Schaeffler KG has terminated the swap transaction (Total Return Equity Swap) in relation to Continental shares, which was concluded with Merrill Lynch International on March 17, 2008 and is described in Section 6.8 of the offer document, on August 21, 2008. The consequences of the termination are described in Section 6.8 of the offer document.

The Schaeffler Group and the trade unions IG Metall and IG BCE have today signed a joint statement about the guarantees for protecting the interests of employees. Both sides have now therefore complied one of the most significant points of the investment agreement between Continental AG and Schaeffler KG.

Herzogenaurach-based Schaeffler Group entered into an investor agreement on Wednesday with Hanover-based Continental AG. The accord paves the way for Schaeffler to acquire a strategic shareholding in Continental, and for both companies to collaborate in a constructive partnership.

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

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

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

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

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

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

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

The Schaeffler Group will again participate in the DTM 2008 as partner of AUDI. When the lights turn green for the season’s first race in Hockenheim on April 13, popular DTM champion Mattias Ekstroem will for the first time drive the new Red Bull A4 with the “LuK look” to defend his title. Mike Rockenfeller, who ranked 12th last year, will enter the race with last year’s car with the green “INA diamond” and a high level of motivation to finish with a high ranking.

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

Schaeffler Group Automotive was successful in the Innovation Competition of the NoAE (Network of Automotive Excellence) at the Wuerzburg Automotive Summit on June 12 with two products. The Group was nominated for participation in the Innovation Vernissage in the “CO2 Reduction, Lightweight Design and New Materials” category for INA’s lightweight balancer shaft with rolling bearing supports as well as FAG’s twin tandem wheel bearings.

Almost 20 years after the successful development of the dual mass flywheel (DMF), automobile supplier LuK has set yet another milestone in vibration damping. Through the compact integration of a centrifugal pendulum-type absorber, the damping capacity of the dual mass flywheel can be increased by an additional speed-adaptive component.

DETROIT, 13.01.2008. LuK has introduced an innovative multi function torque converter (MFTC), which overcomes the challenges imposed onto start-up devices for automatic transmission by modern and highly efficient turbo-diesel engines. Thus, a component has been launched that allows to combine environmentally-friendly diesel technology, which is on a continuous rise in the USA, with the demand for comfort in an automatic transmission.