CELANESE AG
F-1/A, 1999-10-22
PLASTICS, FOIL & COATED PAPER BAGS
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<PAGE>   1


   AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 22, 1999.

                                                      REGISTRATION NO. 333-87889
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                               ------------------


                                AMENDMENT NO. 2

                                       TO

                                    FORM F-1
            REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
                               ------------------

                                  CELANESE AG
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                              CELANESE CORPORATION
                (TRANSLATION OF REGISTRANT'S NAME INTO ENGLISH)

                          FEDERAL REPUBLIC OF GERMANY
                        (STATE OR OTHER JURISDICTION OF
                         INCORPORATION OR ORGANIZATION)

                                      2869
                          (PRIMARY STANDARD INDUSTRIAL
                          CLASSIFICATION CODE NUMBER)

                                 NOT APPLICABLE
                                (I.R.S. EMPLOYER
                              IDENTIFICATION NO.)

                                  CELANESE AG
                              INDUSTRIEPARK HOCHST
                                 BUILDING F-821
                           D-65926 FRANKFURT AM MAIN
                                    GERMANY
                             011-49 (69) 305 14000
         (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
            AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
                             CT CORPORATION SYSTEM
                                111 8(TH)AVENUE
                            NEW YORK, NEW YORK 10011
                                1-(212) 894-8940
                    (NAME, ADDRESS, INCLUDING ZIP CODE, AND
          TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)

                               ------------------

                                   Copies to:

<TABLE>
<S>                               <C>                               <C>
   ROBERT M. CHILSTROM, ESQ.             ABIGAIL ARMS, ESQ.                MARK KESSEL, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER &         SHEARMAN & STERLING               SHEARMAN & STERLING
            FLOM LLP               801 PENNSYLVANIA AVENUE, N.W.          599 LEXINGTON AVENUE
        919 THIRD AVENUE               WASHINGTON, D.C. 20004           NEW YORK, NEW YORK 10022
   NEW YORK, NEW YORK, 10022              1-(202) 508-8000                  1-(212) 848-4000
        1-(212) 735-3000
</TABLE>

        APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
  As soon as practicable after this Registration Statement becomes effective.

     If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 (the "Securities Act"), check the following box. [ ]

     If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
     If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

     If delivery of the prospectus is expected to be made pursuant to Rule 434
under the Securities Act, check the following box. [ ]


                        CALCULATION OF REGISTRATION FEE



<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
                                                                  PROPOSED MAXIMUM       PROPOSED MAXIMUM
         TITLE OF EACH CLASS OF              AMOUNT TO BE       REDISTRIBUTION PRICE        AGGREGATE              AMOUNT OF
      SECURITIES TO BE REGISTERED            REGISTERED(1)          PER UNIT(2)        REDISTRIBUTION PRICE    REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>                   <C>                    <C>                    <C>
Shares, without nominal value...........      10,901,502        $     24.8745          $   271,169,412        $     75,386
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>



(1) Represents all Shares being offered worldwide, including those offered
    hereby in the United States or to U.S. persons and those being offered and
    sold outside the United States in reliance on Regulation S under the
    Securities Act of 1933.



(2) Estimated solely for purpose of calculation of the registration fee in
    accordance with Rule 457 under the Securities Act. The proposed maximum
    offering price per unit of E23.00 has been converted to U.S. dollars at the
    rate of $1.0815 per euro. The noon buying rate on October 21, 1999 was
    $1.0808 per euro.

                               ------------------
     THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SECTION 8(a) OF THE SECURITIES ACT OF 1933, AS AMENDED, MAY
DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>   2

                                [Celanese Logo]


                                  CELANESE AG


                                          SHARES


                                 (NO PAR VALUE)


                            ------------------------


     Celanese, formerly a subsidiary of Hoechst, became an independent company
in a German demerger, or spin-off, on October 22, 1999. In the demerger, Hoechst
distributed all the outstanding shares of Celanese to Hoechst shareholders.
Hoechst shareholders and ADS holders who did not wish to retain the Celanese
shares they were entitled to receive in the demerger were invited to participate
in a redistribution by providing irrevocable commitments to sell all or a
portion of the Celanese shares they were entitled to receive in the demerger.
Celanese has engaged redistribution managers to use their best efforts to
procure purchasers for these shares as part of the redistribution in public
offerings in Germany and the United States, and to institutional investors in
the rest of the world. The Redistribution Managers have advised Celanese that
they intend to offer up to           shares in the United States and up to
          in Germany and elsewhere outside the United States. This prospectus
relates to the offers being made in the United States. Celanese will not receive
any proceeds from the sale of the shares in these offerings. See "The
Redistribution."



     Prior to the redistribution, no public market existed for the shares of
Celanese. The shares have been approved for listing on the New York Stock
Exchange under the symbol "CZ" and on the Frankfurt Stock Exchange under the
symbol "CZZ."

                            ------------------------


              INVESTING IN THE SHARES OF CELANESE INVOLVES RISKS.


                    SEE "RISK FACTORS" BEGINNING ON PAGE 10.

                            ------------------------


<TABLE>
<CAPTION>
                                                             Proceeds to Selling
                                          Price to Public       Shareholders
<S>                                       <C>                <C>
Per Share...............................           E                    E
Total...................................           E                    E
</TABLE>



     The commissions payable to the redistribution managers are payable by
Celanese and, therefore, no deductions to the proceeds due to selling
shareholders will be made in this respect. The redistribution managers expect to
deliver the shares to purchasers in book-entry form through the facilities of
Deutsche Borse Clearing Aktiengesellschaft, The Depository Trust Company, Cedel
Bank, and the Euroclear System on or about October 27, 1999. Any sales in the
United States will be made through the Redistribution Managers' U.S.
broker-dealer affiliates acting as agent for the Redistribution Managers.



     NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

                            ------------------------


                           Joint Global Co-ordinators



CREDIT SUISSE FIRST BOSTON                             DRESDNER KLEINWORT BENSON



                            Joint Global Bookrunners



DRESDNER KLEINWORT BENSON                             CREDIT SUISSE FIRST BOSTON



                                Co-Lead Managers



DEUTSCHE BANC ALEX. BROWN     GOLDMAN, SACHS & CO.             J.P. MORGAN & CO.



                       Prospectus dated October 25, 1999

<PAGE>   3

                               TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
Presentation of Financial Information.......................    3
Prospectus Summary..........................................    4
Risk Factors................................................   10
Cautionary Statement Regarding Forward-looking Statements...   15
Exchange Rate Information...................................   16
Use of Proceeds.............................................   16
Dividend Policy.............................................   17
Selected Combined Financial Data............................   18
Management's Discussion And Analysis of Financial Condition
  And Results of Operations.................................   20
Quantitative And Qualitative Disclosures About Market
  Risk......................................................   45
Celanese....................................................   47
Business....................................................   48
Management..................................................   78
Relationships And Third Party Transactions..................   83
Principal And Selling Shareholders..........................   84
Description of Securities to Be Registered..................   85
Nature of Trading Market....................................   90
Material United States Federal Income Tax And German Tax
  Considerations............................................   92
The Redistribution..........................................   95
Available Information.......................................   97
Service of Process And Enforcement of Civil Liabilities.....   97
Legal Matters...............................................   98
Experts.....................................................   98
Index to Combined Financial Statements......................  F-1
</TABLE>


                            ------------------------

     You should rely only on the information contained in this prospectus or to
which Celanese has referred you. Celanese has not authorized anyone to provide
you with information that is different. If anyone provides you with different or
inconsistent information, you should not rely on it. This prospectus may only be
used where it is legal to sell the Celanese shares.

                            ------------------------

     Celanese's principal executive office is located at Building F-821,
Industriepark Hochst, D-65926 Frankfurt am Main, Germany. Its telephone number
is 011-49 (69) 305 14000 in Germany.

                            ------------------------


     UNTIL NOVEMBER 19, 1999 (25 DAYS AFTER THE COMMENCEMENT OF THIS
REDISTRIBUTION), ALL DEALERS THAT EFFECT TRANSACTIONS IN THE CELANESE SHARES,
WHETHER OR NOT PARTICIPATING IN THE REDISTRIBUTION, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS REDISTRIBUTION MANAGERS.


                                        2
<PAGE>   4

                     PRESENTATION OF FINANCIAL INFORMATION

     The Combined Financial Statements for Celanese contained in this prospectus
were prepared in accordance with generally accepted accounting principles in the
United States or U.S. GAAP. These statements present the combined operations of
the businesses of Celanese. You should read the financial information and the
notes to the Combined Financial Statements included in this prospectus in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations." For the years ended December 31, 1998 and 1997, KPMG
Deutsche Treuhand-Gesellschaft Aktiengesellschaft
Wirtschaftsprufungsgesellschaft audited the Combined Financial Statements.

     Effective January 1, 1999, Germany and 10 other member states of the
European Union introduced the euro or E as their common currency and established
fixed conversion rates between their existing sovereign currencies and the euro.
These countries now form a new "euro zone." The German Deutsche Mark or DM and
the euro are fully convertible currencies.

     The Combined Financial Statements for periods ending prior to January 1,
1999 have been prepared in Deutsche Mark and were restated from Deutsche Mark to
E using the Official Fixed Conversion Rate at January 1, 1999 of DM1.95583 per
E1.00. Celanese does not represent that these restated E amounts for periods
ending prior to January 1, 1999, actually represent the DM amounts in the
Combined Financial Statements as prepared or could be converted into DM at the
rate indicated. For periods ending after December 31, 1998, Celanese's financial
statements have been prepared in E directly instead of being restated from DM
into E, U.S. dollar, or U.S.$, amounts are unaudited and have been converted
solely for your convenience for the year ended December 31, 1998 and for the six
months ended June 30, 1999 from E into U.S. dollars, at an exchange rate of
U.S.$1.0310 per E1.00, the noon buying rate on June 30, 1999. See also Note 1 to
the Combined Financial Statements. For information regarding recent rates of
exchange between E and U.S.$, see "Exchange Rate Information." Celanese does not
represent that the U.S. dollar amounts presented in the U.S. dollar convenience
translation or any amounts translated from E into other currencies could have
been converted from E at the rates indicated.


     On October 21, 1999, the noon buying rate for the E was U.S.$1.0808 per
E1.00.


                                        3
<PAGE>   5

                               PROSPECTUS SUMMARY

     This summary highlights important information about Celanese and, in our
view, discusses the most significant aspects of the offering. Because it is a
summary, it does not contain all the information you should consider before
making an investment in the shares. You should read the entire prospectus
carefully.

CELANESE

     Celanese is a leading global industrial chemicals company. Its business
involves processing chemical raw materials, such as ethylene and propylene, and
natural products, including natural gas and woodpulp, into value-added chemicals
and chemical-based products. Celanese's leadership position is based on two key
factors: its significant market shares and competitive cost structures in its
major products. Celanese's competitive cost structures are based on economies of
scale, vertical integration, technical know-how and the use of advanced
technologies. In 1998, Celanese had net sales of E5,159 million, operating
profit of E183 million and approximately 17,500 employees worldwide. In the
first half of 1999, Celanese had net sales of E2,366 million and an operating
loss of E259 million.

     Most of Celanese's facilities are located in the Americas, principally in
the three North America Free Trade Association, or NAFTA, countries: the United
States, Canada and Mexico. Celanese also has major operations, including
significant joint ventures, in Europe and Asia. Celanese has a large and diverse
global customer base comprised principally of major industrial companies. In
1998, sales to the 10 largest customers of Celanese accounted for less than 20%
of its net sales and the single largest customer represented less than 5% of its
net sales.

     The following charts show Celanese's 1998 net sales by destination and by
origin:

              [Net Sales by Destination and by Origin Pie Charts]

SEGMENTS

     Celanese operates through five business segments:

     Acetyl Products.  This segment produces and supplies acetyl products,
including acetic acid and vinyl acetate monomer. Acetic acid is a commodity used
in the production of other basic chemicals; and vinyl acetate monomer is
primarily used in a variety of adhesives, paints and coatings. Celanese is the
world's leading producer of acetic acid and vinyl acetate monomer and the
largest producer of methanol, the major raw material used for the production of
acetic acid, in North America.

     Chemical Intermediates.  This segment produces and supplies chemical
intermediates, including acrylic acid, acrylates, organic solvents and other
intermediates. Acrylic acid and acrylates are used in the

                                        4
<PAGE>   6

manufacture of superabsorbent polymers, paints and coatings, adhesives and in
water treatment applications. Most of the other chemicals produced in this
segment are organic solvents and intermediates for pharmaceutical, agricultural
and chemical products.

     Acetate Products.  This segment primarily produces and supplies acetate
filament and staple, and acetate filter products. Products from this segment are
found in fashion apparel, linings, home furnishings and cigarette filters.
Celanese is one of the world's leading producers of acetate tow, including
production by its joint ventures, and acetate filament.

     Ticona.  This segment develops and supplies a broad portfolio of high
performance technical polymers for application in automotive and electronics
products and in other consumer goods, often replacing metal or glass. Together
with its 45%-owned affiliate Polyplastics, Celanese is a leading participant in
the global technical polymers business.

     Performance Products.  This segment includes Trespaphan, the oriented
polypropylene, or OPP, films business, which produces thin films used in
packaging of products such as foodstuffs and cigarette packs, in labels and the
production of capacitors. It also includes Nutrinova, the high intensity
sweetener and food protection ingredients business; and Celgard, the separation
products business, which manufactures microporous membranes used, for example,
in lithium batteries and blood oxygenators. Celanese is currently seeking to
sell its Celgard separation products business.

     The chart below illustrates each segment's share of total segment net sales
in 1998. In total, these segments accounted for 87% of Celanese's net sales in
1998.

                         [Segment Net Sales Pie Chart]

OTHER ACTIVITIES

     The portfolio of Celanese contains other businesses and activities separate
from its principal chemical operations, for example, other chemicals business
lines that consist primarily of inorganic chemical businesses, such as
phosphorous, chlorine and chlorine derivative products, as well as a small
business in ethylene oxide and ethylene glycol chemical products; a polyester
staple and bottle resins business in Canada; general corporate functions; and
companies which provide infrastructure and procurement services. Celanese's
Canadian subsidiary has announced a planned transaction to sell the Canadian
polyester staple and bottle resins business. The management of Celanese intends
to continue evaluating its strategic options

                                        5
<PAGE>   7

for its asset portfolio and is pursuing divestiture alternatives for some of
these other businesses, notably its chlorine and chlorine derivatives business
lines and its ethylene oxide and ethylene glycol business lines.

