Ternium Provides Notice of European Commission Decision on Luxembourg's 1929 Holding Company Regime.

LUXEMBOURG -- Ternium S.A. (NYSE:TX) ("Ternium") announced today that the European Commission, or the EC, following an investigation of Luxembourg's 1929 holding company regime, has determined that the tax treatment of such holding companies is incompatible with the EU common market, and is requiring Luxembourg to cancel or modify the tax treatment of the 1929 holding companies not later than December 31, 2006. As a holding company under Luxembourg's 1929 regime, Ternium is exempt from corporate income tax and certain other Luxembourg taxes and its dividend payments are exempt from withholding tax.

The EC decision contemplates a transition period, which would permit Luxembourg to allow pre-existing 1929 holding companies to continue benefiting from their current tax regime after implementation of the EC decision until December 31, 2010. However, pursuant to Article 2, paragraph 3, of the decision, such benefit would appear to terminate if all or part of the capital of such companies is transferred during the transition period. Ternium believes, based on the reasons that led the EC to allow a transition period, that the above-described effect should not apply to listed companies with publicly traded securities. As neither listed companies nor their shareholders are able to prevent trading in the listed companies' shares, a different interpretation would defeat the purpose of the transition period that the EC deemed necessary to accommodate the expectations and reorganization needs of such companies and their shareholders.

Ternium is confident that the EC, or the Grand-Duchy of Luxembourg in its implementing legislation, will clarify that the above-described effect regarding capital transfers during the transition period does not apply to listed companies, such as Ternium, but no assurances can be given in that respect. Ternium will seek such clarification and take appropriate legal action in the unexpected case that the authorities fail timely to confirm Ternium's interpretation.

Some of the statements contained in this press release are "forward-looking statements." Forward-looking statements are based on management's current views and assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by those statements. These risks include but are not limited to risks arising from uncertainties as to gross domestic product, related market demand, global production capacity, tariffs, cyclicality in the industries that purchase steel products and other factors beyond Ternium's control.