Daimler-Benz News from January 17, 1996

AEG Aktiengesellschaft to be
merged into Daimler-Benz AG

Conversion ratio still to be determined -
New management structure
for the remaining activities

Frankfurt/Stuttgart, January 17, 1996
Subject to approval by the bodies responsible, AEG Aktiengesellschaft, Berlin and Frankfurt am Main, will be merged into Daimler-Benz AG, Stuttgart, with financial effect from January 1, 1996. This step is a major element in a plan to restructure the business activities of AEG, which the AEG Board of Management presented to the Supervisory Board of AEG as was previously agreed to by the Board of Management of Daimler-Benz. Prior to the merger, it is planned to convert AEG Aktiengesellschaft into a holding company. In addition, the operating businesses will be fully transferred into legally independent units. They will subsequently be transferred to an intermediate holding company for an initial period.

The shareholders of Daimler-Benz AG and AEG Aktiengesellschaft will vote on the proposal for a merger made by the companies' respective boards of management at their Annual General Meetings on May 22, 1996 and June 5, 1996 respectively. The individual independent AEG shareholders, who currently hold 12.35 % of the share capital of AEG, will subsequently have a direct shareholding in Daimler-Benz AG. The ratio for the conversion of AEG shares into Daimler-Benz shares is currently being determined and examined by an independent court-appointed expert. Until the merger becomes effective it remains possible under the still valid terms of the offer made in 1988, to convert AEG shares into Daimler-Benz shares at a rate of 5:1.

As was previously announced AEG is currently negotiating the sale of its energy distribution and its systems and automation technology divisions.

Jürgen E. Schrempp, Chairman of the Board of Management of Daimler-Benz AG and Chairman of the Supervisory Board of AEG said: "The sale of sectors to companies with a competitive edge will strengthen the market position of these sectors and secure jobs. At the same time, the Daimler-Benz group is concentrating its resources on the activities in the fields of rail technology, microelectronics, postal automation systems and diesel engines. The interests of the AEG shareholders will be safeguarded by the fact that they will in the future have a direct shareholding in Daimler-Benz AG."

In connection with the merger, Daimler-Benz will restructure the activities of AEG that will remain within the group. Three divisions, microelectronics (Temic), rail systems (ABB Daimler-Benz Transportation, "Adtranz", 50 % shareholding) and postal automation (AEG Electrocom), will then be managed directly by Daimler-Benz AG. Subsequently it is planned that the shares held by the intermediate holding company will be sold to Daimler-Benz AG at current market value in the second half of 1996. Management of the diesel engine manufacturer MTU Friedrichshafen will be transferred to Mercedes-Benz AG. The headquarters of AEG Aktiengesellschaft in Frankfurt am Main will therefore cease operations in the course of 1996.

In summary, the restructuring of the activities of AEG with financial effect from January 1, 1996 will take place as follows:

AEG Aktiengesellschaft will convert the energy systems technology as well as the systems and automation technology divisions and further operative units that are currently for sale into limited liability companies.

Since the remaining business activities are already independent legal units, AEG Aktiengesellschaft will thus become a holding company. This requires approval by the AEG shareholders at an extraordinary general meeting which will take place on March 6, 1996.

AEG Aktiengesellschaft will transfer all major assets and liabilities, including its pension obligations, to an intermediate holding company formed as a limited liability company.

AEG Aktiengesellschaft will be merged into Daimler-Benz AG and the intermediate holding company will become a subsidiary of Daimler-Benz AG; Daimler-Benz AG also will directly manage the divisions and sectors remaining within the group - with the exception of MTU Friedrichshafen, the management function of which will be transferred to Mercedes-Benz AG.

Daimler-Benz AG Stuttgart

AEG Aktiengesellschaft Frankfurt am Main

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