• Takeover strengthens Praktiker Group's market position
• Two-brand strategy covers both sides of the home improvements sector
• Acquisition allows sustained improvement of results

Kirkel, 16 August 2006 - Praktiker Bau- und Heimwerkermärkte Holding AG is taking over the operational business of Max Bahr Holzhandlung GmbH & Co. KG. A corresponding transaction was agreed upon by the two partners on Wednesday in Hamburg. In its last financial year (01.03.05 - 28.02.06), Max Bahr achieved net sales of Euro 726 million at 77 locations with a total sales area of 513,249 m². Together with Max Bahr, the Praktiker Group will achieve annual sales of almost Euro 4 billion.

“Max Bahr is a renowned home improvements specialist offering premium quality products and service,” according to Wolfgang Werner, CEO of the Praktiker Bau- und Heimwerkermärkte Holding AG. “By taking over the operational business of Max Bahr, we are acquiring a well-run company that will help us to further develop our market position.”

Two-brand strategy covers both ends of the home improvements sector

Praktiker intends to continue operating Max Bahr as a service-orientated premium brand. “Max Bahr,” says Wolfgang Werner, “is the ideal complement to the strategic alignment of Praktiker which will be more clearly positioned as price-aggressive and discount-orientated. This will be the consequence of the planned implementation of our new Easy-to-shop concept, which has been designed primarily for medium-sized stores. In contrast, Max Bahr has the competence for managing large stores and has already established itself as a premium concept. This gives us a unique position in the German home improvements market by appealing to a much broader range of customers. Our innovative two-brand strategy will enable us to reach additional target groups, and thus cover the market both efficiently and effectively. Thus we do not only gain in size, but also a new quality of our offer. Currently, no competitor in the market can match that.”

Significant reinforcement of store network

Regionally, Max Bahr is an almost ideal addition to Praktiker. Moreover, it facilitates an improved location policy. Wolfgang Werner: “The takeover opens up further growth perspectives in Germany’s DIY market to us. The acquisition not only gives us a denser network of stores, but also enables us to optimise it. By transforming individual stores according the respective core competencies of each brand, we are able to strengthen the positioning of our brands.”

Acquisition leads to sustained improvement of results

The takeover also bears with it potential for improvements in procurement, logistics and administration. Wolfgang Werner: “We have different strengths, and there is much we can learn from each other. I am confident that we will be able to use our future advantages of scale for greater efficiency and profitability. We are confident that the acquisition of Max Bahr will make a positive contribution to our profits already in the first full financial year.”

Improved strategic position

The acquisition of Max Bahr clearly improves Praktiker’s strategic position. As Wolfgang Werner explains: “Our strategy is based on three pillars”, which are:

• International expansion: We will continue our aggressive expansion into attractive East European markets as planned. This acquisition will not have any effect on value-orientated growth abroad. Our target remains unchanged with 15 to 20 new stores per year in the medium term.
  
  
• Two-brand strategy: The two-brand strategy will help assure sustained improvement of our competitive position.
  
  
• Easy-to-shop: After the opening of our six pilot stores in July, the Easy-to-shop concept shall be rolled out in 2007.

The Max Bahr real estate was acquired by Moor Park Holdings Luxembourg Sarl.

The acquisition of Max Bahr is still subject to clearance by the Federal Cartel Office. Both parties agreed in confidentiality regarding the acquisition price.

Praktiker Bau- und Heimwerkermärkte Holding AG was advised by JP Morgan.

* Financial year Max Bahr: 01.03.05 - 28.02.06
** Yearly average, full-time equivalents