STRATEGY

     Celanese intends to strengthen its position as a leading global industrial
chemicals company. Celanese's management has identified five strategies for
continuing growth and increasing value for its shareholders:

     Strengthen Celanese's established global presence.  Celanese operates
facilities throughout the world and intends to leverage its existing
infrastructure and expertise to expand in growth markets.

     Enhance leading technology positions.  Celanese intends to build on the
leading technology positions it holds in core products such as acetic acid,
vinyl acetate monomer, acrylic acid, and in a number of high performance
technical polymers.

     Generate value-added solutions for customers.  Celanese's Ticona segment
intends to continue to specialize in the development of new products and
applications for its products, often developing tailored products to meet the
specifications of its customers.

     Achieve cost efficiencies through rationalization.  Celanese is
implementing or intends to implement restructuring programs in each of its
businesses designed to:

     - Reduce global manufacturing costs,

     - Reduce selling and general administrative costs,

     - Reduce costs for purchasing raw materials, and

     - Optimize its chemical supply chain.

     Optimize Celanese's portfolio.  Celanese has been formed as a result of the
demerger from Hoechst of the basic chemicals, acetates, performance products and
technical polymers and several less significant businesses and activities. As
management implements plans to optimize the operations of Celanese, it will
pursue strategic opportunities including acquisitions, divestitures and joint
ventures, in order to increase profitability and shareholder value.

RATIONALE FOR THE DEMERGER OF CELANESE

     In 1994, Hoechst embarked on a comprehensive review and re-evaluation of
its strategic goals and decided to concentrate on its life sciences businesses.
As part of this process, based on the recommendation of Hoechst's management
board and Hoechst's supervisory board, Hoechst shareholders, at an extraordinary
general meeting on July 15 and 16, 1999, approved the demerger of the businesses
described in this prospectus to Celanese.

RISK FACTORS

     You are urged to read carefully the "Risk Factors" section beginning on
page 10, where specific risks associated with an investment in the Celanese
shares are described.

                                        6
<PAGE>   8

                               THE REDISTRIBUTION


Shares Offered......................     ________________ Celanese shares.



Shares Outstanding..................     55,915,369 ordinary shares with no par
                                         value outstanding.



Selling Shareholders................     Hoechst shareholders who were entitled
                                         to receive Celanese shares in the
                                         demerger who have submitted irrevocable
                                         commitments to the redistribution
                                         managers to sell those shares at the
                                         redistribution price.


Dividends...........................     The amount and payment of any dividends
                                         will depend on Celanese's current and
                                         future earnings, cash flow, financial
                                         condition and other factors. The
                                         Celanese shares are eligible for any
                                         dividends declared for the year ending
                                         December 31, 1999 and subsequent
                                         periods. Celanese has no current
                                         intention of paying dividends in
                                         respect of 1999 earnings. Dividends are
                                         subject to recommendation by the
                                         Celanese supervisory and management
                                         boards and the approval of the
                                         shareholders at Celanese's general
                                         meeting. For further details, see
                                         "Dividend Policy" and "Risk Factors --
                                         Celanese has no current intention of
                                         paying dividends in respect of 1999
                                         earnings."

Voting Rights.......................     Each share permits the holder to cast
                                         one vote on all matters brought before
                                         shareholders. For further details, see
                                         "Description of Securities to be
                                         Registered."

Listing of the Shares...............     There is currently no public market for
                                         our shares. Application has been made
                                         to list our shares on the Frankfurt
                                         Stock Exchange under the symbol "CZZ"
                                         and the New York Stock Exchange under
                                         the symbol "CZ."

Use of Proceeds.....................     Celanese will not receive any of the
                                         proceeds from the sale of the shares in
                                         this redistribution.

                                        7
<PAGE>   9

                        SUMMARY COMBINED FINANCIAL DATA

     The following table presents Summary Combined Financial Data for Celanese.
The data presented in this table have been derived from "Selected Combined
Financial Data," the audited Combined Financial Statements, the unaudited
Condensed Combined Financial Statements and the notes related to those
statements that are included elsewhere in this prospectus. You should read those
statements and the accompanying notes for a further explanation of the financial
data summarized here. The audited Combined Financial Statements and unaudited
Condensed Combined Financial Statements from which the data below have been
derived were prepared in accordance with U.S. GAAP. In the opinion of
management, the unaudited Condensed Combined Financial Statements include all
adjustments, consisting of normal recurring accruals, necessary for a fair
presentation. Celanese advises you that the results for any interim period are
not necessarily indicative of the results for a full fiscal year. You should
also read "Management's Discussion and Analysis of Financial Condition and
Results of Operations," which describes a number of factors that affect the
financial results of Celanese. The Combined Financial Statements for periods
ending prior to January 1, 1999 have been prepared in Deutsche Mark and were
restated from Deutsche Mark to E using the Official Fixed Conversion Rate at
January 1, 1999. For periods ending after December 31, 1998, Celanese's
financial statements have been prepared in E directly instead of being restated
from DM into E. Amounts shown in U.S.$ are unaudited and, for the year ended
December 31, 1998 and for the six months ended June 30, 1999, have been
converted solely for your convenience from E at an exchange rate of U.S.$1.0310
per E1.00, the noon buying rate at June 30, 1999. See also Note 1 to the
Combined Financial Statements.

<TABLE>
<CAPTION>
                                   SIX MONTHS ENDED JUNE                     YEAR ENDED DECEMBER 31,
                                  ------------------------   --------------------------------------------------------
                                   1999     1999     1998       1998        1998     1997     1996     1995     1994
                                  ------   ------   ------   -----------   ------   ------   ------   ------   ------
                                        (UNAUDITED)          (UNAUDITED)      (AUDITED)            (UNAUDITED)
                                  ------------------------   -----------   ---------------   ------------------------
                                  U.S.$      E        E         U.S.$        E        E        E        E        E
                                  ------   ------   ------   -----------   ------   ------   ------   ------   ------
                                             (IN MILLIONS, EXCEPT PER SHARE DATA AND NUMBER OF EMPLOYEES)
                                  -----------------------------------------------------------------------------------
<S>                               <C>      <C>      <C>      <C>           <C>      <C>      <C>      <C>      <C>
STATEMENT OF OPERATIONS DATA
  (FOR PERIOD):
Net sales.......................  $2,439   E2,366   E2,755     $5,319      E5,159   E5,775   E4,881   E4,922   E4,798
Gross profit....................     328      319      538      1,021         990    1,199    1,020    1,236    1,051
Operating profit (loss)(1)......    (267)    (259)     101        189         183      281      216      374     (110)
Earnings (loss) before income
  taxes.........................    (271)    (263)      56         76          73      140       67      178     (287)
Net earnings (loss) before
  minority interests............    (280)    (272)      15         (1)         (1)     111      (26)      89     (114)
Net earnings (loss).............    (280)    (272)      (9)       (45)        (44)      47      (82)       2     (189)
Pro forma basic net earnings
  (loss) per ordinary
  share(2)......................   (5.01)   (4.86)   (0.16)     (0.80)      (0.79)    0.84    (1.47)    0.04    (3.38)
BALANCE SHEET DATA (END OF
  PERIOD):
Working capital(3)..............  $  456   E  442   E  296     $  683      E  662   E   63   E  388   E  435   E  717
Total assets....................   8,515   8,258..   6,511      7,801       7,566    6,403    5,802    5,388    5,922
Short-term and long-term
  borrowings....................   1,750    1,698    1,935      1,562       1,515    1,895    1,914    1,855    2,359
Combined equity(4)..............   2,739    2,657    1,238      2,821       2,736    1,250    1,024      936    1,147
OTHER DATA:
Depreciation and amortization of
  tangible and intangible
  assets........................  $  178   E  173   E  178     $  362      E  351   E  327   E  341   E  298   E  351
Capital expenditures on tangible
  fixed assets..................     136      132      162        385         373      408      447      387      416
Number of employees in thousands
  (end of period)...............    17.1     17.1     18.8       17.5        17.5     19.2     19.5     19.1     19.0
</TABLE>

- ---------------
(1) Hoechst acquired substantially all the 49% minority interest in its Mexican
    subsidiary, Grupo Celanese, in December 1998, and contributed it to
    Celanese. If this minority interest had been contributed to Celanese as of
    January 1, 1998, Celanese's operating profit for the year ended December 31,
    1998 and the six months ended June 30, 1998 would have been reduced by E30
    million and E15 million, respectively, for the amortization of goodwill
    associated with the acquisition. See also Note 4 to the Combined Financial
    Statements.

(2) Pro forma basic net earnings (loss) per share is calculated by dividing net
    earnings (loss) by the number of common shares expected to be outstanding
    upon the demerger, namely, 55,915,369.

(3) Working capital represents total combined current assets less total combined
    current liabilities.

(4) Combined equity increased significantly from 1997 to 1998, reflecting the
    contribution of net assets to Celanese by Hoechst prior to the demerger. The
    principal factors for this increase are the contribution of the minority
    interest in Grupo Celanese of E592 million, the contribution of Hoechst
    group receivables of E384 million, the transfer of other activities from
    Celanese to

                                        8
    Hoechst of E350 million, and the recognition of a deferred tax asset in
    connection with the contribution of the Dyneon equity investment of E109
    million. Dyneon is a joint venture with 3M in which Celanese has a 46%
    interest.

                                        9
<PAGE>   10

     The tables below present net sales, operating profit (loss), depreciation
and amortization and capital expenditures by segment.

<TABLE>
<CAPTION>
                                    SIX MONTHS ENDED JUNE 30,                     YEAR ENDED DECEMBER 31,
                                ---------------------------------   ---------------------------------------------------
                                     1999              1998              1998              1997              1996
                                ---------------   ---------------   ---------------   ---------------   ---------------
                                         % OF              % OF              % OF              % OF              % OF
                                        SEGMENT           SEGMENT           SEGMENT           SEGMENT           SEGMENT
                                  E      TOTAL      E      TOTAL      E      TOTAL      E      TOTAL      E      TOTAL
                                -----   -------   -----   -------   -----   -------   -----   -------   -----   -------
                                  (UNAUDITED)       (UNAUDITED)        (AUDITED)         (AUDITED)        (UNAUDITED)
                                ---------------   ---------------   ---------------   ---------------   ---------------
                                                           (IN MILLIONS, EXCEPT PERCENTAGES)
                                ---------------------------------------------------------------------------------------
<S>                             <C>     <C>       <C>     <C>       <C>     <C>       <C>     <C>       <C>     <C>
NET SALES
  Acetyl Products(1)..........    727      35       834      35     1,518      34     1,757      34     1,485      34
  Chemical Intermediates(1)...    417      20       512      21       920      20     1,123      22       906      21
  Acetate Products............    356      17       436      18       839      19       994      20       897      20
  Ticona......................    384      18       394      16       750      17       742      15       662      15
  Performance Products........    221      10       239      10       455      10       479       9       432      10
                                -----     ---     -----     ---     -----     ---     -----     ---     -----     ---
Segment Total.................  2,105     100     2,415     100     4,482     100     5,095     100     4,382     100
                                          ===               ===               ===               ===               ===
Other Activities(2)...........    318               426               827               848               639
Intersegment Eliminations.....    (57)              (86)             (150)             (168)             (140)
                                -----             -----             -----             -----             -----
Total Net Sales...............  2,366             2,755             5,159             5,775             4,881
                                =====             =====             =====             =====             =====
OPERATING PROFIT (LOSS)
  Acetyl Products.............    (31)     19        67      35       152      44       221      41       159      30
  Chemical Intermediates......     (4)      3        22      12        54      16        73      13        90      17
  Acetate Products............     11      (7)       51      27        94      27       149      27       161      30
  Ticona......................   (102)     64        35      18        53      15        57      10        55      10
  Performance Products........    (33)     21        15       8        (7)     (2)       47       9        72      13
                                -----     ---     -----     ---     -----     ---     -----     ---     -----     ---
Segment Total.................   (159)    100       190     100       346     100       547     100       537     100
                                          ===               ===               ===               ===               ===
Other Activities(2)...........   (100)              (89)             (163)             (266)             (321)
                                -----             -----             -----             -----             -----
Total Operating Profit
  (Loss)......................   (259)              101               183               281               216
                                =====             =====             =====             =====             =====
</TABLE>

<TABLE>
<CAPTION>
                                                         SIX MONTHS ENDED JUNE 30,        YEAR ENDED DECEMBER 31,
                                                       -----------------------------   -----------------------------
                                                           1999            1998            1998            1997
                                                       -------------   -------------   -------------   -------------
                                                              % OF            % OF            % OF            % OF
                                                             SEGMENT         SEGMENT         SEGMENT         SEGMENT
                                                        E     TOTAL     E     TOTAL     E     TOTAL     E     TOTAL
                                                       ---   -------   ---   -------   ---   -------   ---   -------
                                                        (UNAUDITED)     (UNAUDITED)      (AUDITED)       (AUDITED)
                                                       -------------   -------------   -------------   -------------
                                                                     (IN MILLIONS, EXCEPT PERCENTAGES)
                                                       -------------------------------------------------------------
<S>                                                    <C>   <C>       <C>   <C>       <C>   <C>       <C>   <C>
DEPRECIATION AND AMORTIZATION
  Acetyl Products....................................   52      33      42      30      85      29      77      30
  Chemical Intermediates.............................   31      19      27      19      56      19      50      19
  Acetate Products...................................   26      16      24      17      54      18      44      17
  Ticona.............................................   29      18      29      21      62      21      60      23
  Performance Products...............................   22      14      19      13      37      13      30      11
                                                       ---     ---     ---     ---     ---     ---     ---     ---
Segment Total........................................  160     100     141     100     294     100     261     100
                                                               ===             ===             ===             ===
Other Activities(2)..................................   13              37              57              66
                                                       ---             ---             ---             ---
Total Depreciation and Amortization..................  173             178             351             327
                                                       ===             ===             ===             ===
CAPITAL EXPENDITURES
  Acetyl Products....................................   45      41      24      17      70      21      75      22
  Chemical Intermediates.............................   22      20      43      30      97      28     120      36
  Acetate Products...................................   17      15      29      20      69      20      42      12
  Ticona.............................................   19      17      27      19      66      19      44      13
  Performance Products...............................    8       7      21      14      42      12      58      17
                                                       ---     ---     ---     ---     ---     ---     ---     ---
Segment Total........................................  111     100     144     100     344     100     339     100
                                                               ===             ===             ===             ===
Other Activities(2)..................................   21              18              29              69
                                                       ---             ---             ---             ---
Total Capital Expenditures...........................  132             162             373             408
                                                       ===             ===             ===             ===
</TABLE>

- ---------------
(1) Includes inter-segment sales.

