Weichai Power and KION Group Successfully Close Transaction to Form Long-term Strategic Partnership

Weichai Power and KION Group Successfully Close Transaction to Form Long-term
                            Strategic Partnership

  PR Newswire

  WEIFANG, China, Dec. 28, 2012

WEIFANG, China, Dec. 28, 2012 /PRNewswire/ --

  *Weichai Power has joined KKR and Goldman Sachs Capital Partners as an
    anchor investor in KION with a 25% stake via capital increase
  *EUR 671 million shareholder loan of KION converted into equity
  *Weichai Power now the majority shareholder of Linde Hydraulics
  *Linde Material Handling GmbH completes carve-out of Linde Hydraulics
    business and all 1,400 LHY employees agree to transfer to the new entity
  *Aschaffenburg-based Linde Hydraulics business to move into new dedicated
    plant in 2015
  *Supervisory board of KION to reflect new shareholder structure
  *With sound organization structure, Linde Hydraulics can operate
    independently

Weichai Power Co., Ltd. ("Weichai Power"), KION Holding 1 GmbH ("KION") and
their respective subsidiaries (together with KION the "KION Group") and the
shareholders of KION today successfully closed and supplemented their
strategic partnership, which was first announced on 31 August 2012. Weichai
Power, a leading Chinese automotive and equipment manufacturer and part of the
Shandong Heavy Industry Group ("SHIG"), and KION Group, one of the world's
leading manufacturers of industrial trucks, intend to strengthen their
industrial base in the European markets, create additional opportunities for
expansion for their Asia-Pacific businesses and build a platform for future
joint growth.

Weichai Power, through its Luxembourg based subsidiary Weichai Power
(Luxembourg) Holding S.à.r.l., acquired a 25% stake in KION by way of a
capital increase, making it an anchor investor in KION Group alongside KKR and
Goldman Sachs Capital Partners. In addition, Weichai Power now holds a 70%
majority stake in Linde Hydraulics GmbH & Co. KG ("Linde Hydraulics"), which
comprises the carved-out former hydraulics business activities of Linde
Material Handling GmbH. The remaining 30% continue to be held by Linde
Material Handling GmbH. In addition to the existing call option enabling
Weichai Power to increase its shareholding in KION to 30% on a fully diluted
basis upon the completion of a potential future IPO, the parties agreed to
grant Weichai Power a further option to acquire an additional 3.3% stake in
KION from the current shareholders until 30 June 2013 or within three months
after completion of a potential future IPO. If Weichai holds at least 33.3% of
KION, the parties will support the election of a Weichai Power representative
to Chairman of the Supervisory Board of KION.

For Weichai Power, venturing into the world's leading forklift and high-end
hydraulic fields has brought about clear improvements to the structure of its
corporate product division, as well as to its upgrading of enterprise
products. In addition, there is greater rationalization of its corporate
global strategic business structure.

For KION Group, the strategic partnership with Weichai Power provides
additional access to key Asian growth markets as it will leverage Weichai
Power's strong local roots and relationships. KION Group will also have access
to a larger supplier base throughout China and Europe.

Following the successful carve-out, the hydraulics business of Linde is now
being operated and managed by the independent company Linde Hydraulics.
Weichai Power holds 70% in Linde Hydraulics through a subsidiary, while Linde
Material Handling GmbH retains a 30% minority stake in the newly formed
company. Linde Hydraulics continues to market its products under the Linde
trademark. The existing Strategic Sales Agreement between Linde Hydraulics and
Eaton Corporation, which has been reasonably amended, remains in place.
Through its partnership with Weichai Power, Linde Hydraulics will gain
additional scale and will improve its ability to adapt in a changing market
environment and amid increasingly intensive competition. Linde Hydraulics will
leverage Weichai Power's complementary products and technologies in an effort
to exploit untapped market potential, particularly in the growing Asia region.

