21 July 2000

Introduction
Richemont is pleased to announce that it has agreed to acquire Les Manufactures Horlogères SA ("LMH") from Mannesmann AG. LMH owns three luxury watch businesses, namely 60 per cent of Jaeger-LeCoultre, 100 per cent of International Watch Co. ("IWC") and 90 per cent of A. Lange & Söhne.

Richemont also announces that it has acquired from the Audemars Piguet group the 40 per cent interest in Jaeger-LeCoultre not already owned by LMH. Richemont intends to transfer this shareholding to LMH.

The combined cost of the acquisitions on a debt free basis is CHF 3,080 million in cash, comprising CHF 2,800 million for LMH and CHF 280 million for the 40 per cent interest in Jaeger-LeCoultre.

Mannesmann has owned LMH since 1993 and decided to sell the business following the acquisition of Mannesmann by Vodafone AirTouch in February 2000.

Strategic rationale for the transaction
The acquisition represents a major strategic step for Richemont and will strengthen its position as one of the world's leading manufacturers of quality watches. It offers a unique opportunity to acquire an integrated family of watch companies with an excellent manufacturing capability.

LMH's products have a well-deserved reputation for technical excellence and occupy a unique position in the "classical" segment of the market for luxury watches. They complement Richemont's existing portfolio of watch companies which, in addition to Cartier, includes Vacheron Constantin, Piaget, Baume & Mercier and Officine Panerai.

In terms of manufacturing, LMH is a vertically integrated group and a leader in "Haute Horlogerie". Its expertise in manufacturing high value movements adds significantly to Richemont's existing capability in this area.

Richemont's well established worldwide distribution network will open up significant opportunities for Jaeger-Le Coultre, IWC and A. Lange & Söhne in major markets where they have the potential to increase their market share, such as the United States.

LMH has an excellent management team, which shares Richemont's philosophy and has a genuine understanding of the values that underlie luxury watchmaking. This team has built LMH into a very successful business with an outstanding record of sales and profit growth.

Description of LMH and its watch companies
The LMH group comprises the following businesses:


60 per cent of Manufacture Jaeger-LeCoultre SA, together with its wholly-owned French and German distribution companies;
100 per cent of International Watch Co. AG, including a wholly-owned German distribution company; and
90 per cent of Lange Uhren GmbH.
It is intended that the outstanding 40 per cent of Jaeger-LeCoultre, which Richemont has just acquired from the Audemars Piguet group, be transferred to LMH. The Lange family owns the remaining 10 per cent in Lange Uhren GmbH.

In addition, LMH owns a 12.5 per cent shareholding in La Pierette SA (a manufacturer of stones for watch movements) and two other distribution companies for the UK and North American markets.

Jaeger-LeCoultre, IWC and A. Lange & Söhne each have long histories in watch manufacturing dating back to the mid-1800s. The LMH group was formed in 1991 to provide a common platform for the three brands. The brands are nevertheless managed independently with distinct manufacturing facilities, marketing strategies, target customers and brand philosophies.

Jaeger-LeCoultre is the largest of the companies in the LMH group, produces the widest spectrum of products and focuses on the jewellery/fashion and sports/all day watch segments; IWC focuses on sports/all day watches; and A. Lange & Söhne produces watches exclusively for the traditional, classical and collectors' segments. All of the watches sold by the three companies retail for prices at the premium end of the luxury watch market.

The LMH group employs approximately 1,440 people, mostly located in Switzerland and Germany. At 31 December 1999, LMH had net assets (excluding the value of its intellectual property) of approximately CHF 100 million.

Over the three years to 31 December 1999, LMH's sales have grown at a compound annual rate of 19 per cent to CHF 349.4 million. Operating profit before depreciation and amortisation (EBITDA) in 1999 amounted to CHF 80.4 million. Operating profit (EBIT) amounted to CHF 70.8 million.

The LMH companies have continued to show good growth in the six-month period to 30 June 2000. Net sales increased to CHF 197 million in the period, some 25 per cent higher than the comparable period in the prior year, with all three brands progressing well.

(i) Jaeger-LeCoultre

Jaeger-LeCoultre was founded by Antoine LeCoultre in Le Sentier, Switzerland in 1833.

Jaeger-LeCoultre's products can be divided into three main lines: Reverso, Master and Atmos. The Reverso, which was first manufactured in 1931, is a wristwatch that focuses on clear lines and durability. The distinctive feature of the Reverso is the reversible case-back, which can be used for an engraving, miniature art, a second watch or precious stones. Master was first launched in 1992 with the watch Master Grande Taille and has since evolved into a line of models. Atmos is a table clock and was launched in 1933 as the clock "driven by air", using a mechanism based on changes in atmospheric pressure. In 1999 Jaeger-LeCoultre sold approximately 48,000 watches and 3,300 table-clocks.

