Dofasco and ThyssenKrupp have reached an agreement for ThyssenKrupp to acquire Dofasco in a friendly, all-cash transaction.

To initiate the deal, ThyssenKrupp will make an offer to acquire all of Dofasco's outstanding common shares for total consideration of approximately C$4.8 billion ((euro) 3.5 billion), or C$61.50 per common share. ThyssenKrupp, which currently owns no shares in Dofasco, has the necessary funds to complete the transaction from available cash.

Dofasco's Board of Directors has resolved to unanimously recommend to Dofasco shareholders that they accept the offer. Brian MacNeill, Chair of Dofasco's Board of Directors, said, "The ThyssenKrupp offer recognizes the value of one of the world's most consistently profitable steel producers. The significant premium being offered reflects the strategic value of Dofasco to ThyssenKrupp in accelerating the growth of the combined companies in North America."

The offer values Dofasco's equity at a total of 3.5 billion euros (C$4.8 billion). The offer price represents a 9.8% premium over Arcelor’s unsolicited C$56.00 per share bid, which was announced on November 23, 2005. It also represents a 40% premium over Dofasco's closing share price on the day prior to the announcement of Arcelor’s unsolicited offer for Dofasco. ThyssenKrupp expects the acquisition to be accretive to earnings in the first full year of the combination.

ThyssenKrupp regards continuity of management as key to integrating Dofasco and realizing its full value within the ThyssenKrupp Group. With limited overlap between the two organizations, the companies say they do not anticipate restructuring involving employees or operations to result from this transaction.

Going forward, Dofasco will be given responsibility for the successful positioning and strategic development of ThyssenKrupp Steel in North America. ThyssenKrupp Steel's existing processing activities in the NAFTA region will also be assigned to Dofasco.

ThyssenKrupp says its acquisition of Dofasco will strengthen the Group's presence in the NAFTA steel market. The acquisition represents a continuation of ThyssenKrupp's internationalization strategy in high-quality flat steel, providing direct access to attractive customer groups such as the automobile and packaging industries. Together the two companies will have the strength of increased size, scale and geographic reach.

The Support Agreement sets out customary market conditions for the takeover bid, including the acceptance by shareholders representing a minimum of two-thirds of the outstanding Dofasco shares on a fully diluted basis, and the receipt of necessary regulatory approvals including Investment Canada and Competition Act. The support agreement also provides for payments to ThyssenKrupp by Dofasco in the event the acquisition is not completed under certain circumstances. ThyssenKrupp and Dofasco anticipate that the transaction can be completed before the end of first quarter 2006.

Citigroup is acting as financial advisor to ThyssenKrupp and RBC Capital Markets is acting as financial advisor to Dofasco.

Established in 1912, Dofasco employs approximately 11,000 people and is Canada's largest steel producer. Sales in 2004 amounted to C$4.2 billion. Dofasco is a leading North American steel solutions provider. Product lines include hot rolled, cold rolled, galvanized, Extragal(TM), Galvalume(TM), and tinplate flat rolled steels, as well as tubular products, laser-welded blanks and Zyplex(TM), a proprietary laminate. Dofasco's wide range of steel products is sold to customers in the automotive, construction, energy, manufacturing, pipe and tube, appliance, packaging and steel distribution industries. The company has additional operations in Canada, the United States and Mexico. Dofasco also owns 98.7% of Québec Cartier Mining (QCM). QCM owns and operates the Mont-Wright open mine pit and a pellet plant at Port-Cartier.

Focusing on the key areas of Steel, Capital Goods and Services, the capabilities of ThyssenKrupp are organized in six segments — Steel, Stainless, Automotive, Technologies, Elevator and Services. With sales of 39.3 billion euros in 2003/2004 and 184,000 employees, the Group occupies mainly top-three positions with its activities worldwide.

ThyssenKrupp Steel concentrates on flat-rolled steel with high value added, tailored to customers' requirements. With sales of around 8.3 billion euros in fiscal year 2003/2004, almost 31,000 employees and customers in more than 80 countries, the segment is one of the world's foremost steel producers. In carbon steel flat products it is number 2 in Europe. Products from ThyssenKrupp Steel are used in a wide range of everyday applications, such as car bodies, facades and domestic appliances.

ThyssenKrupp has a track record of successful operations in Canada. The Group has been operating in the country since 1914. Today ThyssenKrupp has a total of 25 companies with 4,270 employees in Alberta, British Columbia, New Brunswick, Newfoundland, Ontario and Quebec. Sales amounted to 1 billion euros in fiscal 2003/2004. The activities in Canada focus on the supply of body and chassis components to the North American auto industry, the production and service of elevators and escalators as well as the sale of stainless steel, rolled steel, nickel, tubular products and machine tools.