Disposal

Morgan Crucible Co PLC
30 September 2005


FOR IMMEDIATE RELEASE                                          30 September 2005

                           SALE OF MAGNETICS DIVISION

  The Morgan Crucible Company plc ('Morgan') agrees the sale of its Magnetics
                        division to One Equity Partners

Morgan today announces that it has agreed to sell its Magnetics division to One
Equity Partners ('OEP'), for £225 million payable in cash at completion along
with the assumption by OEP of unfunded IAS19 pension and employee benefit
liabilities. Completion of the transaction, which is subject among other things
to shareholder approval and clearance from the competition authorities in
Germany and Austria, is expected in November 2005.

Warren Knowlton, Chief Executive Officer of Morgan, said:

'The sale of Magnetics creates both value and opportunity for Morgan
shareholders. This transaction delivers cash proceeds of £225 million, plus the
reduction of our pension and employee benefit liabilities by c.£75 million,
giving a total enterprise value of c.£300 million. This represents a post tax
gain on disposal of the Magnetics division in excess of £50 million. The sale
price represents a multiple of 1.7x sales and 21.1x EBITA* for the year ended 4
January 2005.

'This continues the transformation of Morgan. We are now in a position to
accelerate the strategic development of the Group, rigorously focusing on those
businesses where we have Number 1 or 2 positions in our target markets, through
both organic investment and selected bolt-on acquisitions. The Board intends to
pay down some bank debt and will consider making advance payments into our UK
pension funds, and if appropriate, the Board will give consideration to buying
back some shares.

'Our profit improvement plan remains firmly on track to meet or exceed the 10%
operating margin target by the end of 2006.'

Enquiries:

The Morgan Crucible Company plc                             01753 837000
Warren Knowlton - Chief Executive Officer
Mark Robertshaw - Chief Financial Officer

JPMorgan Cazenove                                           020 7588 2828
Julian Cazalet
Robert Constant
Chris Byrne

Finsbury                                                    020 7251 3801
Rupert Younger
Robin Walker

This summary should be read in conjunction with the full text of the following
announcement. There will be a meeting for analysts at 2.30pm today at Cazenove,
20 Moorgate, EC2R 6DA.

*EBITA = Operating profit before financing costs, restructuring costs and
property disposals

                                                               30 September 2005

                        The Morgan Crucible Company plc

                           SALE OF MAGNETICS DIVISION

Morgan agrees the sale of Magnetics to One Equity Partners for £300 million

INTRODUCTION

The Morgan Crucible Company plc ('Morgan') announces that it has today entered
into a conditional agreement to sell its Magnetics Division ('Magnetics') to One
Equity Partners LLC ('OEP') for c.£300 million, comprising £225 million payable
in cash at completion plus the assumption of c.£75 million of International
Accounting Standard ('IAS') 19 pension and employee benefits liabilities (the
'Sale'). The Sale is conditional among other things on shareholder approval and
a circular containing a notice convening an extraordinary general meeting, at
which a resolution to approve the Sale will be proposed, will be sent to
shareholders shortly.

INFORMATION ON MAGNETICS DIVISION
Morgan's Magnetics business comprises Vacuumschmelze, a company based in Hanau
in Germany and that company's subsidiary operations based in Slovakia, Malaysia
and China. The company was acquired by Morgan from Siemens in 1999 for £115
million cash and £25 million debt. Magnetics employs approximately 4,000 people
worldwide including subcontractors (1,500 employees in Germany; 800 employees in
Slovakia; 1,700 employees and subcontractors in Asia). It engineers and
manufactures a wide variety of high quality magnetic materials, parts, inductive
components and integrated systems. As a diversified supplier, Magnetics provides
its customers with a global, single-point sourcing capability and customised
solutions to meet their specific needs. Magnetics' products are used in a wide
variety of industrial sectors, from aircraft construction to medical technology.
Magnetics is led by Dr Hartmut Eisele, Chief Executive Officer, who is assisted
by Andrea Bauer as Chief Financial Officer.

On an International Financial Reporting Standards ('IFRS') basis, for the
financial year ended 4 January 2005, Magnetics generated an operating profit
before financing costs, restructuring costs and property disposals ('EBITA') of
£14.2 million on turnover of £181.2 million. As at 4 January 2005, Magnetics had
net assets of £126.4 million and gross assets of £245.9 million. For the six
months ended 4 July 2005, Magnetics generated EBITA of £7.6 million on turnover
of £90.7 million. As at 4 July 2005, Magnetics had net assets of £131.8 million
and gross assets of £250.2 million.

BACKGROUND TO AND REASONS FOR THE PROPOSED SALE

Since the strategic review that commenced in March 2003, Morgan has concentrated
on driving profitability through a robust profit improvement plan to reach
double digit operating profit margins by the end of 2006. This programme remains
firmly on track with margins increasing each half year, since the first half of
2002 when operating margins were 2.7%, to 8.1% at the end of the first half of
2005.

Morgan continues to reposition its portfolio of businesses by increasing its
focus on attractive market segments with less cyclicality and price
commoditisation. This repositioning, in conjunction with the goal of increasing
the value-added component of its product offering via technological leadership,
further strengthens Morgan's commitment of delivering sustained value for its
shareholders.

Whilst the Board believes that Magnetics is a high quality business, it believes
that the agreed price, which represents an enterprise value multiple of 1.7x
sales and 21.1x EBITA for the year ended 4 January 2005, is an attractive one
which represents fair value for the Magnetics business.

