NON-BINDING ENGLISH CONVENIENCE TRANSLATION. Joint Statement of the Management Board and the Supervisory Board

Transcription

1 NON-BINDING ENGLISH CONVENIENCE TRANSLATION Mandatory Publication pursuant to Section 27 para. 3 sentence 1 in conjunction with Section 14 para. 3 sentence 1 of the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz (WpÜG)) Joint Statement of the Management Board and the Supervisory Board of Demag Cranes AG Forststraße Düsseldorf pursuant to Section 27 of the German Securities Acquisition and Takeover Act on the voluntary public takeover offer (cash offer) by Terex Industrial Holding AG Lindemannstraße Dortmund to the shareholders of Demag Cranes AG Shares of Demag Cranes AG: ISIN DE000DCAG010 Tendered Shares of Demag Cranes AG: ISIN DE000A1KRMM9 Subsequently Tendered Shares of Demag Cranes AG: ISIN DE000A1KRMN7

2 2 Contents I. SUMMARY... 4 II. GENERAL INFORMATION ABOUT THIS STATEMENT Legal basis Factual basis Statement by the competent works council Publication of this Statement and any additional statements on possible amendments to this Offer Independent responsibility of Demag Cranes Shareholders No arrangements between the Bidder and the Company prior to the Offer... 8 III. GENERAL INFORMATION ABOUT THE BIDDER AND DEMAG CRANES Bidder... 8 a) Legal information, capital and shareholder structure of the Bidder... 8 b) Field of business of Terex Demag Cranes a) Legal information, capital and shareholder structure of the Company b) Field of business of Demag Cranes c) Business development and selected financial information d) Goals and strategy of Demag Cranes Demag Cranes Shares currently held by the Bidder IV. INFORMATION ABOUT THE OFFER Execution of the Offer Publication of the decision to launch the Offer Review by the BaFin and publication of the Offer Document Acceptance of the Offer outside the Federal Republic of Germany Details of the Offer a) Offer Price b) Acceptance Period and Additional Acceptance Period c) Conditions for completion d) Waiver and non-fulfilment e) Stock exchange trading with Tendered Demag Cranes Shares f) No contractual right of withdrawal g) Publications Financing of the Offer Priority of the Offer Document V. TYPE AND AMOUNT OF THE CONSIDERATION OFFERED... 26

3 3 1. Type and amount of the consideration Lowest price determined by statute Assessment of the adequacy of the Offer Price a) Mandates of Deutsche Bank AG and Rothschild GmbH b) Mandate of Lazard & Co. GmbH c) Comparison with historical share prices d) Comparison with historical valuation multipliers e) Valuation by financial analysts f) Consideration of the strategic positioning of Demag Cranes g) Overall assessment of the adequacy of the consideration VI. OBJECTIVES OF THE BIDDER AND FORESEEABLE CONSEQUENCES FOR DEMAG CRANES Change of intentions Commercial and strategic reasons of the Bidder Future business activities, assets and obligations of Demag Cranes Domicile of the Company, locations and maintenance of key company divisions The Management Board and the Supervisory Board of the Company Possible structural measures Evaluation of the objectives of the Bidder and the foreseeable consequences a) Strategy and future business activities b) Corporate Governance c) Financial consequences for Demag Cranes Possible consequences for the employees, their terms of employment and representation at Demag Cranes VII. POSSIBLE CONSEQUENCES FOR DEMAG CRANES SHAREHOLDERS Possible negative consequences upon acceptance of the Offer Possible negative consequences upon non-acceptance of the Offer VIII. OFFICIAL PERMITS AND PROCEDURES IX. INTERESTS OF THE MEMBERS OF THE MANAGEMENT BOARD AND THE SUPERVISORY BOARD X. THE INTENTIONS OF THE MEMBERS OF THE MANAGEMENT BOARD AND THE SUPERVISORY BOARD TO ACCEPT THE OFFER XI. RECOMMENDATION... 48

4 4 I. SUMMARY The following summary contains selected information from this statement. The information merely serves to provide the shareholders of Demag Cranes AG with an initial overview of the contents of this statement and the reasons for the recommendation of the Management Board and the Supervisory Board of Demag Cranes AG. The summary should therefore be read in conjunction with the more extensive information contained elsewhere in this statement. Reading the summary cannot substitute reading the entire opinion. The voluntary public takeover offer of Terex Industrial Holding AG, an indirect subsidiary of Terex Corporation, Westport/Connecticut (USA), was unsolicited and was coordinated neither with the Management Board nor with the Supervisory Board of Demag Cranes AG. Terex Corporation indicated to the Management Board of Demag Cranes AG at the end of July 2010 its preliminary non-binding interest in making a takeover offer to the shareholders of Demag Cranes AG at an offer price within the range of EUR and per Demag Cranes share. On this basis, after carefully examining the offer, the Management Board, together with the Supervisory Board, decided that further discussions were not in the interest of Demag Cranes AG. Up until publishing the decision to submit an offer on 2 May 2011, Terex Corporation had presented no information not already contained in the indicated of interest of July 2010, so that no further assessment of the offer was required on the part of Demag Cranes AG. The Management Board and the Supervisory Board of Demag Cranes AG are of the opinion that the takeover offer of Terex Industrial Holding AG announced on 2 May 2011 and published on 19 May 2011 with an offer price of EUR 41.75, which is the subject matter of this statement, is not in the interest of Demag Cranes AG. They recommend that shareholders of Demag Cranes AG should not accept the offer of Terex Industrial Holding AG. The Management Board and the Supervisory Board have based their recommendation notably on the following considerations: The Management Board and the Supervisory Board of Demag Cranes AG regard the offered price of EUR to be inadequate from a financial point of view. Deutsche Bank AG and Rothschild GmbH have confirmed this assessment to the Management Board and Lazard & Co. GmbH has independently confirmed the assessment to the Supervisory Board in their respective fairness opinions. The Demag Cranes Group pursues a clear and successful strategy, which is geared to sustained and profitable growth. Given the positive economic outlook and the strategic positioning of Demag Cranes, the Management Board and the Supervisory Board expect to regain strong rates of revenue growth in the next two financial years. As of today, the company anticipates generating a Group revenue in the ongoing financial year of approx. EUR 1.06 billion (previous target: EUR 1.02 billion to EUR 1.5 billion). For the financial year 2010/2011, the Company anticipates an operating EBIT margin of approx. 6.4 % (previous target: 6.1 % to 6.5 %; financial

5 5 year 2009/2010: 5.8 %). No later than financial year 2012/2013, Group revenue is forecast to grow to approx. EUR 1.3 billion and therefore to exceed the record level reached in financial year 2007/2008 (EUR 1,225.8 million). There are plans for new emerging market product families, among others, to deliver another sharp jump in revenue in financial year 2014/2015 to approx. EUR 1.7 billion. Subject to meeting the revenue target, we expect the Group operating EBIT margin to be above ten percent by as early as financial year 2012/2013. The operating EBIT margin is set to climb again sharply with the significant projected revenue growth in financial year 2014/2015. II. GENERAL INFORMATION ABOUT THIS STATEMENT Terex Industrial Holding AG ("Bidder"), an indirect subsidiary of Terex Corporation, Westport/Connecticut (USA) ("Terex Corporation" or "Terex", Terex together with its subsidiaries "Terex Group"), published, on 19 May 2011 in accordance with Sections 34, 14 para. 2 and 3 of the Securities Acquisition and Takeover Act ("WpÜG") the offer document within the meaning of Section 11 WpÜG ("Offer Document") for its voluntary public takeover offer ("Offer"), to all shareholders of Demag Cranes AG with its business seat in Düsseldorf, Germany ("Demag Cranes AG" or "Company" and together with its affiliated companies within the meaning of Sections 15 et seqq. German Stock Corporation Act (Aktiengesetz) ("AktG") "Demag Cranes" or "Demag Cranes Group" and the shareholders of Demag Cranes AG the "Demag Cranes Shareholders") for the purchase of all no-parvalue bearer shares of Demag Cranes AG (DE000DCAG010, WKN DCAG01) ("Demag Cranes Shares") that are not already held by the Bidder, for a cash payment of EUR per Demag Cranes Share ("Offer Price"). The Offer Document was submitted to the Management Board of the Company ("Management Board") on 19 May The Management Board immediately passed the Offer Document on to the Supervisory Board of the Company ("Supervisory Board") and the competent works council. Time information in this Statement is given in Central European Summer Time (CEST), unless explicitly stated otherwise. In as much as terms such as "at this point in time", "currently", "at the moment", "now", "at present" or "today" are used, these terms refer, in as much as not explicitly stated otherwise, to the date of publication of this Document, that is, 31 May The Management Board and the Supervisory Board herewith provide a joint substantiated Statement in accordance with Section 27 WpÜG ("Statement") with regard to the Bidder's Offer. Both the Management Board and the Supervisory Board discussed this Statement on 27 May 2011 and 31 May 2011 and agreed upon it unanimously and without abstentions on 31 May In the context of the Statement, the Management Board and the Supervisory Board point to the following issues in advance: 1. Legal basis Pursuant to Section 27 para. 1 sentence 1 WpÜG the management board and the supervisory board of a target company are required to provide a substantiated statement on any takeover offer and any amendments thereto. The statements may be provided jointly by the management board and the

6 6 supervisory board of the target company. The Management Board and the Supervisory Board have decided to provide their substantiated statements on the Bidder's Offer jointly. 2. Factual basis All information, forecasts, opinions, valuations, forward-looking statements and declarations of intent in this Statement are based, unless expressly stated otherwise, on the information available to the Management Board and the Supervisory Board on the date of publication of this Statement and reflect their assessments or intentions at that point in time. Forward-looking statements are not historical facts and are indicated by words and phrases such as "believe, "expect", "forecast", "intend", "project", "plan", "estimate", "aim", "anticipate", "assume", "target" or similar. Forward-looking statements are based on current plans, estimates, projections and expectations and are therefore subject to risks and uncertainties, most of which are difficult to estimate and which are in general beyond the control of Demag Cranes. Consequently, actual developments as well as earnings or performance may differ materially from that which is explicitly or implicitly assumed in the forward-looking statements. The Management Board and the Supervisory Board give no guarantee that expectations and targets explicitly or implicitly assumed in the forward-looking statements will be attained. The Management Board and the Supervisory Board do not intend to publish updates and do not assume any obligations, unless they are required to do so as a matter of German law. The information contained in this Statement about the Bidder, the persons acting in concert with it and the Offer are based, unless explicitly stated otherwise, on the information contained in the Offer Document and other publicly available information. The Management Board and the Supervisory Board point out that they are not in a position to review the intentions stated by the Bidder in the Offer Document or to influence the implementation of these intentions. The Management Board and the Supervisory Board do not have any information available to them that gives reason to question the correctness of the statements made by the Bidder about its intentions or their implementation, but the Management Board and the Supervisory Board do point out that the intentions of the Bidder can change at any time. Generally there is no legal obligation for the Bidder to implement the intentions stated in the Offer Document. For this reason, it cannot be ruled out that the Bidder may change its intentions after completion of the Offer and that the intentions published in the Offer Document may not be implemented. 3. Statement by the competent works council The competent works council of a target company may, in accordance with Section 27 para. 2 WpÜG, make a statement about the Offer to the Management Board, which the Management Board then must attach to its statement in accordance with Section 27 para. 2 WpÜG, irrespective of its obligation under Section 27 para. 3 sentence 1 WpÜG. By law the completion of the Offer has no immediate effect on the employees of Demag Cranes Group, the terms and conditions of their employment (in particular commitments from collective bargain agreement (Tarifbindung)) and location, employee representations and the existing shop agreements. In addition, the group works council explicitly supports the clearly

7 7 defined and successful strategy of Demag Cranes. Against this background, the competent works council has so far not provided an own formal statement on the Offer pursuant to Section 27 para. 2 WpÜG. 4. Publication of this Statement and any additional statements on possible amendments to this Offer This Statement and any additional statements regarding any amendment to the Offer will be published in accordance with Section 27 para. 3 sentence 1 and Section 14 para. 3 sentence 1 WpÜG on the Internet at the website of Demag Cranes AG at and as an English translation at Copies of the statements can be obtained from Demag Cranes AG, Investor Relations, Forststraße 16, Düsseldorf, Tel: +49 (0) , Fax: +49 (0) for distribution free of charge. The fact of publication and availability of copies for distribution free of charge will be announced in the electronic Federal Gazette. This Statement and any additional statements regarding any amendment to the Offer will be published in German and as a non-binding English translation. However, the Management Board and the Supervisory Board assume no liability for the correctness or completeness of the English translation. Solely the German versions shall be authoritative. 5. Independent responsibility of Demag Cranes Shareholders The Management Board and the Supervisory Board point out that the description of the Offer contained in this Statement does not claim to be complete and that solely the terms of the Offer Document apply to the content and settlement of the Offer. The valuations and recommendations of the Management Board and the Supervisory Board contained in this Statement do not bind the Demag Cranes Shareholders in any way. In as much as this Statement takes reference to, quotes, summarises or repeats the Offer or the Offer Document, such statements shall only be references, i.e. the Management Board and the Supervisory Board do neither make the statements of the Offer or Offer Document their own, nor do they assume any liability for the correctness or completeness of the Offer or Offer Document. Each Demag Cranes Shareholder must, at its own responsibility, take note of the Offer Document, form its own opinion of the Offer and take any measures for itself that it considers necessary. According to the Bidder's statement in Section 4 of the Offer Document, the Offer can be accepted by all Demag Cranes Shareholders in accordance with the Offer Document. The Bidder points out in the Offer Document, however, that for Demag Cranes Shareholders with their domicile, business seat or habitual abode in the United States of America ("USA") it may be difficult to enforce their rights or claims under US securities law, since both the Bidder and the Company have their seat outside the USA. The Bidder also explains in Section 1.6 of the Offer Document, that the acceptance of the Offer outside the Federal Republic of Germany, the USA or Canada may be subject to certain legal restrictions due to local requirements. The Bidder assumes no liability for acceptance of the Offer outside the Federal Republic of Germany, the USA or Canada being permissible under the relevant applicable legal provisions. The Management Board and the Supervisory Board are not in a position to review whether the Demag Cranes Shareholders, when accepting the Offer, are acting in accordance with all legal obligations that may apply

8 8 to individual Demag Cranes Shareholders. The Management Board and the Supervisory Board therefore advise all Demag Cranes Shareholders receiving the Offer outside the Federal Republic of Germany and/or are subject to other legal regulations than those of the Federal Republic of Germany, to inform themselves about the applicable legal regulations and to comply with these. The Management Board and the Supervisory Board recommend to the shareholders, where necessary, to obtain individual tax and legal advice. In all, each Demag Cranes Shareholder is responsible for reaching its own decision on whether and, where applicable, to what extent it wishes to accept the Offer, taking into account the overall situation, its individual situation (including its individual tax situation) and its personal assessment of the future development of the value and share price of Demag Cranes Shares. In reaching this decision, the Demag Cranes Shareholders should adequately take into account all sources of information available to them and take sufficient account of their personal interests. 6. No arrangements between the Bidder and the Company prior to the Offer The publication of the decision to submit an Offer by the Bidder was unsolicited. At no time agreements or arrangements between the Bidder and the Company in advance to the Offer or this Statement have existed. Until the date of this Statement Terex has not initiated any discussions with the Management Board or the Supervisory Board of Demag Cranes AG relating to the Offer. Terex Corporation indicated to the Management Board of Demag Cranes AG at the end of July 2010 its preliminary non-binding interest in making a takeover offer to the shareholders of Demag Cranes AG at an offer price within the range of EUR and per Demag Cranes Share. On this basis, after carefully examining the offer, the Management Board, together with the Supervisory Board, decided that further discussions were not in the interest of Demag Cranes AG. In this context, several discussions have taken place between the Chairman of the Management Board of Demag Cranes AG and the Chairman and Chief Executive Officer of Terex, both before and after the indication of interest. However, up until and including the last discussion in March 2011 in the form of a telephone call, Terex Corporation had presented no information not already contained in the indication of interest of July 2010, so that no further assessment of the offer was required on the part of Demag Cranes AG. III. GENERAL INFORMATION ABOUT THE BIDDER AND DEMAG CRANES 1. Bidder The Bidder published the following information in the Offer Document. The Management Board and the Supervisory Board have not reviewed this information. a) Legal information, capital and shareholder structure of the Bidder The Bidder is a stock corporation under German law (Aktiengesellschaft) with its corporate seat in Düsseldorf, Germany, and registered in the commercial register of the Düsseldorf Local Court with the number HRB The Bidder's business year is the calendar year.