Jaeger-LeCoultre's unique manufacturing expertise is one of the major strategic attractions of LMH. It produces its components at its own production sites at Le Sentier and Porrentruy in Switzerland, where approximately 900 people are employed.

Jaeger-LeCoultre's products are based on high quality/high-technology manufacturing, with superior craftsmanship in finishing and assembly and the effective combination of traditional design with technical innovation. The brand offers a broad range of watches covering a wide price segment.

The principal markets for Jaeger-LeCoultre are Europe and Asia. Switzerland, Germany and Italy are Jaeger-LeCoultre's largest European markets. In 1999, Jaeger-LeCoultre had 855 points of sale worldwide.

(ii) IWC

IWC was founded by the American-Florentine Aristo Jones in Schaffhausen, Switzerland in 1868.

IWC's best known product range is Da Vinci, an automatic chronograph with perpetual calendar and moon phase. The product range also includes Fliegeruhr/Pilot Watch, GST (the sports line), Portugieser (a marine chronometer) and various complex products, such as II Destriero Scafusia (which contains 750 individually manufactured and hand-finished mechanical components). In 1999, IWC sold approximately 39,000 watches.

The production facilities of IWC are based in Schaffhausen, Switzerland where approximately 360 people are employed.

IWC's largest markets are the Far East, Switzerland and Germany and it has 700 points of sale worldwide.

(iii) A. Lange & Söhne

A. Lange & Söhne was founded by Ferdinand Adolph Lange in Glashütte, Germany in 1845 and was re-established by his great-grandson, Walter Lange, in 1990.

The most important models in A. Lange & Söhne's product range are Lange 1 ( the watch which re-introduced the A. Lange & Söhne name to the watch market in 1994), Datograph and the 1815 range.

Production facilities are located in Glashütte, Germany, where all models are designed, developed and produced. The production process is fully integrated, with all the movements produced in-house. The company employs approximately 180 people.

A. Lange & Söhne's products rely upon craftsmanship used to produce a limited number of handmade watches every year. The product positioning is that of tradition alongside innovation, together with the concept of "Made in Saxony" as distinguished from "Made in Switzerland".

A. Lange & Söhne sold approximately 4,000 watches in 1999. It concentrates on the highest end of the market with its products generally retailing between CHF 10,000 and CHF 300,000. The typical A. Lange & Söhne customer is a connoisseur and watch collector.

Germany, Italy and South East Asia are A. Lange & Söhne's most important markets, with Germany accounting for approximately 50 per cent of total sales. Reflecting the brand's exclusivity, A. Lange & Söhne watches are only distributed through some 50 carefully selected retailers worldwide.

Timing and financing of the acquisitions
The acquisition of LMH is subject to the approval of the Supervisory Board of Mannesmann as well as customary regulatory clearances and is expected to close by the end of September 2000. The acquisition of the outstanding 40 per cent of Jaeger-LeCoultre from the Audemars Piguet group was completed yesterday.
As a result of two recent transactions relating to assets outside Richemont's luxury goods businesses, the current acquisitions will not lead to an increase in the group's net debt position. In June 2000 Richemont received approximately CHF 1.1 billion as a result of the exercise of a put option over one half of its convertible redeemable preference shares in British American Tobacco. In addition, as previously announced, Richemont expects to receive approximately CHF 1.9 billion in September 2000 from the disposal of its interest in Vivendi.

Against the background of the British American Tobacco and Vivendi transactions, and without allowing for any potential benefits resulting from the combination of the LMH and Richemont businesses, the short term dilution in earnings (before the effect of goodwill amortisation) is expected to be insignificant.

Current trading of Richemont
The trend of strong sales growth seen in Richemont's financial year ended 31 March 2000 has continued in the first three months of the current year. Although not necessarily representative of trends for the year as a whole, Richemont's overall sales in the period since the financial year-end have continued to benefit from the generally healthy global economic environment. The group's sales in the first quarter grew by approximately 30 per cent compared to the same period in the prior year.

Comment on the transactions
Johann Rupert, Chief Executive of Richemont said:

"LMH is an excellent business with a remarkable record of sales growth and profitability. Its acquisition represents an outstanding opportunity for us to re-deploy assets into our luxury goods business. We are also delighted that our co-operation with the Audemars Piguet group has enabled us to re-establish Jaeger-LeCoultre under a single owner.

One of the main reasons for the fierce competition for LMH was the quality of its management. Mr Blümlein leads a team of true professionals with many years of experience and institutional knowledge. They have been very successful and we are excited to have them join Richemont.

We are convinced that this acquisition will make a major and positive impact on our group."

Advisers:
Richemont is being advised by Deutsche Bank and Lehman Brothers.


Further inquiries:
Mr Johann Rupert
Chief Executive

Mr Jan du Plessis
Finance Director

Mr Eloy Michotte
Corporate Finance Director

Telephone: + 41 41 710 33 22
Facsimile: + 41 41 711 71 38