(2) Other Activities include other chemicals business lines, consisting
    primarily of inorganic chemical businesses, such as phosphorous, chlorine
    and chlorine derivative products, as well as a small business in ethylene
    oxide and ethylene glycol chemical products; a polyester staple and bottle
    resins business in Canada; generic pharmaceuticals, which, until its sale in
    September 1999, were conducted through Celanese's former subsidiary, Copley
    Pharmaceutical; general corporate functions; and companies which provide
    infrastructure and procurement services.

                                        9
<PAGE>   11

                                  RISK FACTORS

     Your investment in the Celanese shares involves several risks. The
following is a discussion of the most significant risks involved in an
investment in the Celanese shares. You should consider these risks carefully
together with the information and financial data set forth in this prospectus,
before deciding whether an investment in Celanese is suitable for you.

CYCLICALITY IN THE INDUSTRIAL CHEMICALS INDUSTRY HAS IN THE PAST AND MAY IN THE
FUTURE RESULT IN REDUCED OPERATING MARGINS OR OPERATING LOSSES

     The basic chemicals industry is subject to significant cyclicality which
includes periods of low prices during periods of excess capacity which
negatively impact Celanese's operating margins and may result in operating
losses. Typically, periods of inadequate capacity and rising demand lead
chemical producers to increase capacity. In the past, these capacity increases
have led to overcapacities because they have exceeded demand growth. While
periods of inadequate capacity have been characterized by increased selling
prices and higher operating margins, periods of overcapacity have resulted in
declining selling prices and reductions in the use of existing production
capacity, both of which have resulted in lower operating margins or operating
losses. Celanese believes that the basic chemicals industry, particularly in the
commodity portions of the acetyl and acrylic chain products manufactured by
Celanese, is currently characterized by overcapacity, and that there may be
further capacity additions in the next few years. Celanese cannot assure you
that future growth in demand will be sufficient to absorb current overcapacity
or future capacity additions without significant downward pressure on prices and
adverse effects on operating results.

CELANESE'S OPERATING MARGINS MAY DECREASE IF IT CANNOT PASS ON INCREASED RAW
MATERIAL PRICES TO CUSTOMERS OR IF PRICES FOR ITS PRODUCTS DECREASE FASTER THAN
RAW MATERIAL PRICES

     Significant variations in the costs and availability of raw materials and
energy may negatively affect Celanese's operating results. Celanese purchases
significant amounts of natural gas, ethylene and propylene to produce several
basic chemicals and wood pulp from reforested trees to produce cellulose
acetate. Celanese also purchases significant amounts of natural gas, coal,
electricity and fuel oil to supply the energy required in its production
processes. The prices and availability for these raw materials and energy vary
with market conditions and may be highly volatile. There have been in the past,
and may be in the future, periods of time during which raw material price
increases cannot be passed on to customers. Even in periods during which raw
material prices decrease, Celanese may suffer decreasing operating profit
margins, if raw material price reductions occur at a slower rate than decreases
in the selling prices of Celanese's products. Celanese typically does not enter
into hedging arrangements with respect to prices of raw materials.

ENVIRONMENTAL LIABILITIES AND COMPLIANCE COSTS MAY HAVE A SIGNIFICANT NEGATIVE
EFFECT ON CELANESE'S OPERATING RESULTS

     Costs related to Celanese's obligations and potential obligations under
environmental laws for remediation of contaminated sites may have a significant
negative impact on its operating results. These include obligations related to
sites Celanese currently owns or operates, formerly owned or operated, or where
waste from its operations was disposed. Celanese also has obligations related to
the indemnity agreement contained in the demerger and transfer agreement between
Celanese AG and Hoechst AG. See "Relationships and Third Party
Transactions -- Relationships with Hoechst." Celanese's accruals for
environmental remediation obligations may be insufficient if the assumptions
underlying those accruals prove incorrect or if Celanese is held responsible for
currently undiscovered contamination. See "Celanese has an obligation to pay
amounts to Hoechst some of which are not yet determinable" and "Business --
Environmental and Other Regulations."

                                       10
<PAGE>   12

     Furthermore, Celanese is involved in several claims, lawsuits and
administrative proceedings relating to environmental matters. An adverse outcome
in any of these might have a significant negative impact on Celanese's operating
results.

     Stricter environmental, safety and health laws and enforcement policies
could result in substantial costs and liabilities to Celanese and could subject
Celanese's handling, manufacture, use, reuse or disposal of substances or
pollutants to more rigorous scrutiny than at present. Consequently, compliance
with these laws could result in significant capital expenditures as well as
other costs and liabilities and materially adversely affect Celanese's business
and operating results.


     Stricter environmental policies may also affect demand for Celanese's
products. For example, in 1999, for environmental reasons, California and the
United States Environmental Protection Agency have proposed that usage of Methyl
Tertiary Butyl Ether, or MTBE, a gasoline additive manufactured by some of
Celanese's methanol customers, be phased out or significantly reduced over
several years. These measures are likely to lead to reduced usage of MTBE and
therefore result in increased overcapacity in methanol, adversely affecting
prices for methanol and Celanese's other products derived from methanol. See
"Business -- Acetyl Products."


A FAILURE TO COMPETE SUCCESSFULLY MAY REDUCE CELANESE'S OPERATING PROFITS

     Celanese operates in highly competitive industries where the actions of
competitors could reduce Celanese's profitability and market share. In the
Acetyl Products, Chemical Intermediates, Acetate Products, and Performance
Products segments, Celanese competes primarily on the basis of price, service
and reliability of product and supply. In the Ticona segment, Celanese competes
with technical polymer producers primarily on the basis of product
differentiation, innovation, quality and price. Significant product innovations,
technical advances or the intensification of price competition by competitors,
could harm Celanese's operating results.

FAILURE TO DEVELOP NEW PRODUCTS AND PRODUCTION TECHNOLOGIES MAY HARM CELANESE'S
COMPETITIVE POSITION

     Celanese's operating results, especially in its Ticona and Performance
Products segments, significantly depend on the development of commercially
viable new products and production technologies. If Celanese is unsuccessful in
developing new products and production processes in the future, its competitive
position and operating results will be negatively affected.

CELANESE'S PRODUCTION FACILITIES HANDLE THE PROCESSING OF SOME VOLATILE AND
HAZARDOUS MATERIALS WHICH SUBJECT CELANESE TO OPERATING RISKS WHICH COULD
ADVERSELY AFFECT CELANESE'S OPERATING RESULTS

     Celanese's operations are subject to the operating risks associated with
chemical manufacturing, including the related storage and transportation of raw
materials, products and wastes. These hazards include, among other things:

     - Pipeline and storage tank leaks and ruptures;

     - Explosions; and

     - Discharges or releases of toxic or hazardous substances.

     These operating risks can cause personal injury, property damage and
environmental contamination, and may result in the shutdown of affected
facilities and the imposition of civil or criminal penalties. The occurrence of
any of these events may materially adversely affect the productivity and
profitability of a particular manufacturing facility and Celanese's operating
results.

     Celanese maintains property, business interruption and casualty insurance
which it believes is in accordance with customary industry practices, but
Celanese cannot provide any assurance that this insurance will be adequate to
cover fully all potential hazards incident to its business.

     For more detailed information on environmental issues, see
"Business -- Environmental and Other Regulation."

                                       11
<PAGE>   13

CELANESE HAS NO CURRENT INTENTION OF PAYING DIVIDENDS IN RESPECT OF 1999
EARNINGS

     Celanese has no current intention of paying dividends in respect of 1999
earnings. Under German law, dividends are payable only out of net income and
retained earnings of the parent company as shown in the parent company's
unconsolidated statutory annual financial statements, as adopted and approved by
resolutions of the management board and the supervisory board of the parent
company, not from the profits of the parent company and its consolidated
subsidiaries.

PLUMBING LITIGATION COULD HAVE A NEGATIVE IMPACT ON CELANESE'S OPERATING RESULTS
AND CASH FLOWS


     A U.S. holding company for Celanese's operations in North America has been
named as a defendant in a series of lawsuits alleging that plastics manufactured
by it and other companies that were used in the production of plumbing systems
for residential property were defective or caused those plumbing systems to
fail. Some of those lawsuits have been settled, but others are still pending.
These cases have involved substantial claims for damages, and Celanese's results
of operations in recent years have been adversely affected by these cases.
Celanese has established reserves for the litigation and has received payments
from insurance companies under product liability insurance policies. No
assurance can be given, however, that Celanese's litigation reserves will be
adequate or that Celanese will fully recover claims under its insurance
policies. As a result, the plumbing cases could continue to have a material
adverse effect on Celanese's results of operations and cash flows in any given
year. See "Business -- Legal Proceedings -- Plumbing Actions", Note 19 to the
Historical Combined Financial Statements and Note 6 to the Unaudited Interim
Combined Financial Statements contained elsewhere in this Prospectus.


FAILURE TO ADDRESS THE YEAR 2000 ISSUES MAY LEAD TO DISRUPTIONS IN CELANESE'S
BUSINESS AND MAY AFFECT CELANESE'S OPERATING RESULTS

     Failure to remediate any Year 2000 issues in Celanese's or third party's
computer systems may negatively affect Celanese's business and operating
results. Year 2000 issues relate to the problems that computer systems
experience when handling dates beyond December 31, 1999. For example, Year 2000
problems occurring in Celanese's, its customers', its suppliers' or other third
parties' computer systems could cause:

     - Disruptions to Celanese's manufacturing activities resulting in products
       not being available or not meeting required quality standards;

     - Unplanned production shutdowns with safety or environmental consequences;
       and

     - Interruption in or failure of routine business data processing
       activities.

     Celanese is assessing both the internal readiness of its computer systems
and the compliance of computer systems of a number of significant customers and
suppliers for handling the Year 2000 issue. Celanese's inability to implement
changes necessary to address the Year 2000 issue could have a material adverse
effect on Celanese's operating results. In addition, the failure of some of
Celanese's significant customers and suppliers to address the Year 2000 issue
could have a material adverse effect on Celanese's business and operating
results.


     For a more detailed discussion of Celanese's efforts relating to year 2000
issues, see "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Year 2000."


FLUCTUATIONS IN EXCHANGE RATES MAY AFFECT CELANESE'S OPERATING RESULTS

     As Celanese conducts a significant portion of its operations outside the
euro zone, fluctuations in currencies of countries outside the euro zone,
especially the U.S.$, can materially adversely affect Celanese's operating
results. For example, changes in currency exchange rates may affect:

     - the relative prices at which Celanese and competitors sell products in
       the same market; and

     - the cost of items required in Celanese's operations.

                                       12
<PAGE>   14

From time to time, Celanese uses financial instruments to hedge its exposure to
foreign currency fluctuations. The amount of foreign currency forward contracts
at December 31, 1998 was E273 million.

CELANESE WAS NOT PREVIOUSLY OPERATED AS A SEPARATE STRATEGIC ENTITY AND, AS A
RESULT, ITS COMBINED FINANCIAL STATEMENTS MAY NOT BE INDICATIVE OF CELANESE'S
HISTORICAL FINANCIAL CONDITION OR FUTURE FINANCIAL PERFORMANCE

     The Combined Financial Statements included in this prospectus may not be
indicative of Celanese's future financial performance. This is because these
statements do not necessarily reflect the historical financial condition,
results of operations and cash flows of Celanese as they would have been had it
been operated as a single strategic entity during the periods presented.

SIGNIFICANT EXPENSES AND RESTRUCTURING CHARGES MAY RESULT FROM CELANESE'S
RE-EVALUATION OF ITS BUSINESS PORTFOLIO

     Celanese has begun evaluating its business portfolio and has identified
several assets for possible divestiture, including Celgard and its chlorine and
chlorine derivatives business lines and its ethylene oxide and ethylene glycol
business lines. Celanese has entered into discussions with a potential buyer for
its chlorine and chlorine derivatives business lines, and under the proposed
terms of the agreement currently being negotiated would expect to record a loss
in the second half of 1999 of between E80 million and E90 million related to the
disposition of these business lines. However, Celanese is also internally
considering other options for these business lines. Several of the businesses
Celanese is considering for divestiture may need to be restructured to
facilitate their disposal, and there can be no assurance that Celanese will be
able to find attractive means of exiting from these businesses and therefore
could realize significant losses in connection with their sales. If Celanese is
unable to sell some of these operations, the costs of possible plant shutdowns,
both in terms of employee severance costs and environmental costs associated
with permanently closing facilities, could be significant. If Celanese decides
to continue to operate these businesses, significant capital improvements will
be needed to achieve a competitive position in the marketplace.

     In addition, Celanese is developing plans to reduce its workforce by 1,000
by the end of the year 2000, and Celanese expects to record some special charges
in connection with this workforce reduction before the end of 1999, the extent
of which are presently not quantifiable. Celanese also expects to incur special
charges in connection with prepayment penalties and other costs associated with
the refinancing of its indebtedness as well as other costs related to the
demerger of between E70 million and E80 million in the second half of 1999.
Based on the current refinancing commitments, Celanese believes that the costs
of refinancing its debt will be recovered to some extent in future periods
through lower costs of financing in the second half of 1999.

     As a result of the current difficult market conditions in the chemicals
industry, the anticipated net loss associated with the dispositions contemplated
for the second half of 1999 and special charges associated with the reduction of
Celanese's workforce, the refinancing of Celanese's indebtedness and other costs
related to the demerger, Celanese expects that it will incur significant
operating losses in the second half of 1999.

     Celanese may also decide to restructure portions of its existing businesses
in the future and, as a result, may incur material restructuring charges. If
material restructuring charges occur, Celanese's operating results could be
affected.

