EU blocks CVC buy of Lenzing fibres

EU blocks CVC buy of Lenzing fibres

Press Release

Brussels, October 17, 2001 — (Dow Jones) - The European Commission said Wednesday that it has prohibited the acquisition of Austria's Lenzing AG (R.LZG) by the U.K.'s CVC Capital Partners Group Ltd. (U.CVC) due to competition concerns.

Bank Austria is Lenzing's majority shareholder.

The Commission said since CVC already controlled Lenzing's principal rival in Europe, Acordis, the only rival in the man-made fiber manufacturing business would be in the U.S.

Lenzing said in a statement its day-to-day business operations won't be affected by the E.U. decision.



Bank Austria said its 80% stake in Lenzing will be transferred to private foundation B & C Holding as part of the bank's strategy to separate its non-banking activities.

The bank won't receive a cash payment for the stake, but will have profit participation rights, Bank Austria's spokesman Martin Hehemann said.

“There will be practically no difference for the (bank's) profit/loss account from (the total) if we sold the stake to CVC,” he said.

Hehemann said B & C Holding will manage the Lenzing stake and anyone interested in buying the stake would have to deal with B & C Holding.

If the transaction had been approved, CVC would have paid EUR90 a share for Bank Austria's stake, amounting to EUR52 million, a transaction which was expected to be booked in HypoVereinsbank's fourth-quarter figures.

Bank Austria was purchased by Germany's Bayerische Hypo-Und Vereinsbank AG (G.BHV) in 2000.

Company Web sites: http://www.lenzing .at; http://www.bankaustria.com

- by Elena Logoutenkova, Dow Jones Newswires; +49-69-29725-500; elena.logoutenkova@dowjones.com .

(Copyright (c) 2001, Dow Jones & Company, Inc.).

Sources: DOW JONES INTERNATIONAL NEWS 17/10/2001