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Sandvik acquires 26% of shares in Tampella

Sandvik has held a 25% interest in Tamrock Oy of Finland since 1991.

Tamrock, with annual sales of about SEK 3,800 million, is a world-leading supplier of rockdrilling machinery for such applications as mining and civil engineering. The other 75% of the shares in Tamrock are owned by the Finnish Oy Tampella Ab.

In addition to Tamrock, Tampella currently comprises Detec (mechanical demolition hammers, SEK 435 m.) and Roxon (conveyor equipment for handling of bulk goods, SEK 650 m.).The loss-burdened Tampella Power (soda boilers for the pulp and paper industry, SEK 1,500 m.) was divested in March 1996.

The interplay between rockdrilling tools and machinery will become increasingly important in the future since development is toward increased automation through computer-controlled rock drilling and alternative techniques for rock working. Tools and machinery will increasingly become an integrated system in the future. Consequently, a close co-operation in product development and marketing will be a decisive success factor, says Clas Åke Hedström, President and CEO of Sandvik.

Sandvik Rock Tools, one of the world's leading suppliers of rockdrilling tools, with annual sales of SEK 2,000 m., is today already conducting product development and marketing jointly with Tamrock.

In order to significantly intensify further development of this co-operation and achieve a stronger market position for both companies, Sandvik has for some time been discussing various possibilities of strengthening its ownership position in the Tampella Group. Accordingly, in cash transaction Sandvik has acquired 35 million Tampella shares, corresponding to 26% of the voting rights, from Kvaerner of Norway.

Sandvik does not intend to tender an offer for all of Tampella since it is deemed important that the company maintain its Finnish profile and continue to be listed on the Helsinki Stock Exchange. However, a certain increase in ownership interest, up to about 40%, may occur. In such a case, Sandvik's 25% ownership interest in Tamrock could be eliminated and Tamrock become a wholly owned Tampella subsidiary.

Sandviken, April 13, 1996

Sandvik AB; (publ)

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