ITT Corporation

ITT Industries to Sell Automotive Brake and Chassis Business To Continental AG for $1.93 Billion

    7/27/1998

     Concluding Strategic Review, Company Positioned to Repurchase Common Stock,
                               Invest in Future Growth
    
        WHITE PLAINS, N.Y., July 27 /PRNewswire/ -- ITT Industries, Inc.
    (NYSE: IIN) today announced a definitive agreement under which Continental AG
    will acquire ITT Industries' automotive Brake and Chassis business for
    US$1.93 billion in cash.  This proposed transaction follows the pending sale
    of ITT Industries' automotive Electrical Systems business, announced on
    June 25, 1998, and concludes the strategic review of ITT Industries'
    automotive Brake and Chassis and Electrical Systems businesses, announced on
    March 18, 1998.
        It is expected that the sale of the Brake and Chassis unit, which is
    subject to U.S. and European regulatory approvals and other customary
    conditions, could close by late in the third or early in the fourth quarter.
    The Brake and Chassis business is based in Frankfurt, Germany.  The operations
    to be acquired by Continental include 16 production facilities, located
    primarily in Europe and North America and six research and development
    facilities, as well as the unit's interest in four joint ventures.  North
    American operations are centered in Auburn Hills, Michigan.  The unit serves
    the global automotive industry by designing, developing and manufacturing
    anti-lock brake systems (ABS), traction control systems (TCS), and electronic
    stability (ESP) systems, brake actuation products, foundation brake systems
    and chassis modules.  The unit had 1997 sales of approximately $2.2 billion.
    The Brake and Chassis business employs approximately 11,000 people around the
    world.
        ITT Industries' after-tax cash proceeds from the sale of the Brake and
    Chassis unit are estimated to be approximately $1.3 billion.  The after-tax
    cash proceeds from the sale of the Electrical Systems business are estimated
    to be $1.3 billion.
        "We're pleased with the outcome of this transaction; ITT Industries is
    receiving an attractive price for the Brake and Chassis business, and the
    sale, once completed, will allow us to move forward more aggressively with our
    plans to continue creating economic value with our remaining businesses," said
    Travis Engen, chairman, president and chief executive of ITT Industries.
    "Assuming both transactions close as expected, we anticipate initiating a
    stock repurchase program within the next several months.   We estimate that up
    to $1 billion in open market purchases could be executed by the end of 1999.
    After an initial program is completed, we will evaluate additional
    repurchases.  The actual amount of stock repurchases will depend on then
    existing market conditions and other business factors that the company may
    consider from time to time."
        Mr. Engen said that the balance of the proceeds from these sales will be
    used to pay down debt as well as to finance external growth opportunities
    within all of ITT Industries' core businesses:  fluid technology, defense,
    electrical connectors and automotive components.
        "The actions we are announcing today further meet our long-standing
    commitment to provide greater potential for growth, profitability, financial
    flexibility and predictability, all aimed at creating greater long-term value
    for ITT Industries' shareholders," Mr. Engen said.
    
        Balancing the Portfolio for Profitability and Growth
        Since becoming an independent company in 1995, ITT Industries has taken
    major steps to strengthen its key businesses with significant potential for
    enhanced profitability and growth.  Through a series of strategic acquisitions
    (Goulds Pumps and Kaman Sciences, among others) and divestitures (non-core
    businesses primarily in automotive and fluid), the company has positioned
    itself going forward with four key growth businesses.
    
        -- Fluid Technology:  ITT Industries' fluid technology business is the
           world's leading provider of pumps, systems and services to move,
           measure, and control liquids.  The company provides a variety of
           sophisticated pumps, valves and systems used worldwide in residential,
           agricultural, commercial, municipal, and industrial and process
           applications.  Included are large pumps that control urban storm water
           drainage, and submersible pumps that are used in water and wastewater
           treatment plants and drain construction sites, tunnels and mines.
           Other products and systems include valves for the aerospace, chemical
           and energy markets, and pumps for the leisure marine, hydrotherapy,
           pharmaceutical and biotechnology sectors.  Following the integration of
           Goulds Pumps, the business is now generating significant synergy
           orders, and has total annualized sales of $2.1 billion.
    