9 9 The business object of the Bidder, as stated in its articles of association, comprises in particular the acquisition, holding and management and disposal of interests in enterprises, in particular of interests in companies and enterprises active in the fields of development, planning, production, distribution, trade, repairing and leasing of machines, vehicles and equipment, in particular of mining equipment, lifting and transport equipment, equipment for the vertical and horizontal handling of loads, in each case in particular for open-cast mining, other extractive operations and port systems, including similar products, the development and marketing of necessary software, as well as rendering of relevant services in these areas and the commercial trading in these business fields. The Bidder may conduct all transactions and take all actions which are suitable to serve its purpose directly or indirectly. The Bidder has the power to become active itself in the aforementioned business fields, in particular by carrying out specific transactions. It is entitled to establish domestic and foreign branch offices and to establish, acquire or take interest in domestic and foreign enterprises. The Bidder has the power to manage companies and conclude enterprise agreements with them or limit itself to managing the participation. It may spin off its operations in part or in total to affiliated companies and for investment purposes acquire, manage and dispose interests in companies of all kind. According to the information in the Offer Document, the Bidder was incorporated on 21 October 2010 under the name Hercules Holding Germany AG and registered in the commercial register of the Düsseldorf Local Court on 2 November By resolution of the general meeting dated 21 April 2011 (entered in the commercial register on 29 April 2011), the company name of the Bidder was changed to Terex Industrial Holding AG. The Bidder has not developed any business activities so far except for the acquisition of Demag Cranes Shares. It has no subsidiaries and does not have any employees. The management board of the Bidder consists of Mr. Brian Henry and Mr. Thomas Ostermann, who each have been appointed with sole power to represent the Bidder. The supervisory board of the Bidder consists of Mr. Eric I. Cohen, Mr. Phillip C. Widman and Mr. Ronald M. DeFeo. The Bidder's registered share capital as of the time of publication of the Offer Document amounted to EUR 50, The sole shareholder of the Bidder at this point in time was Terex Deutschland GmbH & Co. KG ("Terex Germany"), a limited partnership under German law (Kommanditgesellschaft) which has its seat in Dortmund, registered in the commercial register of the local court of Dortmund under HRA On 5 November 2010, Terex Germany as controlling entity and the Bidder as subordinated company entered into a domination and profit-and-loss transfer agreement, which was registered in the commercial register on 9 December Terex Germany is a member of Terex Group. b) Field of business of Terex Terex Corporation, a stock corporation established under the law of the state of Delaware, is a globally active, diversified manufacturer of machinery products. Terex is a publicly listed company traded on the New York Stock Exchange under the symbol TEX. According to the information in the Offer Document, at the time of publication of the Offer Document, Terex Corporation had a market capitalisation of about USD 3.3 billion. According to publicly available information, the market capitalisation of Terex Corporation as of 27 May 2011 amounts to USD billion. According to the information in the Offer Document, Terex has more than 160 subsidiaries worldwide. As of 31 December 2010, Terex Group had approx. 16,300 employees. In its financial year ending 31 December 2010, Terex Group generated

10 10 consolidated revenues of approx. USD 4.4 billion and consolidated earnings (net income) of USD 0.36 billion. Terex currently operates in four segments: The aerial work platforms segment designs, manufactures, refurbishes and markets aerial work platform equipment, telehandlers, light towers and utility equipment. Terex markets the aerial work platforms principally under the Terex and Genie brand names. The aerial work platforms segment has manufacturing facilities in North America, Europe and China. The construction segment designs, manufactures and markets primarily, three categories of construction equipment and their related components and replacement parts: (heavy construction equipment, compact construction equipment and roadbuilding equipment). The equipment offered in the construction equipment segment under the brand name Terex Fuchs is also used to some extent in ports to handle bulk material. The construction equipment segment has manufacturing facilities in North America, Europe, India and Brazil. The cranes segment, designs, manufactures, services and markets in particular mobile telescopic cranes, tower cranes, lattice boom crawler cranes, lattice boom truck cranes, truckmounted cranes (boom trucks) and specialized port and rail equipment including straddle carriers, gantry cranes, mobile harbor cranes, ship-to-shore cranes, reach stackers, lift trucks and forklifts, as well as their related replacement parts and components. The crane segment has manufacturing facilities in North America, Europe and China. The materials processing segment, designs, manufactures and markets materials processing equipment including crushers, washing systems, screens, apron feeders and the related replacement parts and components. The materials processing segment has manufacturing facilities in North America, Europe, Malaysia, India and China. Terex offers services for its products. In 2009 Terex generated, according to its own figures, approximately 25 % of the consolidated revenue by providing such services. Moreover, Terex supports the acquisition of its products by providing financial services through the Terex Financial Services division. 2. Demag Cranes a) Legal information, capital and shareholder structure of the Company Demag Cranes AG is a listed German stock corporation with its seat in Düsseldorf, registered in the commercial register of Düsseldorf Local Court under HRB The Company's business address is Forststraße 16, Düsseldorf. The financial year of the Company commences on 1 October and ends on 30 September of the following calendar year. The Company is the parent company of the Demag Cranes Group. The purpose of the Company as specified in its articles of association is to manage a group of companies that is active in particular in the field of the development, planning, manufacture, sale and marketing of machines, plant, other trading goods and the rendering of services in the field of transport processes and Port Technology, including cranes, automatic port systems and similar products, their components and related software solutions. The

11 11 management also encompasses the rendering of services to companies of the Group. The Company can also be active itself in the above-mentioned fields and may enter into all transactions and activities that appear to be suitable to serve the purpose of the Company. The Company can also found, acquire or acquire participations in other companies in Germany and abroad for this purpose, or combine companies in which the Company holds a majority share under its management or restrict itself to managing the participation. The Company may spin-off its operations in part or in full to affiliated companies. The Demag Cranes Share (ISIN DE000DCAG010, WKN DCAG01) has been listed in the Prime Standard of Deutsche Börse at the Frankfurt Stock Exchange since the end of June 2006 and it is included, for example, in the MDAX stock index. The Demag Cranes Shares can also be traded over the counter at the stock exchanges in Munich, Berlin, Düsseldorf, Hamburg, Hanover and Stuttgart. The share capital of the Company at the time of publication of this Statement amounts to EUR 21,172, and divides up into 21,172,993 ordinary bearer shares with no par value (no-par shares), each amounting to a EUR 1.00 share of the share capital. The Company holds none of its own shares. According to the voting rights notifications received up to the date of publication of the Statement, the following shareholders hold more than 3 % of the voting rights of the Company. The remaining Demag Cranes Shares are in free float. The Management Board and the Supervisory Board point out that the overview of main shareholders in Section 7.5 of the Offer Document only lists the directly held voting rights of Demag Cranes Shareholders and therefore may be incomplete. Shareholder Share of voting rights in % Cevian Capital % Cevian Capital II Master Fund LP, Camana Bay, Grand Cayman, Cayman Islands Cevian Capital II GP Limited, St. Helier, Jersey, Channel Islands Centaurus 5.06 % Centaurus Capital LP, London, United Kingdom Centaurus Capital Ltd., London, United Kingdom Centaurus Global Holding Ltd., Grand Cayman, Cayman Islands Bernard Oppetit, United Kingdom Centaurus International Risk Arbitrage Master Fund Ltd, Grand Cayman, Cayman Islands Centaurus International Risk Arbitrage Fund Ltd, Grand Cayman, Cayman Islands Allianz Global Investors 4.33 % Boussard & Gavaudan 3.19 % Boussard & Gavaudan Gestion SAS, Paris, France Boussard & Gavaudan Asset Management, LP (BGAM), London, United Kingdom Boussard & Gavaudan Partners Ltd, London, United Kingdom La Campagnie des Ecréhous SAS, Paris, France Emmanuel Boussard, France Emmanuel Gavaudan, China Halcyon 3.19 % Halso Lux 2 S.à r.l., Luxembourg, Grand Duchy of Luxembourg

12 12 Halso Lux 1 S.à r.l., Luxembourg, Grand Duchy of Luxembourg, Halso Lux Cayman LP, George Town, Cayman Islands Halcyon Asset Management LLC, Wilmington (Delaware), USA b) Field of business of Demag Cranes Demag Cranes manufactures products in the industrial cranes, crane components, harbour cranes and terminal automation technology sectors. As a global provider, Demag Cranes Group manufacturers in 16 countries on five continents and runs a worldwide sales and service network through subsidiaries such as Demag Cranes & Components GmbH and Gottwald Port Technology GmbH, representations and a joint venture, with presence in more than 60 countries. The business activities of Demag Cranes divide up into the following segments: aa) Industrial Cranes In the Industrial Cranes Segment, Demag Cranes develops and manufactures high-quality components, such as rope hoists, chain hoists, travel units and motors, as well as complete cranes. In the field of crane manufacture, a distinction is made between standard cranes and process cranes. Standard cranes are configured individually from standardised modules for industrial infrastructure applications. Process cranes on the other hand are integrated individually into the customer s specific production processes. The highly flexible KBK crane construction kit is primarily used in industries with changing production requirements, such as the automotive industry. Demag Cranes is the world market leader in these crane systems. bb) Port Technology The Port Technology segment covers products and services for ports and terminals, which are sold under the Gottwald brand. The range extends from conventional cargo handling equipment such as Mobile Harbour Cranes to automated solutions for container transport and storage. In this segment, Demag Cranes also offers planning and consultancy services for port operators, software solutions as well as assembly and maintenance services. The primary focus here is on solutions that enable customers of Demag Cranes to optimise their material flow and logistics processes. According to its own market research, Demag Cranes occupies the leading position in Mobile Harbour Cranes with an installed base of over 1,300 sold cranes. The Demag Cranes also ranks among the pioneers and leading international suppliers in the promising terminal automation sector. As one of the few suppliers in this field, Demag Cranes is able to develop and offer integrated end-to-end solutions, including own software solutions. cc) Services In its services segment, Demag Cranes offers a complete range of services for the optimum use, maintenance and refurbishment of cranes and lifting equipment. Demag Cranes also operates one of the world's largest service networks for cranes and lifts. Alongside standard services such as spare parts supply, fault elimination, maintenance and repairs, this also increasingly includes consultancy and training services to optimise the use of crane systems. Refurbishments and conversion work are carried

13 13 out using both standard products and sophisticated tailored solutions. The range of service contracts extends from simple recurring inspections through preventive maintenance to full-service arrangements. They cover not just Demag Cranes' own industrial crane products but also third-party products and related equipment. With more than 1,000 patents and higher than average investments in research and development, Demag Cranes puts its focus on innovation and technology leadership. Development and production are always based on the principles of modularisation and standardisation. By integrating crane construction partners in the industrial cranes business, Demag Cranes also achieves a broad geographic coverage and high operative flexibility even in less industrialised regions. c) Business development and selected financial information aa) General market development With its products and services in the industrial cranes, Port Technology and services segments, Demag Cranes operates on the global market for cargo handling equipment and material logistics. This market includes all products which perform, control and monitor cargo handling and logistics processes, including the corresponding software solutions and services. The global economy continued to grow despite political unrest in the Arab world and North Africa and the catastrophic earthquake in Japan. According to estimates from Oxford Economics, global GDP increased by 4.3 % in the second quarter of financial year 2010/2011 (January to March 2011) compared with the same period a year earlier. Emerging markets were particularly dynamic with estimated GDP growth of 7.5 % on the previous year s period. Brazil, India and China (the "BIC-States") contributed substantially to the overall trend, with estimated GDP growth of 8.5 % compared with the same period of the previous year. For the mature markets, the Oxford Economics experts projected only moderate GDP growth of 2.3 % compared with the second quarter of the previous financial year. The past few months brought a slight recovery in the US economy, partly due to increasing capital investment. The weak dollar also encouraged exports. According to statistics from Oxford Economics, the US economy will consequently have grown by 2.5 % compared with the previous year s period. In China, on the other hand, the central bank and the government continue to enforce tighter monetary policy and lower capital investment to slow growth and dampen burgeoning inflation. Looking at the outlook for the year as a whole, the Oxford Economics experts expect the global economy to grow by 4.3 % in calendar year 2011 compared with the previous year. Emerging market GDP is expected to grow by 7.6 % and mature market GDP by 2.5 % compared with calendar year The euro zone economy continued to show only moderate growth. Germany and smaller European countries, in contrast, recorded a strong upswing. Notable reasons for the upward trend in Germany include favourable borrowing terms, sustained strong foreign demand from the euro zone and especially Asia and Eastern Europe, and companies readiness to carry out capital spending. The Oxford Economics experts expect, as a result, the German economy will have grown by 3.8 % in the second quarter of the 2010/2011 financial year (1 January to 31 March 2011) compared with the same period the previous year. In line with this good economic situation, German GDP is expected to increase by 2.3 % in 2011 as a

