WEG announces transformers business acquisition in South Africa

WEG S.A. (Bovespa: WEGE3 / OTC: WEGZY) announced today business acquisition of manufacturing transformers and substations belonging to Hawker Siddeley Electric Africa (Pty) Ltd. ("HST") in South Africa. The acquiried business will form a new subsidiary, WEG Transformers Africa (Pty) Ltd.

HST was one of the pioneers companies in mini substations and has become one of the largest manufacturers of mini substations and distribution transformers in South Africa, with the capability to design and manufacture the complete range presently in use in the country¿s industrial sector. HST has estimated potential revenues of approximately US$ 10 million over the next 12 months. The transaction was notified to the competition protection agencies in South Africa.

Mr. Carlos Prinz, WEG¿s T&D Managing Director, says the rationale behind the acquisition is that while WEG has enjoyed tremendous success in the African market with the supply of large transformers (higher than 20 MVA), it has not been able to participate in the transformer sector with products from 50 kVA to 20 MVA, in both distribution transformers and mini substations.

"With this acquisition we can supply a complete product range in the various segments, on a turnkey basis, with a cost leadership advantage. We are creating a very strong and competitive expansion platform in the African continent" said Carlos Prinz. WEG¿s Managing Director in South Africa, Louis Meiring, mentioned that "the acquisition is in line with our philosophy of localization and local investment and aligns with the localization requirements of Eskom and other parastatals." According Louis Meiring "the intention is to recapitalise the HST business with investments in new equipment and training of employees."

The assets acquisition of HST will not trigger withdraw rights for this acquisition does not fit into any of the situations foreseen in Article 256 of Law 6404/76, amended by Law No. 10.303/01, since it is not the acquisition of mercantile society.

Laurence Beltrão Gomes

Finance and Investor Relations Officer

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