Pergo and Witex Sign Letter of Intent

Trelleborg, Sweden, Nov. 12--Pergo AB and the mainshareholder of Witex AG, HW Industries GmbH & Co. KG, have signed a letter of intent concerning a merger between Pergo and Witex. Presently, Pergo owns a minority share of 25.1% in Witex, while HW Industries owns all the remaining shares. The integration of Pergo andWitex will create a very strong, global laminate flooring group. Witex's know-how in manufacturing combined with Pergo's strengths in marketing and innovation forms a platform for profitability and future growth. Under the terms of the merger, HW Industries willtransfer all of its shares in Witex to Pergo. As payment, Pergo will issue new shares of HW Industries, whereby HW Industries will become a major shareholder in Pergo. The merger is conditional upon the execution of a binding agreement, customary due dilligence, possible anti trust approvals and approval by Pergo stockholders at a special shareholder meeting. Both firms expect to have signed a binding agreement by year end.