14 14 whole compared with the previous year. Figures based on the analyses of Oxford Economics are as at 31 March The mechanical engineering industry generated a significantly higher intake of new orders in December 2010 compared with the months before. This positive trend in the order situation continued in the second quarter of the 2010/2011 financial year (1 January to 31 March 2011). Companies recorded dynamic growth in order intake both from domestic and international sources, even to the extent that there are now first signs of supply bottlenecks. Production capacity utilisation has also further improved. According to economic bulletin for May 2011 published by the German Engineering Association ("VDMA"), mechanical engineering production grew by 20.4 % in January and February accumulated in real terms compared with the previous year. This meant that capacity utilisation in engineering rose in April 2011 to 88.8 %. German machinery exports did correspondingly well in the past few months, with exports to China, the USA and South America showing particularly strong growth. Given the considerable rise in mechanical engineering production, the VDMA expects production to increase by 14 % in 2011 as a whole. bb) Selected financial information The accelerating global economic recovery also had a positive effect on the specific business performance of the Demag Cranes Group. Demag Cranes generated significantly increased order intake of EUR million during the second quarter of financial year 2010/2011 (Q2 2009/2010: EUR million). This represents growth of 28.8 % compared with the previous year's quarter. Order intake in the first half of 2010/2011 totalled EUR million (H1 2009/2010: EUR million), equivalent to an increase of 40.4 % on the comparative figure for the previous financial year. All segments contributed to this very positive trend. The Group order book improved compared with the previous financial year s reporting date (31 March 2010: EUR million) by 30.3 % to reach EUR million as at 31 March. Demag Cranes generated EUR million in revenue in the second quarter of financial year 2010/2011, 12.0 % up on the previous year s quarter (EUR million). Revenue for the first six months, at EUR million, was up 11.4 % on the comparative period of the previous financial year (H1 2009/2010: EUR million). Looking at the regional figures, the Demag Cranes Group boosted revenue in mature markets by 2.8 % compared with the second quarter of financial year 2009/2010. Emerging markets even saw 28.4 % revenue growth. This positive trend was driven by the Central and South America, BIC-States, Russia and Asia/Pacific regions. Earnings before interest and tax (EBIT) totalled EUR 13.4 million in the second quarter of the financial year, 53.8 % up on the comparative figure from the previous financial year (Q2 2009/2010: EUR 8.7 million). Growth in EBIT was the result of higher order volumes and our factories consequently operating at higher capacity. In the second quarter of financial year 2010/2011, the Demag Cranes Group generated operating EBIT 1 of EUR 14.6 million. This represents a marked 39.0 % increase on the comparative 1 When calculating the operative EBIT, effects of depreciation on current value differences arising from the assumption of assets from company mergers are not considered. One-off effects such as settlement payments and restructuring measures are not included either.

15 15 figure a year earlier (EUR 10.5 million). On a six-month basis, we improved operating EBIT by 37.6 % from EUR 19.7 million to EUR 27.1 million. Operating net income after tax amounted to EUR 8.3 million in the second quarter of financial year 2010/2011. This corresponds to a marked increase of 43.1 % on the previous year s period (Q2 2009/2010: EUR 5.8 million). In the first half of 2010/2011, EUR 15.7 million were generated, compared with EUR 10.7 million in the first half of 2009/2010. Operating earnings per share (operating EPS) was EUR 0.74, up from EUR 0.51 in the first half of financial year 2009/2010. Earnings per share (EPS) stood at EUR 0.68, compared with EUR 0.43 in the first six months of the previous financial year. cc) Business outlook The Management Board still expects global economic growth to continue, primarily driven by the emerging markets and among these notably the BIC-States. The Management Board aims to further extend the market position of Demag Cranes in the relevant markets in financial year 2010/2011. First and foremost, Demag Cranes plans a rapid expansion of its business in emerging markets by launching new product families, especially in the mid- market segment, initially in the industrial cranes and then in the Mobile Harbour Cranes segments. Significant growth in the service business is expected, which is largely due to the significant improvement in capacity utilisation at the customers of Demag Cranes. In addition to organic growth the Company also aims to make acquisitions and/or enter into cooperations, in particular further improving the presence of Demag Cranes in the emerging markets. The strong capitalisation of Demag Cranes gives the Company the flexibility and room to manoeuvre it needs in this context. Given the positive economic outlook, the Management Board expects to regain strong rates of revenue growth in the next two financial years. In the ongoing financial year a Group revenue of approx. EUR 1.06 billion (previous target: EUR 1.02 to EUR 1.05 billion) is anticipated. Due to the changed cost structure, Demag Cranes will again also generate significant improvements in its operating EBIT. For financial year 2010/2011, the Management Board now anticipates an operating EBIT margin of approx. 6.4 % (previous target: 6.1 to 6.5 %; financial year 2009/2010: 5.8 %). No later than financial year 2012/2013, Group revenue is forecast to grow to approx. EUR 1.3 billion and therefore to exceed the record level reached in financial year 2007/2008 (EUR 1,225.8 million). In the 2014/2015 financial year, in particular new product families for the emerging markets, the recovery of the port business, supported by the expected awarding of a number of major projects for port terminals and further growth in the service business, especially by increasing the degree of penetration of the broadly installed base are to lead to another sharp jump in revenue to approx. EUR 1.7 billion. Subject to meeting the revenue target, a Group operating EBIT margin of more than 10 % is expected by as early as financial year 2012/2013. This is set to climb again sharply with the significant projected revenue growth in financial year 2014/2015, since positive effects from the localisation of manufacturing with respect to manufacturing and logistics costs and scale effects in administration costs are expected. On the whole, Demag Cranes Group capital expenditure will stay around two percent of revenue. Demag Cranes will invest in particular in the emerging markets, which in addition to logistics advantages should also lead to cost reductions and a reduction of the working capital. Net working capital is expected to equal less than 20 % of revenue in financial year 2014/2015. Furthermore, around 2 % of revenue will

16 16 continue to be invested in research and development for the product portfolio of the Demag Cranes Group. d) Goals and strategy of Demag Cranes Demag Cranes pursues a clear and successful strategy that aims to achieve sustained and profitable growth. The strategy and its underlying mid-term business plan until 2014/2015 were discussed in detail in the Supervisory Board meeting in September 2010 and have been adopted unanimously without any abstention. aa) Restructuring and group integration Demag Cranes created a basis for sustained growth with its Group-wide restructuring programme in With this restructuring programme the Company reduced key cost items and thereby permanently boosted the competitiveness of the Demag Cranes Group. Through the Group integration, key management functions were pooled within the Company. In addition to optimising costs, this simplified Demag Crane's decision-making and operational processes, making them more flexible and efficient. Another important step in Group integration was the creation of the Executive Committee, which comprises the Management Board and executive vice presidents in charge of development and construction, production, product and contract management, services, sales and human resources at a global level. The committee pools strengths and allows the Group to exploit more quickly any market opportunities that arise. bb) Main components of the corporate strategy The Demag Cranes Group offers products, service solutions and system integration for material flow technology throughout the world. Demag Cranes stands for customer orientation, quality, reliability and innovation. In accordance with this strategic guiding principles, Demag Cranes pursues, inter alia, the following goals: (1) Capitalising on dynamic growth in emerging markets The continuous expansion of business activities in the emerging markets is one of the main pillars of the corporate strategy. Demag Cranes pursues the aim of generating more than 40 % of its sustainable revenues in the emerging markets until the year In order to achieve this goal Demag Cranes strengthens its competitive position in the emerging markets with solutions which are tailored to individual customers and fulfil the country-specific requirements. Thereby Demag Cranes can capitalise on the dynamic growth in the emerging markets. Expansion of the mid-market segment It is not just demand for Demag Cranes' premium products that is rising steadily in emerging markets. There are also excellent opportunities to establish the Group in the mid-market segment product range with solutions geared specifically to meet customer needs. In order to strengthen the sustained growth, Demag Cranes therefore also aims to expand the service spectrum of Demag Cranes

17 17 (including the service solutions and system integration) from the premium segment to the mid-market segment. - At product level this applies to both the Industrial Cranes and the Port Technology segments. In the Industrial Cranes segment, Demag Cranes has developed a new rope and chain hoist product range in past two years which will be launched on the relevant target markets in the second half of the year Furthermore, in China Demag Cranes has applied for the first German-Chinese patent for a rope hoist in the mid-market product range. - In the Port Technology segment, Demag Cranes is working on designing a new Mobile Harbour Crane family, characterised by a modular platform strategy. This makes it possible on the one hand to replace existing crane series; on the other hand, the same approach and platform can be used to configure cranes for emerging markets based on local modules and components, which can then be build at existing plants of Demag Cranes. Consequent focus on the respective requirements of the market An essential element of this growth strategy in the emerging markets is to continue localising development and production units. Decentralised competence centres thereby enable Demag Cranes a systematic orientation on the respective market requirements. On the basis of the local knowledge and the local knowledge of many years' expertise as technology leaders in the Industrial Cranes Segment new forward-looking developments and production approaches are developed for the emerging markets. - In countries like India and China, Demag Cranes has established local development teams that are specialised in the special market circumstances and customer requirements of the respective region. In addition, Demag Cranes can also make use of the experience and information of an integrated group that is also a global innovation and technology leader. In this way future orientated products and services are created that offer customers significant added value. - Examples for the realisation of this strategic goal are the development centre for components in the mid-market segment, in China and the local crane development centre in India together with the new production site that opened in July In particular India is a good example of the outstanding international cooperation within the integrated group. For years now a team of Indian and German engineers has been successfully developing new products that focus on the special challenges and customer requirements of the Indian market, which can greatly differ from those in established markets such as Western Europe or the USA. Through the opening of a new production unit in July 2010 Demag Cranes has already expanded its production in India by approx. factor five. (2) Expansion in China Growth in the People's Republic of China is especially important. Here, the Demag Cranes Group intends to increase its market share to 10 % by the year For building up this market position Demag Cranes

18 18 is, in addition, considering external growth options such as the targeted strategic alliance with the Weihua Group. - Weihua is one of the largest manufacturers of industrial cranes and crane components in China and it also produces port cranes. It is one of the few suppliers with a nationwide sales network and numerous sales outlet. Weihua also has considerable potential, especially in the fields of steel production, railways, hydraulic engineering and ports. The Group, which was founded in 1988, has a workforce of 5,000 employees and generated revenue of RMB 2.5 billion (approx. EUR 270 million) with its crane business in With this transaction, Demag Cranes would complement its product range for the established and emerging markets and further strengthen its position in the dynamically growing Chinese market. - It is intended to have Demag Cranes initially take on a minority share of the crane business of the Weihua Group. In the medium term, Demag Cranes then plans to participate in the industrial management of the Weihua Group by taking a majority stake. The Company and Weihua signed a letter of intent to this effect in January 2011 and agreed upon exclusivity for the subsequent negotiations. Both parties are currently working intensively on preparing a due diligence. (3) Further global expansion of service-activities With its global service presence and the world's largest installed base of more than 660,000 cranes and electric hoists, Demag Cranes has enormous business potential in the profitable field of services. With its service strategy the Company pursues a product life cycle approach. The aim is, by developing relevant services solutions to achieve an optimum utilisation of plant and machinery throughout the entire life-cycle of the Demag Cranes product range and thus creating a lasting added value for the customer. Demag Cranes also sees a sustainable growth potential in the emerging markets in the field of services. The focus of the service strategy remains on continuously improving the profitability of the spare parts business. The cost-effective production in Brazil of spare parts for older industrial crane products also accounts for this. It is intended that the Service Segment shall generate more than one third of the total generated revenues of Demag Cranes by the year 2015 (4) Strengthening of environmental friendly innovations Demag Cranes also intends to continuously expand its product range, in particular in the field of environmentally friendly technologies, and improving it with further new innovations. In implementing this strategy, Demag Cranes has already designed a battery-driven, automated guided vehicle for container transport (E-AGV) together with partners and participates among others in a research project for hybrid drives.

19 19 E-AGV With the battery-driven AGV the diesel-electric drive used previously is replaced by a battery drive. The goal of this new system is not only to make an important contribution to sustainable environmental protection in urban ports, the project also shall produce an efficient and thus resourcesaving solution that can then be used in the powertrains of heavy industrial trucks. In close cooperation with the long-standing customer HHLA the fist battery-powered, emission free prototype AGV have, after a successful testing period, been put into operation at the world's most advanced container terminal in Hamburg-Altenwerder. The German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) is supporting the development work with funding of EUR 1.2 million under the National Development Plan für Electric Mobility. Participation in innovative research projects With the purpose of continuously promoting innovations, Gottwald Port Technology GmbH, a subsidiary of Demag Cranes, participates in consortium to research alternative drive systems for the heavy-load segment. Demag Cranes presented the first hybrid drive for electrically powered Mobile Harbour Cranes in 2010 at the world's leading fair for Port Technology "TOC Europe". Energy efficient and therefore environmentally friendly drives are also advantageous when competing for terminal concessions for port operators. Demag Cranes will not only install this forward looking technology in new cranes, it will also offer corresponding retrofit packages. Such engineering achievement has already been honoured. The "International Bulk Journal" (IBJ), one of the leading trade journals for the maritime bulk handling has awarded the Demag Cranes hybrid drive the IBJ Award 2010 in the "Innovative Technology" category. In addition, with its Green Range product series, Demag Cranes makes an important contribution to making the most efficient use of the available space in the port terminal, achieving high energy efficiency and reducing noise and light emissions. (5) Holistic Systemintegration Demag Cranes also pursues the goal of offering its customers more system integrations, in which the own product portfolio can be supplemented with related third-party products. Correspondingly, Demag Cranes has also already achieved a milestone in the field of diversifying the software for material flow calculations by acquiring the British company DB Controls. In particular the participation in tenders for major port automated projects highlights both the Company's efforts in the field of system integration and the innovativeness of Demag Cranes. Here, Demag Cranes offers excellent, integrated system solutions, for example consisting of automated guided vehicles for container transport (AGV), automated container stacking cranes (ASC) and software solutions. The major port automated projects mentioned also offer considerable potential for services. The installed base of more than 450 automated guided vehicles for container transport in use is another indication of the technology leadership of Demag Cranes in port automation.

