EQT New Shareholder of the Former DaimlerChrysler Off-Highway Business Unit

• EQT supports management’s growth strategy for mtu
• The company will remain a member of the German Employers’ Association

The sale of the DaimlerChrysler Off-Highway business unit to the private Equity fund EQT is complete: DaimlerChrysler and EQT signed the Agreement. The sale covers 100 percent of German engine manufacturer MTU Friedrichshafen including the Off-highway part of Detroit Diesel in the USA. The sale is subject to approval from relevant antitrust authorities.

“The sale process has come to a favorable end for all parties. EQT is our favorite candidate. With their industrial approach, they substantially contribute to our company on the financial side, and will work together with us on our growth strategy”, said Volker Heuer, Chairman of the mtu Board of Management and the former DaimlerChrysler Off-Highway business unit. “EQT will participate in our company over the long term” Heuer continued, “Through a great willingness to invest, EQT enables us to extend our technology leadership.”

mtu Chief Volker Heuer also underscores that the current business is clearly the responsibility of the existing Management which will implement the defined growth strategy. Friedrichshafen will remain the company’s headquarters, with the legal entity, management and operations located there. EQT will invest in mtu to ensure future growth and market leadership.

“Growth always requires considerable capital expenditures, and these bear fruit only after an extended start-up phase”, said Marcus Brennecke, Managing Partner of EQT Germany’s operation. “We believe that our investments in the planned new products of mtu are excellently placed. We are well aware that it will take time until we can harvest the fruits of this work.”

“EQT’s value creation strategy is based on heavy investments into the growth of acquired companies,” Marcus Brennecke pointed out. “By investing into R&D, new products and add-on acquisitions, we want to make good companies even better and sustainably improve their competitive position. We are highly impressed by mtu’s technology leadership which is a strong base to foster the planned growth.”

The company will remain a member of the German Employers’ Association

Karl-Heinz Wulle, Chairman of the mtu Works Council, is also satisfied with the development: “Initially, the Works Council was clearly in favor of an industrial investor as new partner. The industry-based approach of the financial investor EQT is reflected in a detailed concept presented to us.” In particular, the mtu Works Council was convinced by EQT investing based on management’s business plan with a significant increase in research and development budgets and investments in the planned 1600 engine series. The company will remain a member of the German Employers’ Association and maintain compliance with the legal union agreements.

In legal terms, the former DaimlerChysler Off-Highway division is expected to be transferred to the new partner EQT in early 2006. According to Volker Heuer, “the road towards a successful future is open and we will be able to further extend our leading position in technology and innovation with our well established brands, mtu, Detroit Diesel and L’Orange.”