Shareholders are advised that Afrox has entered into an agreement dated 22 December 2010 with Linde AG ("Linde"), its controlling shareholder, to acquire proprietary technology and equipment for a new GOX 6000 Air Separation plant ("the GOX 6000 Plant") for a cash purchase consideration of approximately EUR10.9 million (or R97 million) ("the GOX 6000 acquisition"). The GOX 6000 acquisition represents the first phase of the project. Following the GOX 6000 acquisition, Afrox will commence with the second phase of the project which will entail the installation and integration of the GOX 6000 Plant at its Pretoria West Air Separation Plant ("the GOX 6000 installation"). Afrox is currently in the process of considering contractual obligations relating to the GOX 6000 installation and once contractual obligations have been entered into, a further announcement will be made. The cash cost of the GOX 6000 installation is expected to be approximately EUR10.4 million (or R93 million). The total capital expenditure relating to the GOX 6000 acquisition and the GOX 6000 installation (collectively "the transaction") is expected to be approximately EUR21.3 million (or R190 million).

The GOX 6000 acquisition
Linde Engineering (a division of Linde) will provide the full lump sum turnkey ("LSTK") plant consisting of a 200 ton per day GOX 6000 Air Separation Unit incorporating an Argon rectification column and associated equipment. It is anticipated that risk and ownership of the GOX 6000 Plant will pass to Afrox within 24 months of placing the order with Linde. The payment structure for the GOX 6000 acquisition is based on various milestones throughout the ensuing 24 months.

The GOX 6000 installation
The GOX 6000 installation will take place between 2011 and 2013. The integration into product and service lines as well as the civil infrastructure will be undertaken internally by Afrox Technical and Engineering. It is estimated that the GOX 6000 Plant will be fully integrated within the existing Afrox operations in January 2013.

Rationale
Afrox's Merchant Gases business supports a well developed industrial packaged gases and extended product offering. This business contributes substantially to the overall profitability of the company. The transaction will enable Afrox to substantially enhance its production facilities. This will ensure that the company is well positioned to defend and grow Afrox`s market share and brand reputation in the merchant gases market.

Small related party transaction
Linde currently owns 173 046 413 Afrox shares, comprising 50.47% of the share capital of Afrox including treasury shares (or 56.08% excluding treasury shares), and is thus the controlling shareholder of Afrox. Linde is therefore regarded as a related party to Afrox in terms of the listings requirements of the JSE and accordingly written confirmation is required from an independent professional expert, confirming that the GOX 6000 acquisition is fair to Afrox's shareholders. Rand Merchant Bank (a division of FirstRand Bank Ltd) and Bateman Engineering N.V. have been appointed as the joint independent experts ("experts"). The experts have confirmed that the terms of the GOX 6000 acquisition are fair to the Afrox shareholders. The report of the experts will be available for inspection at the registered office of Afrox up until 1 February 2011.