20 20 (6) Research and Development The products and services of Demag Cranes shall offer customers the greatest possible degree of benefits and production efficiency. The guiding principles of Demag Cranes is to strive to produce high-quality, effective and reliable products that are geared to meet market requirements. Such principle also defines the field of research and development ("R&D"). As a technology leader Demag Cranes feels a permanent obligation to pursue groundbreaking solutions and exploit the potential to optimise successful product lines. By critically examining our manufacturing and process costs and stringently managing complexity Demag Cranes moves pursues also the gaol of cross-product modularisation of all used components and assemblies. Internationally networked teams of development engineers with broadly spread specialist and local market expertise now work closely together to develop products that can be used globally. Demag Cranes will carry on to invest around 2 % of its revenue for research and development of its products in order to claim sustainable the technology leadership of Demag Cranes. Industrial Cranes Segment In the Industrial Cranes segment, in the fiscal year 2009/2010 the Demag Cranes R&D activities continued to focus on optimising existing product lines in the mature markets and extending the product portfolio for the mature and emerging markets. At this, especially new product lines have been developed which will soon be launched on the relevant target markets. Port Technology Segment In the Port Technology segment the compact class portfolio of Mobile Harbour Cranes has bee further expanded. In addition the continuous development of environmental friendly technologies has been pushed forward. Among other things individual Mobile Harbour Cranes have been provided with the new Gottwald hybrid drive. As an innovation leader in the area of Port Technology, Demag Cranes has set itself the aim of developing an emissionfree drive train for numerous heavy-load transport vehicles for transport operations in the terminal. For this, a battery-electric powered automated guided vehicle for container transport (E-AGV) has been developed and implemented as a first step, which resides in a testing period at the moment. Services Segment The Services segment actively supports all R&D activities to maximise benefits notably with regard to operation and maintenance and to ensure the provision of all resources and expertise needed by the service force. In addition Demag Cranes develops associated spare part and service packages to span the entire crane and component life cycle and application range.

21 21 Due to the ongoing Group integration, its independent market position and its continuous reviewing of its strategic goals Demag Cranes is excellently positioned to take advantage of the opportunities and face the challenges of the future. 3. Demag Cranes Shares currently held by the Bidder According to the Offer Document, at the date of publication of the Offer Document, the Bidder held 216,180 Demag Cranes Shares, i.e. approx. 1 % of the share capital and voting rights of the Company. More detailed information on the purchase of Demag Cranes Shares by the Bidder is set forth in Section 6.5 and in Appendix 3 of the Offer Document. According to the Bidder, neither the Bidder nor persons acting in concert with it nor their subsidiaries hold any additional Demag Cranes Shares or voting rights attached to Demag Cranes Shares. With regard to persons acting in concert with the Bidder pursuant to Section 2 para. 5 sentence 3WpÜG, reference is made to Section 6.3 of the Offer Document. IV. INFORMATION ABOUT THE OFFER In the following, certain selected information contained in the Offer Document about the Offer is summarised: 1. Execution of the Offer In accordance with Section 29 para. 1 WpÜG, the Offer will be carried out by the Bidder in the form of a voluntary public takeover offer (cash offer) for the acquisition of all Demag Cranes Shares. The Offer is made as a takeover offer under the law of the Federal Republic of Germany, in particular, in accordance with the WpÜG and the Regulation Pertaining to Content of the Offer Document, the Consideration in the Event of Takeover Offers and Mandatory Offers and the Release from the Obligation to Publish and to Make an Offer (the "WpÜG Offer Regulation") and certain applicable securities law regulations of the USA. The Management Board and the Supervisory Board have not carried out an independent evaluation of the Offer with respect to compliance with all applicable legal regulations and provisions 2. Publication of the decision to launch the Offer The Bidder has published its decision to launch the Offer in accordance with Section 10 para. 1 sentence 1 WpÜG on 2 May This announcement can be found on the Internet at The decision to launch the Offer was unsolicited and was coordinated neither with the Management Board nor with the Supervisory Board. 3. Review by the BaFin and publication of the Offer Document The German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht ("BaFin") has reviewed the Offer Document in accordance with German law and in the German language and permitted its publication, as stated by the Bidder, on 18 May According to the Offer Document, no registrations, certifications or approvals of the Offer Document and/or the Offer under any other law than that of the Federal Republic of Germany have been obtained to date or are intended to be obtained.

22 22 The Offer Document was published by the Bidder (i) on the internet at and (ii) by way of keeping available copies of the Offer Document at Commerzbank AG, ZCM, ECM, Mainzer Landstrasse 153, Frankfurt am Main (order by fax: ) for distribution free of charge on 19 May The announcement regarding the availability of the Offer Document for distribution free of charge and the internet address at which the publication of the Offer Document has taken place was published in the electronic Federal Gazette on 19 May Furthermore, an English translation of the Offer Document, which has neither been reviewed nor approved by the BaFin, was made available under the aforementioned internet address. According to the Bidder, an announcement regarding the availability of the Offer Document was also published in Canada in English in The Globe and Mail and in French in La Presse. 4. Acceptance of the Offer outside the Federal Republic of Germany In the Offer Document the Bidder points out that the acceptance of the Offer outside the Federal Republic of Germany, the USA or Canada may be subject to certain legal restrictions as a result of local regulations. The Bidder recommends to Demag Cranes Shareholders who come into the possession of this Offer Document outside the Federal Republic of Germany, the USA or Canada, who wish to accept the Offer outside Federal Republic of Germany, the USA or Canada and/or who are subject to legal provisions other than those of the Federal Republic of Germany, the USA or Canada, that they inform themselves of the relevant applicable legal provisions and comply with them. The Bidder states that it assumes no liability for acceptance of the Offer outside the Federal Republic of Germany, the USA or Canada being permissible under the relevant applicable legal provisions. Neither does Demag Cranes assume any such liability. 5. Details of the Offer a) Offer Price The Bidder offers to the Demag Cranes Shareholders to purchase their Demag Cranes Shares, including all ancillary rights (in particular dividend rights) existing at the respective time of settlement of the Offer at a purchase price of EUR ("Offer Price") per Demag Cranes Share subject to the terms and conditions set forth in the Offer Document. b) Acceptance Period and Additional Acceptance Period The acceptance period of the Offer began upon publication of the Offer Document on 19 May 2011 and will expire on 30 June 2011, 24:00 hrs. ("Acceptance Period"). In the circumstances set out below, the Acceptance Period of the Offer will in each case be extended automatically as follows: In the event of an amendment to the Offer pursuant to Section 21 WpÜG within the last two weeks before expiry of the Acceptance Period, the Acceptance Period will be extended by two weeks (Section 21 para. 5 WpÜG) and, consequently, would be expected to end on 14 July 2011, 24:00 hrs. This shall apply even if the amended Offer violates legal provisions.

23 23 If, during the Acceptance Period of the Offer, a competing offer regarding the Demag Cranes Shares is made by a third party for the Demag Cranes Shares ("Competing Offer") and if the Acceptance Period for the present Offer expires prior to the expiration of the acceptance period of the Competing Offer, the expiration of the Acceptance Period for the present Offer shall be determined by reference to the expiration of the acceptance period of the Competing Offer (Section 22 para. 2 WpÜG). This shall apply even if the Competing Offer is amended or prohibited or violates legal regulations. With regard to the prerequisites of the right of withdrawal (Rücktritssrecht) in the event of an amendment of the Offer or the submiting of a Competing Offer and the requirements for the exercise of the right of withdrawal, reference is made to the statements made in Section 16 of the Offer Document. Demag Cranes Shareholders who have not accepted the Offer within the Acceptance Period may still accept the Offer in accordance with, and subject to the conditions of, Section 16 para. 2 WpÜG within two weeks after publication of the results of the Offer by the Bidder pursuant to Section 23 para. 1 sentence 1 No. 2 WpÜG ("Additional Acceptance Period"). As stated in the Offer Document, the Additional Acceptance Period is expected to commence on 7 July 2011 and to end on 20 July 2011, 24:00 hrs. c) Conditions for completion According to the Offer Document, for the consummation of the Offer and the agreements which come to existence as a result of accepting the Offer the following conditions (jointly referred to as the "Completion Conditions" or individually as a "Completion Condition") shall apply: (i) (ii) (iii) (iv) No implementation of material capital measures with regard to the Company (except for a capital increases in accordance with Section 186 para. 3 sentence 4 AktG based on the Section 4 para. 5 lit. d of the articles of association of the Company and the issue of convertible bonds and/or warrant-linked bonds in accordance with the analogous application Section 186 para. 3 sentence 4 AktG) during the Acceptance Period; Reaching a minimum acceptance threshold of 51 % by the end of the Acceptance Period; Granting merger control clearance or the occurrence of similar events (e.g. the expiration of respective waiting periods) until 28 December 2011; During the Acceptance Period, no company of the Demag Cranes Group has entered into an agreement with, or has granted an irrevocable option to conclude such an agreement to, a company not being part of the Demag Cranes Group if such agreement provides for the sale, transfer, encumbrance or contribution of assets of the Company or its subsidiaries and has an aggregate transaction value, which shall be calculated pursuant to the concept of Fair Value (beizulegender Zeitwert) as defined by the IFRS, by itself or in conjunction with one or several similar agreements, of more than EUR 100 million;

24 24 (v) (vi) (vii) No changes to the majority requirements or other resolution requirements as set forth in the articles of association of the Company during the Acceptance Period; During the Acceptance Period no notice of the loss in the amount of half of the registered share capital pursuant to Section 92 para. 1 AktG nor application for the opening of insolvency proceedings with regard to the assets of one or several of the following companies: (a) Demag Cranes AG, (b) Gottwald Port Technology GmbH and (c) Demag Cranes & Components GmbH; At the expiry of the Acceptance Period the last daily closing value of the DAX index is at least 6,279 points and (viii) No insider-relevant compliance violation by directors, officers, employees or agents of a company of the Demag Cranes Group or by the owner of an equity capital share in such a company has occurred during the Acceptance Period. For further information on the Completion Conditions and the determination thereof, reference is made to Sections 13.1 to 13.5 of the Offer Document. d) Waiver and non-fulfilment To the extend legally permissible, the Bidder reserves the right to waive, in whole or in part, one, several or all of the Completion Conditions up to one working day prior to the end of the Acceptance Period. A waiver of Completion Conditions is legally permissible only up to one day before the end of the Acceptance Period. Completion Conditions which the Bidder has validly waived shall be deemed to have been satisfied for the purposes of the Offer. The waiving of Completion Conditions constitutes an amendment to the Offer. The Bidder is obligated to publish any amendment to the Offer, and therefore also a waiver of any Completion Condition, immediately in accordance with Section 14 para. 3 sentence 1 WpÜG. In the event of an amendment to the Offer within the last two weeks prior to the end of the Acceptance Period, the Acceptance Period will automatically be extended by two weeks pursuant to Section 21 para. 5 WpÜG, i.e. presumably until 14 July 2011, 24:00 hrs. In the event of a waiver of Completion Conditions Demag Cranes Shareholders that have accepted the Offer prior to the publication of the amendment of the Offer, may within the Acceptance Period withdraw from the agreements which came into existence as a result of accepting the Offer pursuant to Section 21 para. 4 WpÜG. This right of withdrawal also applies in other cases of an amendment of the Offer. If (i) one or several of the Completion Conditions set out in Sections , and to of the Offer Document have not been fulfiled by the end of the Acceptance Period or (ii) one or several of the Completion Conditions set forth in Section of the Offer Document (merger control clearance) has not been fulfiled by 28 December 2011, and the Bidder has not validly waived the respective Completion Conditions in accordance with Section 21 para. 1 sentence 1 No. 4 WpÜG, the Offer will lapse. In this case, the agreements which came into existence as a result of accepting the Offer will not be consummated and will cease to exist (condition subsequent). Demag Cranes Shares already tendered shall be re-booked. For further details reference is made to Section 13.4 of the Offer Document.

25 25 e) Stock exchange trading with Tendered Demag Cranes Shares The Bidder intends to make the Demag Cranes Shares tendered for sale ("Tendered Demag Cranes Shares") tradable from the third stock exchange trading day after the commencement of the Acceptance Period until the end of the Acceptance Period. If the Completion Conditions set out in Section of the Offer Document (merger control clearance) have not been fulfiled prior to the expiry of the Acceptance Period and the Bidder has not waived the respective unfulfiled Completion Condition before then, the Bidder intends to have the Tendered Demag Cranes Shares traded on the Regulated Market (Prime Standard) of the Frankfurt Stock Exchange under the ISIN DE000A1KRMM9 upon commencement of the Additional Acceptance Period, if any, until no later than the end of the stock exchange trading day following the day of publication pursuant to Section 13.5 of the Offer Document of the fulfilment of all Completion Conditions then still applicable. If the Completion Conditions regarding merger control clearance have not been fulfiled by the end of the Additional Acceptance Period, if any, and the Bidder has not waived the respective unfulfiled Completion Condition before then, the central settlement agent will cause the Demag Cranes Shares subsequently tendered for sale during the Additional Acceptance Period to be rebooked into ISIN DE000A1KRMM9. Thus, the Demag Cranes Shares subsequently tendered for sale shall be tradable on the Regulated Market of the Frankfurt Stock Exchange until no later than the end of the stock exchange trading day following the day of publication of the fulfilment of all Completion Conditions then still applicable. For further details of the stock exchange trading regarding the Tendered Demag Cranes Shares, reference is made to Section 11.9 of the Offer Document. f) No contractual right of withdrawal The Bidder has not offered the Demag Cranes Shareholders any contractual right of withdrawal in the Offer Document, although, in a worst-case scenario, there might be clarity only after 28 December 2011 regarding the fulfilment or the final omission of the Completion Conditions set forth in Section of the Offer Document (merger control clearance). Thus the Demag Cranes Shareholders who have accepted the Offer are exposed to the risk of not receiving the offered consideration until more than five months after accepting the Offer. In this regard the Management Board and the Supervisory Board point out that the possibility to trade the Tendered Demag Cranes Shares also depends on the number of Tendered Demag Cranes Shares. If the acceptance ratio ends up being low, stock trading with the Tendered Demag Cranes Shares may be limited or even impossible on the date of execution due to lack of liquidity. The Bidder also expressly points this out in Section 11.9 of the Offer Document. g) Publications In Section 13.5 of the Offer Document the Bidder states that it will publish without undue delay on the website (in German and as a non-binding English translation) and in the electronic Federal Gazette if (i) a Completion Condition has been waived, (ii) all Completion Conditions still existing at the relevant time have been fulfiled or (iii) the Offer has lapsed.