KUWAIT PETROLEUM CORPORATION, WHO INDIRECTLY HOLDS A SIGNIFICANT NUMBER OF
SHARES, MAY BE ABLE TO BLOCK SOME CORPORATE ACTIONS

     Upon completion of the demerger, Kuwait Petroleum Corporation will
indirectly own approximately 25.8% of the Celanese shares. Kuwait Petroleum
Corporation may have the ability, as a matter of German corporate law, to block
some corporate actions by Celanese such as mergers, spinoffs and capital
measures which require either a majority of 75% of the votes cast or 75% of the
share capital represented at a
                                       13
<PAGE>   15

shareholders' meeting. Celanese is not aware of any voting agreements or
agreements of any kind between Kuwait Petroleum Corporation and any of
Celanese's other shareholders. In addition, an officer of Kuwait Petroleum
Corporation has been elected as one of the shareholder representatives on the
Supervisory Board of Celanese.

CELANESE HAS AN OBLIGATION TO PAY AMOUNTS TO HOECHST SOME OF WHICH ARE NOT YET
DETERMINABLE

     Under the demerger agreement, Celanese has agreed to indemnify Hoechst for
environmental liabilities that Hoechst may incur with respect to Celanese's
German production sites, which were transferred from Hoechst to Celanese in
connection with the demerger. In the demerger agreement, Celanese also agreed to
indemnify Hoechst against liabilities for environmental contamination arising
under 19 divestiture agreements regarding chemical participations, businesses or
assets entered into by Hoechst prior to the demerger. As the indemnification
obligations depend on the occurrence of unpredictable future events, the costs
associated with them are not yet determinable and may materially affect business
operating results.

     Celanese's obligation to indemnify Hoechst in connection with the
divestiture agreements is subject to the following thresholds:

     - Celanese will indemnify Hoechst for the total amount of these liabilities
       up to E250 million;

     - Hoechst will bear the full amount of those liabilities between E250
       million and E750 million; and

     - Celanese will indemnify Hoechst for one third of those liabilities for
       amounts exceeding E750 million.


Also, Celanese has undertaken in the demerger agreement to indemnify Hoechst to
the extent that Hoechst is required to discharge liabilities, including tax
liabilities, in relation to assets included in the demerger, where such
liabilities have not been demerged due to transfer or other restrictions. Under
the demerger agreement Celanese also assumed responsibility for 50% of the costs
incurred in connection with the demerger, estimated at E52 million in total, and
50% of the applicable real estate transfer taxes, estimated at E21 million in
total. Under the demerger agreement, Celanese will also be responsible, directly
or indirectly, for all obligations to past employees of Hoechst businesses that
were demerged to Celanese. Hoechst has agreed to bear 80% of the financial
obligations arising in connection with the government investigation and
litigation associated with the sorbates industry for price fixing described
under "Business -- Legal Proceedings -- Antitrust", and Celanese has agreed to
bear the remaining 20%.


                                       14
<PAGE>   16

           CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     You are cautioned that this prospectus contains forward-looking statements
within the meaning of Section 27A(i)(1) of the Securities Act of 1933, as
amended, and Section 21E(i)(1) of the Securities Exchange Act of 1934, as
amended. The "safe-harbor" for forward-looking statements provided under those
sections does not apply to statements made in connection with initial public
offerings.

     You can identify forward-looking statements by, among other things, the use
of forward-looking language, such as "anticipate," "believe," "estimate,"
"intend," "plan," "project," "expect" and similar expressions. In addition,
statements relating to the following aspects of Celanese's business may contain
forward-looking statements:

     - Celanese's expected future financial position;
     - Future results of operations;
     - Future cash flows;
     - Dividends;
     - Business strategy;
     - Financing plans;
     - Budgets;
     - Projected costs and capital expenditures;
     - Future competitive position;
     - Growth opportunities of Celanese or its products;
     - Celanese's ability to divest some of its activities;
     - Benefits from new technology; and
     - Plans and objectives of management for future operations.

     Forward-looking statements reflect the current expectations, estimates and
projections of Celanese's management about future events. These statements are
not guarantees of future performance and involve risks and uncertainties that
are difficult to predict. They are based upon assumptions as to future events
that may not prove to be accurate. Therefore, many factors could cause the
actual results, performance or achievements of Celanese to differ materially
from any future results, performance or achievements that may be expressed or
implied by any forward-looking statements. For a discussion of factors that
could cause actual results to differ, please see the discussion under "Risk
Factors" contained in this prospectus.

     Celanese does not intend, and does not assume any obligation, to update
these forward-looking statements.

                                       16
<PAGE>   17

                           EXCHANGE RATE INFORMATION

     On January 1, 1999, Germany and 10 other member states of the European
Union introduced the euro or E as their common currency alongside their own
sovereign currencies. These euro zone countries established fixed conversion
rates between their sovereign currencies, including the Deutsche Mark or DM.
Currency exchanges traded the E beginning on January 4, 1999. The affected
sovereign currencies are scheduled to remain legal tender until January 1, 2002
when they will be withdrawn. Beginning January 1, 2002, new E denominated bills
and coins will be issued.

     Celanese began using the E as its reporting currency on January 1, 1999 and
will pay any dividends on its shares in E. Furthermore, prices quoted for the
Celanese shares on the Frankfurt Stock Exchange will be quoted in E.
Fluctuations in the exchange rate between the E and the U.S.$ will affect:

     - The U.S.$ equivalent for dividends received by U.S. holders of Celanese
       shares; and

     - The trading market price of the Celanese shares on the Frankfurt and New
       York Stock Exchanges.

     The table below sets forth the noon buying rates for the Deutsche Mark
versus the U.S.$, restated in E for all periods prior to January 1, 1999, and,
for all subsequent periods, sets forth the noon buying rates for the E in U.S.$.
For the calculation of the E amounts for all periods prior to December 31, 1998,
Celanese has restated the applicable noon buying rate for the DM per U.S.$ into
E at the official fixed DM/E conversion rate of DM 1.95583 per E1.00. This
restatement matches the restatement into euro of Celanese's Combined Financial
Statements, which, for all periods prior to January 1, 1999, we prepared in
Deutsche Mark and restated the DM amounts into euro. Celanese does not represent
that the U.S.$ amounts referred to below could have been or could be converted
into E at any particular rate indicated. The average amounts set forth below
under "Average" are calculated as the average of the noon buying rates on the
last business day of each month.


<TABLE>
<CAPTION>
YEAR                                           LOW      HIGH    AVERAGE    END
- ----                                          ------   ------   -------   ------
<S>                                           <C>      <C>      <C>       <C>
1994........................................  1.1096   1.3109   1.2134    1.2622
1995........................................  1.2528   1.4418   1.3715    1.3634
1996........................................  1.2493   1.3626   1.2978    1.2711
1997........................................  1.0398   1.2689   1.1244    1.0871
1998........................................  1.0548   1.2178   1.1115    1.1733
1999 (through October 21)...................  1.0139   1.1812   1.0720    1.0808
</TABLE>


     For a more complete discussion of exchange rate fluctuations and the
hedging techniques used by Celanese to manage its exposure to these
fluctuations, please see "Risk Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

                                USE OF PROCEEDS

     Celanese will not receive any proceeds from the sale of the shares offered
in the redistribution.

                                       16
<PAGE>   18

                                DIVIDEND POLICY

     The payment and amount of any dividends will depend on Celanese's current
and future earnings, cash flow, financial condition and other factors. The
Celanese shares offered by this prospectus are eligible for any dividends
declared for the year ending December 31, 1999 and subsequent periods. Celanese
has no current intention of paying dividends in respect of 1999 earnings.
Dividends are subject to recommendation by the Celanese supervisory and
management boards and the approval of the shareholders at Celanese's ordinary
general meeting. Under German law, dividends are payable only out of balance
sheet profits as shown in the unconsolidated annual financial statements of
Celanese AG, as adopted and approved by resolutions of the Celanese management
board and the Celanese supervisory board, not from the consolidated profits of
Celanese. The management of Celanese has indicated that in determining the
dividend policy of Celanese, it will consider what portion of the cash flow
generated by Celanese should be paid as dividends and what portion should be
used in other ways to enhance shareholder value, such as through share
repurchases, reduction of debt or capital investments.

                                       18
<PAGE>   19

                        SELECTED COMBINED FINANCIAL DATA

     The following table presents selected combined financial information of
Celanese. You should read this table in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations," the
audited Combined Financial Statements, the unaudited Condensed Combined
Financial Statements and the notes to those statements that are included
elsewhere in this prospectus. All the combined financial data have been prepared
in accordance with U.S. GAAP.

     The statement of operations and balance sheet data set forth below for the
fiscal years 1998 and 1997 are derived from the audited Combined Financial
Statements included elsewhere in this prospectus and should be read in
conjunction with those financial statements and the notes thereto. The statement
of operations and balance sheet data for the years ended 1996, 1995 and 1994 are
derived from unaudited combined financial statements not included in this
prospectus. The statement of operations and balance sheet data set forth below
for the six-month periods ending June 30, 1999 and 1998 are derived from the
unaudited Condensed Combined Financial Statements appearing elsewhere in this
prospectus. Both the data for the years 1996, 1995 and 1994 and the interim six
months data have been prepared on a basis consistent with that of the audited
Combined Financial Statements and, in the opinion of Celanese's management,
include all adjustments, consisting only of normal recurring accruals, necessary
for a fair presentation. Results of operations for the six months ended June 30,
1999 are not necessarily indicative of results to be expected for the full
fiscal year.

     The Combined Financial Statements for periods ending prior to January 1,
1999 have been prepared in Deutsche Mark and were restated from Deutsche Mark to
E using the Official Fixed Conversion Rate at January 1, 1999. For periods
ending after December 31, 1998, Celanese's financial statements have been
prepared in E directly instead of being restated from DM into E. Amounts shown
in U.S.$ are unaudited and, solely for your convenience, for the year ended
December 31, 1998 and for the six months ended June 30, 1999, have been
converted from E at an exchange rate of U.S.$1.0310 per E1.00, the noon buying
rate at June 30, 1999. See also Note 1 to the Combined Financial Statements.

<TABLE>
<CAPTION>
                                      SIX MONTHS ENDED
                                          JUNE 30,                                 YEAR ENDED DECEMBER 31,
                                -----------------------------   --------------------------------------------------------------
                                  1999       1999      1998         1998        1998      1997      1996      1995      1994
                                --------   --------   -------   ------------   -------   -------   -------   -------   -------
                                         (UNAUDITED)            (UNAUDITED)        (AUDITED)               (UNAUDITED)
                                -----------------------------   ------------   -----------------   ---------------------------
                                 U.S.$        E          E         U.S.$          E         E         E         E         E
                                --------   --------   -------   ------------   -------   -------   -------   -------   -------
                                   (IN MILLIONS, EXCEPT NET INCOME PER ORDINARY SHARE, PERCENTAGES AND NUMBER OF EMPLOYEES)
<S>                             <C>        <C>        <C>       <C>            <C>       <C>       <C>       <C>       <C>
STATEMENT OF OPERATIONS DATA
  (FOR PERIOD):
Net sales.....................  $2,439..   E 2,366    E2,755       $5,319      E5,159    E5,775    E4,881    E4,922    E4,798
Cost of sales.................  2,111..      2,047     2,217        4,298       4,169     4,576     3,861     3,686     3,747
Gross profit..................  328....        319       538        1,021         990     1,199     1,020     1,236     1,051
Selling, general and
  administrative expenses.....      325        315       365          619         600       655       531       524       642
Research and development
  expenses....................       48         47        63          127         123       149       143       128       139
Special charges(1)............      211        205        15          102         100       103       121       268       371
Operating profit (loss)(2)....     (267)      (259)      101          189         183       281       216       374      (110)
Interest and other income,
  net(3)......................        4          4        21           69          67        77        93       109       103
Income tax expense
  (benefit)...................        9          9        65          121         117        93       149       176       (98)
Minority interests............        -          -        24           44          43        64        56        87        75
Net earnings (loss)...........     (280)      (272)       (9)         (45)        (44)       47       (82)        2      (189)
Pro forma basic net earnings
  (loss) per ordinary
  share(4)....................    (5.01)     (4.86)    (0.16)       (0.80)      (0.79)     0.84     (1.47)     0.04     (3.38)
BALANCE SHEET DATA (END OF
  PERIOD):
Working capital(5)............  $   456    E   442    E  296       $  683      E  662    E   63    E  388    E  435    E  717
Total assets..................    8,515      8,258     6,511        7,801       7,566     6,403     5,802     5,388     5,922
Debt..........................    1,750      1,698     1,935        1,562       1,515     1,895     1,914     1,855     2,359
Combined equity(6)............    2,739      2,657     1,238        2,821       2,736     1,250     1,024       936     1,147
</TABLE>

                                       18
<PAGE>   20

<TABLE>
<CAPTION>
                                        SIX MONTHS ENDED
                                            JUNE 30,                                 YEAR ENDED DECEMBER 31,
                                  -----------------------------   --------------------------------------------------------------
                                    1999       1999      1998         1998        1998      1997      1996      1995      1994
                                  --------   --------   -------   ------------   -------   -------   -------   -------   -------
                                           (UNAUDITED)            (UNAUDITED)        (AUDITED)               (UNAUDITED)
                                  -----------------------------   ------------   -----------------   ---------------------------
                                   U.S.$                             U.S.$
                                  --------   --------   -------   ------------   -------   -------   -------   -------   -------
                                     (IN MILLIONS, EXCEPT NET INCOME PER ORDINARY SHARE, PERCENTAGES AND NUMBER OF EMPLOYEES)
<S>                               <C>        <C>        <C>       <C>            <C>       <C>       <C>       <C>       <C>
OTHER DATA:
Operating margin (%)............   (10.95)    (10.95)     3.67         3.55        3.55      4.87      4.43      7.60     (2.29)
Depreciation and amortization of
  tangible and intangible
  assets........................  $   178       E173      E178       $  362        E351      E327      E341      E298      E351
Capital expenditures on tangible
  fixed assets..................      136        132       162          385         373       408       447       387       416
Number of employees (end of
  period) in thousands..........     17.1       17.1      18.8         17.5        17.5      19.2      19.5      19.1      19.0
</TABLE>

- ---------------
(1) Special charges represent charges in the applicable period for the
    impairment of goodwill and fixed assets, litigation charges and
    restructuring charges, which include employee termination costs, plant and
    office closures and other costs. See also Note 21 to the Combined Financial
    Statements and Note 5 to the unaudited Interim Combined Financial
    Statements.

