EANS-Adhoc: Salzgitter AG launches an offering of bonds exchangeable into shares of Aurubis AG

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ad-hoc disclosure pursuant to section 15 of the WpHG transmitted by euro
adhoc with the aim of a Europe-wide distribution. The issuer is solely
responsible for the content of this announcement.
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28.10.2010

Salzgitter, October 28, 2010

Not for publication or distribution in the United States, Australia,
Canada, Japan or South Africa

Ad-hoc-release according to § 15 WpHG

Salzgitter AG launches an offering of bonds exchangeable into shares
of Aurubis AG

The Management Board of Salzgitter AG, with the approval of the
Supervisory Board, resolved today to issue senior unsecured bonds
exchangeable into existing ordinary bearer shares of Aurubis AG (the
"Bonds"). The Bonds will be issued by Salzgitter Finance B.V. (the
"Issuer"), a wholly-owned Dutch subsidiary of Salzgitter AG, and are
guaranteed by Salzgitter AG. The Bonds (each with a denomination of
EUR50,000) will be offered in an accelerated bookbuilding to
institutional investors outside of the U.S. only.

The base offering size will be approximately EUR 250 million (over
approximately 6 million shares of Aurubis AG initially). The base
offering size may be increased by up to EUR 25 million by Salzgitter
AG. In addition, Salzgitter AG has granted the Joint Bookrunners a
greenshoe option of up to EUR 25 million to cover over-allotments (if
any). The maximum number of underlying shares of Aurubis AG assuming
exercise of increase and greenshoe options will initially be up to 7
million, representing approximately 17% of the current share capital
of Aurubis AG. The issue size can amount to up to approximately EUR
300 million, depending on the development of the Aurubis AG share
price during placement.

With this transaction Salzgitter AG diversifies its funding sources
and intends to use the proceeds from the sale of the exchangeable
bonds for general corporate purposes.

The Bonds will have a maturity of seven years and are callable by the
Issuer on or after 28 November 2013 if the Aurubis AG share price
(over a certain period) exceeds 130% of the then applicable exchange
price. Holders of the Bonds will be entitled to require an early
redemption of their Bonds on the fifth anniversary of the issue date,
at the principal amount plus accrued interest. The Bonds will be
issued around 8 November 2010 (the "Settlement Date") at 100% of the
principal amount. The coupon will be between 1.75%- 2.50 % p.a. and
will be determined during an accelerated bookbuilding taking place
today. The exchange price will be set at an exchange premium of 25%
above the VWAP (Volume Weighted Average Price) of the Aurubis AG
share on XETRA from the time of launch of the placement until
pricing, which is expected to occur today. Salzgitter AG intends to
list the Bonds on the Open Market (Freiverkehr) segment of the
Frankfurt Stock Exchange. BofA Merrill Lynch, Commerzbank and
Deutsche Bank are acting as Joint Bookrunners and Lead Managers in
relation to the transaction.

The commitment of Salzgitter AG to its stake of Aurubis AG is
underpinned by certain structural features of the Bonds, such as the
Issuer´s ability to cash settle the Bonds if Bondholders decide to
exercise their exchange right. This reflects Salzgitter AG´s strong
interest in further supporting Aurubis AG in its successful
development which is also of advantage for Salzgitter AG. From the
date of the announcement of the final terms of the Bonds, BofA
Merrill Lynch, as stabilisation manager, may over-allot or effect
transactions with a view to supporting the market price of the Bonds
at a level higher than that which might otherwise prevail. Such
stabilising, if commenced, must be brought to an end no later than 5
November 2010. If commenced, such stabilising may lead to a market
price of the Bonds which may be higher than the level that would
exist if no such stabilising measures were taken and may indicate to
the market a price stability which without such stabilising might not
prevail. However, there is no obligation to engage in such
stabilisation activities and such stabilisation, if commenced (which
may not occur before the final terms of the Bonds have been
announced), may be discontinued at any time. Stabilisation/FSA.

IMPORTANT NOTE - NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION,
DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA (OR
TO US PERSONS), AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA, OR IN ANY
OTHER JURISDICTION IN WHICH OFFERS OR SALES WOULD BE PROHIBITED BY
APPLICABLE LAW

This ad- hoc announcement is for information purposes only and does
not constitute or form part of, and should not be construed as an
offer or an invitation to sell, or issue or the solicitation of any
offer to buy or subscribe for, any securities. In connection with
this transaction there has not been, nor will there be, any public
offering of any securities. No prospectus will be prepared in
connection with the offering of the Bonds. The Bonds may not be
offered to the public in any jurisdiction in circumstances which
would require the Issuer of the Bonds to prepare or register any
prospectus or offering document relating to the Bonds in such
jurisdiction. The distribution of this ad- hoc announcement and the
offer and sale of the Bonds in certain jurisdictions may be
restricted by law. Any persons reading this ad- hoc announcement
should inform themselves of and observe any such restrictions.

