Management expects substantial growth opportunities for both companies

Bremen (Germany), August 2008. - Kirloskar Electric Company Limited (KEC), one of India 's leading manufacturers of electrical and power equipment, has acquired a majority interest in Lloyd Dynamowerke GmbH & Co. KG (LDW), Bremen. Both companies are expected to benefit significantly from the acquisition.

KEC and LDW both provide custom-engineered design solutions to their customers, and the product lines complement each other well. "By combining these products, we will be able to offer a wider range of products at very competitive prices", the companies announced. LDW is expected to provide the impetus for Kirloskar Electric's accelerated growth in Europe, while KEC will open up the Indian market for LDW products. Also, both companies can rationalise procurement activities to achieve economies of scale and therefore reduce costs.

Kirloskar acquired the shares from German investment company CMP Fonds I GmbH. CMP had owned the majority for two years, providing capital to facilitate LDW's growth and paving the way for a successful business year 2007. KEC now expects to continue this development. While LDW will be integrated in its existing business structure, the German company will be "managed, operated and reported as a measurable separate organisation", KEC announced. Berthold Groeneveld will keep his shares in the company.

"Kirloskar Electric believes that the management and the employees of LDW are the core of the acquisition as they possess the market knowledge, customer relationships, domain knowledge and skills", the Indian management emphasised. The number of employees in Bremen - currently about 250 - is expected to remain the same or increase.

About Kirloskar:
Established in 1946 by Ravi L. Kirloskar, Kirloskar Electric manufactures AC motors, AC generators, DC machines, traction equipment, electronics, switchgear, and transformers. It also undertakes turnkey electrical projects. For 60 years, the company has relied on a combination of special technological and engineering skills and state-of-the-art manufacturing facilities. Kirloskar Electric is capable of delivering a wide range of custom engineered products that meet and exceed global standards.

About LDW:
LDW, founded in 1915, develops, constructs and produces electrical machines and drive systems for industrial applications. These products are special designs for applications with extraordinary requirements. LDW also repairs old machines or rebuilds them. The company's worldwide service guarantees optimum care and maintenance for all products. More than 90 years of experience are combined with innovative ideas and the capacities of partners in various research institutions.

More information:
www.kirloskar-electric.com
www.LDW.de