Bong Ljungdahl: Bong Acquires German Competitor.

KRISTIANSTAD, Sweden -- Bong has signed an agreement to acquire the German envelope manufacturer RCT Kuvert. RCT is one of Europe's 10 largest envelope makers, with annual sales of around EUR 27 million and an annual volume of approximately 3 billion envelopes. Envelope production is based in Hilden, some 20 km from Wuppertal where Bong has its largest production facility. RCT's envelopes are sold by its own German sales organisation and through a wholly owned subsidiary in the Netherlands that is responsible for all exports, which go primarily to the Benelux countries and the UK.

"The acquisition of RCT will increase the Bong Group's volumes by more than 20 percent and strengthen our position in Germany and other European envelope markets. RCT's new and modern machinery will also enable us to further improve our manufacturing productivity and postpone replacement investments into the future", says Bong's President & CEO Anders Davidsson. "The geographical proximity to our factory in Wuppertal and the synergy potential are other key motives for the acquisition. By combining the best from Bong with the best from RCT, we can realise valuable cost-savings and give our customers a better and more comprehensive offering."

The transaction is expected to be completed in January 2006 when Bong formally takes over ownership of RCT. The final price of the shares will be determined by RCT's financial position on the transaction date, and is preliminarily estimated at around EUR 2.5 million. Financing of the acquisition has been arranged and will consist entirely of new bank loans.

The acquisition of RCT is expected to make a positive contribution to Bong's profit starting in the second half of 2006.

Bong is one of Europe's leading envelope companies. The Group has an annual turnover of approximately SEK 1.8 billion, some 1,300 employees and an annual manufacturing capacity of around 15 billion envelopes at its factories in Sweden, Denmark, Norway, Finland, Poland, Germany, Belgium, the UK, Ireland and Russia. Bong has a very strong market position, particularly in Northern Europe, and conducts sales and marketing in eleven European countries through its own sales organisations. The Group sees attractive opportunities for further expansion and development. Bong is a publicly listed company and its shares are quoted on the O list of the Stockholm Stock Exchange.

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