Furthermore, of Morgan's four main divisions, Magnetics has the lowest
percentage of its sales from segments with a number one or two market position.
The Board believes that the Group's remaining divisions, which enjoy stronger
comparative market positions than Magnetics, will provide excellent
opportunities for future growth and returns in the Group and that these will be
enhanced by the increased financial resources created by the disposal of
Magnetics. Particular opportunities for growth include a number of new product
developments such as piezo ceramics (Technical Ceramics), second generation
ballistic armour (Carbon), and next generation high temperature Superwool
(Thermal Ceramics).

USE OF PROCEEDS AND STRATEGIC DEVELOPMENT

The net cash proceeds from the Sale are expected to be approximately £200
million net of tax and transaction costs. The proceeds of the Sale will
significantly strengthen Morgan's balance sheet and, as indicated above, will
provide the Company with increased financial flexibility to accelerate the
strategic development of the Group, by investing in profitable growth
initiatives including, if the opportunity arises, selected bolt-on acquisitions.
The proceeds from the Sale will improve the Company's balance sheet. Morgan is
intending to pay down some bank borrowings to give greater flexibility.
Additionally, Morgan will consider making advanced payments into the Morgan UK
pension funds to reduce statutory deficits and, if appropriate, the Board will
give consideration to buying back some shares. The Sale is expected to result in
a post tax profit on disposal in the current financial year in excess of £50
million with consequential effect on the consolidated shareholders' funds of the
Group in the current financial year.

CURRENT TRADING AND PROSPECTS FOR THE CONTINUING MORGAN GROUP

The Group's geographic markets, taken overall, continue to grow. Within this,
European markets are expected to remain soft for the foreseeable future; however
the total exposure of Morgan to lower growth Continental European markets has
been reduced by the disposal of Magnetics. Demand in the North American and
Asian markets continues to be strong.

Current trading is in line with the Board's expectations. Through the strategic
repositioning of Morgan and the ongoing delivery of the profit improvement
programme, the Board is confident in the financial and trading prospects of the
Group for the current financial year.

PRINCIPAL TERMS OF THE PROPOSED SALE

The consideration for the sale of Magnetics is c.£300 million, of which £225
million will be received by Morgan in cash at completion, together with the
assumption by the purchaser of c.£75 million of IAS19 pension and employee
benefits liabilities. The cash element of the price is subject to adjustments to
be made in respect of the aggregate amount of cash, debt and working capital in
certain companies in the Magnetics business as at 30 September 2005.

Completion of the Sale is conditional, among other things, on shareholder
approval, clearance of the Sale by the competition authorities in Germany and
Austria, and confirmation being given that the Sellers (being certain Morgan
subsidiaries) have effected certain agreed restructuring steps of the holding
companies of the Magnetics group and of the amount of capital reserves in the
balance sheets of Vacuumschmelze and the holding companies in the Magnetics
group. Completion is also conditional on certain warranties being true and
correct as at the date of completion.

If any of the conditions to completion have not been fulfilled or (where capable
of waiver) waived by the purchaser by 28 February 2006, or if following such
fulfilment, completion does not occur within 14 days of the agreed completion
date, each of the purchaser and the Sellers shall have the right to terminate
the agreement, unless the failure to fulfil is in the control of the party
seeking to terminate.

The agreement may also be terminated prior to completion by the purchaser or any
of the Sellers if certain material adverse changes affecting the Magnetics
business occur prior to completion.

The Sellers have given various representations, warranties and indemnities,
subject to certain limitations, and have given certain undertakings not to
compete with the Magnetics business. Certain representations and warranties will
be repeated at completion. Morgan has assumed joint and several liability for
the obligations of the Sellers under the Sale agreement.

Certain governmental approvals and consents in China are required for the
transfer of the shares in the Chinese subsidiary company which forms part of the
Magnetics business being sold. The Sale agreement provides that if such
approvals and consents have not been obtained when the other conditions to
completion are fulfilled (or, where applicable, waived), transfer of the shares
in the Chinese subsidiary shall be delayed until 10 days after such approvals
and consents have been obtained and £6.8 million of the purchase price shall be
held in escrow until the earlier of (i) the date on which transfer of those
shares becomes effective and (ii) 29 September 2006.

JPMorgan Cazenove Limited, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting for The Morgan Crucible
Company plc and no one else in connection with the matters referred to in this
announcement and will not be responsible to any person other than The Morgan
Crucible Company plc for providing the protections afforded to clients of
JPMorgan Cazenove, or for providing advice in relation to these matters.


Notes to Editors

About The Morgan Crucible Company plc

Morgan was founded in 1856 and is based in Windsor, near London, in the United
Kingdom. The company's shares are listed and traded on the London Stock
Exchange. Morgan is a constituent of the FTSE250 index. Following completion of
the above transaction, Morgan will be composed of 4 Global Business Units
('GBUs'), focusing on two main product groups, Carbon and Ceramics. The
companies that comprise the GBUs own sites that are located all over the world.

The GBUs design, develop and supply a broad range of products made from carbon
and ceramic materials. They own many global brands. Their products are used in a
wide range of applications from transport and aerospace to fire protection and
body armour.

About One Equity Partners

One Equity Partners ('OEP') manages $5 billion of investments and commitments
for JPMorganChase & Co. in direct private equity transactions. Partnering with
management, OEP invests in transactions that initiate strategic and operational
changes in businesses to create long-term value. OEP's investment professionals
are located across North America and Europe, with offices in New York, Chicago
and Frankfurt.


                      This information is provided by RNS
            The company news service from the London Stock Exchange END
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