Goss To Take Heidelberg Web Press Division

Heidelberg and Goss International have reached an agreement on major issues for the intended transfer of the Heidelberg web offset division to Goss International.

Heidelberg and Goss International have reached an agreement on major issues for the intended transfer of the Heidelberg web offset division to Goss International.

After completion of the consultation process with the workers' councils in France and the Netherlands and the agreement of the anti-trust organisations, Heidelberg will transfer the web offset division for commercial web and newspapers to Goss International Corporation.

The move also incorporates the web finishing business in the USA An outline deal has been agreed in principle but some issues remain to be resolved before definitive documents are executed over the coming weeks.

Under the deal, Heidelberg will become a new shareholder at Goss International, holding slightly below 20% of the company's shares.

The financial details of the agreement were not disclosed.

"The market volume for web offset printing presses has diminished.

The weak economy and the corresponding low levels of advertising spending contributed to this development," explained Bernhard Schreier, chief executive officer of Heidelberg.

Both companies expect drastically improved capacity utilisation and market penetration from the business combination and restructuring of activities.

In 2002-2003, Heidelberg's web offset division achieved 430 million Euros in sales, which accounted for roughly 10% of Heidelberg's total sales (4.1 billion Euros).

At closure of the contract, nearly 2,100 employees at sites in the USA, France and the Netherlands will be transferred to Goss International.

In 1988 Heidelberg acquired Harris Graphic Corporation, with sites in the USA and France to enter the web offset market.

The acquisition of Stork Contiweb in the Netherlands allowed Heidelberg to add splicers and dryers to their offerings for this market segment.

In connection with the announced realignment, in the third quarter of 2003/2004 Heidelberg had reserved an amount of 525 million Euros, mostly for depreciation of book values.

"We expect no further burdens for the current fiscal year.

The improved profitability of the Group will become visible by the beginning of next fiscal year," said chief financial officer Dr Herbert Meyer.

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