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Forbo: Transaction Agreement signed - EGM scheduled for 24 March 2005

Eglisau / Zurich, 25 February 2005

The Board of Directors is pleased to announce that a transaction agreement has been signed today with AFB Investment, wholly owned by funds advised by CVC Capital Partners. AFB and Forbo have agreed that AFB may announce a public tender offer for all outstanding shares at an offer price of CHF 260 per share until 8 March 2005. Independent of an offer being launched, Forbo will hold an EGM on 24 March 2005 in order to allow an expedited decision by the shareholders on the future governance of the company.

Forbo and AFB, a company wholly owned by funds advised by CVC, have signed a transaction agreement this Friday, according to which AFB may announce a public tender offer for all outstanding shares of Forbo at an offer price of CHF 260 per share until 8 March 2005. CVC will not conduct any further due diligence so that the tender offer will not affect the ongoing business of the Company thus allowing management and the employees of the Forbo group to fully concentrate on their business.

The potential tender offer gives the shareholders the opportunity to freely decide on the future ownership structure of the company. Now that a group of shareholders has built up a large minority participation in Forbo which would give it de facto control if registered, the Board of Directors believes it is proper to give all shareholders a choice between allowing a minority shareholder to control the company or accepting an offer for all shares in a tender offer.

No other bidders have signed an agreement within the deadline set by the Board of Directors that expired this evening. Competing offers remain possible, but the board will stick to its original statement and not enter into any agreement or allow further due diligence after this date, unless required to do so under Swiss take-over regulation.

In the interest of Forbo, the Board of Directors is committed to expedite the process and let the shareholders decide as soon as possible on all important governance issues. Independently of an offer being announced, Forbo will hold an extraordinary shareholders meeting on 24 March 2005 to vote on the following agenda items. Shareholders may register their shares until 17 March 2005.

1. Request by Tweedy, Browne Global Value Fund: amendment of the articles of association to the effect that whoever launches a public tender offer will have to offer at least the price paid by the offeror during the 12 months preceding the announcement of the offer.

2. Full unconditional abolition of the 8% voting restriction. In order to assure a fair treatment between the minority group and the offeror, the amendment will make it clear that registration will only occur at the end of the offer period, if such period is running.

3. Elections (which agenda item will only be voted if (a) there is no public offer launched and if (b) agenda item 2 is approved by the shareholders, in which case the present board with the exception of Mr. Schneider will resign as previously announced). Under this item, the shareholders can elect new board members, whose names will be proposed by the new controlling shareholder.

"We believe that by allowing the shareholders a fair choice and by trying to have a decision on the table as soon as possible, we act in the best interest of all our shareholders, customers and employees," designated Chairman Rolf Watter commented.

Forbo is a leading manufacturer and supplier of floor coverings, adhesives, and belting. Our products and services are globally recognized. In our flooring business the focus is on environmentally friendly and design-oriented linoleum, high quality vinyls and ready-to-lay parquetry. In the adhesives business high-performance adhesives provide stable and durable bonding of a variety of materials. Forbo manufactures conveyor, processing and power transmission belts under the trade name "Siegling".

The Forbo Group with head office in Eglisau, Switzerland, has some 5’600 employees today. The holding company, Forbo Holding AG, is listed at the SWX Swiss Exchange (securities number 354'151, Bloomberg FORN SW, Reuters FORZn S). Further information can be found at www.forbo.com.

Corina Atzli
Head of Corporate Communications
Tel: + 41 1 868 25 69
Fax: + 41 1 868 35 69