26 26 6. Financing of the Offer According to Section of the Offer Document, the Bidder has taken the measures necessary to ensure that the financial resources necessary to fully perform the Offer will be available in due time. According to its statements, the Bidder has cash in hand in an amount of approx. EUR 195 million. According to the Bidder, Terex has additional cash in hand in an amount in excess of USD 300 million (according to Section of the Offer Document this amount was equivalent to approx. EUR 212 million as of 16 May 2011). Furthermore, on 30 April 2011 Terex has entered into a loan agreement with Credit Suisse AG, Cayman Islands Branch and Goldman Sachs Lending Partners LLC as lenders ("Terex Loan Agreement"). As shown by the Offer Document and publicly available information, the Terex Loan Agreement provides for a term loan facility under which Terex may draw funds of up to USD 1.1 billion (according to Section of the Offer Document this amount was equivalent to approx. EUR 779 million as of 16 May 2011) primarily for the purpose of purchasing Demag Cranes Shares and financing the related costs. By letter dated 29 April 2011, Terex has undertaken vis-à-vis the Bidder to make available these additional funds, to the extend required to complete the Offer, to the Bidder, directly or indirectly, in due time by equity contributions and/or shareholder loans. According to the Offer Document, the Bidder therefore has sufficient financial resources to complete the Offer. Credit Suisse Securities (Europe) Limited issued the respective financing confirmation in accordance with Section 13 para. 1 WpÜG on 6 May The Management Board and the Supervisory Board have no reason to doubt the correctness of Credit Suisse Securities (Europe) Limited's financing confirmation. 7. Priority of the Offer Document For further information and details (especially regarding the Completion Conditions, the Acceptance Periods, the acceptance and settlement modalities and the statutory rights of withdrawal) the Demag Cranes Shareholders are referred to the statements in the Offer Document. It is the sole responsibility of each Demag Cranes Shareholder to take note of the Offer Document and to take the actions necessary for him. V. TYPE AND AMOUNT OF THE CONSIDERATION OFFERED 1. Type and amount of the consideration The Bidder offers an Offer Price of EUR for each Demag Cranes Share. 2. Lowest price determined by statute To the extent the Management Board and the Supervisory Board are able to verify this on the basis of the available information, the Offer Price corresponds to the provisions on minimum prices as set forth in Section 31 para. 1 WpÜG and Sections 4 and 5 of the WpÜG-AngebotsVO: In accordance with Section 5 WpÜG-AngebotsVO the consideration must be at least equivalent to the weighted average domestic stock exchange price for Demag Cranes Shares over the period

27 27 of the last three months prior to the publication of the decision to submit the Offer on 2 May 2011 ("Three-Month Average Price"). In accordance with Section 4 WpÜG-AngebotsVO (in conjunction with Section 31 para. 6 WpÜG) the consideration in a takeover offer must be at least equal to the value of the highest consideration provided or agreed by the Bidder or a person acting in concert with it within the meaning of Section 2 para. 5 WpÜG or one of their subsidiaries for the acquisition of the Demag Cranes Shares (or the closing of corresponding agreements that authorise it to purchase Demag Cranes Shares) within the last six months prior to the publication of the Offer Document (19 May 2011). In accordance with the Offer Document, the Three-Month Average Price applicable in this case is EUR according to BaFin calculations. The Offer Price is higher than this. In the Offer Document the Bidder stated that it acquired 216,180 Demag Cranes Shares during the period of six months before 19 May The highest price it paid for these shares was stated in the Offer Document to be EUR per Demag Cranes Share (cf. Section 6.5 of the Offer Document). With the exception of the purchases listed in Section 6.5 of the Offer Document, it is stated in the Offer Document that neither the Bidder or a person acting in concert with it nor one of their subsidiaries purchased any Demag Cranes Shares or entered into any agreements for the purchase of Demag Cranes Shares during the period of six months prior to 19 May The minimum offer price in accordance with Section 4 WpÜG-AngebotsVO is therefore EUR The Offer Price of EUR per Demag Cranes Share is higher than this. 3. Assessment of the adequacy of the Offer Price The Management Board and the Supervisory Board have assessed the adequacy of the consideration offered by the Bidder from a financial point of view and on the basis of the current strategy and financial plan of Demag Cranes and other assumptions. The Management Board was advised in this analysis and evaluation by Deutsche Bank AG, Taunusanlage 12, Frankfurt a.m. ("Deutsche Bank") and Rothschild GmbH, Börsenplatz 13-15, Frankfurt a.m. ("Rothschild"). The Supervisory Board has retained Lazard & Co. GmbH, Neue Mainzer Strasse 69-75, Frankfurt a.m. ("Lazard") as its own financial advisor. a) Mandates of Deutsche Bank AG and Rothschild GmbH Deutsche Bank und Rothschild have both submitted an opinion to the Management Board about whether the consideration offered is adequate from a financial point of view (jointly "Fairness Opinions" and individually "Fairness Opinion"). Deutsche Bank and Rothschild presented and explained their analyses, which they conducted independently from one another, to the Management Board and the Supervisory Board in the meetings of the Supervisory Board held on 27 May 2011 and 31 May 2011, in which all members of the Management Board were present. The Fairness Options of Deutsche Bank and Rothschild were delivered to the Management Board on 31 May 2011.

28 28 In their Fairness Opinions Rothschild and Deutsche Bank came to the conclusion, subject to the assumptions contained therein at the time the Fairness Opinions were delivered, that the Offer Price is inadequate for the Demag Cranes Shareholders from a financial point of view. The Fairness Opinions which describe the underlying assumptions and facts, procedures followed, matters considered and limitations on the review undertaken, are attached to this Joint Statement as Exhibits 1 and 2. The Management Board points out that the Fairness Opinions were delivered solely for the information and support of the Management Board in connection with the review of the adequacy of the consideration offered by Terex from a financial point of view; in addition the Supervisory Board took note of these Fairness Opinions and considered them when coming to its decision. The Fairness Opinions are not directed at third parties and do not establish any rights of third parties or any protective rights of third parties. No contractual relationships between Deutsche Bank or Rothschild and third parties come into existence in the context of the respective Fairness Opinion nor the underlying mandate agreement. Neither the Fairness Opinions nor the mandate agreements between Deutsche Bank or Rothschild and the Company on which the Fairness Opinions are based on have a protective effect for third parties or lead to an inclusion of third parties in their respective scope of protection. The Fairness Opinions are especially not addressed to the Demag Cranes Shareholders and do not constitute a recommendation to any Demag Cranes Shareholders to accept the Offer or not. The consent to attach their respective Fairness Opinion to this Join Statement as an exhibit does not and will not constitute any expansion or addition to the addressees of such opinion or the persons who are permitted to rely on such opinion, and any such consent may not be conceived or construed as such. Furthermore, the Fairness Opinions do not make any statements as to the relative advantages and disadvantages of the Offer in comparison to other business strategies or transactions which could be available for the Bidder or the Company. In the course of their assessment of the consideration offered by the Bidder, Deutsche Bank and Rothschild conducted a series of analyses independently from one another, in the same way as are conducted in comparable capital market transactions and appear appropriate to provide the Management Board and the Supervisory Board with a reliable basis for their assessment of the amount of the consideration offered from a financial point of view. In the process they have taken into account a number of factors, assumptions, procedures, restrictions and judgments, which are described in the respective Fairness Opinion. The analyses are based, among others, on the Midterm Business Plan until 2014/2015 including explanatory documents, the updated outlook for the current financial year 2010/2011 (end of financial year: 30 September 2011), various discussions with certain representatives of Demag Cranes to explain and assess the business plan and publicly available information regarding Demag Cranes and other listed companies deemed similar to Demag Cranes comparable as well as certain capital markets information. Furthermore, Deutsche Bank and Rothschild also compared the Offer Price with certain historical stock prices and the general stock price development of the Company as well as with the development of stock prices of certain other selected listed companies of the same industry, examined and analysed the recommendations and target stock prices of share analysts, compared selected financial data of the Company with those of other listed companies in the same industry and evaluated selected transactions

29 29 and comparing thereby, among others, the respective implicit takeover premiums. Furthermore, a discounted cash flow analysis was also carried out. The Management Board also points out that the Fairness Opinions of Deutsche Bank and Rothschild are subject to certain assumptions and reservations and that it is necessary to completely read and study the Fairness Opinions in order to understand the underlying examinations and results. The Fairness Opinions are especially based on the economic conditions and market circumstances at the time of the issuance of the Fairness Opinions and the information available at that time. Events occurring after the date of the issuance of the respective Fairness Opinions may have an impact on the assumptions made when preparing the respective Fairness Opinion and on the results therein and Deutsche Bank and Rothschild have no obligation to update or reaffirm their respective Fairness Opinions with regard to events taking part after the date of delivery of the respective Fairness Opinion. The Fairness Opinions do not constitute valuation reports (Wertgutachten) as typically rendered by qualified auditors and must not be considered as such. Accordingly, it has not been prepared according to the standards for valuations reports by qualified auditors as set by the Institut der Wirtschaftsprüfer in Deutschland e.v. ("IDW") (for the company evaluation, IDW S1; for the preparation of fairness opinions, IDW S8) and may not be considered as such. Fairness Opinions of the type issued by Deutsche Bank and Rothschild differ in important aspects from a company evaluation by qualified auditors. Deutsche Bank and Rothschild do also not issue any assessment whether or not it would have been reasonable or necessary for the Management Board to retain such a valuation opinion by a qualified auditor. Furthermore, Deutsche Bank and Rothschild issue no statement about whether or not the terms and conditions of the offer, including the Offer Price, comply with the legal requirements of the WpÜG. Deutsche Bank and Rothschild will receive a fee for its services as a financial advisor in connection with the Offer the amount of which is dependent on the evaluation of the Offer by the Management Board, the amount of the Offer Price and the acceptance ratio. It is to be pointed out that Deutsche Bank and Rothschild and its respective affiliated companies may have maintained or may maintain other business relationships with Demag Cranes, the Bidder or the shareholders of the Bidder, or their affiliated companies, which may have or will be compensated to Deutsche Bank and Rothschild by way of fees and disbursements. Furthermore, Deutsche Bank and Rothschild are engaged in the securities trading business, which may result in acquiring, holding or selling, for its own or a third party account, securities of any kind issued by Demag Cranes shareholders of the Bidder or their affiliated companies. b) Mandate of Lazard & Co. GmbH The Supervisory Board has independently from the Managing Board requested Lazard to issue an opinion to the Supervisory Board about whether the consideration offered is adequate from a financial point of view ("Lazard Fairness Opinion"). The engagement of Lazard was intended to provide the Supervisory Board with independent advisory services of an investment bank which did not act as a financial advisor for the Management Board of the Company.

30 30 Lazard explained its analyses, conducted independently from Deutsche Bank and Rothschild, to the Supervisory Board and the Management Board during the meetings of the Supervisory Board held on 27 May 2011 and 31 May 2011, in which all members of the Management Board were also present. The Lazard Fairness Opinion was delivered to the Supervisory Board on 31 May Lazard therein comes to the conclusion, subject to the assumptions contained therein, that at the time the Lazard Fairness Opinion was delivered the offered consideration is inadequate for the Demag Cranes Shareholders from a financial point of view. The Lazard Fairness Opinion as of 31 May 2011 which describes the underlying assumptions and facts, procedures followed, matters considered and limitations on the review undertaken, is attached to this Joint Statement as Exhibit 3. The Supervisory Board points out that the Lazard Fairness Opinion was delivered solely for the information and support of the Supervisory Board in connection with the review of the fairness of the consideration offered by Terex from a financial point of view. It is not directed at third parties and does not establish any rights of third parties or any protective rights of third parties. No contractual relationship between Lazard and third parties comes into existence in the context of the Lazard Fairness Opinion. Neither the Lazard Fairness Opinion nor the mandate agreement between Lazard and the Company on which the Lazard Fairness Opinion is based have a protective function for third parties or lead to an inclusion of third parties in their respective protection area. The consent to attach the Lazard Fairness Opinion to the Joint Statement as an exhibit does not and will not constitute any expansion or addition to the addressees of such opinion or the person who are permitted to rely on such opinion, and any such consent may not be conceived or construed as such. The Lazard Fairness Opinion is especially not addressed to the Demag Cranes Shareholders and does not constitute a recommendation to any Demag Cranes Shareholder to accept the Offer or not. Furthermore, the Lazard Fairness Opinion does not make any statements as to the relative advantages and disadvantages to other business strategies or transactions which could be available for the Bidder or the Company. Within the framework of its assessment of the consideration offered by the Bidder, Lazard conducted a series of analyses, which are customary for comparable capital market transactions and appear appropriate in order to provide the Supervisory Board with a basis for its assessment of the amount of the consideration offered from a financial point of view. In the process Lazard has taken into account a number of factors, assumptions, procedures, restrictions and judgments, which are described in the Lazard Fairness Opinion. The analyses are based, among others, on the Midterm Business Plan until 2014/2015 including explanatory documents, the updated forecast for the current financial year 2010/2011 (end of financial year: 30 September 2011), various discussions with certain representatives of Demag Cranes to explain and assess the business plan and publicly available information regarding Demag Cranes and other listed companies deemed comparable to Demag Cranes as well as certain capital markets information. Among others, Lazard compared the Offer Price with certain historical stock prices and the general stock price development of the Company as well as with the development of stock prices of certain other selected listed companies of the same industry, examined and analysed the recommenddations and target stock prices of share analysts, compared selected financial data of the Company with those of other listed companies in the same industry and evaluated selected transactions and comparing thereby, among others,

31 31 the respective implicit takeover premiums. Furthermore, a discounted cash flow analysis was also carried out. The Supervisory Board points out that the Lazard Fairness Opinion is subject to certain assumptions and reservations and that it is necessary to completely read and study the Lazard Fairness Opinion in order to understand the underlying examinations and results. The Lazard Fairness Opinion is especially based on the economic conditions and market circumstances at the time of the issuance of the Lazard Fairness Opinion and the information available at that time. Events occurring after the date of the issuance of the Lazard Fairness Opinion may have an effect on the assumptions made when preparing the Lazard Fairness Opinion and on the results therein. Lazard has no obligation to update or reaffirm its Lazard Fairness Opinion with regard to events taking part after the date of delivery of the Lazard Fairness Opinion. The Lazard Fairness Opinion does not constitute a valuation report (Wertgutachten) as typically rendered by qualified auditors and must not be considered as such. Accordingly, it has not been prepared according to the general guidelines for valuations reports as set by the IDW (for the company evaluation, IDW S1; for the preparation of fairness opinions, IDW S8) and may not be considered as such. The Lazard Fairness Opinion of the type issued by Lazard differs in important aspects from a company evaluation by qualified auditors. Lazard does also not issue any assessment whether or not it would have been reasonable or necessary for the Supervisory Board to retain such a valuation opinion by a qualified auditor. Furthermore, Lazard has issued no statement about whether or not the terms and conditions of the offer, including the Offer Price, are consistent with the legal requirements of the WpÜG. Lazard will receive a fixed fee for its services as a financial advisor in connection with the Offer which will be due and payable upon the issuance of the Lazard Fairness Opinion. It is to be pointed out that Lazard and its respective affiliated companies may have maintained or may maintain other business relationships with Demag Cranes, the Bidder or the shareholders of the Bidder, or their affiliated companies, which may have or will be compensated to Lazard by way of fees and disbursements. Furthermore, Lazard is engaged in the securities trading business, which may result in acquiring, holding or selling, for its own or a third party account, securities of any kind issued by Demag Cranes shareholders of the Bidder or their affiliated companies. c) Comparison with historical share prices The Management Board and the Supervisory Board also considered the development of the price of Demag Cranes Shares in compiling this Statement. In this context, the Management Board and the Supervisory Board recommend to all Demag Cranes Shareholders considering an acceptance of the Offer to also look into the possibility of selling their Demag Cranes Shares through the stock exchange and to obtain information as to the current market price of Demag Cranes Shares before deciding whether they wish to submit their Demag Cranes Shares for sale as part of the Offer. The Management Board and the Supervisory Board point out that the closing price of Demag Cranes Shares in the electronic trading system XETRA of the Frankfurt Stock Exchange on 30 May 2011 is EUR The Offer Price is therefore EUR 3.8 or approx. 8.3 % lower than this market price.

