June 29, 2007

LANXESS moves business unit Lustran Polymers into a global joint venture with INEOS

Full withdrawal from this field of business two years after the first closing, which is expected for end of September 2007 / Two purchase price payments: After first and second closing each

Leverkusen - The Leverkusen-based chemical group LANXESS has found a partner for its global ABS plastics business and is establishing a joint venture with the British chemical group INEOS. LANXESS is incorporating its Lustran Polymers business unit into the joint venture and will initially hold a 49 percent minority interest in the new company. As part of this transaction, all associated pension obligations in the amount of approximately EUR 30 million will be transferred to the joint venture. LANXESS will receive an initial payment of EUR 35 million after the first closing to occur at the end of September 2007.

"The transfer of this business unit to the joint venture headed by INEOS is a key milestone in LANXESS' realignment and offers both the ABS business and its employees the best opportunities for further development," said Chairman of the Board of LANXESS Management, Axel C. Heitmann. "The agreed joint venture provides INEOS with strong market positions in a new portfolio of products, that complement our styrenic, polyethylene, polypropylene and PVC plastics businesses," said Jim Ratcliffe, Chairman of INEOS. "There is also a good fit with a number of our existing businesses and the JV will benefit from upstream integration into key raw materials."

It has been agreed that INEOS will take over LANXESS' 49 percent minority interest in the joint venture company two years after the first closing. As a result, LANXESS will then have withdrawn completely from this business. LANXESS will also receive a second payment at this point, which is to be determined by the economic success of the joint venture company.

"By creating this joint venture and defining specific exit conditions, we have not only established a solution that ensures the best possible development opportunities for the Lustran Polymers business unit, we have also secured that LANXESS participates in the restructuring efforts that we have initiated in the last two years." explained Heitmann. In light of the fact that the INEOS Group produces all three respective raw materials of the LANXESS ABS products, the joint venture should be in a position to be more competitive in the future and should be able to better manage cyclical swings", Heitmann added.

The completion of the transaction still requires, among other things, approval from the antitrust authorities. The parties expect the transaction to be completed at the end of September 2007. LANXESS will then show its holding in the joint venture as investment in other affiliated companies in the balance sheet.

In 2006, the international workforce of around 1,600 in the Lustran Polymers business unit achieved an EBITDA pre exceptionals of approximately EUR 16 million, with sales amounting to almost EUR 900 million. For 2007 an EBITDA pre exceptionals of approximately EUR 40 million is expected.

The British-based INEOS Group is the world's third-largest chemical group after BASF and the Dow Chemical Group and employs a workforce of around 16,600, when it reported sales of approximately USD 38 billion. The group operates 73 production sites in 18 countries and had a global production capacity for petrochemical products amounting to over 30 million metric tons per year.

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Leverkusen, June 29, 2007
eic (2007-0191e)

Forward-looking statements
This news release contains forward-looking statements based on current assumptions and forecasts made by LANXESS AG management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.