Continental AG: Continental concludes Investment Agreement with Schaeffler

Continental AG / AgreementRelease of an Ad hoc announcement according to § 15 WpHG, transmitted byDGAP - a company of EquityStory AG.The issuer is solely responsible for the content of this announcement.----------------------------------------------------------------------Continental Aktiengesellschaft, Hannover, ISIN DE0005439004 On August 21, 2008, Continental AG entered into a far-reaching InvestmentAgreement with Schaeffler KG, Mrs. Maria-Elisabeth Schaeffler and Mr. GeorgF.W. Schaeffler. With this agreement, the dispute regarding the publictakeover offer by the Frankish family owned business has been settled.Former German Chancellor Dr. Gerhard Schröder has been won as a guarantorfor ensuring the interests of all stakeholders of Continental.The open ended Investment Agreement, that cannot be terminated by theparties before spring 2014, contains several provisions to safeguard theinterests of Continental AG and its shareholders, employees and customers. Schaeffler KG has committed itself to increase the offer price perContinental share from EUR 70.12 to EUR 75.00 (this price resulting in apremium of 39 % on the stock price per Continental share immediately priorto announcement of the takeover bid).In addition, Schaeffler has undertaken to limit its position to a minorityshareholding in Continental AG (up to 49.99 %) for a period of four years,to support the ongoing strategy and business policies of Continental AG'sexecutive board while maintaining its current market and brand appearanceand to not demand a sale of activities or other material structuralmeasures.A further material element of the agreement directed at safeguarding theinterests of Continental AG is the obligation of Schaeffler to compensateContinental AG for possible negative effects resulting form a so calledchange-of-control in connection with existing financing agreements ofContinental AG and negative tax effects resulting from Schaeffler'sshareholding in the amount of overall 522 mn Euro.Schaeffler KG further has accepted to give, in case of a possible sale ofblocks of its minority stake in Continental within the next four years, apre-emptive right to a person nominated by the guarantor, if the sale tosuch person is in the best interest of Continental AG and Schaeffler KG. Inaddition, it has been agreed that there will be no changes to ContinentalAG’s form of incorporation, its corporate seat, headquarters or businessdivisions, its listing on the stock exchange, its dividend policy or anincrease of its debt to equity ratio against the wishes of Continental AG.To safeguard the interests of the employees, Schaeffler KG is obliged notto conduct or support, without the consent of Continental’s executiveboard, any measures directed at changing the current collective bargainingor works council agreements or abolishing the employees’ codeterminationrights based on parity in the supervisory board. In addition, Schaeffler isobliged to respect all rights of the employees, works councils and thelabour unions under applicable law, agreements, regulations and contractsin force at Continental.In addition, without undue delay after completion of the takeover offerboth parties will examine the possibilities for strategic cooperationprojects between the Schaeffler Group and the Continental Groupparticularly in the Powertrain division based on the principles of analliance of equals between two productive and independent companies.As a guarantor for ensuring the interests of Continental, its shareholders,its employees and other stakeholders, former German Chancellor Dr. GerhardSchröder is authorized and empowered to enforce all obligations ofSchaeffler at any time by legal action or out of court. In this regard heis entitled to request information from Schaeffler about their level ofcompliance with their obligations under the Investment Agreement.Once the offer document has been amended by Schaeffler, the executive boardand the supervisory board shall issue an additional statement pursuant toSect. 27 of the Securities Acquisition and Takeover Act (WpÜG).21.08.2008 Financial News transmitted by DGAP---------------------------------------------------------------------- Language: EnglishIssuer: Continental AG Vahrenwalder Straße 9 30165 Hannover DeutschlandPhone: +49 (0)511 938-1068Fax: +49 (0)511 938-1080E-mail: ir@conti.deInternet: www.conti.deISIN: DE0005439004WKN: 543900Indices: DAXListed: Regulierter Markt in Berlin, Frankfurt (Prime Standard), Hannover, Hamburg, Luxembourg, Stuttgart; Freiverkehr in München, Düsseldorf; Terminbörse EUREX; Foreign Exchange(s) SWX, Wien End of News DGAP News-Service ---------------------------------------------------------------------------