32 32 Furthermore, the closing price of Demag Cranes Shares has continuously been above the Offer Price of EUR since 2 May 2011, i.e. the day on which the intention to make the Offer was announced. Since this date, the cumulative trading volume of Demag Cranes Shares alone in the electronic trading system XETRA has been more than 25.9 % of the total share capital; i.e. in particular without taking into account other trading venues and OTC transactions (Source: Deutsche Börse). The closing price of Demag Cranes Shares in XETRA trading on the Frankfurt Stock Exchange on 29 April 2011, i.e. the last trading day before publication of the decision to submit the Offer on 2 May 2011, was EUR The Offer Price therefore includes a premium of EUR 5.45 or around 15 % on top of this price (Source: Deutsche Börse). The Offer Price of EUR includes a premium of EUR 6.57 or approx % above the Three- Month Average Price of EUR determined by the BaFin. In Section of the Offer Document, the Bidder also refers to 6 October 2010 as relevant trading day before takeover speculations in addition to the last trading day before publication of the decision to submit the Offer (29 April 2011). This reference is not understandable for the Management Board and the Supervisory Board. From the point of view of the Management Board and the Supervisory Board, the price development of Demag Cranes Shares since October 2010 relative to companies considered to be comparable and to share indices considered to be relevant point to the fact that the price of Demag Cranes Shares on 29 April 2011 was not affected by takeover speculations. The Management Board and the Supervisory Board base this opinion first of all on the following observations: The share price of Demag Cranes AG has developed sideways since October 2010 up until today (i.e. after the rise in the price of Demag Cranes Shares after confirmation of receipt of nonbinding indications of interest), even after there were no more press reports on possible takeover scenarios. The share price increased between 11 October 2010 and 29 April 2011 by 0.8 %. During the same period the market price of Terex Corporation shares increased by 45.5 %. The MDAX rose by 19.5 % during the same period. This indicates that the environment for stocks improved considerably in the months leading up to the end of April. Therefore, share prices from October 2010 do not appear to be relevant anymore for the current valuation situation. Furthermore, during this period, the average target price cited by financial analysts observing Demag Cranes AG increased from EUR 31.0 per share to EUR 42.0 per share. The average target price was 15.7 % above the closing price of EUR on 29 April The development of the share price of Demag Cranes Shares in comparison to the development of share prices of the shares of other companies, which - at least partially - operate within the same industry as Demag Cranes, such as Konecranes ("Konecranes") and Cargotec Ovi ("Cargotec"), confirms in the opinion of the Management Board and the Supervisory Board that the last closing price of EUR on 29 April 2011, the last trading day before the publication of Terex' decision to submit the Offer, is significant to determine the premium offered by Terex:

33 33 - Since 6 October 2010, the last trading day before press reports regarding takeover speculations as to Demag Cranes became public, the share price of Demag Cranes Shares increased by 22.4 % until 29 April In the same period, the share price of Konecranes shares and Cargotec shares increased by 18.9 % (Source: Factset); - In the twelve-month period from 29 April 2010 to 29 April 2011, the share price of the Demag Cranes Shares increased by 37.5 %, which is also comparable to the share price increase of Konecranes share (by 34.5 %) and Cargotec shares (by 57.4 %) (Source: Factset). Against this background, the Management Board and the Supervisory Board are of the opinion that it is not appropriate to regard the share price of Demag Cranes Shares as affected by takeover speculations. On the contrary, the Management Board and the Supervisory Board note that the share price of Demag Cranes Shares in the prior periods considered relevant developed comparable to the share prices of Konecranes, Cargotec and Terex and partially even fell short of these share prices.the development of the share price, the MDAX and the average target price for Demag Cranes Shares results in the following chart: Abbildung 1: Relative Aktienkursentwicklung zwischen 11. Okt 2010 und 29. April ,0 65,0 60,0 55,0 % Delta (Okt-10 bis Apr-11) Demag Cranes 0,8% Demag Cranes Zielpreis 35,4% Terex 45,5% MDAX 19,5% Aktienpreis ( ) 50,0 45,0 40, Volume ('000) 35, , , , Okt Nov Dez Feb Mrz Apr-11 Volumen Demag Cranes Terex (rebasiert) Demag Cranes Zielpreis MDAX (rebasiert) Quelle: Bloomberg d) Comparison with historical valuation multipliers The Bidder also states that it has determined the ratio of the value of the Company (i.e. the market capitalisation, financial debt and pensions less cash) to the latest estimates published by analysts of the earnings before interest, tax and depreciation for the next twelve months (the "valuation multiplier") and compared it with the average historical valuation multipliers since the Company's IPO in The multiplier analysis showed that the multiplier that can be derived from the Offer Price is approx. 35 % above the average of the valuation multipliers observed since this date. The Management Board and the Supervisory Board cannot understand how this "premium" has been calculated.

34 34 Independent of this, the Management Board and the Supervisory Board are of the opinion that the undifferentiated consideration of historical valuation multipliers implied by the price of the Demag Cranes Shares can easily lead to distorted results because of the cyclical nature of the business and hence of the Company's revenues and profits. In this context the Management Board and the Supervisory Board find that Demag Cranes was in a trough of its earnings cycle in the 2009/2010 financial year. Because of the late-cycle nature of Demag Cranes' business, it is expected that the market recovery that is currently taking place and planned for the years to come will not show up in the results of Demag Cranes until after a certain delay. Against the background that Demag Cranes is only at the beginning of this expected earnings recovery and increase, the application of an average valuation multiplier does not seem to be suitable for showing the expected earnings dynamic in such a valuation. As shown in the medium-term outlook, Demag Cranes expects to return to the earnings level of the financial year 2007/2008 in the financial year 2012/2013. Applying the historical average multiplier to this amount would lead to a much higher figure. Terex seems to share this view when speaking of the expected cyclical improvement of earnings in its information event on the Offer for Research analysts on 2 May According to the Bidder's statements, no other methods for determining an appropriate Offer Price were used in the Offer Document. When assessing the appropriateness of the Offer Price, the future development of the share price can be taken into consideration. The Management Board and the Supervisory Board cannot however predict what path the price of Demag Cranes Shares will take in the future. It is uncertain whether the price of Demag Cranes Shares will remain at a comparable level once the Offer has been completed, or whether it will rise above or fall below the current share price. e) Valuation by financial analysts The Company is observed by a number of German and international financial analysts, which publish both purchase recommendations and target prices. The following table shows a summary of the published recommendations and target prices. Institute Analyst Recommendation Target Date price Bankhaus Lampe Gordon Schönell Hold EUR Berenberg Bank Stephan Klepp Hold EUR CA Cheuvreux Hans-Joachim Heimbürger 2/Outperform EUR Commerzbank Ingo Schachel Buy EUR DZ Bank Karsten Oblinger Buy EUR Equinet Holger Schmidt Buy EUR Goldman Sachs Benjamin Moore Buy EUR Hauck & Aufhäuser Thomas Wissler Sell EUR HSBC Jörg-André Finke Neutral EUR HVB Unicredit Ulrich Scholz Buy EUR MM Warburg Thomas Rau Buy EUR Nomura Juho Lahdenpera Neutral EUR NordLB Thomas Wybierek Buy EUR

35 35 UBS Sebastian Ubert Buy EUR 52, WestLB Achim Henke Buy EUR f) Consideration of the strategic positioning of Demag Cranes In the course of this Statement the Management Board and the Supervisory Board have also reviewed the strategic positioning of Demag Cranes and the corresponding risk-opportunity profile. The sales and earnings development expected on the basis of this review has been compared with the available estimates and forecasts of research analysts. The Management Board and the Supervisory Board are of the opinion that the strategic positioning of Demag Cranes and its focus on new markets both from a geographical standpoint and with regard to its products justify sustainable long-term revenues and earnings expectations exceeding market expectations, and that the Company thus offers the Demag Cranes Shareholders considerable further value creation potential. aa) Broad basis of growth drivers for revenues and earnings (1) Cyclical recovery in established markets and realisation of potentials One main driver for the expected earnings growth is the cyclical recovery of the current end markets of Demag Cranes, which it supplies with its established products. This expectation is supported by the positive outlook on the relevant macro-economic indicators such as economic growth, industrial production and trading and transport volume. The growth in order intake across all segments of the Company that has been observed in recent quarters documents this dynamic. Furthermore, it is expected that the consistent investments in and expenses for new capacities and innovative products throughout recent years generate incremental sales, earnings and cash flow. Across all segments of the Company, Demag Cranes can draw on sustainable and tangible potential, which should generate growth and new business in addition to the current activities from fiscal year 2012/2013 onwards. (2) Expansion of mid-market products and localisation of production In the Industrial Cranes segment it is expected that new products in the mid-market segment, which has not been a field of business to date, will contribute additional sales in the low three-digit million range by the financial year 2014/2015. These products have been developed and are manufactured in India and China. The share of locally manufactured and purchased components is around 95 %, and the annual market potential is expected at around EUR 0.5 billion for India and EUR 1.5 billion per year for China. While marketing of these products in India already commenced in 2010 the production capacity has been increased by a factor of approx. five in the last two years - the market launch in China is envisaged for the second half of These products are also intended for exports to other emerging markets. Such localisation of production in growth markets such as Brazil, India and China also helps Demag Cranes to further optimise production and logistics costs and working capital requirements.

36 36 (3) Expansion in China Furthermore, the strategic alliance with the Weihua Group - regarding which a letter of intent was signed in January represents a promising option for Demag Cranes to become the leading local provider of industrial cranes in China in a single step, and to access new markets in China and other regions in the lower-tier segments with established products. The Management Board and the Supervisory Board are of the opinion that the potential of this additional business volume is reflected only to a very limited extent in research analysts' estimates and in capital markets' expectations. (4) Major projects in the Port Technology For the Port Technology Segment, the Management Board and the Supervisory Board expect that Demag Cranes will be able to successfully secure a certain share of the major projects that are expected to be awarded in the next few years. In addition to equipment revenues, individual large projects may contribute significant long-term spare parts and service business, and generate sales of between EUR 70 million and EUR 100 million per project. It is publicly known that various major projects are already in or near the tender phase; among these are Rotterdam / Maasvlakte, London Gateway, Brisbane and others. (5) Further initiatives in the Port Technology (E-AGV, Green Range, mid-market segment) Furthermore, Demag Cranes expects a revival of the AGV business, including products based on innovative electric drive technology, in which the company claims technology leadership. In the medium term, alternative applications besides Port Technology are conceivable for the E-AGV machines. Beyond E-AGV, the so-called Green Range includes Mobile Harbour Cranes with hybrid drive. The family of Mobile Harbour Cranes will furthermore be complemented by mid-market products. The Green Range primarily targets achieve growth in established industrial markets based on environmentally friendly equipment, while the mid-market Mobile Harbour Cranes are focused on portfolio complementation and new business generation in emerging markets. Such additional potential major orders are generally not included in the estimates made by research analysts, and thus represent pure additional value potential from a capital market point of view. (6) Continued global expansion of the service-activities In the Services Segment, Demag Cranes targets to achieve a further increase in the penetration of the installed base of more than 660,000 cranes and electric hoists (status: 30 September 2010) from the level of currently slightly above 50 % to more than 60 % in the medium term. The Management Board and the Supervisory Board consider in particular the increasing complexity of innovative equipment, the corresponding structurally higher service penetration rate of new products, increased customer focus on uninterrupted availability, and the increasing service acceptance among emerging markets customers as important drivers of this development. In addition, Demag Cranes is expanding its activities with system services as well as a specific service offering for third-party products. The Management Board and the Supervisory Board are of the opinion that the potential of this additional business volume is reflected only to a very limited extent in research analysts estimates and in capital markets expectations.

37 37 (7) Continuous Enhancement of efficiency and cash flow The Management Board and Supervisory Board expect that these growth drivers, in combination with significant operational improvements, will result in substantial improvements in profitability over the next five years. Thanks to its lean outsourcing-based "assembler" and systems provider business model, the Company has the ability to generate strong growth without major additional investment and capital requirements. The capacities, infrastructure and product program required to realise the expected growth in India and China have already been developed and implemented in recent years. In the course of the 2009 restructuring, Demag Cranes reviewed its cost structures and eliminated inefficiencies, successfully reducing costs by approx. EUR 60 million. The Company also continues to optimize its production and assembly processes to sustainably reduce production costs and working capital. At the Wetter location, for example, cycle times were reduced by up to 70 % based on re-designed processes. Where possible, these processes are now being established as Group-wide standard in a global roll-out. The Management Board and the Supervisory Board are of the opinion that it will be possible to considerably improve cash flow generation over the coming years on the basis of a combination of organic (and possibly external) growth, significant economies of scale due to the excellent scalability of the business model, and continuous efficiency increases. The Management Board and the Supervisory Board are, furthermore, of the opinion that this additional potential is reflected only to a very limited extent in research analysts estimates and in capital markets' expectations. bb) Adopted business plan The Management Board and the Supervisory Board are of the opinion that from today's perspective, the business plan reflects a realistic view on the development expected by the Company, and that the assumptions upon which the plan is based have been elaborated with the necessary diligence and prudence. The Mid-term Business Plan until 2014/2015, which was approved in September 2010, was reviewed and verified by a reputable independent international accounting firm in the context of the November 2010 refinancing, and presented to the international bank consortium (UniCredit, Deutsche Bank, Société Générale, WestLB, Helaba and SEB) as the basis for the refinancing. g) Overall assessment of the adequacy of the consideration The Management Board and the Supervisory Board have comprehensively reviewed and carefully considered the adequacy of the consideration offered by the Bidder. Taking into account the respective Fairness Opinions, historical share prices, historical valuation multiples, valuations by research analysts, the strategic positioning of Demag Cranes and based on diligent and comprehensive internal reviews, and upon consideration of the overall situation, the Management Board and the Supervisory Board consider the Offer Price of EUR per Demag Cranes share as inadequate. In particular, the Offer Price does not adequately reflect the current positioning and substantial growth prospects of the Demag Cranes Group based on the Company s investments throughout recent years. In this context, it has to be considered that key business areas of Demag Cranes will react to the economic recovery after the crisis only with a certain time lag, and that they will therefore also participate in the general market growth with a corresponding delay. Against this background, in particular the longer-term prospects are relevant for a fundamental company valuation.

