Clayton, Dubilier & Rice to acquire Culligan from Veolia Environnement of France

Clayton, Dubilier & Rice, Inc. (CD&R), a global private equity firm, today announced that it has reached a definitive agreement with Veolia Environnement SA of France to acquire Culligan International in a transaction valued at $610 million.

Private Equity Fund Will Pay $610 Million for Global Water Treatment
Company

NEW YORK, July 22, 2004 - Clayton, Dubilier & Rice, Inc. (CD&R), a global private equity firm, today announced that it has reached a definitive agreement with Veolia Environnement SA of France to acquire Culligan International in a transaction valued at $610 million.

The transaction is subject to normal regulatory approvals and is expected to close in the fall.

"This transaction bears many of the hallmarks of our most successful investments," said Donald J. Gogel, President and Chief Executive Officer of CD&R. "It is a carve-out of a non-core division from a major multinational parent that we believe we can build and enhance with our operationally focused investment model."

This is the second investment by CD&R in 2004 and follows upon the $1.65 billion acquisition of VWR International, a global distributor of laboratory supplies from Merck KGaA of Germany in April. Also in 2004, CD&R sold Kinko's to FedEx Corporation, sold Jafra Cosmetics to Vorwerk & Co. KG and completed a successful secondary offering of a portion of its fund's ownership interest in SIRVA, the Chicago-based global relocation services company.

Culligan is a leading manufacturer and distributor of water treatment products and bottled water for household and commercial use in North America and Europe with annual sales of $682 million in 2003. Founded by Emmett Culligan in 1936 and based in Northbrook, Ill., Culligan has 3,000 employees worldwide, a network of more than 1,000 owned and franchised dealerships in the US and Europe and one of the more recognizable brands in the U.S.

"Our hands-on approach is particularly well suited to tackling complex business situations and helping to redefine a company's position in the marketplace," said George W. Tamke, an operating partner of CD&R involved in the transaction. "We think Culligan has a wonderful set of assets, including an outstanding dealer network and a great brand that we can build on to create an even stronger company." Most recently, Mr. Tamke served as the lead operating partner from CD&R in connection with the firm's investment in Kinko's. He also served as Kinko's interim-CEO for a period of time.

"We look forward to working with Culligan to take the company to the next level of profitable growth," said David H. Wasserman, a CD&R financial partner involved in the transaction, who also worked with Mr. Tamke on Kinko's. "We have successfully invested in manufacturing and distribution businesses and we have worked with distribution networks. We will draw upon that valuable experience to accelerate Culligan's growth by creating a more service-intensive business model."

Bank of America and Lehman Brothers advised CD&R on the transaction. Bank of America, BNP Paribas and Citigroup will lead the debt financing. Debevoise & Plimpton served as legal advisers to CD&R.

About Clayton, Dubilier & Rice

Clayton, Dubilier & Rice, Inc. (CD&R) is a leading private equity investment firm that has earned consistent, superior investment returns using an integrated operational and financial approach to building and growing portfolio businesses. Since its founding in 1978, CD&R has managed the investment of over $5 billion in 37 businesses - mostly subsidiaries or divisions of large multi-business corporations - representing a broad range of industries with an aggregate transaction value in excess of $20 billion and revenues of more than $27 billion.

The firm has offices in New York and London. For more information about CD&R, visit www.cdr-inc.com.

About Culligan

Among the most widely recognized brand names in America, Culligan has been manufacturing and distributing water treatment products and bottled water for household and commercial use worldwide since 1936, and entered the air purification market in 2003. Culligan's network of dealerships and licensees worldwide is committed to delivering superior customer satisfaction and expertise. For more information, call a local dealership or 1-800-Culligan or visit Culligan's website at
www.culligan.com.

About Veolia Environnement

Veolia Environnement is the leading provider of environmental services to municipalities and industrial companies worldwide. The company has global operations in four core business areas: Water, Waste, Energy Services and Transportation. In 2003, Veolia Environnement generated consolidated revenue of 28.6 billion euros ($36.1 billion). Visit the company's web site at www.veoliaenvironnement-finance.com.

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