  The
company generates sales of about hfl 1.7 billion with a workforce of 5,500
employees.
    The combination of Mannesmann VDO and PCS creates one of the largest
global suppliers of integrated information, navigation and traffic telematics
systems.  Moreover, the acquisition of the PCS subsidiary Philips Automotive
Electronics (PAE) will give Mannesmann VDO wider access to the US market.  PAE
is engaged in the field of sensors, control elements and components for engine
control.
    Mannesmann anticipates strong growth for navigation systems and telematic
applications and will rank at the top in this market as a result of this
acquisition.
    Mannesmann already provides telecommunications services for traffic
navigation through Mannesmann Passo and Mannesmann D2.

SOURCE  Mannesmann VDO