Skanska to divest its entire holding in Sandvik

SKANSKA TO DIVEST ITS ENTIRE HOLDING IN SANDVIK

Skanska has decided to divest its shareholding in Sandvik the Swedish-based cemented carbide and speciality steels company for an amount in the range of SEK 10 billion. To accomplish this, Skanska will guarantee the share redemption of SEK 4 billion proposed by Sandvik’s Board of Directors. Skanska will also sell shares to the Swedish investment company Industrivärden, and also sell shares to Deutsche Morgan Grenfell for subsequent purchase by Swedish and international investors.

Since the autumn of 1993, when the Skanska Group began the process of focusing on its core operations, it has made clear to the market its intention to divest the holding in Sandvik. Skanska has, moreover, undertaken a number of exploratory discussions with industrial enterprises that were potential purchasers of its strategic ownership position in Sandvik. These discussions did not lead to any results. Meanwhile Sandvik’s share price has risen and is today close to its all-time high. Skanska’s Board of Directors has therefore reached the conclusion that a divestment in the abovedescribed manner is a solution that would be good for Sandvik, while yielding the best possible outcome for Skanska shareholders.

Guarantee of Sandvik’s share redemption

Skanska will guarantee the redemption of SEK 4 billion in Sandvik shares that has been proposed by Sandvik. The redemption price will be calculated on the basis of the average market price of a Sandvik share during the May 7-22, 1997 application period, minus a discount of 3 percent. One precondition for Skanska’s guarantee, however, is that the redemption price, which will be fixed after separation of Sandvik’s dividend proposed at SEK 6.50 per share is not below SEK 170 per share. Nevertheless, Skanska may carry out its application for redemption even at a lower redemption price. In conjunction with this, Skanska has pledged to submit a maximum of 23,529,412 Sandvik shares, thereby fully subscribing the offer. If the redemption price should be higher than SEK 170, excess Sandvik shares will be divested.

Sale to Industrivärden

Skanska has further decided to accept a purchase offer from Industrivärden for 22,000,000 Series A shares in Sandvik, effective on May 13, 1997. The proposed dividend in Sandvik - amounting to SEK 143 million in respect of the shares sold - will go to Skanska. This block of shares, which is equivalent to 10.2 percent of voting power and 7.9 percent of capital stock in Sandvik, has been sold at a price of SEK 185 per share, for a total of about SEK 4.1 billion. In conjunction with the purchase, Industrivärden has pledged to support the implementation of the share redemption proposed by the Board of Directors of Sandvik.

Sale to Deutsche Morgan Grenfell

Furthermore, Skanska has decided to accept a purchase offer from DMG for 10,377,163 Series A shares in Sandvik. This block of shares, which is equivalent to 4.8 percent of voting power and 3.7 percent of capital stock in Sandvik, has been sold at a price of SEK 180 per share, totaling SEK 1.8 billion. DMG intends to sell these shares as soon as possible to institutional investors in Sweden and internationally.

Capital gain

These divestments will earn Skanska an estimated capital gain of at least SEK 9.1 billion.

Transfer of capital

In its Year-End Report for 1996, issued on February 25, 1997, Skanska announced plans to transfer SEK 8-10 billion in excess capital to its shareholders. The divestments that have now been approved by the Board are one step in this process, in which the intention is to implement the transfer of capital by means of a share redemption. Skanska intends to provide information on such a redemption in conjunction with the Annual Shareholders’ Meeting of the Company on May 5, 1997.

Danderyd, April 14, 1997

SKANSKA AB

Group Public Affairs