BOCA RATON, Fla., Sept. 16 /PRNewswire/ -- W. R. Grace & Co. (NYSE: GRA) today announced that its shareholders approved a plan to spin off to Grace's common shareholders a new company comprising Grace's packaging and specialty chemicals businesses and to combine its health care subsidiary, National Medical Care, Inc., with the worldwide dialysis business of Fresenius AG. The transactions are expected to be completed by the end of the month.

At the special shareholder meeting today, Albert J. Costello, chairman, president and chief executive officer of Grace, said, "With the NMC transaction nearing completion, we are crossing a major threshold at Grace. We now are an efficient, global operating company, entirely focused on our packaging and specialty chemicals businesses.

"The new Grace will comprise the very best businesses from what was once a highly diversified conglomerate. With annual sales of approximately $3.3 billion and a strengthened balance sheet, we will be well positioned for significant growth in our businesses and also have the flexibility to return value to our shareholders through dividends and share repurchases," he said.

Costello said, "The tax-free transaction approved today is valued by the Street at more than $4.4 billion, a value considerably above all other proposals received. This reinforces our conviction that the NMC-Fresenius combination delivers the highest value opportunity for Grace and its shareholders."

When the transaction is completed, Grace common shareholders will receive 44.8 percent of the newly created health care company, to be named Fresenius Medical Care AG, and 100 percent of the "new" Grace, which will retain the name W. R. Grace & Co. Fresenius Medical Care AG will be the world's largest fully integrated dialysis company. Headquarterd in Germany, the new company will base its North American operations in Massachusetts.

For each Grace common share, shareholders will receive one share of the "new" Grace; one share of a new class of preferred stock with a value based solely on the next five-year cash flow of Fresenius Medical Care AG; and approximately 1.013 American Depositary Shares (ADS), each representing one third of an ordinary share of Fresenius Medical Care AG and with a current market value of more than $22.

Prior to the transaction, Grace will receive a cash distribution of approximately $2.3 billion from NMC. Approximately one billion dollars of the distribution will be used to repurchase stock, and the remainder will be applied to reduce debt and invest in Grace's packaging and specialty chemicals businesses.

Following the shareholder meeting today, Grace intends to resume purchases of its stock under a previously authorized 10 million share repurchase program. After close of the transaction, Grace has approval to purchase up to 20 percent of the outstanding common stock in the open market, from time to time.

Fresenius AG shareholders approved the transaction last April. Shareholders of Fresenius USA, the U.S. subsidiary of Fresenius AG, also are voting on the transaction today. It is anticipated that both the "new" Grace and Fresenius Medical Care ADSs (traded under the symbol FMS) will begin trading on the New York Stock Exchange on a "when issued" basis beginning tomorrow, Tuesday, September 17.

Grace is a leading global supplier of flexible packaging and specialty chemicals.

SOURCE W. R. Grace & Co.

CONTACT: Chuck Suits, or Mary Lou Kromer, both of W. R. Grace
''&'' Co., 407 - 362-2600 or 800-GRACE99