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OCI Announces Agreement with Lafarge

Egypt - Orascom Construction Industries (" OCI ") announces that an agreement has been signed with Lafarge S.A. (" Lafarge ") for the proposed divestment ("Divestment") of the OCI Cement Group (the "Cement Group") for a total payment of € 8.8 billion (US$ 12.9 billion)¹ plus the assumption by Lafarge of US$ 2.0 billion in debt.

Highlights:

· The Board of Directors of OCI (the "Board") intends to return approximately US$ 11 billion of the proceeds of the Divestment to OCI shareholders.

· OCI will focus on accelerating the development of its construction operations and investments in infrastructure and natural gas industries.

· An additional amount of up to US$ 2 billion will be invested to capitalize on the attractive growth opportunities in these areas.

· The Divestment crystallizes the value that has been created through the significant growth of the Cement Group.

· The Cement Group will benefit from being part of a larger and more geographically diversified business that will be the leading player in the building materials industry.

· OCI and Lafarge have also signed a cooperation agreement to allow both groups to continue to benefit from mutual synergies in the construction of cement plants.

· As part of the transaction, NNS Holding, a family investment holding company controlled by Nassef Sawiris, will subscribe for 22.5 million new shares in Lafarge at a price of € 125 per share.

· In addition to continuing his current role as Chief Executive Officer of OCI , Nassef Sawiris will also become a member of the Lafarge board of directors and will continue to chair Egyptian Cement Company as well as other key Cement Group subsidiaries.

OCI Chief Executive Officer, Nassef Sawiris, commented:

"This transaction allows us to focus all of our resources on developing our construction, infrastructure and natural gas operations which we believe currently have unprecedented growth opportunities. It recognizes the significant value created in our cement business and allows us to reward our shareholders with a substantial return of cash. The Cement Group and its employees will also benefit from being part of the leading building materials group in the world with the financial strength and geographical diversity to continue to prosper."

¹ based on an exchange rate of € 1 = US$ 1.4649

1. Rationale for the Divestment

The Board has increasingly recognized that the strategic objectives of the construction and cement groups would be better served as part of separate, focused businesses. The Board believes that the construction, infrastructure and natural gas operations offer unprecedented opportunities for investment and growth. At the same time, the Cement Group operates in a consolidating industry that will require significant investment to continue its growth profile. Given these competing demands on capital and management resources, the Board has concluded that OCI will deliver superior growth and value to shareholders by focusing all its resources on developing its construction, infrastructure and natural gas operations and divesting its cement business.

Although OCI has been highly successful in growing the Cement Group, it is still dependent on a relatively small number of key markets. To achieve the next stage of its development, the Board believes that it would be necessary to increase the geographical scale of its operations and to invest in more mature downstream markets including ready-mix and aggregates. Becoming part of the enlarged Lafarge Group will immediately achieve these strategic objectives for the Cement Group.

The Divestment will allow OCI to pursue the superior growth opportunities in the construction, infrastructure and natural gas industries and to crystallize the significant value that has been created in the Cement Group at a price that fully reflects its leading market positions.

OCI is currently active on over 100 construction projects in more than 20 countries. It is also one of the region's largest manufacturers of fabricated steel products and has strategic investments in natural gas industries including stakes in a greenfield ammonia plant in Egypt, an operating urea plant in Egypt and an ammonia/urea complex in Algeria with a combined annual production capacity of approximately 4 million tons. OCI also invests in infrastructure concessions where it believes it can combine the roles of contractor and developer. As a result, in addition to construction work, this provides the opportunity to generate steady cash flow streams and exceptional value for shareholders.

In construction, OCI will continue to target large, complex and demanding industrial, commercial and infrastructure projects which by their nature have fewer competitors and higher margins. The Board believes that OCI is uniquely positioned in the Middle East, Africa and in select European markets to capitalize on a wide array of new projects. During the first nine months of 2007, OCI has already received a total of US$ 4.8 billion in new contract awards, 85% higher than the value of awards received during the full year 2006.