(2) Hoechst acquired substantially all the 49% minority interest in its Mexican
    subsidiary, Grupo Celanese, in December 1998, and contributed it to
    Celanese. If this minority interest had been contributed to Celanese as of
    January 1, 1998, Celanese's operating profit for the year ended December 31,
    1998 and the six months ended June 30, 1998 would have been reduced by E30
    million and E15 million, respectively, for the amortization of goodwill
    associated with the acquisition. See also Note 4 to the Combined Financial
    Statements.

(3) Interest and other income, net, represents equity in net earnings of
    affiliates, interest expense, and interest and other income, net, as defined
    in Celanese's Combined Financial Statements.

(4) Pro forma basic net earnings (loss) per share is calculated by dividing net
    earnings (loss) by the number of common shares expected to be outstanding
    upon the demerger, namely, 55,915,369.

(5) Working capital represents total combined current assets less total combined
    current liabilities. The increase in working capital from 1997 to 1998
    reflects an increase in net receivables with Hoechst of E374 million, an
    increase in net third party receivables of E107 million, an increase of E64
    million in current deferred taxes and a decrease of E64 million in short
    term borrowings and current installments of long term debt.

(6) Combined equity increased significantly from 1997 to 1998 and reflects the
    contribution of net assets to Celanese by Hoechst prior to the demerger. The
    principal factors for this increase are the contribution of the minority
    interest in Grupo Celanese of E592 million, the contribution of Hoechst
    group receivables amounting to E384 million, the transfer of some other
    activities from Celanese to Hoechst of E350 million and the recognition of a
    deferred tax asset in connection with the contribution of the Dyneon equity
    investment of E109 million. Dyneon is a joint venture with 3M in which
    Celanese has a 46% interest.

                                       19
<PAGE>   21

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     You should read the following discussion and analysis of the financial
condition and the results of operations of Celanese together with Celanese's
Combined Financial Statements and the unaudited Condensed Combined Financial
Statements and the notes to those financial statements included elsewhere in
this prospectus, which were prepared in accordance with U.S. GAAP.

INTRODUCTION

     Celanese was formed through the demerger of the principal industrial
chemicals businesses and some other businesses and activities from Hoechst as
part of Hoechst's realignment as a life sciences company. The businesses and
activities demerged principally comprise the basic chemicals, acetates and
technical polymers businesses formerly reported by Hoechst in its Celanese and
Ticona segments. See "Celanese." The Combined Financial Statements and Condensed
Combined Financial Statements included elsewhere in this prospectus reflect, for
the periods indicated, the financial condition, results of operations and cash
flows of the businesses transferred from Hoechst to Celanese. The Combined
Financial Statements and Condensed Combined Financial Statements assume that
Celanese, for the periods described, had existed as a separate legal entity with
five business segments, Acetyl Products, Chemical Intermediates, Acetate
Products, Ticona and Performance Products, as well as the other businesses and
activities of Hoechst transferred to Celanese in the demerger. The Combined
Financial Statements and Condensed Combined Financial Statements, which have
been carved out from the consolidated financial statements of Hoechst using the
historical results of operations and assets and liabilities of these businesses
and activities, reflect the accounting policies adopted by Hoechst in the
preparation of its financial statements and thus do not necessarily reflect the
accounting policies which Celanese might have adopted had it been an independent
company. Some costs have been reflected in the Combined Financial Statements and
Condensed Combined Financial Statements which are not necessarily indicative of
the costs that Celanese would have incurred had it operated as an independent,
stand-alone entity for all periods presented. These costs include allocated
Hoechst corporate overhead, interest expense and income taxes. Prior to the
demerger, the businesses and activities demerged to Celanese were not managed as
a single strategic business entity. These businesses and activities were
operated by separate management teams which coordinated with strategic
management at the Hoechst holding company level. In contrast, following the
demerger, Celanese will be managed as a single strategic entity.

     Effective January 1, 1999, Germany and 10 other member states of the
European union introduced the euro as their common currency and established
fixed conversion rates between their existing sovereign currency and the euro.
The Combined Financial Statements for each period presented on or before
December 31, 1998 have been prepared using the Deutsche Mark and have been
restated in euro using the official fixed conversion rate between the euro and
the Deutsche Mark of DM 1.95583 per E1.00. Accordingly, the Combined Financial
Statements for all periods prior to December 31, 1998 depict the same trends
that would have been presented had they been presented using the Deutsche Mark.
Because the combined financial information for those periods was originally
prepared using the Deutsche Mark, it is not necessarily comparable to financial
statements of other companies which originally prepared financial statements in
a European currency other than the Deutsche Mark and subsequently converted that
other currency into euros. See also Note 1 to the Combined Financial Statements
included elsewhere in this prospectus. Beginning January 1, 1999, Celanese's
financial statements are prepared in euro and are no longer restated from
Deutsche Mark into euro.

FACTORS AFFECTING CELANESE'S FINANCIAL PERFORMANCE

     Factors affecting Celanese's financial condition, cash flows and results of
operations are described below. For further discussion of these and other
factors that may adversely affect Celanese's business and financial results, see
"Risk Factors."

                                       20
<PAGE>   22

GENERAL ECONOMIC CONDITIONS

     Celanese operates in the global market and has customers in many countries.
Celanese has major facilities located throughout North America, Europe and the
Pacific Rim, including facilities in China, Japan, and Saudi Arabia operated
through joint ventures. Its principal customers are similarly global in scope,
and the prices of its most significant products are typically world market
prices. Consequently, Celanese's business and financial results are affected
directly and indirectly by world economic and political conditions. In recent
years the financial turmoil in Asia has adversely affected volumes sold by
Celanese to its Asian customers and has adversely affected selling prices
achievable in Asian and other markets.

HISTORICAL CYCLICALITY IN PARTS OF THE INDUSTRIAL CHEMICALS INDUSTRY

     Consumption of the basic chemicals which Celanese manufactures in the
commodity portions of the acetyl and acrylic chains, principally methanol,
formaldehyde, acetic acid and acrylic acid, has increased significantly over the
past 30 years. Despite this growth in consumption, producers have experienced
alternating periods of inadequate capacity and excess capacity for these
products. Periods of inadequate capacity, including some due to raw material
shortages, have usually resulted in increased selling prices and operating
margins. This has often been followed by periods of capacity additions, which
have resulted in declining capacity utilization rates, selling prices and
operating margins.

     Celanese expects that these cyclical trends in selling prices and operating
margins relating to capacity shortfalls and additions will likely persist in the
future, principally due to the continuing combined impact of five factors:

     - Significant capacity additions, whether through plant expansion or
       construction, can take two to three years to come on-stream and are
       therefore necessarily based upon estimates of future demand.

     - When demand is rising, competition to build new capacity may be
       heightened because new capacity tends to be more profitable, with a lower
       marginal cost of production. This tends to amplify upswings in capacity.

     - When demand is falling, the high fixed cost structure of the capital
       intensive chemicals industry leads producers to compete aggressively on
       price in order to maximize capacity utilization.

     - As competition in these products is focused on price, being a low-cost
       producer is critical to profitability. This favors the construction of
       larger plants, which maximize economies of scale, but which also lead to
       major increases in capacity which can outstrip current growth in demand.

     - Cyclical trends in general business and economic activity produce swings
       in demand for chemicals.

     Celanese believes that the basic chemicals industry, particularly in the
commodity portions of the acetyl and acrylic chain products manufactured by
Celanese, is currently characterized by overcapacity, and that there may be
further capacity additions in the next few years. Celanese believes that, as a
result, current difficult market conditions are likely to persist for at least
the next 12 months before any significant upturn in conditions can be expected.

COST OF RAW MATERIALS

     Celanese purchases significant amounts of natural gas, ethylene and
propylene from third parties for use in its production of basic chemicals in the
acetyl and acrylic chains, principally methanol, formaldehyde, acetic acid and
acrylic acid, as well as acrylates and oxo products. Celanese uses a portion of
its output of these chemicals, in turn, as inputs in the production of further
products in the Acetyl Products, Chemical Intermediates and Acetate Products
segments, as well as some products in the Ticona and Performance Products
segments. Celanese also purchases significant amounts of cellulose or wood pulp
for use in its production of cellulose acetate in the Acetate Products segment.
Celanese purchases

                                       21
<PAGE>   23

significant amounts of natural gas, electricity, coal and fuel oil to supply the
energy required in its production processes.

     While Celanese has agreements providing for the supply of natural gas,
ethylene, propylene, woodpulp, electricity, coal and fuel oil, the contractual
prices for these raw materials and energy vary with market conditions and may be
highly volatile. Factors which have caused volatility in Celanese's raw material
prices in the past and which may do so in the future, include:

     - Shortages of raw materials due to increasing demand, e.g., from growing
       uses or new uses;

     - Capacity constraints, e.g., due to construction delays, strike action or
       involuntary shutdowns;

     - The general level of business and economic activity; and

     - The direct or indirect effect of governmental regulation.

     Celanese typically does not enter into hedging arrangements with respect to
prices of raw materials. While Celanese seeks to balance increases in raw
material prices with corresponding increases in the prices of its products,
there have been in the past, and may be in the future, periods of time during
which there is a time lag before raw material price increases are passed on to
customers.

VARIATIONS IN EXCHANGE RATES

     Celanese's Combined Financial Statements for periods prior to January 1,
1999 have been prepared using the Deutsche Mark and are restated from Deutsche
Mark to E using the Official Fixed Exchange rate between the Deutsche Mark and
the euro. Starting in 1999, Celanese's financial statements are prepared in E. A
substantial portion of Celanese's assets, liabilities, revenues and expenses is
denominated in currencies other than the euro-zone currencies, principally the
U.S. dollar, and to a lesser extent in other currencies. Fluctuations in these
currencies' values against the E, and in the past against the DM, particularly
the value of the U.S. dollar, can have, and in the past have had, a direct and
material impact on Celanese's business and financial results. A decline in the
value of the U.S. dollar versus the E, for example, results in a decline in the
E value of Celanese's sales denominated in U.S. dollars and earnings due to
translation effects. As noted above, for periods prior to January 1, 1999,
Celanese's Combined Financial Statements have been restated from DM into E.
Celanese estimates that the translation effects of changes in the value of other
currencies against the DM reduced the fall in net sales by approximately 1% in
1998 and contributed to the increase in net sales in 1997 by 14% and that the
translation effects of changes in the value of other currencies against the E
contributed to the fall in net sales by approximately 1% in the first six months
of 1999. Celanese's exposure to transactional effects of variations in exchange
rates is greatly reduced by a high degree of overlap between the currencies in
which sales are denominated and the currencies in which the raw material and
other costs of goods sold are denominated.

     Celanese's policy with respect to limiting its exposure to transactional
effects of variations in exchange rates is to use financial instruments that
reduce such exposure. The principal instruments used are forward exchange
contracts generally with terms of less than one year. See "Market Risk" below
and "Risk Factors" and Note 18 to the Combined Financial Statements.

IMPACT OF SPECIAL CHARGES

     The Combined Financial Statements and unaudited Interim Combined Financial
Statements have in the past and may in the future be affected by special
charges. Special charges include provisions for restructuring and other unusual
expenses incurred outside the ordinary course of operations. See Note 21 to the
Combined Financial Statements and Note 5 to the unaudited Interim Combined
Financial Statements.

     The restructuring for which provisions have been taken was undertaken in
accordance with the strategies of achieving cost efficiencies through
rationalization and optimizing Celanese's portfolio. The restructuring is
expected to benefit Celanese through reduction of its fixed cost base and
through the disposal of non-core activities.
                                       22
<PAGE>   24

     The provisions for restructuring that have been recorded are normally
expected to be used in the fiscal year following the year of the provision and
the related benefits are therefore anticipated to be realized in the periods
immediately thereafter. Further restructuring provisions relating to the cost of
employee terminations, the cost of facility closures and other restructuring
costs may be incurred in the future, but their timing or extent cannot yet be
quantified.

RESULTS OF OPERATIONS

     The following table sets forth the net sales, and net sales expressed as a
percentage of total segment sales, excluding eliminations, and the operating
profit (loss), and operating profit (loss) expressed as a percentage of total
segment operating profit (loss), for each Celanese segment for the six months
ended June 30, 1999 and 1998 and the three years ended December 31, 1998.

<TABLE>
<CAPTION>
                                    SIX MONTHS ENDED JUNE 30,                      YEAR ENDED DECEMBER 31,
                                ----------------------------------   ---------------------------------------------------
                                      1999              1998              1998              1997              1996
                                ----------------   ---------------   ---------------   ---------------   ---------------
                                          % OF              % OF              % OF              % OF              % OF
                                        SEGMENT            SEGMENT           SEGMENT           SEGMENT           SEGMENT
                                  E     TOTAL(1)     E      TOTAL      E      TOTAL      E      TOTAL      E      TOTAL
                                -----   --------   -----   -------   -----   -------   -----   -------   -----   -------
                                  (UNAUDITED)        (UNAUDITED)        (AUDITED)         (AUDITED)        (UNAUDITED)
                                ----------------   ---------------   ---------------   ---------------   ---------------
                                                           (IN MILLIONS, EXCEPT PERCENTAGES)
                                                           ---------------------------------
<S>                             <C>     <C>        <C>     <C>       <C>     <C>       <C>     <C>       <C>     <C>
NET SALES
  Acetyl Products.............    727      35        834      35     1,518      34     1,757      34     1,485      34
  Chemical Intermediates......    417      20        512      21       920      20     1,123      22       906      21
  Acetate Products............    356      17        436      18       839      19       994      20       897      20
  Ticona......................    384      18        394      16       750      17       742      15       662      15
  Performance Products........    221      10        239      10       455      10       479       9       432      10
                                -----     ---      -----     ---     -----     ---     -----     ---     -----     ---
Segment Total.................  2,105     100      2,415     100     4,482     100     5,095     100     4,382     100
                                          ===                ===               ===               ===               ===
Other Activities..............    318                426               827               848               639
Intersegment Eliminations.....    (57)               (86)             (150)             (168)             (140)
                                -----              -----             -----             -----             -----
Total Net Sales...............  2,366              2,755             5,159             5,775             4,881
                                =====              =====             =====             =====             =====
OPERATING PROFIT (LOSS)
  Acetyl Products.............    (31)     19         67      35       152      44       221      41       159      30
  Chemical Intermediates......     (4)      3         22      12        54      16        73      13        90      17
  Acetate Products............     11      (7)        51      27        94      27       149      27       161      30
  Ticona......................   (102)     64         35      18        53      15        57      10        55      10
  Performance Products........    (33)     21         15       8        (7)     (2)       47       9        72      13
                                -----     ---      -----     ---     -----     ---     -----     ---     -----     ---
Segment Total.................   (159)    100        190     100       346     100       547     100       537     100
                                          ===                ===               ===               ===               ===
Other Activities..............   (100)               (89)             (163)             (266)             (321)
                                -----              -----             -----             -----             -----
Total Operating Profit
  (Loss)......................   (259)               101               183               281               216
                                =====              =====             =====             =====             =====
</TABLE>

- ---------------
(1) The percentages in this column under Operating Profit (Loss) represent the
    percentage contribution of each segment to the total operating loss of all
    segments.

