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Forbo in Negotiations on a Management Buyout of the Carpet Business

Eglisau, August 28, 2001

Forbo is negotiating the divestment of its carpet activities to the management of this business unit. The negotiations comprise production sites in the Netherlands, Germany and Switzerland, as well as all the European marketing organizations. This transaction would exclude the needlefelt production in Reims (France). Talks on these plans with employees' representatives have been initiated.

Existing brand names and especially the brand "Forbo Carpet" would be used by the new independent entity also in the future, and the cooperation with the marketing organizations for the non-textile flooring activities of the Forbo Group would continue to exist. Forbo intends to hold a minority interest in the new company in order to underline the business connection. The business under negotiation had sales of CHF 188 million in 2000 and employs some 550 people, 250 of them in the Netherlands, 195 in Germany, and 80 in Switzerland.
In line with the focus on the four core businesses, i.e. linoleum, vinyls, adhesives, and belting, Forbo is looking for a viable solution for the carpet business. After last year's successful restructuring, this activity has clearly improved its profitability. The management buyout would be a convincing solution that would secure the jobs and locations. The new independent entity headed by a successful management team offers the best preconditions for further expansion. In addition, this solution will ensure the continuation of the proven cooperation with other Group businesses on an autonomous basis.

The negotiations over the next weeks will show whether it will be possible to bring the transaction to a successful conclusion. Forbo would receive a cash in-flow that could be used for acquisitions in the core businesses. In this context Forbo announces that the acquisition of the Spanish adhesives producer Carzuh will be concluded on September 1, 2001. As one of the leading Spanish high-quality adhesive manufacturer Carzuh mainly supplies the automotive, furniture and wood industries.

Forbo is a global producer of floor coverings and industrial specialties. It employs some 5 800 people worldwide and has an international network of 28 production companies in 12 countries and 67 marketing organizations in 25 countries.

Contact:

Ursula Leonhard
Head of Corporate Communications
Tel: + 41 1 868 25 69
Fax: + 41 1 868 35 69

Gerold Zenger
Chief Financial Officer
Tel: + 41 1 868 25 25
Fax: + 41 1 868 25 26