The Schaeffler Group welcomes Continental AG’s decision to continue the negotiations about an agreement without delay. Schaeffler is very confident that the negotiations will lead to a positive result.

With the modification of its offer document published today, the Schaeffler Group waives certain closing conditions relating to the preparation of capital measures, such as resolutions of the boards of Continental AG. With this waiver, the Schaeffler Group is reacting to speculation in the market that its offer to the shareholders of Continental AG could already be obstructed by such preparatory measures.

The Federal Financial Supervisory Authority (BaFin) has approved the offer document for the voluntary public takeover offer of the Schaeffler Group, Herzogenaurach, to all shareholders of Continental AG, Hanover. The acceptance period for the offer begins with the publication of this offer document on July 30, 2008. It ends on August 27, 2008 at 12.00 midnight. Shareholders of Continental AG can thus tender their shares for purchase by the Schaeffler Group starting today.

The Schaeffler Group welcomes the initiative made by the general works council of Continental AG and has offered to rapidly open a dialog with regard to the issues and questions mentioned by employee representatives.

Since announcing its takeover offer, Schaeffler Group has repeatedly stressed that it remains open to constructive talks with the management of Continental AG. Both the owners and management therefore welcome Mr. Wennemer’s statements regarding possible talks. However, Schaeffler Group’s objective to become a major strategic shareholder of Continental AG by acquiring more than 30 percent of its shares remains unchanged. For this reason Schaeffler Group has announced on July 15 its decision to extend an offer to all shareholders of Continental AG.

Schaeffler Group, Herzogenaurach, finds the negative reaction of the management board of Continental AG incomprehensible and does not appreciate the tone of debate chosen by Continental AG’s chief executive officer. As an independent, family-owned company Schaeffler Group has always stood for entrepreneurial foresight and responsibility across generations, for pronounced public spirit, reliability and continuity. The company’s owners, management and all employees are committed to these values today and in the future.

Schaeffler Group, Herzogenaurach, is seeking to acquire a strategic shareholding of more than 30 percent in Continental AG, Hanover, but not necessarily a majority stake. In order to acquire the shares Schaeffler Group is extending the shareholders of Continental AG a voluntary public takeover offer. Schaeffler is offering each shareholder of Continental AG 69.37 EUR per share in cash or – if higher – the minimum offer price as determined by the Federal Supervisory Authority for Financial Services (Bundesanstalt für Finanzdienstleistungsaufsicht). This corresponds to the weighted average share price of Continental shares on XETRA and in floor trading over the past three months and is thus viewed as fair consideration in accordance with the Securities Acquisition and Takeover Act (WpÜG).

The Schaeffler Group, with its three renowned brands INA, FAG and LuK, now has an “extraterrestrial” outpost. The precision bearings that lend flexibility to the robotic arm of Mars probe “Phoenix” have been supplied by The Barden Corporation, the Group’s super precision bearing specialist headquartered in Danbury, Connecticut (USA).

“Creating standards” – that was the Schaeffler Group Industry motto of the EMO 2007, which is one of the topics we will be reporting on in this issue. “Tailored solutions for the textile machine” was the motto of the But how do these two mottos fit together, do they not seem to be mutually exclusive? I believe that they are both perfectly suited for us. Almost all currently successful INA and FAG products started life at some point as innovative special solutions or future-oriented ideas for a specific single application. Subsequently, these “new developments” proved to be convincing.

Mr. Detlef Sieverdingbeck became Head of Corporate Communication at the Schaeffler Group on June 1, 2008. He is responsible for internal and external communication of all brands that are part of the Schaeffler Group worldwide. The main brands of the Schaeffler Group are INA, FAG and LuK. Mr. Sieverdingbeck will report directly to the President and CEO of the Schaeffler Group, Dr. Juergen Geissinger.