Weichai Power has invested a total of EUR 738 million, including EUR 467
million paid in to acquire its 25% stake in KION through a capital increase
and EUR 271 million paid to Linde Material Handling GmbH for its 70% majority
stake in Linde Hydraulics. Proceeds from this transaction will further
strengthen KION Group's capital structure. A large portion of the proceeds
will be used for repaying outstanding debt under KION Group's senior
facilities. In addition to the received cash proceeds, an outstanding EUR
671million shareholder loan granted by the shareholders to KION that would
have matured in2021 was converted into equity in connection with the closing.

Tan Xuguang, Chairman and CEO of Weichai Power, said: "Our teams have done a
tremendous job in closing this transaction in a very short timeframe, and have
thus helped our strategic partnership get off to an encouraging start. We will
now make an immediate start to implementing our common growth strategy in the
area of hydraulics. The new Aschaffenburg-based Linde Hydraulics plant is set
to start operations in 2015. Also, teams from Linde Hydraulics and Weichai
Power have already started to explore a wide range of applications for Linde
Hydraulics technologies in Weichai Power products. Our options to increase our
overall shareholding in KION up to 33.3% demonstrate our strong commitment to
the common goals of KION Group and Weichai Power."

Gordon Riske, CEO of KION Group, said: "The closing of this long-term
strategic partnership is a milestone in our strategy to continuously expand
our forklift truck business in the growing Asian and Chinese markets.
Moreover, the additional enhancement of our capital structure provides
exciting opportunities with which we can build on our growth strategy. Our
teams have successfully completed all of the more than 3,000 action items in
less than four months. This is a considerable achievement which highlights our
exceptional execution capabilities and spirit that the two partners share."

Johannes Huth, Member & Head of KKR Europe, and Alexander Dibelius, Head of
Goldman Sachs Germany, Austria and Central and Eastern Europe, added: "We very
much look forward to the additional growth opportunities this partnership
brings to KION to continue its highly successful development trend over the
past years. This strategic partnership is part of our strategy to further
enhance KION Group's global business presence so as to exploit the vast market
opportunities in markets outside Europe."

The long-term strategic partnership between Weichai Power and KION Group will
also be reflected in the governance structure of KION and Linde Hydraulics.

Jiang Kui, President of Shandong Heavy Industry Group and Director of Weichai
Power, will join the Supervisory Board of KION, which will continue to be led
by Chairman John Feldmann. Jiang will succeed Michael Süß, member of the
executive board of Siemens AG, who will leave the KION Supervisory Board. All
other members of the Supervisory Board of KION will retain their current
positions.

The Supervisory Board of the newly established Linde Hydraulics will consist
of Jiang Kui (Chairman), Sun Shaojun and Jeffrey Chen, all of whom were
nominated by Weichai Power, as well as Theodor Maurer, who was nominated by
Linde Material Handling, and who will ensure full continuity in the business
relationship between Linde Hydraulics and Linde Material Handling as one of
the continued key customers of Linde Hydraulics. The respective employee
representatives have yet to be nominated.

Jörg Ulrich (Speaker of the Management Board and Head of Finance and
Administration, age 42), Steffen Appel (Head of Operations, age 45), and
Thorsten Van der Tuuk (Head of Products and Markets, age 56) have been
appointed to the Management Board of Linde Hydraulics.

About Weichai Power

Weichai Power Co., Ltd. (2338HK/000338SZ) is a leading automotive and
equipment manufacturing group in China. It operates in three main business
segments: power assembly (including engines, gear boxes and axles), commercial
vehicles, and automobile electronics and parts, encompassing one of the most
comprehensive product ranges in the industry. Weichai Power has the highest
sales volume globally in high-speed heavy-duty engines and heavy-duty
gearboxes. Its spark plug products enjoy the largest market share in China,
and its heavy-duty axle products are considered a top brand in China. The
company also ranks No. 4 in heavy duty trucks in China. The company was listed
on Hong Kong Stock Exchange in 2004 and on Shenzhen Stock Exchange in 2007. In
2011, Weichai Power generated revenue of RMB 60 billion (about USD 9.5 billion
or EUR 7.5 billion) and a net profit of RMB 5.6 billion (about USD 900 million
or EUR 700 million). At the end of 2011, Weichai Power has approximately
42,000 employees globally.

