Owens Corning & Saint-Gobain Announce Intent to Merge Reinforcements Businesses

Owens Corning & Saint-Gobain Announce Intent to Merge Reinforcements Businesses

July 28, 2006

Customers Benefit from Improved Technology, Expanded Product Range and Geographic Reach
Creates Focused and Efficient Business with World-Class Technology and Products
Establishes Strong Global Company with $1.8 Billion (Euro 1.5 Billion) in Annual Sales

    TOLEDO, Ohio, and PARIS, July 28 /Xinhua-PRNewswire/ --
Owens Corning and Saint-Gobain jointly announced today that
they are in discussions to merge Owens Corning's
Reinforcements Business and Saint-Gobain's Reinforcement
and Composites Businesses (a part of the entity known as
Vetrotex) into a new company, to be called Owens
Corning-Vetrotex Reinforcements.  The partnership of these
two businesses would establish a global company in
reinforcements and composite fabrics products, with
worldwide revenues of approximately $1.8 billion (euro 1.5
billion) and 10,000 employees.  The new company would have
operations across Europe, North and South America, and
Asia, including the following key emerging markets:  China,
India, Russia, Mexico and Brazil.  

    Saint-Gobain's Textile Solutions business, serving
mainly construction markets, will remain part of
Saint-Gobain's High Performance Materials Sector.  Owens
Corning's Veil Technologies and Fabwel businesses will
remain part of the Owens Corning Composite Solutions
Business.
     
    A Customer-Focused Enterprise

    Owens Corning-Vetrotex Reinforcements would bring
together two pioneers in the reinforcements and composite
fabrics industry, each with long histories of product
innovation and customer focus.  

    Owens Corning-Vetrotex Reinforcements would provide
outstanding service to its customers as a result of
improved geographic scale, an expanded product base and
combined technological expertise.  The new company would
better serve both regional and global customer needs by
taking advantage of new world-class technologies and
innovative products, and improved logistics, productivity
and supply efficiency.  The new company and its customers
would also benefit from access to greater financial and
human resources. 

    The new company would have a strengthened presence in
both developed and emerging markets. This broad geographic
presence would lead to more security of supply and reduced
shipping time for current and future customers. Owens
Corning-Vetrotex Reinforcements would participate more
effectively in today's increasingly competitive
marketplace.  

    "This is an exciting opportunity for Owens
Corning, our customers and our employees," said Dave
Brown, President and Chief Executive Officer of Owens
Corning. "It demonstrates our commitment to the
composites business and our customers on every continent. 
We plan to combine the best of both companies, grow with
our customers, and deliver strong operating results."

    The Saint-Gobain Group President, Jean-Louis Beffa
said. "The combined company is an excellent project. 
It would enable us to better serve our customers and ensure
a promising future for our Reinforcement and Composites
business and its employees."

    Structure and Financial Impact

    While the parties have not yet reached a definitive
agreement, it is anticipated that the transaction would be
structured as a joint venture, with Owens Corning owning a
60 percent equity interest and Saint-Gobain owning the
remaining 40 percent.  After a minimum of four years, the
joint venture provisions would give an option to
Saint-Gobain to sell its 40 percent stake to Owens Corning,
and Owens Corning to buy the same.

    On a pro forma basis, the new company would have
approximately $1.8 billion (euro 1.5 billion) in annual
revenues. The Owens Corning-Saint-Gobain joint venture
would present significant opportunities for synergies. 
These are expected to come primarily from scale benefits in
purchasing and procurement; operational and technological
plant improvements; improved distribution costs; reduced
administrative costs; and asset management optimization.   
  

    The transaction is expected to close by early 2007 and
is subject to the negotiation and execution of definitive
transaction documents, Board of Directors approval by the
parent companies, and regulatory and antitrust approvals.  
 
 
    Leadership and Operations

    Owens Corning-Vetrotex Reinforcements would be
headquartered in Toledo, Ohio, and would maintain
leadership offices in key locations around the world.  The
Board of Directors for the new company would be comprised
of three representatives from Owens Corning and two from
Saint-Gobain.  The Chief Executive Officer of Owens
Corning-Vetrotex Reinforcements would be Chuck Dana,
currently President of Owens Corning's Composite Solutions
Business. The new organization would be managed by an
executive management team comprised of key leaders from
Owens Corning and Vetrotex.  
 
    About Owens Corning

    Owens Corning (OTC Bulletin Board: OWENQ) is a world
leader in building materials systems and composite
solutions. A Fortune 500 company for more than 50 years,
Owens Corning people redefine what is possible each day to
deliver high-quality products and services ranging from
insulation, roofing, siding and manufactured stone veneer,
to glass composite materials used in transportation,
electronic, telecommunications and other high-performance
applications. Since the company's founding in 1938, Owens
Corning has become a market-leading innovator of glass
fiber technology with sales of $6.3 billion in 2005 and
20,000 employees in 26 countries. Additional information is
available at http://www.owenscorning.com . 

    About Saint-Gobain

    Saint-Gobain Group specializes in the design,
production and distribution of functional materials for the
construction, industrial and consumer markets. The Group is
organized into five business sectors: Flat Glass,
Packaging, Construction Products, Building Materials
Distribution, and High-Performance Materials.

    Established in more than 50 countries, Saint-Gobain is
the market leader in each of its core businesses. In 2005,
it achieved more than euro 35 billion sales with around
200,000 employees. 

    Forward Looking Statements

    This news release contains forward-looking statements
within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. These forward-looking
statements are subject to risks and uncertainties that
could cause actual results to differ materially from those
projected in these statements. Further information on
factors that could affect the company's financial and other
results is included in the company's Forms 10-Q and 10-K,
filed with the Securities and Exchange Commission.

    For more information, please contact:

     Mr. Jason Saragian
     Owens Corning Media Relations Department
     Tel:   [phone]

     Mr. Scott Deitz 
     Owens Corning Investor Relations Department
     Tel:   [phone]

     Saint-Gobain External Relations Department
     Tel:   [phone]

     Mrs Florence TRIOU-TEIXEIRA
     Saint-Gobain Investor Relations Department
     Tel:   [phone]

     Mr. Alexandre ETUY
     Saint-Gobain Investor Relations Department
     Tel:   [phone]
     Fax:   [phone]

SOURCE  Owens Corning