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Danfoss & Sauer-Danfoss To Merge

Posted on March 1, 2013

Danfoss A/S, Nordborg, Denmark and Sauer-Danfoss Inc., Ames, Ia. have jointly announced a definitive merger agreement for Danfoss to acquire the 24.4% of Sauer-Danfoss common shares not already owned by Danfoss and its affiliates for $58.50 per share in cash.

The $58.50 per share price represents a 48.6% premium to the closing price of Sauer-Danfoss shares on November 27, 2012, the day prior to the announcement of the Danfoss proposal.

The Sauer-Danfoss board approved the transaction based on the unanimous recommendation of a special committee of the board made up solely of independent directors. The special committee undertook a deliberate and comprehensive negotiation with Danfoss to achieve a highly attractive cash offer for stockholders that factored in Sauer-Danfoss' prospects as well as the current economic environment, Danfoss said.

Under the terms of the agreement, Danfoss will commence a tender offer at $58.50 per Sauer-Danfoss share within 10 business days. The tender offer will be conditioned upon, among other things, the tender of a majority of the 24.4% of Sauer-Danfoss shares owned by the public minority stockholders.

If, following the tender offer, Danfoss owns at least 90% of the outstanding shares as a result of its current shareholdings, shares tendered in the tender offer and the issuance of new shares by Sauer-Danfoss pursuant to a "top up" provision in the merger agreement between the parties that would go into effect only following a successful tender offer, Danfoss intends to cause Sauer-Danfoss to enter into a short-form merger as soon as reasonably practicable thereafter in which shares not tendered in the tender offer would be converted into the right to receive $58.50 per share in cash without interest.

The transaction does not require antitrust approval and is expected to close in the second quarter of 2013 subject to satisfaction of the tender offer conditions and customary closing conditions.