38 38 Deutsche Bank, Rothschild and Lazard consider the Offer Price as inadequate in their respective Fairness Opinions. Based on the statements and explanations provided by Rothschild and Deutsche Bank, the Management Board is convinced of the plausibility and suitability of the procedures, methodologies and analyses applied by Rothschild and Deutsche Bank in the context of this task. Based on the statements and explanations provided by Lazard, the Supervisory Board is convinced of the plausibility and suitability of the procedures, methodologies and analyses applied by Lazard in the context of this task. The Management Board and the Supervisory Board can neither exclude nor can they make any assessment as to whether the Bidder or persons or subsidiaries acting together with the bidder or as the case may be third parties may acquire (further) Demag Cranes Shares at a later date at a price higher than the Offer Price. Firstly, the Bidder could acquire Demag Cranes Shares at higher prices on the stock exchange after the expiration of the Acceptance Period, without having to retro-actively increase the Offer Price for those Demag Cranes Shareholders that have accepted the Offer. Secondly, the Bidder could also acquire Demag Cranes Shares off the stock exchange, at perhaps higher prices than Offer Price, once the Offer is completed and a one-year waiting period has passed, without having to retro-actively increase the Offer Price for those Demag Cranes Shareholders that have accepted the Offer. The Management Board and Supervisory Board cannot provide any assessment as to whether a higher or lower price than the Offer Price may be paid in the future within the scope of another public takeover offer of the Bidder or another bidder. Management Board and Supervisory Board do not provide any assessment of a present value of Demag Cranes in accordance with the valuation standard IDW S 1 and therefore also not as to whether a higher or lower amount than the Offer Price would possibly be assessed or will be assessed in the future within the scope of statutorily prescribed, appropriate settlement, for example within the context of the conclusion of a domination and profit and loss transfer agreement as intended by the Bidder pursuant to Section 9.6, a possible delisting of the Demag Cranes Shares, a possible squeeze-out of minority shareholders or a possible change in the legal form of the Company. The shareholders accepting the Offer will have no claim to such a subsequent settlement, not even if such a measure were to occur within one year of the final announcement in accordance with Section 23 para. 1 sentence 1 no. 2 WpÜG (c.f. Section 31 para. 5 sentence 2 WpÜG). Demag Cranes conducted the assessment of the adequacy of the Offer Price on a stand-alone basis and thus does not consider, in the same way as the Bidder's Offer, possible synergies that may arise as a result of a combination between Demag Cranes and Terex, in particular regarding a consolidation of Terex's activities in the field of port equipment with the Port Technology business of Demag Cranes. Management Board and Supervisory Board point out in this context that a complete realisation of the synergy potential described by the Bidder could require that a domination and profit and loss transfer agreement be entered into, as intended by the Bidder in Section 9.6 of the Offer Document. In this context the Bidder states, in Section 9.1 of the Offer Document, that it cannot be assessed as to whether synergy effects can in fact be realised, or to what extent these will be realisable, until completion of the Offer and only with the cooperation of the Company.

39 39 VI. OBJECTIVES OF THE BIDDER AND FORESEEABLE CONSEQUENCES FOR DEMAG CRANES 1. Change of intentions The Bidder has described its intentions and objectives for the Company and the Demag Cranes Group in the Offer Document. The Management Board and the Supervisory Board point out that the Bidder only makes statements to its current intentions. These intentions can change at short notice and at any time. There is no legal obligation to realise the intentions and objectives stated in the Offer Document. 2. Commercial and strategic reasons of the Bidder The Bidder states that in making the Offer it wants to expand Terex' position as a globally active manufacturer of machinery and industrial products with leading positions in niche market segments. As shown in the Offer Document, the activities of the Demag Cranes Group are complementary to those of the Terex Group both in terms of product and geographic fit. According to the statements made in the Offer Document, attractive strategic opportunities could arise from a cooperation between the port equipment business of the Bidder and the Port Technology business of Demag Cranes, as the activities of the Bidder in this field are said to be complementary to those of Demag Cranes. The Bidder also believes that there will be opportunities for each of the Bidder and Demag Cranes to leverage their technology and engineering capabilities and know-how to further improve the product and service offerings and enhance the value delivered to the customers and the competitive position. For the field of services, the Bidder believes, as is shown in the Offer Document, that it can learn from and utilize Demag Cranes' services footprint and capabilities after a merger to offer similar services for a broader, joint range of products. The Bidder also states that the expansion of the business activities in regional growth markets can be significantly accelerated through cooperation. We refer to the further statements of the Bidder on the financial and strategic background to the Offer in Section 8 of the Offer Document. 3. Future business activities, assets and obligations of Demag Cranes As shown in the Offer Document, the Bidder intends to further develop and expand the businesses of Demag Cranes. In doing so, the merger with Terex Group is predicated upon growth and not cost reduction. The Bidder intends to provide the competences as well as the market knowledge and the market access of Terex in order to support the development and expansion of the Demag Cranes Group. In particular, Terex intends, as stated in the Offer Document, to bring the activities of Terex in the port equipment business together with the Port Technology business of Demag Cranes. More details on the Bidder's intentions for the future business acitivites of Demag Cranes can be found in Section 9.1 of the Offer Document. 4. Domicile of the Company, locations and maintenance of key company divisions According to the Bidder, it does not intend at this time to move the company seat of Demag Cranes from Düsseldorf to another location. Furthermore, the commercial identity of the Demag Cranes Group is to be retained. As shown in the Offer Document, the Bidder does not currently intend to relocate or close any

40 40 significant business operations of Demag Cranes. Indeed, the Bidder intends to keep the current production sites of the Demag Cranes Group and to support investments in them that in its opinion will help support the growth of its business. 5. The Management Board and the Supervisory Board of the Company Following completion of the Offer, the Bidder intends to enter into a dialogue with the Management Board regarding the future development of Demag Cranes Group and strategic opportunities of a cooperation between Terex Group and Demag Cranes Group. The Bidder wants to decide on the basis of these discussions to what extent it will support the members of the Management Board of Demag Cranes to remain in their current positions. The Bidder also intends to be represented on the Supervisory Board of Demag Cranes in a way that appropriately reflects the extent of its participation in Demag Cranes at that time. The Bidder reserves the right to have current shareholder representatives on the Supervisory Board being recalled from office through the shareholders' meeting before the end of the term of their office. 6. Possible structural measures According to the statements made in Section 9.6 of the Offer Document, the Bidder intends to enter into a domination and profit-and-loss transfer agreement pursuant to Sections 291 et seqq. AktG with Demag Cranes as the dominated company, if the Bidder, at a given point in time, holds at least 75 % of the Demag Cranes Shares and this appears to be economically and financially reasonable. Furthermore, the Bidder intends to demand a transfer of the Demag Cranes Shares of the outside shareholders against appropriate cash compensation (squeeze-out) and to take any actions required that such squeeze-out is achieved, if the Bidder holds as many Demag Cranes Shares as are required for such squeeze-out and if it appears economically reasonable to the Bidder at that time. 7. Evaluation of the objectives of the Bidder and the foreseeable consequences a) Strategy and future business activities The Management Board and the Supervisory Board take note that the Bidder intends to make the expertise of Terex Group and its market know-how and market access available to the Demag Cranes Group to continue to drive forward the development and growth of the Demag Cranes Group. The Management Board and the Supervisory Board view positively that this shows the faith the Bidder has in the strategy of sustainable and long-term value growth of the Demag Cranes Group pursued by the Management Board. The Management Board and the Supervisory Board also view positively that the Bidder's Offer, as stated in the Offer Document, is not designed to recuce costs but to achieve growth, and that the future business activities of Demag Cranes are not to be changed. In this context the Management Board and the Supervisory Board take note of the Bidder's intention not to relocate the seat of Demag Cranes and to retain the commercial identity of the Demag Cranes Group and not to close or relocate any significant business operations of Demag Cranes Group.

41 41 Nonetheless, the Management Board and the Supervisory Board must point out that the Bidder's intentions may change at any time and that there is no legal obligation to realise the intentions stated in the Offer Document. For this reason it cannot be ruled out that the Bidder may change its intentions after completing its Offer and that the intentions published in the Offer Document may not necessarily be realised. Therefore, it can in particular not be ruled out that changes may occur with respect to individual venues of the Demag Cranes Group in the course of future structural measures. b) Corporate Governance As seen from the point of view of the Management Board and the Supervisory Board, the statements made by the Bidder do, however, give reason to doubt the future corporate governance of Demag Cranes AG. The Bidder does not make any unequivocal statements as to the future composition of the Management Board and the Supervisory Board. On the contrary, the Bidder makes the future composition of the Management Board dependent on discussions held between Terex and Demag Cranes about a cooperation. c) Financial consequences for Demag Cranes Furthermore, completion of the Offer could have negative financial effects on Demag Cranes. aa) Refinancing loans upon a change of control The Management Board and the Supervisory Board point out that Demag Cranes mainly covers its need for capital by means of a revolving syndicated line of credit with a total volume of EUR 350 million (including a tranche of EUR 150 million which can only be used for providing sureties). This revolving credit facility, for which the main companies of the Demag Cranes Group are liable to the lender as guarantors, was first used in the amount of EUR 100 million on 31 January 2011 (the tranche for sureties is utilised at this time to the amount of EUR 50.7 million). Under certain conditions, the loan agreement gives each lender the right to terminate and render due and payable its share in the credit line and any loans or sureties already granted, if a person or persons acting in concert acquire control over Demag Cranes. Acquisition of control is defined as in particular the acquisition of more than 50 % of the Demag Cranes Shares ("Change of Control"). Furthermore, it cannot be ruled out that depending on the amount of the shareholding achieved individual banks may find themselves forced to, or want to, terminate existing financing agreements with Demag Cranes Group because they also have business relations with companies belonging to Terex Group and after a takeover of Demag Cranes by Terex Group, the maximum amounts that internal rulings of the bank allow to be loaned to a single company group may be reached. If there is a Change of Control in the sense of the above-described agreement, and one of the contractual partners exercises its related rights, this can lead to a considerable need for refinancing on the part of the Demag Cranes Group. It is to be taken into account here that in the current market environment and after a changed risk estimate on the part of the bank after the Change of Control it may not be possible to continue the financing at the existing conditions. This could lead to significantly higher financing costs for the Demag Cranes Group.

42 42 According to the publicly available information on the financing of the offer by Terex there is some doubt as to whether the Terex Group has made provisions for the event that the current credit line of Demag Cranes may be rendered due and payable because of the Change of Control. The Terex Loan Agreement does provide for the option of granting revolving loans and credit lines, but with respect to these revolving loans and lines of credit there is no obligation for the financing banks visible in the published contractual document and no obligation to enter into one. Thus, in the estimation of the Management Board and the Supervisory Board based on publicly available information, the Terex Loan Agreement does not contain any obligation on the part of the lender to make loans of any kind available that would be of a suitable structure to refinance the syndicated credit line of Demag Cranes. Furthermore, the Terex Loan Agreement only sees the Terex Corporation itself and its 100 % subsidiaries as possible borrowers, so that there would be no possibility for Demag Cranes to directly take advantage of any revolving lines and credit lines that may have to be set up under the provisions of the Terex Loan Agreement. It also has to be pointed out that the Terex Loan Agreement, which otherwise provides for a restriction of the financing liabilities of Terex Group (including financing liabilities of companies acquired by Terex Group), expressly allows the financing liabilities of Demag Cranes and its subsidiaries within the scope of the credit line (or of a credit line replacing this up to an amount of EUR 350 million). In the opinion of the Management Board and the Supervisory Board this can point to the fact that Terex Group does expect that the existing framework credit line of Demag Cranes continues or that a replacement of this line is made available by a third party other than Terex or its financing banks. Demag Cranes intends to hold talks with the financing banks about a continuation of the financing even after a Change of Control, but it is not foreseeable at this time whether and in what form such a continuation is possible. bb) Tax consequences The completion of the Offer can have negative effects on the tax situation of the Company and the companies of the Demag Cranes Group. At the Company and the companies of the Demag Cranes Group there are currently corporate tax loss carryforwards of approx. EUR 74 million and trade tax loss carryforwards of approx. EUR 38 million ("Tax Loss Carryforwards"). According to the statements in the Offer Document, the execution of the Offer is subject to the reaching of a minimum acceptance threshold of 51 %. If this condition is met, the Bidder will hold more than 50 % of the shares in Demag Cranes. The Management Board and the Supervisory Board point out that in this case the Tax Loss Carryforwards may be lost entirely. If the Bidder holds more than 25 % of the shares after the completion of the Offer but less than 50 % of the share capital or voting rights of the Company, the share of the Tax Loss Carryforwards is lost to the extent of the share ratio held by the Bidder. The Tax Loss Carryforwards can then no longer be used to reduce the tax burden of future profits of the Company or companies of the Demag Cranes Group. The discontinuation of the Tax Loss Carryforwards would lead to an additional corporate tax burden of EUR 11.7 million and an additional trade tax burden of EUR 5.7 million. In the financial year in which the Tax Loss Carryforwards are discontinued, the latent taxes of EUR 17.4 million would have to be written off. The balance sheet profit to be paid out to the Demag Cranes Shareholders in that financial year would be reduced by EUR 17.4 million. The Management Board and the Supervisory Board point out in this context that the tax audit for the financial

43 43 years 2005 to 2007 has not yet been completed. The outcome of the audit and its financial effects cannot yet be foreseen. cc) Flexible dividend policy The current dividend policy of Demag Cranes AG provides for paying out approx. 35 % to 45 % of the operative earnings after taxes to the Demag Cranes Shareholders. The Management Board has reserved its right to alter the dividend policy when implementing an internal or external growth strategy. This flexibility might be lost in the event of an unlimited transfer of profits and losses caused by the conclusion of a domination and profit-and-loss transfer agreement as intended by the Bidder. dd) Costs of the Offer The Management Board and the Supervisory Board also point out that additional costs will presumably arise for the Company in connection with the Bidder's Offer of between EUR 15 million and EUR 20 million, in particular for external consultancy. 8. Possible consequences for the employees, their terms of employment and representation at Demag Cranes Due to statutory regulations, the completion of the Offer has no immediate effects on the employees of the Demag Cranes Group, the terms of their employment or their workers' representatives. The Bidder emphasises in the Offer Document that the commercial success of the Demag Cranes Group is determined materially by the expertise and commitment of its employees. The Bidder is of the opinion that the Terex Group is in a better position than any other company to offer the employees of Demag Cranes long-term strategic advantages. On the other hand, the Bidder expressly points out that isolated staff reductions could arise in the event of personnel overlaps. The Management Board and the Supervisory Board point out that the Bidder only comments on its current intentions, and that these can change at any time. There is no legal obligation to implement the intentions stated in the Offer Document. The Management Board and the Supervisory Board are convinced that the commercial success of Demag Cranes depends especially on the willingness of its employees to provide and achieve superior performance and to tread new paths as teams. The commitment and motivation of the employees are bearing pillars for the lasting growth of the Demag Cranes Group. The Management Board and the Supervisory Board point out that the offer document does not contain any detailed or concrete information with regard to safeguarding of the locations and employment, even though this would be common in transactions with a friendly character. The Bidder expresses the expectation that there are hardly any employment overlaps between the operating businesses of Demag Cranes Group and Terex Group. Further the Bidder states that there are no material plans to change employment conditions or employee representation at Demag Cranes. Therefore, at this point in time and on the basis of the Offer Document, the Management Board and the Supervisory Board are not able to

