As previously reported, Polaris and KTM Power Sports AG's largest shareholder, Cross Industries AG ("Cross"), have entered into option agreements which, under certain conditions in 2007, either Cross may purchase Polaris' interest in KTM Power Sports AG or, alternatively, Polaris may become the majority shareholder of KTM Power Sports AG.
In the latter case, the majority of the purchase price to Cross will be settled in Polaris shares and Cross will become a significant shareholder in the combined Polaris/KTM organization. Cross' principal shareholders are KTM CEO Stefan Pierer and KTM CFO Rudolf Knunz. The exercise price under both option arrangements are based on market-based, predetermined pricing formulas to be derived from operating results of both companies in 2007.
KTM Sportmotorcycle AG designs, engineers, manufacturers and markets off-road and on-road motorcycles and related parts, garments and accessories with annual sales of Euros 402 million in 2004. The product portfolio consists of over 23 different off-road and on-road motorcycles ranging in engine size from 50cc to 990cc.
US based apparel maker Polaris is the recognized leader in the snowmobile industry and one of the largest producers of ATVs in the world. Victory motorcycles, established in 1998 and representing the first all-new American-made motorcycle from a major company in nearly 60 years, are rapidly making impressive in-roads into the motorcycle cruiser marketplace.
With annual 2004 sales of $1.8 billion, Polaris designs, engineers, manufactures and markets snowmobiles, all-terrain vehicles (ATVs), Victory motorcycles and the Polaris RANGER for recreational and utility use. Consumers can also purchase apparel and vehicle accessories anytime at company website.
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