euro adhoc: Cross Holding AG / Mergers - Acquisitions - Takeovers / KTM and POLARIS - A Strategic Partnership in the field of POWER SPORTS Vehicles (E)

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Disclosure announcement transmitted by euro adhoc.
The issuer is responsible for the content of this announcement.
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19.07.2005

Wels/Mattighofen: The KTM POWER SPORTS AG (formerly CROSS Holding AG) is
entering into a strategic partnership with POLARIS Industries Inc., which is
based in Minneapolis, Minnesota, U.S.A. As it has announced, POLARIS shall take
over the 24% equity stake in KTM POWER SPORTS AG held by Swisspartners. It will
thereby become a new shareholder of the KTM POWER SPORTS AG, which is listed on
the prime market of the Wiener Börse (Vienna Stock Exchange). It is contemplated
that DI Stefan Pierer, managing director of the KTM Power Sports AG, shall be
nominated for a seat on the Board of Directors at POLARIS and that Tom Tiller,
the Chief Executive Officer (CEO) of POLARIS, also be nominated for a seat on
the KTM supervisory board.

The first stage in the strategic partnership with POLARIS has been given a
two-year timetable. As of now there will be a co-operation in the sector product
development, manufacture, and distribution. Both companies shall thereby
continue their business activities as independent entities.

With POLARIS and KTM, two strategic partners have found each other who can both
point to exceptional economic successes and a dominant position in their
respective business sectors. Furthermore, POLARIS and KTM share a very similar
culture, in which the focal point is the "passion to ride". The combined
turnover of both companies amounts to about USD 2.4 billion.

In the past business year (2004), POLARIS Industries Inc. achieved a turnover of
approx. USD 1.8 billion. As the largest non-Japanese manufacturer of ATV’s,
snowmobiles (world market leader), 4x4 utility vehicles and (in the motorcycle
segment) of the "Cruiser" under the brand name VICTORY, POLARIS is primarily
active in the North American market. Through this co-operation, KTM can
intensify its presence in North America and accelerate its entry into the ATV
segment. KTM shall supply POLARIS with KTM engines and the groundwork is being
laid for KTM’s distribution of the POLARIS product spectrum in certain Central
and Eastern European markets. With production sites on both continents there is
the possibility for both companies to hedge against foreign exchange exposure.

Two strong brands, established distribution networks and above all the
companies’ matching objectives - to become together the dominating power in the
global POWER SPORTS business - are the basis of this strategic alliance, from
which both companies shall profit.

In 2007, after a two-year period, the partners will have the opportunity to
further expand their co-operation. POLARIS and CROSS Industries AG - the main
shareholder of KTM POWER SPORTS AG - have entered into an agreement that enables
CROSS to convert KTM shares into POLARIS shares - according to an established
assessment formula - and thereby become a significant shareholder in a joint
POLARIS/KTM Group.

Information about KTM POWER SPORTS AG can be found under www.cross-ag.com and
August 1, 2005 at the latest under www.ktm.com/investor relations.

Further inquiry note:
DI STefan Pierer, Telefon +43 (0) 7242 / 694 02
mailto:[email protected]

end of announcement euro adhoc 19.07.2005 07:30:00
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emitter: Cross Holding AG
Bauernstrasse 9 / WDZ III
A-4600 Wels
phone: +437242/69402
FAX: +437242 69402 109
mail: [email protected]
WWW: http://www.cross-ag.com
ISIN: AT0000645403
indexes:
stockmarkets:
sector: Economy, Business & Finance
language: English

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