44 44 assess how the Bidder is planning to address the interests of Demag Cranes' stakeholders, especially those of employees, nor what significance the Bidder places on this subject. VII. POSSIBLE CONSEQUENCES FOR DEMAG CRANES SHAREHOLDERS The following information is intended to provide Demag Cranes Shareholders with the necessary information to evaluate the consequences of whether or not to accept the Offer. The information provided reflects certain aspects which are considered as being potentially relevant by the the Management Board and the Supervisory Board. However, Demag Cranes Shareholders shall have to decide independently if and to what extent they will accept the Offer, whereby each Demag Cranes Shareholder should take into account its own personal circumstances for reaching a corresponding decision. The Management Board and the Supervisory Board recommend that each individual Demag Cranes Shareholder should obtain expert advice if and to the extent necessary. 1. Possible negative consequences upon acceptance of the Offer Taking into account the aforementioned, all Demag Cranes Shareholders who intend to accept the Offer should, inter alia, note the following: - Demag Cranes Shareholders who accept or have accepted the Offer will no longer benefit from any positive development of the stock exchange price of Demag Cranes Shares or from any favourable business development of Demag Cranes. - Demag Cranes Shareholders who accept or have accepted the Offer will no longer receive dividend rights for the current financial year 2010/ Demag Cranes Shareholders who accept or have accepted the Offer may be required to unwind the agreements which came into existence as a result of accepting the Offer, if and to the extent Completion Conditions have not been fulfiled or not validly waived by the Bidder by the end of the Acceptance Period (see Section 13.4 of the Offer Document for further details). - Demag Cranes Shareholders who have accepted the Offer may withdraw from the agreements which came into existence as a result of accepting the Offer only under the conditions pursuant to Section 16 of the Offer Document, although it might be uncertain until 28 December 2011 whether the Completion Conditions have been fulfiled or non-fulfilment has become final pursuant to Section of the Offer Document (merger control clearances). Demag Cranes Shareholders who have accepted the Offer are bound by the Offer until this date. They have no contractual right to withdraw from the Offer. The Bidder also expressly points out in Section 11.9 of the Offer Document that if the acceptance ratio is low, stock trading with the Tendered Demag Cranes Shares may be limited or even impossible due to lack of liquidity. Pursuant to Section 11.5 of the Offer Document the completion of the Offer and the payment of the Offer Price can be delayed until mid-january 2012 or be cancelled altogether due to the required merger clearance procedures.

45 45 - After completion of the Offer and the expiration of the one-year period pursuant to Section 31 para. 5 WpÜG the Bidder would be entitled to acquire additional Demag Cranes Shares at higher prices over the counter, without being required to raise the Offer Price to the benefit of those Demag Cranes Shareholders who have already accepted the Offer. The Bidder might also purchase Demag Cranes Shares at a higher price via the stock exchange within the aforementioned one-year period, without being required to amend the Offer Price to the benefit of those Demag Cranes Shareholders who have already accepted the Offer. - Demag Cranes Shareholders who accept the Offer do not participate in certain compensation payments which are payable by law (or due to the interpretation of the laws based on case law) in the event of certain structural measures realised after the completion of the Offer (in particular the completion of a domination agreement, discontinuation of the listing at the stock exchange (delisting), squeeze-out pursuant to Section 327a et seqq. AktG or transformations). These Compensation Payments are calculated on basis of the enterprise value of Demag Cranes and are subject to being reviewed by a court in award proceedings. Such Compensation Payments may be higher or lower than the Offer Price. Demag Cranes Shareholders who have already tendered their Demag Cranes Shares have no right to claim the difference between the Offer Price and the Compensation Payment should the Compensation Payment exceed the Offer Price. Should the Bidder following completion of this Offer acquire at least 95 % of the voting registered share capital, it may pursuant to Sections 39a et seqq. WpÜG apply for the transfer of the remaining voting Demag Cranes Shares by court order in return for payment of an appropriate compensation (Abfindung) (so-called squeeze out under takeover law). The consideration paid under the Offer is presumed to constitute an appropriate consideration pursuant to Section 39a para. 3 WpÜG if, as a result of the Offer, the Bidder has acquired shares in an amount of at least 90 % of the registered share capital covered by the Offer. 2. Possible negative consequences upon non-acceptance of the Offer Demag Cranes Shareholders who do not accept the Offer and who also do not otherwise sell their Demag Cranes Shares remain Demag Cranes Shareholders, but should inter alia note the following, (see Section 17 of the Offer Document for further details): - Demag Cranes Shareholders bear the risk of the future development of the Demag Cranes Group and therefore also of the future development of the stock exchange price of Demag Cranes Shares. - Demag Cranes Shares that have not been tendered in the sense of the Offer continue to be traded on the respective stock exchanges until a possible delisting occurs. It is uncertain whether the stock exchange price of Demag Cranes Shares will increase or decrease in the near future or whether it will remain at a similar level. - The execution of the Offer will presumably result in a further reduction of the free float of Demag Cranes Shares. The number of Demag Cranes Shares in free float could even be reduced to such

46 46 an extent that the liquidity of Demag Cranes Shares will decrease significantly. As a result it may not be possible to execute purchase or sell orders relating to Demag Cranes Shares or not in a timely manner. A significant reduction of the market capitalisation in free float could result in the Demag Cranes Shares being excluded from the MDAX on one of the next index adjustment dates. This could lead to investment funds and other institutional investors, whose investments mirror indices such as the MDAX, selling their Demag Cranes Shares. This could result in an oversupply of Demag Cranes Shares in a comparatively illiquid market, impacting adversely on the stock exchange price of Demag Cranes Shares. - Upon successful completion of the Offer, the Bidder may have the necessary qualified majority to implement significant corporate structural measures permitted under stock corporation law (Aktienrecht) or to adopt other resolutions of significant importance in the Company s general meeting. Such possible measures include inter alia (where legally permitted) changes to the articles of association, capital increases, approval of a domination and/or profit-and-loss transfer agreement, restructurings, mergers and the dissolution (including dissolution by transfer) of the Company and measures that result in the delisting of the Company. In case of a domination and profit-and-loss transfer agreement the Bidder, as controlling company, would be in the position to give the Management Board of Demag Cranes binding instructions with respect to the company management. Due to the obligation to transfer profits, the Bidder could demand the transfer of the entire annual profit of the Company. Some of the aforementioned measures could give rise to an obligation of the Bidder to make an offer to the minority shareholders to acquire their shares for adequate consideration or to pay a recurring compensation amount. The compensation payments could be higher or lower than the Offer Price. A number of measures would not trigger an obligation to offer any kind of compensation payments to Demag Cranes Shareholders. It cannot be excluded that such measures may still have an adverse effect on the Demag Cranes share price. In case of a so-called delisting the shareholders would not benefit anymore from increased disclosure duties resulting from a stock exchange listing. - Furthermore, the Bidder can, if it has the required majority of Demag Cranes Shares, decide unilaterally upon how the balance sheet profit shall be used. For this reason at this point in time no statements can be made about the future dividend policy of Demag Cranes. VIII. OFFICIAL PERMITS AND PROCEDURES The Bidder assumes that the transaction is inter alia subject to merger control clearance by the European Commission ("EU Merger Control Procedure"). However, according to the Offer Document the Bidder cannot make any conclusive judgement as to the outcome. To the knowledge of the Management Board and the Supervisory Board the transaction is subject to merger clearance by the European Commission. See Section of the Offer Document concerning schedule, requirements and legal consequences of an EU Merger Control Procedure. In the opinion of the Management Board and the Supervisory Board, it cannot be excluded that the European Commission might uncover facts relevant with respect to the impeding of competition, especially in the segment of Port Technology. This would delay the completion of the Offer, possibly until after 28 December The completion of the Offer may also be prohibited. Since the EU merger

47 47 control clearance by 28 December 2011 is a Completion Condition pursuant to Section (a) of the Offer Document, the Offer would lapse in both cases and the agreements which came into existence as a result of accepting the Offer would not be consummated and cease to exist. For further details, reference is made Section 13.4 of the Offer Document. The Bidder assumes that the transaction also requires merger control clearance from the merger control authorities in the USA, China, Russia, South Africa, Turkey, Brazil and Ukraine. According to the Offer Document, the Bidder cannot make any conclusive statement on the duty to file for merger control clearance in China or South Africa. See Section of the Offer Document with regard to the schedule, requirements and legal consequences of merger control procedures. With the exception of Brazil, the transaction may, as shown in the Offer Document, only be executed after the aforementioned merger control authorities have cleared the transaction or the statutory waiting periods have expired. Pursuant to Section (b) of the Offer Document only the availability of merger clearance by the competition agencies in the USA by 28 December 2011 is a Completion Condition. Accordingly, the Bidder could be obliged to implement the Offer although the required clearance in one or more countries has not yet been obtained. IX. INTERESTS OF THE MEMBERS OF THE MANAGEMENT BOARD AND THE SUPERVISORY BOARD The Management Board currently consists of three members: Mr. Aloysius Rauen (Chief Executive Officer and Member of the Board for Services), Mr. Rainer Beaujean (Chief Financial Officer) and Mr. Thomas H. Hagen (Member of the Board for Industrial Cranes and Port Technology). The Supervisory Board consists of twelve members. It is composed of six shareholder representatives and six employee representatives in accordance with the provisions of the AktG and the Germand Co- Determination Act (MitbestimmungsG). Currently, the Supervisory Board consists of the following twelve members: Mr. Burkhard Schuchmann (Chairman of the Supervisory Board); Mr. Josef Berger* (Deputy Chairman of the Supervisory Board); Mr. Gerd-Uwe Boguslawski*; Mr. Harry Hansen*; Prof. Dr. h.c. Karlheinz Hornung; Mr. Robert J. Koehler; Dr. Herbert Meyer; Mr. Reinhard Möller*; Mr. Hubert Rosenthal*; Dr. Rudolf Rupprecht; Mr. Horst Thelen*; Mr. Jens Tischendorf (employee representatives are marked with an *). The members of the Management Board and the Supervisory Board have not been granted, promised or given the prospect of financial benefits or any other non-cash benefits by the Bidder or any persons acting in concert with the Bidder. Nor have the Bidder or any persons acting in concert with the Bidder entered into any agreements with members of the Management Board or the Supervisory Board, and the members of the Management Board have not been offered the prospect of amendments or extensions of their employment contracts. In the event of a change in control of the Company, the members of the Management Board have the right to terminate their respective Management Board contract within six months, giving three months' notice to the end of the month, and to resign from office. A change of control exists when (i) a shareholder has acquired control of the Company within the meaning of Section 29 WpÜG by holding at least 30 % of the voting rights in the Company, including the voting rights attributable to that shareholder pursuant to Section 30 WpÜG, or (ii) an inter-company agreement within the meaning of Section 291 AktG under which the Company is a dependent company has been concluded and taken effect, or (iii) the Company

48 48 has been merged with another legal entity pursuant to Section 2 of the German Company Transformation Act (Umwandlungsgesetz), unless the value of the other legal entity according to the agreed exchange ratio is less than 50 % of the value of the Company. If the special termination right is exercised, the Management Board members receive their fixed salary up to the planned end of the contract term as well as a target bonus pro rata temporis up to the end of contract term, assuming 100 % target attainment, but no more than two times the total annual compensation. In case of Mr. Aloysius Rauen the compensation payment continues in accordance with the current Management Board contract being in force until 30 September 2011 for a period no longer than 24 months from the effective date of the termination, taking into account other earnings; in the version of the contract coming into force on 1 October 2011 with a term until 30 April 2017, the compensation payment will be no more than two times the total annual compensation. The Management Board members Rainer Beaujean and Thomas H. Hagen participate in the Matching Stock Programme ("MSP"), which is described in Section of the Offer Document, based on the description on page 38 et seqq. of the annual report of Demag Cranes for the 2009/2010 financial year. The MSP entitles participants to subscribe to phantom shares, if they have acquired Demag Cranes Shares ("MSP Share"). For each MSP Share acquired in the MSP, participants received five tranches, one tranche a year issued in June of each year from 2006 to 2010, of six phantom shares each. The allocated phantom shares are subject to a two-year lock-up period from allocation of each tranche and are exercised automatically thereafter at the base price if a specific performance threshold is attained. On attainment of the performance threshold, for each phantom share, an amount equal to the difference between the base price and the exercise price, less payroll tax and social insurance contribution, is disbursed in shares in Demag Cranes Shares. The Demag Cranes Shares so automatically acquired are booked into a lock-up account for a period of two years. For the (fourth) tranche issued in 2009, the performance threshold will be attained, so that, with regard to Mr. Rainer Beaujean and Mr. Thomas H. Hagen, an automatic exercising of a defined number of phantom shares will take place, presumably on 23 June Nevertheless, the interests of the two members of the Management Board are in this respect only affected by the current and future share price development of Demag Cranes Share, but not directly by the Bidder's Offer. X. THE INTENTIONS OF THE MEMBERS OF THE MANAGEMENT BOARD AND THE SUPERVISORY BOARD TO ACCEPT THE OFFER As far as members of the Management Board and the Supervisory Board hold Demag Cranes Shares, they intend not to tender the Demag Cranes Shares they hold in the Offer. XI. RECOMMENDATION In consideration of the information in this Statement, the overall circumstances in connection with the Offer and the objectives and intentions of the Bidder, the Management Board and the Supervisory Board regard the consideration offered by the Bidder to be inadequate within the meaning of Section 31 para. 1 WpÜG. For this reason and considering the aforementioned explanations in this Statement, the Management Board and the Supervisory Board recommend to all Demag Cranes Shareholders not to accept the Offer.

49 49 Each Demag Cranes Shareholder must make the decision whether or not to accept the Offer by considering the overall circumstances, its individual circumstances and its personal assessment of the potential future performance of the value and the market price of Demag Cranes Shares. Subject to applicable law, the Management Board and the Supervisory Board assume no responsibility in the event that the acceptance or non-acceptance of the Offer subsequently have adverse economic consequences for any Demag Cranes Shareholder. Düsseldorf, 31 May 2011 Demag Cranes AG The Management Board The Supervisory Board Annex 1: Annex 2: Annex 3: Fairness Opinion of Deutsche Bank AG Fairness Opinion of Rothschild GmbH Fairness Opinion of Lazard & Co. GmbH

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