This ad- hoc announcement does not constitute an offer to sell or a
solicitation of an offer to purchase any securities in the United
States. The securities referred to herein (including the Bonds and
the shares of Aurubis AG) have not been and will not be registered
under the U.S. Securities Act of 1933, as amended (the "Securities
Act") or the laws of any state within the U.S., and may not be
offered or sold in the United States or to or for the account or
benefit of U.S. persons, except in a transaction not subject to, or
pursuant to an applicable exemption from, the registration
requirements of the Securities Act or any state securities laws. This
ad- hoc announcement and the information contained herein may not be
distributed or sent into the United States, or in any other
jurisdiction in which offers or sales of the securities described
herein would be prohibited by applicable laws and should not be
distributed to United States persons or publications with a general
circulation in the United States. No offering of the Bonds is being
made in the United States.

Subject to certain exceptions, the securities referred to herein
(including the Bonds and the shares of Aurubis AG) may not be offered
or sold in Australia, Canada, Japan or South Africa to, or for the
account or benefit of, any national, resident or citizen of
Australia, Canada, Japan or South Africa. The offer and sale of the
securities referred to herein has not been and will not be registered
under the applicable securities laws of Australia, Canada or Japan.

In the United Kingdom, this ad- hoc announcement is only being
distributed to and is only directed at (i) persons who have
professional experience in matters relating to investments falling
within Article 19(1) of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005 (the "Order") and (ii) high net
worth entities falling within Article 49(2) of the Order and (iii)
persons to whom it would otherwise be lawful to distribute it (all
such persons together being referred to as "relevant persons"). The
Bonds are only available to, and any invitation, offer or agreement
to subscribe, purchase or otherwise acquire such Bonds will be
engaged in only with, relevant persons. Any person who is not a
relevant person should not act or rely on this ad- hoc announcement
or any of its contents.

The Joint Bookrunners are acting on behalf of the Issuer and
Salzgitter and no one else in connection with the securities and will
not be responsible to any other person for providing the protections
afforded to clients of the Joint Bookrunners, or for providing advice
in relation to the securities.

In connection with the offering of the Bonds, each of the Joint
Bookrunners and any of their respective affiliates acting as an
investor for their own account may take up Bonds and in that capacity
may retain, purchase or sell for its own account such securities and
any securities of the Issuer, of Salzgitter AG or of Aurubis AG or
any related investments and may offer or sell such securities or
other investments otherwise than in connection with the offering of
the Bonds. The Joint Bookrunners do not intend to disclose the extent
of any such investment or transactions otherwise than in accordance
with any legal or regulatory obligation to do so.

Any offer if made may only be addressed to and directed, in member
states of the European Economic Area which have implemented the
Prospectus Directive (each, a "relevant member state"), at persons
who are "qualified investors" within the meaning of Article 2(1)(e)
of the Prospectus Directive (Directive 2003/71/EC) and pursuant to
the relevant implementing rules and regulations adopted by each
relevant member state ("Qualified Investors").

Each person who initially acquires any Bonds in connection with the
issuance or to whom any offer of securities may be made will be
deemed to have represented, acknowledged and agreed that it is a
Qualified Investor as defined above. In the case of any securities
being offered to any investor as a financial intermediary as that
term is used in Article 3(2) of the Prospectus Directive, such
investor will also be deemed to have represented and agreed that the
securities acquired by it in the offering have not been acquired on
behalf of persons in the EEA other than Qualified Investors or
persons in the UK and other member states (where equivalent
legislation exists) for whom the investor has authority to make
decisions on a wholly discretionary basis, nor have the securities
been acquired with a view to their offer or resale in the EEA where
this would result in a requirement for publication by the Issuer,
Salzgitter AG or the Joint Bookrunners of a prospectus pursuant to
Article 3 of the Prospectus Directive, unless the prior consent of
the aforementioned parties has been obtained to such offer or resale.

end of announcement euro adhoc
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ots Originaltext: Salzgitter AG
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:

Markus Heidler

+49 (0) 5341/21-6105

heidler.m@salzgitter-ag.de

Branche: Iron & Steel
ISIN: DE0006202005
WKN: 620200
Index: Midcap Market Index, MDAX, CDAX, Classic All Share, Prime All
Share
Börsen: Frankfurt / regulated dealing/prime standard
Berlin / free trade
Hamburg / free trade
Stuttgart / free trade
Düsseldorf / free trade
Hannover / free trade
München / free trade