FIRST HALF 1999 COMPARED WITH FIRST HALF 1998

     NET SALES

     Acetyl Products.  Net sales for the Acetyl Products segment decreased by
13% to E727 million in the first half of 1999 from E834 million in the first
half of 1998 primarily due to price decreases (18%) and unfavorable currency
movements (1%), partially offset by volume increases (6%). For example,
according to Tecnon Consulting, the U.S. average price of vinyl acetate monomer
in the first half of 1999 declined to 28 cents/lb. from 34.5 cents/lb. in the
first half of 1998. Average prices for ester products also showed a significant
decline between the two periods. These declining sales prices and the general
declines in other Acetyl Products reflect the adverse conditions in the global
chemical industry. Since June 30, 1999, some of this segment's products have
experienced price increases. Volumes were higher in the first half of 1999 due
to recovery of the Asian markets from the economic crisis that began in late
1997 and continued into

                                       23
<PAGE>   25

1998 and continued growth, particularly in vinyl acetate monomer, acetic acid
and the acetate esters products.

     Chemical Intermediates.  Net sales for the Chemical Intermediates segment
decreased by 19% to E417 million in the first half of 1999 from E512 million in
the first half of 1998 primarily due to price decreases (12%), volume decreases
(6%), and unfavorable currency movements (1%). The decreases in prices resulted
primarily from continuing downward pricing pressure on acrylic acid, butanol and
2-ethylhexanol due to continued industry overcapacity. For example, acrylic acid
prices declined an average of 5% and butanol and 2-ethylhexanol prices decreased
by an average of 27% as compared with price levels in the first half of 1998.
The volume decreases were primarily attributable to volume declines in the oxo
business line, as difficulties related to a planned capital improvement
prolonged a scheduled shutdown at the Bay City facility. These decreases were
partially offset by increased volumes in acrylates resulting from acrylic acid
capacity added at the Clear Lake, Texas facility in the second half of 1998.

     Acetate Products.  Net sales for the Acetate Products segment decreased by
18% to E356 million in the first half of 1999 from E436 million in the first
half of 1998 as a result of volume decreases (13%), price decreases (4%), and
unfavorable currency movements (1%). Cellulose acetate filament experienced
significantly lower volumes and weaker pricing as a result of declines in the
demand for acetate filament from the global fashion industry. Increased
competitive pressures resulted in volume losses as well as lower overall pricing
in the cellulose acetate tow business.

     Ticona.  Net sales for the Ticona segment decreased by 3% to E384 million
in the first half of 1999 from E394 million in the first half of 1998 primarily
as a result of price declines (3%), with little impact from volumes and currency
movements being relatively flat. The price declines were mainly attributable to
pricing pressure from Asian exports, particularly in Europe.

     Performance Products.  Net sales for the Performance Products segment
decreased by 8% to E221 million in the first half of 1999 from E239 million in
the first half of 1998, primarily as a result of decreases in sales for the OPP
films business (12%) and the separation products business (5%), partially offset
by an increase in the food ingredients business (4%). OPP film sales for the
first half of 1999, which represented 62% of sales in this segment, decreased
primarily because of lower selling prices in all product lines resulting from
worldwide overcapacity and the pass-through of lower raw material prices to
customers. An increase in volumes experienced in the Americas, resulting from an
expansion of the Mexican facility in 1998, was offset by slightly lower volumes
in Europe. Food ingredients sales for the first half of 1999, which represented
26% of total segment sales, increased primarily because of higher volumes, which
were partially offset by lower prices in the high intensity sweetener and
sorbates product lines. Lower prices in sorbates resulting from global
overcapacity and pricing pressure from Japanese and Chinese competitors were
partially offset by increased volumes, as volumes lost in 1998 were regained in
the first half of 1999. Lower prices in Sunett(R) were caused by competition
from sweetener substitutes and Chinese competitors. The high intensity
sweeteners product line experienced significant volume growth in part because of
a July 1998 approval by the U.S. Food and Drug Administration for the use of
Sunett(R) in liquid beverages. Separation products sales for the first half of
1999, which represented 12% of sales in this segment, decreased primarily as a
result of lower prices resulting from increased competition.

     Other Activities.  Net sales from Other Activities decreased by 25% to E318
million in the first half of 1999 compared to E426 million in the first half of
1998 as a result of decreases in sales in other chemicals, the staple and bottle
resins business of Celanese Canada and the generic pharmaceuticals business of
Celanese's former subsidiary Copley, which was sold in September 1999, which
were slightly offset by an increase in premiums earned by captive insurance
companies (see "Relationships and Third Party Transactions -- Relationships with
Hoechst"). Other chemicals consists primarily of the inorganic chemicals
business lines as well as other minor chemical activities which are not part of
the above-described chemical business segments. Sales of Other Activities in the
first half of 1999 were comprised of other chemicals (60%), the polyester staple
and bottle resins business (21%), generic pharmaceuticals (15%), and captive
insurance and other ancillary businesses (4%). Other Activities also include the
research activities previously conducted by Hoechst Research & Technology, which
have been phased out

                                       24
<PAGE>   26

over the past few years as well as general corporate functions and several
service companies, which do not have significant sales. In August 1999, Celanese
agreed to sell its 52% interest in Copley and in March 1999, Celanese Canada
announced a planned transaction involving the sale of its polyester staple and
bottle resins businesses. The decrease in sales in other chemicals resulted
primarily from lower prices in all businesses and lower volumes in the ethylene
oxide/ethylene glycol business. The lower prices in the inorganic chemicals
business were primarily due to pricing pressure from Asian exports. The lower
volumes and prices in the ethylene oxide/ethylene glycol business was primarily
due to some lost business with the former polyester fibers business of Hoechst,
which was sold at the end of 1998. The decrease in sales for Celanese Canada's
polyester staple and bottle resins business resulted from lower prices and
volumes due to weak markets and intense competition. The decrease in sales in
the generic pharmaceuticals business resulted from the continued erosion of
selling prices, primarily distributed products, which was partially offset by
increased volumes associated with the introduction of several new products. The
increase in premiums earned by the captive insurance companies resulted from
taking on new international Hoechst business. The insurance policies with
Hoechst are scheduled to expire in May 2000 and are not expected to be renewed.
Net sales of Other Activities do not include sales of Targor, Dyneon, Vinnolit
and the unconsolidated InfraServ affiliates, which are accounted for under the
equity method.

     COST OF SALES AND OTHER OPERATING EXPENSES

     Cost of Sales.  Cost of sales decreased by 8% to E2,047 million in the
first half of 1999 compared with E2,217 million in the first half of 1998. Cost
of sales as a percentage of sales increased to 87% in the first half of 1999
from 81% in the first half of 1998. The decrease in cost of sales was
principally attributable to lower cost of sales in the Chemical Intermediates,
Acetate Products and Other Activities segments, as cost of sales in the Acetyl
Products, Ticona and Performance Products segments remained relatively flat.
Cost of sales in the Acetyl Products segment remained essentially flat between
the two periods as volume increases were offset primarily by raw material price
decreases, particularly for ethylene, propylene and natural gas, as well as by
ongoing cost reduction efforts at all manufacturing locations. The Chemical
Intermediates segment experienced lower cost of sales in the first half of 1999
because of lower propylene costs and reduced oxo volumes resulting from the
difficulties at the Bay City facility discussed above. Within the Chemical
Intermediates segment, higher volumes in acrylates increased cost of sales but
these increases were offset by lower propylene prices. The Acetate Products
segment experienced lower cost of sales because of lower production volumes in
addition to a concentrated effort to significantly reduce costs at all
production facilities. The Ticona segment experienced a slight increase in cost
of sales resulting from a slight increase in volumes as raw material costs
remained relatively stable. In the Performance Products segment, cost of sales
decreased slightly as lower raw material costs were partially offset by
increased depreciation expense associated with the expansion of the Mexican
facility in the OPP films business line, and by increased cost of sales in the
food ingredients business due to higher volumes in high intensity sweetener and
sorbate products. Cost of sales in separation products remained flat as volumes
remained stable. Cost of sales in Other Activities decreased principally as a
result of decreased cost of sales in other chemicals, generic pharmaceuticals
and the staple and bottle resins business, which was partially offset by
increased cost of sales in the captive insurance companies. Other chemicals had
lower cost of sales primarily as a result of lower volumes in the ethylene
oxide/ethylene glycol business mentioned above. Generic pharmaceuticals had
lower cost of sales primarily as a result of lower costs associated with
distributed products and favorable manufacturing plant utilization. The
polyester staple and bottle resins business had lower costs of sales due to
favorable raw material costs and slightly lower volumes. Higher cost of sales of
the captive insurance business resulted from increased business with Hoechst and
its affiliates, which required higher insurance premiums to reinsurers.

     Selling, General and Administrative Expense.  Selling, general and
administrative expense decreased by 14% to E315 million in the first half of
1999 from E365 million in the first half of 1998. Selling, general and
administrative expense as a percentage of sales remained flat at 13%. Selling,
general and administrative expense was lower across most segments primarily as a
result of the completion of the installation of new SAP computer systems in 1998
and other cost reduction efforts.

                                       25
<PAGE>   27

     Research and Development Expense.  Research and development expense
decreased by 25% to E47 million in the first half of 1999 from E63 million in
the first half of 1998 principally as a result of the continuing impact of a
strategic reorientation of research, according to which most research activity
was to be undertaken by the operating businesses themselves instead of by a
separate research entity, with more emphasis to be placed on applied research
than on basic research. This decision led to lower personnel and overall
research and development expense related to Hoechst Research & Technology in the
United States, which did not have any activity in the first half of 1999 as
compared to E28 million in expense in the first half of 1998. The segments
experienced increased costs in the first half of 1999 as compared to the first
half of 1998 due to the assumption of some of the research activities previously
performed by Hoechst Research & Technology. Research and development expense as
a percentage of sales remained flat at 2% for both periods.

     Special Charges.  In the first half of 1999, Celanese recorded special
charges totaling E205 million, related to the plumbing cases (E128 million), the
U.S. antitrust actions relating to the sorbates industry (E38 million),
additional restructuring costs associated with the discontinuation of Hoechst
Research & Technology in the United States (E10 million), costs associated with
the closure of an acetaldehyde facility in France in the Acetyl Products segment
(E17 million), severance costs associated with downsizing in both the Acetate
Products (E6 million) and Chemical Intermediates (E3 million) segments and other
costs relating to the demerger (E3 million).

     In the first half of 1998, Celanese recorded special charges totaling E15
million, primarily related to restructuring costs associated with the
discontinuation of Hoechst Research & Technology in the United States (E5
million), and severance costs associated with downsizing in the Acetate Products
(E6 million) and Chemical Intermediates (E4 million) segments.

     Over the past few years, Celanese has recorded a total of E76 million in
restructuring costs related to the discontinuation of Hoechst Research &
Technology in the United States which was completed by June 30, 1999. Annual
cost savings from the discontinuation of these activities are estimated to be
approximately E34 million. Annual cost savings from the closure of the French
acetaldehyde facility and the downsizing in the first half of 1999 in the
Acetate Products and Chemical Intermediate segments are estimated to be
approximately E12 million.

     Other Operating Income (Expense).  Other operating income (expense)
decreased to a loss of E11 million in the first half of 1999 from income of E6
million in the first half of 1998. This decrease was primarily because of E10
million lower gains on the disposition of assets primarily related to the sale
of facilities in the United States and increased losses on foreign exchange
transactions of E7 million.

     OPERATING PROFIT

     Acetyl Products.  Operating profit for the Acetyl Products segment declined
to an operating loss of E31 million in the first half of 1999 from an operating
profit of E67 million in the first half of 1998. This decrease was primarily
attributable to the price and volume declines discussed above, compounded by raw
material price decreases occurring at a slower rate than decreases in selling
prices for this segment's products. These factors were slightly offset in part
by cost reduction efforts. The first half of 1999 was negatively affected by a
E17 million restructuring charge for the closure of Celanese's acetaldehyde
facilities in France and an increase in amortization of goodwill of E10 million
resulting from Hoechst acquiring substantially all the minority interest in
Grupo Celanese and contributing this interest to Celanese in December 1998.

     Chemical Intermediates.  Operating profit for the Chemical Intermediates
segment decreased to an operating loss of E4 million in the first half of 1999
from an operating profit of E22 million in the first half of 1998. Severe price
declines in 2-ethylhexanol and butanol, as mentioned above, and lesser price
declines in other oxo products were only partially offset by a favorable price
decline in propylene, the principal raw material used in this segment. In
addition, the operating profit in the oxo business line of the Chemical
Intermediates segment was negatively affected by an increase in average costs
primarily as a result of the difficulties at the Bay City facility discussed
above. Acrylates price declines were largely offset by the
                                       26
<PAGE>   28

decline in propylene costs. There was a positive effect on operating profit in
acrylates due to the positive effect of full operation of an additional acrylic
acid unit in the first half of 1999, which started up late in the first half of
1998.

