RNS Number:4743O
Molins PLC
08 August 2003


8 August 2003

                                   Molins PLC
                         Proposed acquisition of Sasib
                               and Notice of EGM


Molins, the international specialist engineering company, announces the proposed
acquisition of Sasib S.p.A. ("Sasib"), a leading manufacturer of packing
machinery for the tobacco industry.


Molins is purchasing Sasib from CIR S.p.A., an industrial holding company listed
on the Milan Stock Exchange.  Sasib, based in Bologna, Italy, designs,
manufactures and sells specialist machinery, predominantly packing machines for
cigarette manufacturers.  Like Molins, Sasib operates on a global basis and in
the year ended 31 December 2002 made profits before tax of #1.5 million on
turnover of #36.9 million.  Net assets at that date were #6.8 million.


The combination of Sasib's packing machinery and Molins' range of cigarette
making and handling machines will enable Molins to offer a complete line of
cigarette making machinery in two principal speed ranges, to meet the majority
of current market requirements.


Molins is acquiring Sasib for a maximum consideration of Euro10.6 million (#7.5
million).  The consideration, to be satisfied in cash, is subject to a downward
adjustment related to the amount by which the value of the net assets of Sasib
at 30 June 2003 was below Euro10.4 million (#7.3 million).  This adjustment is
expected to be approximately Euro1.9 million (#1.4 million), thereby reducing the
consideration to be paid to approximately Euro8.7 million (#6.1 million).  Molins
will retain Sasib's net debt at completion of the acquisition.


Commenting on the acquisition Peter Byrom, Chairman of Molins, said: "Sasib's
products are highly complementary to those of Molins and we believe that the
acquisition will further strengthen the position of both businesses.  This is an
important step and will consolidate Molins' position as a major supplier of
products and services to the tobacco industry."


Benefits of the acquisition


-  Sasib brings to Molins a range of product offerings in packing machinery
   to complement its existing range of cigarette making and handling machines


-  Molins will be able to use its successful recent experience in product
   development and in improving operational efficiency to the benefit of Sasib


-  Molins' existing servicing, refurbishment and rebuild capabilities can
   be extended to encompass Sasib machines in support of its current activities


-  The combined businesses will be able to offer customers a more efficient
   service through a coordinated response to specified requirements


Background to the acquisition


Over the last four years Molins has undertaken a fundamental restructuring of
its Tobacco Machinery division to take advantage of current opportunities in the
market. The company has focused on continually improving the levels of service
and spares delivery to its customers and reducing costs of production through
design and sourcing.


The focus of research and development has been on providing added value to
customers through enhancements to Molins' product offering.  A number of new
products at competitive prices have been introduced to meet market requirements.
The result has been a significant improvement in the profitability of the
Tobacco Machinery division.


Molins has made a number of acquisitions over the past four years to extend the
range of its tobacco related activities, increasing the number of products and
expanding the services offered to customers.


Current trading and prospects


Current trading of Molins


The full year results of Molins for the twelve months to 31 December 2002 were
announced on 12 February 2003 and were sent to shareholders on 10 March 2003.
At the annual general meeting of the Company, held on 16 April 2003, Peter Byrom
made the following comment:


"Trading this year is meeting our expectations.


"The continued investment in the Tobacco Machinery businesses and the focus on
operational efficiencies has positioned the division well for 2003.  Order books
are higher than at this time last year and we expect that business levels will
grow as a result.  The market outlook for Packaging Machinery is less certain,
but we remain confident in the ability of our businesses to perform
comparatively well in this difficult market.


"We maintain a strong balance sheet and remain committed to further investment
in all parts of our business.  We believe that the Company will continue its
progress through 2003."


Current trading continues to meet the Board's expectations.


Current trading of Sasib


Sasib's order book at the end of 2002 was at similar levels to that at the
beginning of 2002.  However, its machine order intake in the first six months of
2003 has been substantially lower compared with the same period in 2002.  Sasib
has been affected by the outbreak of SARS in the Far East and also by the unrest
in the Middle East, both of which have historically been important markets for
the business.  Consequently, Sasib's management expects to report a
disappointing performance for the six months to 30 June 2003 but is forecasting
an upturn in both order intake and delivery in the second six months of the
year.


Prospects for the enlarged group


Overall, taking into account the expected benefits of the acquisition, the
Directors are confident that Molins, as enlarged by Sasib, will perform
satisfactorily for the current financial year.


Financial effects of the acquisition


The cost of the acquisition, including transaction expenses of approximately
Euro0.7 million (#0.5 million), will involve cash payments by Molins of
approximately Euro11.3 million (#8.0 million), less an amount related to any
reduction in value of the net assets of Sasib at 30 June 2003 below Euro10.4
million (#7.3 million). Sasib's management estimates that such reduction in net
assets will be approximately Euro1.9 million (#1.4 million), reflecting the
underperformance of Sasib in the first six months of 2003 together with exchange
rate adjustments. This is expected to reduce the cost of the acquisition to
approximately Euro9.4 million (#6.6 million).


The enlarged group will retain Sasib's net debt at completion of the
acquisition.  At 31 December 2002 Sasib had net debt, including amounts owing to
its parent company, of Euro2.7 million (#1.8 million).  However, net debt is
expected to be substantially higher at completion.  At 30 June 2003 net debt, as
disclosed in Sasib's management accounts, was Euro6.3 million (#4.4 million)
reflecting, inter alia, an increase in working capital in the order of Euro1.5
million (#1.1 million) and also the impact of the underperformance of Sasib
since 31 December 2002.  The consideration and refinancing of Sasib's debt will
be met by an extension of #14.0 million to Molins' existing bank borrowing
facilities.


Further information


KPMG Corporate Finance is acting as financial adviser to Molins in relation to
the acquisition.


In view of the size of Sasib relative to Molins, the acquisition is conditional
upon the approval of the holders of Molins ordinary shares.  A circular giving
further details of the acquisition and containing a notice of an extraordinary
general meeting to be held at 9 am on 29 August 2003, at which approval for the
acquisition will be sought, will be sent to shareholders as soon as practicable.


Enquiries:


Molins PLC             David Cowen, Group Finance Director    Tel: 01908 219000


KPMG Corporate Finance Tom Franks                             Tel: 020 7311 1000
                       Richard Brown


Citigate Dewe Rogerson Margaret George                        Tel: 020 7638 9571
                       Sue Pemberton



KPMG Corporate Finance, a division of KPMG LLP which is authorised by the
Financial Services Authority for investment business activities, is acting for
the Company as financial adviser in relation to the acquisition and is not
acting for any other person in relation to such acquisition.  KPMG Corporate
Finance will not be responsible to anyone other than the Company for providing
the protections afforded to its clients or for providing advice in relation to
the contents of this announcement or any transaction or arrangement referred to
herein.



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