Atlas Copco Restructures Assembly of Pneumatic Tools.

STOCKHOLM, Sweden -- Regulatory News:

Atlas Copco (STO:ATCOA) (STO:ATCOB) has decided to establish a factory for assembly of pneumatic power tools in Hungary. Designed to strengthen the long-term competitiveness of its Industrial Technique business area, the step includes a proposal to transfer assembly from Hemel Hempstead, Great Britain.

"This is part of our strategy to increase sourcing from Eastern Europe and Asia," says Fredrik Moller, Business Area President, Atlas Copco Industrial Technique. "By establishing production in Hungary, we are lowering our cost base and safeguarding our future growth prospects."

The factory, located close to Budapest, will become fully operational during the first quarter of 2008. A consultation process will be initiated in Hemel Hempstead, where Atlas Copco primarily produces pneumatic tools for the automotive and general industry under the CP Desoutter brands. The measures are expected to affect approximately 85 employees. The factory currently employs almost 200 people. Costs related to the proposed move amount to slightly less than MSEK 50.

"We regret the unfortunate situation this change will represent for our employees in Hemel Hempstead, and the company will take every reasonable action to assist those affected in achieving alternative employment either within or outside the Atlas Copco Group," Moller says.

Great Britain is an important market for Atlas Copco and the changes will not have any effect on the marketing, sales and service of CP Desoutter products. Moller says: "This reorganization will give us the efficiencies of production and administration to be able to operate in the market with a greater competitive edge and to further develop the range and quality of products to the benefit of our customers."

Atlas Copco is a world leading provider of industrial productivity solutions. The products and services range from compressed air and gas equipment, generators, construction and mining equipment, industrial tools and assembly systems, to related aftermarket and rental. In close cooperation with customers and business partners, and with more than 130 years of experience, Atlas Copco innovates for superior productivity. Headquartered in Stockholm, Sweden, the Group's global reach spans more than 150 markets. In 2006, Atlas Copco had 25 900 employees and revenues of BSEK 51 (BEUR 5.6). Learn more at www.atlascopco.com.

Atlas Copco's Industrial Technique business area develops, manufactures and markets industrial power tools, assembly systems, aftermarket products, software and service. It innovates for superior productivity for applications in the automotive and aerospace industry, general industrial manufacturing and maintenance, and vehicle service worldwide. Principal product development and main manufacturing units are in Sweden, Great Britain, France. More information is available on www.atlascopco.com.

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