        -- Defense:  As military forces of the U.S. and other countries are
           turning to technology to increase their efficiency and support or
           supplant manpower, ITT Industries' defense business has experienced
           greater demand for its products and services.  The unit generates
           annual sales of $1.2 billion.  Products include air traffic control
           systems, jamming devices that guard against radar-guided weapons, night
           vision equipment, sophisticated, secure, digital combat radios, and
           high-tech electronics to safeguard military communications on the
           Tactical Internet.  Meanwhile, the defense unit is also one of the
           largest U.S.-based technical and support services contractors.
    
        -- Electrical Connectors:  ITT Industries' electrical connectors are
           marketed globally under the ITT Cannon brand, with annual sales of
           approximately $600 million.  ITT Industries is ranked as one of the top
           ten worldwide manufacturers in an industry with more than 1,500
           competitors.  The company continues to grow its presence in the fastest
           growing segments of the commercial communications markets, including
           interconnects for cellular telephones, network communications, smart
           cards and PC cards for laptop computers.
    
        -- Automotive Components:  This business area, with nearly a half century
           of experience in its highly focused markets and more than $540 million
           in annual sales, serves a number of demanding technology applications
           in automotive fluid handling, brake friction materials and specialty
           shock absorbers.  Growth opportunities include expansion into new
           geographic markets and non-automotive applications for existing
           products.
    
        Continental AG manufactures tires and industrial products through several
    divisions which include Continental, Uniroyal, Semperit, Barum, General Tire
    and ContiTech.  The company sells its products to the original equipment
    manufacturers and the replacement market, with annual sales of
    DM 11.2 billion.  Based in Hannover, Germany, the company employs
    44,800 people.
        ITT Industries (http://www.ittind.com) is a leading worldwide-diversified
    manufacturing company, with 1997 sales of $8.8 billion from its primary
    business segments:  automotive, defense, electronics, and fluid technology.
    Based in White Plains, New York, ITT Industries employs more than 58,000
    people around the world.
        In addition to the New York Stock Exchange, ITT Industries' stock is
    traded under the symbol ("IIN") on the Midwest, Pacific, London, Frankfurt and
    Paris exchanges.
    
        Certain material presented herein consists of forward-looking statements
    which involve known and unknown risks, uncertainties and other important
    factors that could cause actual results to differ materially from those
    expressed in or implied from such forward-looking statements.  Such factors
    include those set forth in Item 1. Business and Item 7. Management's
    Discussion and Analysis of Financial Condition and Results of Operations --
    Forward-Looking Statements in the ITT Industries, Inc. Form 10-K Annual Report
    for the fiscal year ended December 31, 1997, and other of its filings with the
    Securities and Exchange Commission.
    
        ITT Industries and its subsidiaries' news releases are available at no
    charge via fax and the Internet.  For ITT Industries news and information on
    the Internet, visit http://www.ittind.com or http://www.prnewswire.com.  To
    receive releases by fax, call 800-758-5804, extension 110006.
    
    SOURCE  ITT Industries, Inc.
    
    

    Web site: http://www.ittind.com
    CONTACT: Tom Glover of ITT Industries, 914-641-2160

About ITT

ITT is a diversified leading manufacturer of highly engineered critical components and customized technology solutions for the transportation, industrial, and oil and gas markets. Building on its heritage of innovation, ITT partners with its customers to deliver enduring solutions to the key industries that underpin our modern way of life. ITT is headquartered in White Plains, N.Y., with employees in more than 35 countries and sales in a total of approximately 125 countries. The company generated 2016 revenues of $2.4 billion.

Investors

Jason Moss
tel +1 914-641-2030
jason.moss@itt.com

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Laurent Lawrence
tel +1 914-304-1809
laurent.lawrence@itt.com

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