     Acetate Products.  Operating profit for the Acetate Products segment
declined by 78% to E11 million in the first half of 1999 from E51 million in the
first half of 1998. This decrease was primarily attributable to declines in
sales volumes and sales prices discussed above. These factors were offset in
part by an aggressive cost reduction program begun in 1996 that has been
successful in improving operations and significantly reducing costs. The cost
reduction efforts accounted for a significant portion of the period-to-period
spending reduction. Operating profit for the Acetate Products segment in 1999
continues to experience the negative effects of the overcapacity in the market,
including costs associated with shutdowns of production lines, and the declines
in demand for acetate filament in the fashion industry.

     Ticona.  Ticona's operating profit declined to an operating loss of E102
million in the first half of 1999 from an operating profit of E35 million in the
first half of 1998. This decrease was primarily attributable to the recording of
a special charge of E128 million relating to the plumbing cases, discussed under
"Business -- Legal Proceedings -- Plumbing Actions". Excluding the effects of
this special charge, operating profit decreased by 26% to E26 million in the
first half of 1999 from E35 million in the first half of 1998. This decrease is
primarily attributable to lower selling prices as discussed above, as raw
material pricing remained relatively stable.

     Performance Products.  The Performance Products segment experienced an
operating loss of E33 million in the first half of 1999 as compared to an
operating profit of E15 million in the first half of 1998. The OPP films
business and the food ingredients business experienced decreases in operating
profit while the operating profit of the separation products business was
largely unchanged. The OPP films business recorded a loss of E10 million in the
first half of 1999 compared to minimal profit in the first half of 1998. This
was mainly a result of lower sales prices and increased expenses, including
depreciation, associated with the expansion of the Mexican OPP facility. The
food ingredients business recorded an operating loss of E28 million in the first
half of 1999 from an operating profit of E11 million in the first half of 1998.
This was principally due to a E38 million charge to income recorded in the first
half of 1999 relating to U.S. antitrust actions relating to the sorbates
industry. Separation products recorded an operating profit of E5 million in the
first half of 1999 as compared to E4 million in the first half of 1998. The
operating profit in separation products remained relatively flat as the lower
sales prices mentioned above were offset by lower overall costs.

     Other Activities.  Operating losses of Other Activities increased by 12% to
an operating loss of E100 million in the first half of 1999 from an operating
loss of E89 million in the first half of 1998. This increase was principally a
result of higher losses in other chemicals, the polyester staple and bottle
resins business as well as general corporate functions, offset by positive
effects associated with the discontinuation of Hoechst Research & Technology in
the United States. Other chemicals business had slightly higher operating losses
due to lower prices in all businesses as mentioned above. The polyester staple
and bottle resins business had higher operating losses due to significantly
lower prices. The costs of general corporate functions increased primarily due
to higher foreign exchange losses. The positive effect on the operating losses
of Other Activities associated with the discontinuation of Hoechst Research &
Technology in the United States was due to a reduction in operating losses. See
also "Business -- Research and Development."

     EQUITY IN NET EARNINGS OF AFFILIATES

     Equity in net earnings of affiliates increased by 17% to E14 million in the
first half of 1999 from E12 million in the first half of 1998. This increase was
mainly attributable to increased earnings in Celanese's investments in Targor, a
joint venture in which Celanese owns a 50% interest, which was partially offset
by a reduction in the earnings of Polyplastics, a joint venture in which
Celanese owns a 45% interest, and of InfraServ Hochst, in which Celanese owns a
27% interest.

                                       27
<PAGE>   29

     INTEREST EXPENSE

     Interest expense decreased by 9% to E60 million in the first half of 1999
from E66 million in the first half of 1998. This decrease was mainly as a result
of lower net average debt outstanding during the first half of 1999 compared to
the first half of 1998, which was partially offset by an increase in average
interest rates.

     INTEREST AND OTHER INCOME, NET

     Interest and other income, net increased by 27% to E42 million in the first
half of 1999 from E33 million in the first half of 1998. Interest and other
income was mainly generated from interest on loans to Hoechst and affiliates and
interest and dividend income earned by Celanese's captive insurance
subsidiaries.

     INCOME TAXES

     Income tax expense decreased to E9 million in the first half of 1999 from
E65 million in the first half of 1998. The effective tax rate decreased to (3)%
in the first half of 1999 from 81% in the first half of 1998. The decrease is
mainly attributable to the increase in nondeductible goodwill amortization, the
increase in valuation allowances primarily in Germany and the effect of new tax
consolidation rules in Mexico.

     MINORITY INTEREST

     Earnings attributable to minority interest decreased to nearly zero in the
first half of 1999 from E24 million in the first half of 1998. This decrease was
principally attributable to Hoechst acquiring substantially all the remaining
interest in Grupo Celanese and contributing this interest to Celanese in
December 1998 and to lower earnings at Celanese Canada in which there was a
minority interest of approximately 44% as of June 30, 1999.

     In August 1999, Celanese pursuant to a tender offer at E17.41 (CAD 27.25)
per share became the owner of 97.7% of the common stock of Celanese Canada,
Inc., and through its affiliate exercised the statutory rights to acquire all
the remaining shares and on September 3, 1999 became sole owner of all such
remaining shares, thereby giving Celanese 100% ownership of Celanese Canada.
Celanese Canada had approximately 40.7 million shares outstanding at December
31, 1998.

     Also in September 1999, Celanese sold its 52% interest in Copley
Pharmaceuticals Inc. to Teva Pharmaceutical Industries as part of Teva's cash
tender offer for Copley.

     Together these two transactions will substantially reduce earnings
attributable to minority interest outstanding in future periods.

     NET EARNINGS (LOSS)

     As a result of the factors mentioned above, the net loss of Celanese
increased by E263 million to a net loss of E272 million in the first half of
1999 from a net loss of E9 million in the first half of 1998.

1998 COMPARED WITH 1997

     NET SALES

     Acetyl Products.  Net sales for the Acetyl Products segment decreased by
14% to E1,518 million in 1998 from E1,757 million in 1997 primarily as a result
of price decreases (14%) and volume decreases (1%), which were slightly offset
by favorable currency movements (1%). For example, the price of methanol, which
was $0.55 per gallon in 1997, declined to $0.35 per gallon in 1998 as excess
capacity and the effects of a general decline in demand were felt. Prices for
acetic acid, vinyl acetate monomer and many other chemical products also
declined significantly. These declining sales reflect the adverse conditions in
the global chemical industry, compounded by the depressed market conditions in
Asia.

                                       28
<PAGE>   30

     Chemical Intermediates.  Net sales for the Chemical Intermediates segment
decreased by 18% to E920 million in 1998 from E1,123 million in 1997. Excluding
the positive effect of a one-time license fee of E31 million related to an
acrylates project in Germany in 1997, sales decreased by 16%, primarily due to
price decreases (16%) and volume decreases (1%) offset by favorable currency
movements (1%). The decreases in prices resulted primarily from downward pricing
pressure in acrylic acid, butanol and 2-ethylhexanol caused by industry
overcapacity and depressed economic conditions in Asia. Volume decreases were
not as significant as the price decreases, not only because of the addition of
acrylic acid capacity at the Clear Lake, Texas facility but also because of
improved volumes in acrylates, which rebounded from production outages in 1997.

     Acetate Products.  Net sales for the Acetate Products segment decreased by
16% to E839 million in 1998 from E994 million in 1997 primarily as a result of
price decreases (5%) and volume decreases (12%), which were slightly offset by
favorable currency movements (1%). Increased competitive pressure resulted in
volume losses as well as lower overall pricing in the cellulose acetate tow
business. Cellulose acetate filament experienced significantly lower volumes and
weaker pricing as a result of the ongoing impact of the depressed market
conditions in Asia and declines in the demand for acetate filament from the
fashion industry.

     Ticona.  Net sales for the Ticona segment increased by 1% to E750 million
in 1998 from E742 million in 1997 as favorable currency movements (1%) and
increased sales volumes (3%) were offset by price declines (3%). Volume growth
was driven by favorable market conditions, including strong growth in automotive
sales in continental Europe as well as the development of new applications for
Ticona's products. This growth was partially offset by lower demand in the
United States, in part the result of the negative impact on orders from
suppliers resulting from the strike at General Motors. In the United States and
Europe, Ticona lost business in standard grades of polymers as a result of
competitive pricing from Asian imports.

     Performance Products.  Net sales for the Performance Products segment
decreased by 5% to E455 million in 1998 from E479 million in 1997, primarily as
a result of decreases in sales for the OPP films business (4%) and the food
ingredients business (14%), partially offset by an increase in the separation
products business (13%). The 1998 OPP film sales, which represented 66% of sales
in this segment, decreased primarily because of lower prices in all product
lines resulting from worldwide overcapacity in the OPP films market, which were
partially offset by increased volumes resulting from debottlenecking in European
facilities and expansion of the Mexican facility. The 1998 food ingredients
sales, which represented 23% of total segment sales, decreased primarily because
of lower prices in the high intensity sweetener and sorbates product lines.
Lower prices in sorbates resulted from worldwide overcapacity and pricing
pressure from Chinese competitors, which, together with lower volumes,
contributed to lower sales. Lower prices in Sunett(R) were caused by competition
from sweetener substitutes and price discounts. The high intensity sweeteners
product line experienced significant volume growth in part because of a July
1998 approval by the U.S. Food and Drug Administration for the use of Sunett(R)
in beverages and in part as a result of business from new customers in the food
industry, particularly in the United States. The 1998 separation products sales,
which represented 11% of sales in this segment, increased primarily as a result
of higher volumes in flat sheet membranes, which were partially offset by lower
prices resulting from competitors' capacity additions.

     Other Activities.  Net sales from Other Activities decreased by 2% to E827
million in 1998 compared to E848 million in 1997 as a result of increases in
sales in the staple and bottle resins business of Celanese Canada, Copley's
generic pharmaceuticals business and an increase in premiums from captive
insurance policies with Hoechst (see "Relationships and Third Party
Transactions -- Relationships with Hoechst") which were more than offset by
decreases in sales of other chemicals. The 1998 sales of Other Activities
comprised other chemicals (55%), the polyester staple and bottle resins business
(20%), generic pharmaceuticals (14%), and captive insurance and other ancillary
businesses (11%). Other Activities also include the research activities
previously conducted by Hoechst Research & Technology in the United States,
which have been phased out over the past few years, as well as general corporate
functions and several service companies, which do not have significant sales.
The increase in sales for Celanese Canada's
                                       29
<PAGE>   31

staple and bottle resins business resulted from the start up of additional
production. The increase in premiums by the captive insurance companies resulted
from taking on new international Hoechst business. The increase in sales in the
generic pharmaceuticals business resulted from increased volumes of existing
products along with the introduction of several new products, which more than
offset continued price erosion. The decrease in sales in other chemicals
resulted from lower volumes and prices primarily attributable to production
outages in the phosphorous business line and lower prices in the ethylene
oxide/ethylene glycol business due to weaker economic conditions. Net sales of
Other Activities do not include sales of Targor, Dyneon, Vinnolit and
unconsolidated InfraServ affiliates, which are accounted for under the equity
method.

     COST OF SALES AND OTHER OPERATING EXPENSES

     Cost of Sales.  Cost of sales decreased by 9%, to E4,169 million in 1998
compared with E4,576 million in 1997. This decrease was principally attributable
to reductions in raw material prices, particularly ethylene and propylene, and
slight favorability resulting from the liquidation of LIFO reserves, in the
Acetyl Products and Chemical Intermediates segments. In addition, the Acetate
Products segment experienced lower cost of sales because of lower production
volumes and a positive impact resulting from the liquidation of LIFO reserves in
addition to a concentrated effort to significantly reduce costs at all
production facilities, which was offset by higher cost of sales in the Ticona
segment as a result of a temporary shutdown associated with scheduled
maintenance at one of its European facilities that was slightly offset by the
liquidation of LIFO reserves. In aggregate, Celanese realized benefits to cost
of sales of E19 million in 1998 as compared to E2 million in 1997 from the
liquidation of LIFO reserves. In Performance Products, cost of sales increased
primarily because of increased volumes and increased depreciation expense
associated with the expansion of the Mexican facility in the OPP films business
line, but was offset partially by lower raw materials costs, as well as
increased cost of sales in the separation products business because of higher
volumes and higher indirect costs associated with the business which were
partially offset by lower cost of sales in the food ingredients business because
of lower volumes in sorbates and improved operations in the Sunett(R) product
line. In 1997, the Sunett(R) plant was temporarily shut down as part of
scheduled maintenance and capacity improvements. Cost of sales in Other
Activities increased principally as a result of increased cost of sales in other
chemicals, generic pharmaceuticals and captive insurance companies, while cost
of sales in the staple and bottle resins business was largely unchanged. Other
chemicals had lower cost of sales primarily as a result of lower volumes
resulting from the production outage in the phosphorus business compounded by
lower raw material and manufacturing costs in the ethylene oxide/ethylene glycol
business partially offset by higher costs associated with the chlorine business
as well as costs incurred in connection with the writeoff of specialty chemical
assets. Higher cost of sales of the captive insurance business resulted from
increased business which required higher insurance premiums to reinsurers.
Copley had higher cost of sales primarily as a result of increased sales
volumes. Cost of sales as a percentage of sales increased to 81% in 1998 from
79% in 1997.

     Selling, General and Administrative Expense.  Selling, general and
administrative expense decreased by 8% to E600 million in 1998 from E655 million
in 1997. Selling, general and administrative expense as a percentage of sales
increased to 12% in 1998 from 11% in 1997. Celanese received a settlement in
1998 in connection with a patent infringement lawsuit of E46 million. Selling,
general and administrative expense related to Hoechst Research & Technology in
the United States in 1998 was significantly less than in 1997, reflecting
progress made in winding down the Hoechst Research & Technology activities.
After eliminating the effect of the settlement payment and the selling, general
and administrative expense associated with the discontinuation of Hoechst
Research & Technology in the United States, selling general and administrative
expense increased to E641 million in 1998 as compared with E638 million in 1997.

     Research and Development Expense.  Research and development expense
decreased by 17% to E123 million in 1998 from E149 million in 1997 principally
as a result of a strategic reorientation of research. Most research activity was
to be undertaken by the business segments themselves instead of by a separate
research entity, with more emphasis to be placed on applied research than on
basic research. This

                                       30
<PAGE>   32

decision led to lower personnel and overall research and development expense
related to Hoechst Research & Technology in the United States, which accounted
for the E26 million decline. Research and development expense as a percentage of
sales decreased to 2% in 1998 from 3% in 1997.