About Shandong Heavy Industry Group

Shandong Heavy Industry Group is one of the most comprehensive leading
industrial equipment manufacturers in China, with two complete industrial
chains of the highest quality commercial vehicles and construction machinery.
The Group has four listed subsidiaries, including Weichai Power
(2338HK/000338SZ), Weichai Heavy Machinery (000880SZ), Yaxing Motor Coach
(600213SH), and Shantui Construction Machinery (000680SZ), which is the
largest bulldozer producer in the world. In 2011, the Group generated revenue
of RMB 122.5 billion (about USD 19.4 billion or EUR 15.4 billion) and a profit
of RMB 8.6 billion (about USD 1.4 billion or EUR 1.1 billion), with 60,000
employees worldwide.

About KION Group

KION Group - comprising the six brands Linde, STILL, Fenwick, OM STILL, Baoli
and Voltas - is Europe's market leader in industrial trucks, the global number
two in the industry and the leading non-domestic supplier in China. The Linde
and STILL brands serve the premium segment worldwide. Fenwick is the largest
supplier of material handling products in France, while OM STILL is a market
leader in Italy. The Baoli brand focuses on the economy segment, and Voltas is
one of the two market leaders in India. In 2011, KION Group employed roughly
22,000 people and generated revenue of around EUR 4.4 billion.

Disclaimer Weichai Power

This press release contains forward-looking statements involving known and
unknown risks, uncertainties and other factors, many of which are outside the
control of the Weichai Power Co., Ltd. ("Weichai Power"), are difficult to
predict and may cause future developments to differ significantly from assumed
developments as expressed or implied in the forward-looking statements in this
press release. Any liability (including in respect of direct, indirect or
consequential loss or damage) of any member of Weichai Power with a view to
the information contained in this press release is expressly disclaimed. This
press release does not purport to contain all of the information that may be
required to evaluate any proposed transaction, and any recipient hereof should
seek its own legal, accounting and other relevant professional advice. No
member of Weichai Power undertakes any obligation or expects to update or
revise this press release, including forward-looking statements or any other
information contained herein, whether as a result of new information, future
events or otherwise.

Disclaimer KION Group

This press release contains forward-looking statements involving known and
unknown risks, uncertainties and other factors, many of which are outside the
control of KION Group ("KION"), are difficult to predict and may cause future
developments to differ significantly from assumed developments as expressed or
implied in the forward-looking statements in this press release. Any liability
(including in respect of direct, indirect or consequential loss or damage) of
any member of KION with a view to the information contained in this press
release is expressly disclaimed. This press release does not purport to
contain all of the information that may be required to evaluate any proposed
transaction, and any recipient hereof should seek its own legal, accounting
and other relevant professional advice. No member of KION is under any
obligation or expectation to update or revise this press release, including
forward-looking statements or any other information contained herein, whether
as a result of new information, future events or otherwise.

Contact: Michael Hauger, Head of Corporate Communications, KION Group GmbH,
Tel.: +49-(0)-611-770-655, Email: michael.hauger@kiongroup.com; Dai Lixin,
Secretary of Board, Weichai Power Co., Ltd., Tel.: +86-536-2297-068, Email:
dailx@weichai.com; Monika Schaller, Head of Corporate Communications Germany,
Austria, Switzerland, CEE and Russia, Goldman Sachs AG, Tel:
+49-(0)-69-75-32-26-44, Email: monika.schaller@gs.com; Anna Sperber, Media
Spokesperson Germany for Kohlberg Kravis Roberts, Tel.:
+49-(0)-69-92-18-74-78, Email: asperber@heringschuppener.com
 
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