Swiss Army Brands, Inc. and Victorinox AG of Ibach, Switzerland jointly announced today an agreement to form Victorinox Swiss Army Watch, AG, a new watch company that will market and distribute a single unified brand of Victorinox/Swiss Army Watches in all international markets outside the United States, Canada and the Caribbean. Swiss Army Brands expects the transaction to be completed by October 2001.

Swiss Army Brands and Victorinox will each contribute an equivalent amount of cash, inventory, and their entire watch businesses outside the United States, Canada, and the Caribbean to the new company. Distribution and logistics for the new company will be located at Victorinox in Ibach, Switzerland. Sales, marketing and product design and development will be located in Bienne, Switzerland, the current headquarters of Swiss Army Brands Schweiz AG, Swiss Army Brands’ existing international watch company.

Victorinox, the majority shareholder of Swiss Army Brands, is the manufacturer of Victorinox(R) Original Swiss Army(TM) Knives and is the provider of the Swiss-made knives, multi-tools and cutlery products marketed by Swiss Army Brands in the United States, Canada, and the Caribbean. Victorinox and Swiss Army Brands have a business relationship dating back to 1937.

“Victorinox and Swiss Army Brands have a strong and long-standing relationship,” said Sue Rechner, president of the new company. “This merger is a natural combination of two watch brands with similar attributes and complementary business strategies. All of the individual strengths of the two watch brands will be combined to form a strong company poised for international growth.”

A group of watch industry veterans will head the executive team of Victorinox Swiss Army Watch. In addition to Rechner, Cheri McKenzie, vice president of global marketing for Swiss Army Brands, will be responsible for marketing, Jean-Marc Guillod, currently with Swiss Army Brands Schweiz, and David Feuter, currently with Victorinox, will direct international sales. Michel Thievent, president of Xantia S.A., a company owned by Swiss Army Brands and Victorinox and the manufacturer of Swiss Army Brand watches, will lead the manufacturing efforts.

Victorinox Swiss Army Watch expects to initiate its introduction of the new Victorinox/Swiss Army brand in Italy in October of this year. Brand rollouts are scheduled to occur shortly thereafter in other international markets where one or both of the companies currently do business.

JCK