BorgWarner Buys Majority Stake in Beru

4 January 2005

BorgWarner has purchased approximately 62% of German-based Beru AG from its major shareholders, The Carlyle Group and a group of family shareholders. The purchase was a cash transaction at a price of €59 per share or €367 million (approximately US $490 million at current exchange rate of 1.335). Of the €367 million in financing, €240 million was borrowed locally and the remainder was funded by available cash balances.

Having a majority ownership in Beru gives us additional access to the fast- growing diesel market and enhances our sensor and engine electronics expertise. —Timothy M. Manganello, Chairman and CEO of BorgWarner

Beru AG is a leading global automotive supplier and manufacturer of diesel cold starting technology (glow plugs and instant starting systems—earlier post); gasoline ignition technology (spark plugs and ignition coils); and electronic and sensor technology (tire pressure sensors, diesel cabin heaters and selected sensors.)

The acquisition was not a surprise—it had been talked about for months, and approved by the EC in December. But it does reflect how important the diesel business is becoming to global automakers and systems suppliers.