EXECUTIVE BOARD AND SUPERVISORY BOARD ISSUE STATEMENTS ON SHARE-PURCHASE OFFER BY BORGWARNER
16 December 2004 - BERU

Pursuant to Section 27, Subsection 1 of the German Act on the Acquisition of Securities and Takeovers (WpÜG), the Executive Board of BERU AG today issued a statement on the public tender offer by BorgWarner Germany GmbH.

At the same time, the Supervisory Board also issued a statement on this offer. Both the Executive Board and the Supervisory Board view the price offered of €67.50 per share as fair and appropriate. The Executive Board recommends that the shareholders of BERU AG accept the offer. The regular period for acceptance expires at midnight on January 24, 2005.

The Executive Board of BERU AG supports this offer because it is of the opinion
that the offer simultaneously serves the interests of the Company, its shareholders
and its employees. The price offered represents a premium of 14.66% compared
with the volume-weighted average price of BERU shares over the last twelve
months (€58.87) and is 14.4% higher than the price that the major shareholders will receive according to the share-purchase agreement they concluded with BorgWarner on October 30, 2004. The purchase price offered is thus 252.1% above the shares’ issue price of €19.17 in October 1997. The fairness opinion commissioned by the Executive Board of BERU AG and the company valuation prepared in this context confirm that the price offered is fair and appropriate from a financial perspective. BorgWarner Germany GmbH, an indirect subsidiary of BorgWarner Inc. of Wilmington, Delaware, USA, already notified BERU AG on November 1, 2004 that a share-purchase agreement for 62.21% and a share-purchase option agreement for a further 0.82% (in total around 63% of the shares in BERU AG) had been signed with The Carlyle Group and a group of family shareholders. The closing of the share-purchase agreement and the exercise of the share-purchase option agreement are subject to the approval of the relevant regulatory authorities. On December 8, 2004, BorgWarner Germany GmbH published the details of a voluntary public tender offer and provided these details to BERU AG.

The Executive Board of BERU AG welcomes the strategic importance that the
BorgWarner Group sees in BERU AG. According to the offer documents,
BorgWarner intends to continue operating BERU AG as an independent company
with its present headquarters and divisions, extending and completing the existing
product portfolio within BorgWarner’s Engine Group. With their products, both
companies are successfully positioned as diesel players in the globally growing
market for vehicles with diesel engines, as well as in the field of automotive
electronics and sensorics. The product portfolios of BERU and BorgWarner are
complementary.

Growth opportunities can arise in the future from the use of each other’s customer
relations and geographical presence. As a result of the takeover, on the one hand
BERU will extend its position in the strategically important markets of North
America and Asia, and on the other hand the activities of BorgWarner in Europe
will be further expanded. With this acquisition, BorgWarner aims to increase its
customer base and revenues, while diversifying and strengthening its position in
Europe. BorgWarner regards the purchase of BERU as an important step in its
strategy of striving for market leadership. It is planned that all three divisions of
BERU AG will be maintained – Diesel Cold-Start Technology, Ignition Technology
and Electronic and Sensor Technology. According to the offer, no changes are
planned regarding the production locations of BERU AG at present.

In view of the complementary character of the planned takeover in terms of
products and markets, the BERU Executive Board assumes that the employment
situation at the BERU Group will not change as a result of this transaction. From the
contents of the offer it is apparent that no measures are currently planned which
would have a significant impact on the workforce of BERU AG or its subsidiaries.

The separate statements by the Executive Board and the Supervisory Board of
BERU AG can be seen at www.beru.com/deutsch/investor/uebernahme.php.

www.beru.de

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