OCI will also continue to seek new high return investment opportunities which offer attractive steady cash flow streams and allow the business to leverage its project management, project finance and execution expertise. The Divestment will provide the group with up to US$ 2 billion in available funding for the implementation of its growth and investment plan.

2. Transaction Summary

The transaction is conditional on the approvals by both OCI and Lafarge shareholders, which will be sought at shareholder meetings to be held in January. The Divestment is expected to be completed during January 2008.

Under the terms of the agreement, OCI will receive a total payment of € 8.8 billion (US$ 12.9 billion) and Lafarge will assume US$ 2.0 billion of debt. The cash payment will be received in two separate installments of € 6.0 billion (US$ 8.8 billion) and € 2.8 billion (US$ 4.1 billion). The first installment is expected to be received in January, with the second installment expected in March.

The Board intends to return approximately US$ 11 billion to shareholders in the form of two extraordinary dividends. The extraordinary dividend installments are expected to be paid during the first quarter 2008. OCI will retain the remaining proceeds to finance new investments and expansion projects.

Under the agreement, NNS, a family holding company controlled by Nassef Sawiris, will subscribe for 22.5 million new shares in Lafarge at an issue price of € 125 per share. Following this subscription, NNS will own approximately 11.4% of the enlarged share capital of Lafarge . In addition, NNS will enter into a shareholder agreement with Lafarge which, amongst other things, will give NNS the right to appoint two nominees to the board of Lafarge . It is intended that Nassef Sawiris will become a member of the Lafarge board of directors.

3. Cooperation Agreement

As part of the transaction, Lafarge and OCI have agreed upon a cooperation agreement whereby both groups can continue to benefit from mutual synergies in connection with the construction and expansion of new and existing cement plants in geographic areas where OCI has a competitive advantage by virtue of its existing operational infrastructure. In addition, OCI will continue to procure its supply of basic materials at competitive prices.

4. Information on the Cement Group

The Cement Group includes all cement, aggregates, ready-mix concrete and cement bags manufacturing operations. It owns and operates cement plants in Egypt, Algeria, northern Iraq, Pakistan, United Arab Emirates, Turkey and Spain which have a combined annual gross production capacity approaching 35 million tonnes. New investments in Nigeria, Saudi Arabia, Syria, DPRK and South Africa will increase the annual gross cement production capacity to 45 million tonnes by 2010.

5. Information on Lafarge

Lafarge is a world leader in cement, aggregates, concrete and gypsum, operating in over 70 countries and employing over 71,000 people. In the year ended 31 December 2006, Lafarge reported sales of €17 billion and net income of €1.4 billion (please visit www. Lafarge .com).

6. Advisors

Citi is OCI 's sole financial advisor on this transaction. Shalakany and Allen & Overy LLP are acting as legal advisors. Hazem Hassan KPMG is acting as the accounting and tax advisor.

-Ends-

Editors Notes
For additional information on OCI : www.orascomci.com
Orascom Construction Industries ( OCI )
Nile City Towers - South Tower
2005A Corniche El Nil, Cairo, Egypt
OCI stock symbols: OCIC.CA / ORCI EY / OCICqL / ORSD

Citigroup Global Markets Limited ("Citi"), which is authorized and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for OCI and for no one else in connection with the Divestment and will not be responsible to any person other than OCI for providing the protections afforded to customers of Citi or for providing advice in relation to the matters described in this announcement.

For more information, please contact:
OCI Investor Relations Department:
Hassan H. Badrawi
Tel : +202 2461 1039/1036
Email: hassan.badrawi@orascomci.com

Citi:
Cyrus Shabi
Tel: +44 207 986 7555

Brunswick Group LLP:
Jerome Biscay
Benoit Grange

Paris: +33 1 53 96 83 83
Richard Jacques

James Olley
London: +44 207 404 59 59

© Press Release 2007