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Electronics Production | April 03, 2006

Continental buys Motorola's<br>automotive electronics business

Continental AG and Motorola, Inc. today jointly announced that the companies have entered into an agreement under which Continental, a leading automotive supplier, will acquire Motorola's automotive electronics business for approximately US$ 1 billion in cash.
The transaction includes Motorola' controls, sensor, interior electronics and telematics businesses. The acquired business will be integrated into Continental's Automotive Systems Division. The transaction is expected to be completed in the first half of 2006, and is subject to customary closing and regulatory conditions.

The acquisition marks another milestone in Continental's mission to make individual mobility safer.

- It will significantly increase its product portfolio and R&D capabilities in body and sensor electronics as well as powertrain and chassis controls.

- It will double overall sales of Continental's Automotive Systems division in North America.

- It will add a completely new and exciting technology to Continental's product range: telematics.

- Telematics will further enhance Continental's position as a leader in active and passive vehicle safety. It will allow Continental to intensify and expand the integration of features that help avoid collision with features of post crash safety/emergency assistance of occupants.

"This strategic move will further strengthen our position as a safety and systems supplier to the automotive industry and will give us a real push forward in automotive electronics," said Continental's Executive Board chairman Manfred Wennemer on Monday in Frankfurt.
"Motorola's automotive electronics business is a perfect fit with our strategy of providing sophisticated safety systems to our customers. They are a premier telematics supplier and possess profound experience in this field. We are thus adding a successful enterprise with well-educated, highly motivated and innovative employees in a field of our business predicted to generate double digit growth in the upcoming years. This is a perfect example of our strategy to improve our sales and operating profits with organic growth as well as sound acquisitions."

Continental has been constantly expanding its core competencies in vehicle dynamics, reaching EUR 13.8 billion (US$ 17.2 billion) in sales in 2005. The corporation will be integrating Motorola's automotive electronic business of US$ 1.6 billion in annual sales into its EUR 5.2 billion (US$ 6.5 billion) Automotive Systems Division.

"We are pleased to work with Continental to transition our automotive business to an industry leader focused on bringing innovative solutions to automotive customers worldwide. Motorola is proud of the performance and leadership of our automotive electronics employees who will become a valuable addition to Continental," said Greg Brown, president of Motorola's Net works & Enterprise business, which oversees the automotive electronics unit. "This transaction positions Motorola for continued success by further sharpening our strategic focus on communications solutions that advance our vision of Seamless Mobility."

Since inventing the first commercially successful car radio in 1930, Motorola has been an industry leader and innovator for electronic solutions to the global automotive industry. Innovations include: the first all-electronic alternator system (1961); the first computerized electronic engine control module (1980); and the first Telematics emergency messaging system (1996).

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