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Company Press Release

Ciba Specialty Chemicals to sell Polymers business to Morgan Grenfell Private Equity

- Purchase price agreed at CHF 1.845 billion

BASEL, Switzerland--(BUSINESS WIRE)--Dec. 14, 1999-- - Transaction expected to close in the first quarter of 2000

Ciba Specialty Chemicals and Morgan Grenfell Private Equity (MGPE) announced today that they have signed a contract under which MGPE will buy Ciba's Performance Polymers division. Ciba and MGPE, which is the private equity arm of Deutsche Asset Management, have agreed to a purchase price of CHF 1.845 billion. The transaction is expected to be completed during the first quarter of 2000, subject to customary closing conditions. These include the assignment of contracts, the transfer of assets, such as joint venture interests, and regulatory approvals, particularly in the U.S. and Europe.

Ciba plans to use the proceeds from the sale to repay debt and for corporate development purposes.

``Ciba has successfully restructured the Performance Polymers division and has now found a strong new partner to take over the business. Our agreement with MGPE marks an important milestone to secure a promising future for the business, its customers and its employees,'' said Rolf A. Meyer, Chairman and Chief Executive Officer of Ciba Specialty Chemicals. ``This move also underscores Ciba's strategy to focus its portfolio on specialty chemicals rather than specialty materials and allows us to further promote innovative and high value effects for customers and consumers.''

``The Performance Polymers division is a high quality branded asset with top-line growth potential driven by its leading technological position,'' said Graham Hutton, Chief Executive of Morgan Grenfell Private Equity. ``It is one of the world's top three epoxy resins manufacturers and has strong positions in specialty applications such as advanced tooling, adhesives and photo polymers.''

MGPE will appoint Karl-Gerhard Seifert, head of its German Private Equity team, formerly CEO of Clariant, as non-executive Chairman of the Performance Polymers business. Karl-Gerhard Seifert said: ``We are looking forward to working with the management and employees of the Performance Polymers business to develop it organically and by acquisition over the next few years. The financing package we have put together provides a solid platform from which to grow the business as an independent entity outside Ciba.''

Under MGPE, the headquarters of the Performance Polymers business will be based in Basel, Switzerland. The business employs more than 3,100 people world-wide.

After a successful restructuring of the business under a strong management team, Performance Polymers raised its operating income to CHF 62 million in the first half of 1999 from CHF 26 million in the comparable period in 1998; EBITDA (Earnings before Interest, Taxes, Depreciation and Amortisation) amounted to CHF 94 million in the first half of this year. At the same time, in line with a strategic focus on profitable growth, sales of lower value-added products declined while those of specialities increased. In the first six months of 1999, the division's sales totalled CHF 846 million.

Company-wide, Ciba has completed its major cost reduction programmes and is achieving targeted operational improvements. The Company has also noted the expected continuation of the upward trend in the business climate, which was confirmed by October and November sales figures.

Ciba Specialty Chemicals (SWX:CIBN) is a leading company dedicated to producing high-value effects for our customers' products. Our specialty chemicals, added in small quantities, enhance the performance, look and feel of the final product. Business success is driven by our long-term strategy of innovation and continuous operational improvements. Ciba brings new and creative thought to the processes and products of our customers in more than 117 countries. Ciba generated sales of more than CHF 8.4 billion in 1998 and spent CHF 300 million on R&D to foster innovation across the Company.

Morgan Grenfell Private Equity (MGPE), the private equity arm of Deutsche Asset Management, is a leading European private equity house with funds under management of USD 1.8 billion. Its strategy is to acquire controlling stakes in companies of high quality and with a high growth potential. Since inception, MGPE has made 47 investments with a total enterprise value of USD 9 billion. Recent high profile transactions include:

• the agreement to purchase up to 50 percent of the holding company of Formula One Holdings.
• The acquisition of a controlling interest in Piaggio & C. SpA, the leading European motor scooter manufacturer; and
• the FF 1.4 billion acquisition of Giraudy, one of the top three outdoor advertising operations in France and Skyrock, its multi-radio subsidiary from Lagadere;
• the GBP390 million purchase of Coral, the third largest off-course bookmaker in the UK, from Ladbroke Group plc.

Please see attached facts sheet for more information about the Performance Polymers business or further information please contact:

Ciba Specialty Chemicals Ciba Specialty Chemicals Media Investor Relations Tarrytown, NY USA Basel, Switzerland Hugh Stuart-Buttle Matthias A. Fankhauser Communications Investor Relations Tel: 914 785 2692 Tel: +41 61 636 5081 Fax: 914 785 2211 Fax: +41 61 636 5111

Morgan Grenfell Private Equity Graham Hutton Chief Executive Tel: +44 171 545 7810

Tom Leader Director Tel: +44 171 545 5322

Ciba Specialty Chemicals Website: http://www.cibasc.com

     Ciba Specialty Chemicals, Tarrytown, NY
     Media
     Hugh Stuart-Buttle
     Communications
     Tel: 914 785 2692
     Fax: 914 785 2211
     or
     Ciba Specialty Chemicals, Basel, Switzerland
     Investor Relations
     Matthias A. Fankhauser
     Investor Relations
     Tel: +41 61 636 5081
     Fax: +41 61 636 5111
     or
     Morgan Grenfell Private Equity
     Graham Hutton
     Chief Executive
     Tel: +44 171 545 7810
     Tom Leader
     Director
     Tel: +44 171 545 5322