     Special Charges.  In 1998, Celanese recorded special charges totaling E100
million, primarily related to the U.S. antitrust actions related to the sorbates
industry (E27 million), discontinuation of Hoechst Research & Technology in the
United States (E21 million), the planned shutdown of the former U.S. corporate
headquarters (E29 million), costs associated with plant closures in the Acetyl
Products segment (E9 million) and other chemicals business (E4 million) and
severance costs associated with downsizing in the Acetates Products (E6
million), Performance Products (E3 million) and Chemical Intermediates (E1
million) segments. Annual cost savings from the shutdown of the former U.S.
corporate headquarters, the plant closures in the Acetyl Products segment and
other chemicals business, and the 1998 downsizing of the Acetate Products,
Performance Products and Chemical Intermediates segments are estimated to be
approximately E24 million.

     In 1997, Celanese recorded special charges totaling E103 million. As a
result of Hoechst's reorientation of basic research, Celanese recorded special
charges of E45 million for fixed asset impairment and personnel costs and E43
million resulting from the related impairment of goodwill associated with the
discontinuation of Hoechst Research & Technology in the United States. Further
special charges related to severance costs associated with the downsizing of the
former U.S. corporate headquarters (E8 million) and downsizing in the other
chemicals business (E3 million) and an impairment charge related to the
investment in Copley (E4 million).

     Other Operating Income (Expense).  Other operating income (expense)
increased to income of E16 million in 1998 from expense of E11 million in 1997.
This increase is primarily because of E20 million higher gains on the
disposition of assets primarily related to the sale of idle facilities in the
United States and decreased losses on foreign exchange transactions of E7
million.

     OPERATING PROFIT

     Acetyl Products.  Operating profit for the Acetyl Products segment declined
by 31% to E152 million in 1998 from E221 million in 1997. This decrease was
primarily attributable to the price and volume declines discussed above,
compounded by raw material price decreases occurring at a slower rate than
decreases in selling prices for this segment's products. These factors were
offset in part by cost reduction efforts, particularly at U.S. facilities, and a
substantial settlement in 1998 of a long-standing suit for patent infringement.

     Chemical Intermediates.  Operating profit for the Chemical Intermediates
segment decreased by 26% to E54 million from E73 million in 1997. Excluding the
positive effect of the receipt in 1997 of a E31 million one-time license fee for
an acrylates project in Germany, operating profit actually increased by 29% to
E54 million in 1998 from E42 million in 1997, primarily as a result of lower raw
material costs, in particular for propylene, which more than offset the effects
of price reductions of 16%.

     Acetate Products.  Operating profit for the Acetate Products segment
declined by 37% to E94 million in 1998 from E149 million in 1997. This decrease
was primarily attributable to declines in sales prices and sales volume
discussed above. These factors were offset in part by cost reduction efforts,
particularly at U.S. plants. Cost reduction efforts accounted for a significant
portion of the reduction of the cost of goods sold. Management expects that
operating profit for 1999 will continue to experience the negative effects of
the overcapacity in the market, including costs associated with shutdowns of
production lines, the continuing adverse market conditions in Asia, and the
declines in demand for acetate filament in the fashion industry.

     Ticona.  Ticona's operating profit declined 7% to E53 million in 1998 from
E57 million in 1997. This decrease was primarily attributable to the price
declines described above and implementation costs for SAP software that were
approximately E11 million higher in 1998 than in 1997. Cost of sales as a
percentage of sales increased to 69% in 1998 from 67% in 1997 principally as a
result of increased

                                       31
<PAGE>   33

maintenance costs resulting from a temporary shutdown associated with scheduled
maintenance at one of Ticona's European facilities. These factors were somewhat
offset by the benefits of volume growth and, to a lesser extent, exchange rate
effects. Raw material pricing remained relatively stable in 1998. Legal fees in
connection with the plumbing litigation were slightly lower as compared with
1997 levels. Please see "Legal Proceedings -- Plumbing Actions."

     Performance Products.  The Performance Products segment experienced an
operating loss of E7 million in 1998 as compared to an operating profit of E47
million in 1997. The OPP films business and the food ingredients business had
sharp decreases in operating profit while the operating profit of the separation
products business was largely unchanged. The OPP films business recorded a loss
of E2 million in 1998 compared to a E14 million profit in 1997. This was mainly
a result of lower sales prices, which were only partially offset by lower raw
material costs, as well as restructuring charges in connection with the shutdown
of a small production line and higher amortization of goodwill resulting from
the acquisition of the outstanding minority interest in Europe in the first
quarter of 1998 and increased depreciation expense associated with the expansion
of the Mexican facility. The foods ingredients business recorded a loss of E10
million in 1998 from an operating profit of E28 million in 1997. This was a
result of lower prices and volumes in the sorbates product lines and lower
prices in high intensity sweeteners. In addition, this business line recorded a
E27 million special charge to income in 1998 related to U.S. antitrust actions
related to the sorbates industry. Separation products recorded an operating
profit of E5 million in both 1998 and 1997. The operating profit in separation
products remained flat as increased sales volumes were offset by lower prices
caused by increased competition as well as by higher overall costs.

     Other Activities.  Operating losses of Other Activities decreased by 39% to
an operating loss of E163 million in 1998 from an operating loss of E266 million
in 1997. In 1998, Other Activities' operating losses were negatively affected by
E54 million of special charges, which were associated with general corporate
functions (E29 million), the discontinuation of Hoechst Research & Technology in
the United States (E21 million), and other chemicals (E4 million). In 1997,
Other Activities operating losses were negatively affected by E103 million of
special charges, which were associated with general corporate functions (E8
million), Hoechst Research & Technology in the United States (E88 million), an
impairment charge related to the investment in Copley (E4 million) and other
chemicals (E3 million). Excluding the effects of these special charges,
operating losses were lower in Hoechst Research & Technology in the United
States and in general corporate functions as a result of an effort to reduce
employment levels and higher in the other chemicals business because of lower
selling prices and higher operating costs and restructuring charges associated
with the chlorine business, as well as costs incurred in connection with the
writeoff of specialty chemical assets. Operating profit improved for the
polyester staple and bottle resins business primarily because of stronger bottle
resin volumes and significantly lower raw material prices. Operating profit for
generic pharmaceuticals improved primarily as a result of higher margins
achieved through favorable plant utilization and favorable sales mix of higher
margin products and cost reduction efforts. See also "Business -- Research and
Development."

     EQUITY IN NET EARNINGS OF AFFILIATES

     Equity in net earnings of affiliates increased by 43% to E20 million in
1998 from E14 million in 1997. This change was mainly attributable to increased
earnings in Celanese's investments in InfraServ Hochst, InfraServ Gendorf and
Vinnolit, which were partially offset by a reduction in earnings of
Polyplastics, a joint venture in which Celanese holds a 45% interest, Fortron
Industries, a joint venture in which Celanese holds a 50% interest, and Targor,
a joint venture in which Celanese owns a 50% interest.

     INTEREST EXPENSE

     Interest expense decreased by 2% to E135 million in 1998 from E138 million
in 1997. This decrease was mainly as a result of lower net average debt
outstanding during 1998 compared to 1997.

                                       32
<PAGE>   34

     INTEREST AND OTHER INCOME, NET

     Interest and other income, increased by 2% to E48 million in 1998 from E47
million in 1997. Interest and other income was mainly generated from interest on
loans to Hoechst and affiliates and interest income earned by Celanese's captive
insurance subsidiaries.

     INCOME TAXES

     Income tax expense increased by 26 % to E117 million in 1998 from E93
million in 1997. The effective tax rate increased from 46% in 1997 to 101% in
1998. The increase is mainly attributable to the nondeductibility of goodwill
amortization, the limitation on foreign tax credit utilization, the tax costs of
restructuring in the United States and the 1998 losses incurred in Germany for
which no benefit was recognized as it was determined that the associated net
operating loss carry forwards may not be realized. See Note 10 to the Combined
Financial Statements.

     MINORITY INTEREST

     Earnings attributable to minority interest decreased by 33% to E43 million
in 1998 from E64 million in 1997. This decrease is principally attributable to
lower earnings in Grupo Celanese. In December 1998, Hoechst acquired
substantially all the remaining interest in Grupo Celanese and contributed this
interest to Celanese.

     NET EARNINGS (LOSS)

     As a result of the factors mentioned above, net earnings (loss) of Celanese
decreased by E91 million to a loss of E44 million in 1998 from net earnings of
E47 million in 1997.

1997 COMPARED WITH 1996

     NET SALES

     Acetyl Products.  Net sales of the Acetyl Products segment increased by 18%
to E1,757 million in 1997 from E1,485 million in 1996, principally driven by the
effects of favorable currency movements (10%), volume increases (6%) and price
increases (2%). The principal effect of currency movements was through the
appreciation of the U.S. dollar against the DM. The significant volume change in
this segment between 1996 and 1997 related to increased acetyls volume, after
the successful start-up of the Singapore vinyl acetate monomer facility in July
1997, and increased acetyl derivatives because of improved utilization of
capacity for these products. In both 1997 and 1996, the segment achieved near
full capacity utilization even with the new Singapore facility coming on stream
in 1997. During 1997, Celanese benefited from increases in the market price of
methanol, which was stronger than expected because of temporary supply shortages
occasioned by various operational difficulties at competitors' facilities. In
addition, Celanese increased prices for vinyl acetate and acetic acid in April
1997, which improved profit margins, slightly offset by weakness in acetic
anhydride and acetate esters.

     Chemical Intermediates.  Net sales for the Chemical Intermediates segment
increased by 24% to E1,123 million in 1997 from E906 million in 1996. Excluding
the positive effects of the receipt in 1997 of a one-time license fee of E31
million related to an acrylates project in Germany, sales increased by 21%
primarily as a result of volume increases (12%), favorable currency movements
(8%), particularly the appreciation of the U.S. dollar against the DM, and price
increases (1%). Volume increases were experienced across all business lines,
especially in the acrylates and oxo business lines as sales increased because
Celanese purchased acrylates from third parties and sold them to customers in
order to secure these customers for increased volumes expected from the
expansion of the Clear Lake plant. Pricing was higher in the oxo business line
resulting from formula driven sales contracts based upon raw material costs,
which were partially offset by price decreases in the acrylates business line as
industry capacity exceeded demand.

                                       33
<PAGE>   35

     Acetate Products.  Net sales of the Acetate Products segment increased by
11% to E994 million in 1997 from E897 million in 1996, principally driven by the
effects of favorable currency movements (15%), partially offset by volume
decreases (2%) and price decreases (2%). The principal effect of currency
movements was through the appreciation of the U.S. dollar against the DM. The
cellulose acetate tow industry experienced a decline in capacity utilization
during 1997 as industry expansions pushed industry capacity ahead of demand.
Acetate filament volume was lower because of fashion changes in the textile
industry.

     Ticona.  Net sales for the Ticona segment increased by 12% to E742 million
in 1997 from E662 million in 1996. The sales increase was primarily attributable
to the effects of favorable currency movements (9%) and to increased sales
volumes (5%), partially offset by a decrease in prices (2%). Increased market
penetration by competitors in specific markets, such as the electronics
industry, held down prices in performance polymers. However, overall sales
volume growth was strong, especially in Europe. The strong growth was
attributable to improved market conditions in the converting industry, inventory
replenishment at customers and continued market development success. Volume
growth in North America was in line with the overall market growth.

     Performance Products.  Net sales for the Performance Products segment
increased by 11% to E479 million in 1997 from E432 million in 1996, primarily
because of increases in sales for the OPP films business (5%), the food
ingredients business (23%) and the separation products business (25%). The 1997
OPP film sales, which represented 65% of the sales in this segment, increased
primarily because of favorable currency movements, particularly the appreciation
of the U.S. dollar and British pound sterling against the DM, which were
partially offset by lower volumes and prices. The 1997 food ingredients sales,
which represented 26% of the sales in this segment, increased primarily from
higher volumes in the high intensity sweetener and sorbates product lines. The
volume increases were partially offset by decreased prices in the sorbates
product line because of the economic crisis in Asia and pricing pressure from
new Chinese competitors. The 1997 separation products sales, which represented
9% of the total segment sales, increased primarily as a result of favorable
currency movements, particularly the appreciation of the U.S. dollar against the
DM, and were partially offset by a decline in prices resulting from competitive
pricing pressure.

     Other Activities.  Net sales of Other Activities increased by 33% to E848
million in 1997 from E639 million in 1996. In 1997, the net sales of Other
Activities were comprised of other chemicals (63%), polyester staple and bottle
resins (18%), generic pharmaceuticals (13%) and other ancillary activities (6%).
The increase in sales was mainly attributable to a packaging resins unit
becoming operational in 1997 compounded by higher prices and volumes in the
ethylene oxide/ethylene glycol businesses. Sales improved slightly in generic
pharmaceuticals, offset by decreased sales in other chemicals.

     COST OF SALES AND OTHER OPERATING EXPENSES

     Cost of Sales.  Cost of sales increased by 19% to E4,576 million in 1997
from E3,861 million in 1996. This increase was principally attributable to the
appreciation of the U.S. dollar against the Deutsche Mark in all segments except
for the Performance Products segment, the operations of which are predominantly
in Germany. In addition to the effect of currency movements, the Acetyl Products
and Chemical Intermediate segments' cost of sales increased as a result of
increased volumes across most business lines, compounded by increased raw
material costs in the acetyl derivatives, acrylates and oxo business lines. In
addition to the effect of currency movements, the Acetate Products segment
experienced lower sales volumes principally in acetate filament due to
increasing substitution by other materials in the fashion industry. In addition
to the effect of currency movement, the Ticona segment's cost of sales increased
as a result of higher volumes resulting from improved market conditions. In the
Performance Products segment, cost of sales increased in the OPP films, food
ingredients and separation products businesses. The increase in the OPP films
business is primarily a result of an upward movement in raw material prices as
well as the impact of the appreciation of the British pound sterling against the
DM. In the food ingredients business, despite the temporary shutdown of the
Sunett(R) facility in 1997 as part of scheduled maintenance and capacity
improvements, cost of sales increased primarily in the high intensity sweeteners
business line
                                       34
<PAGE>   36

in 1997 over 1996 as a result of increased sales volumes as inventory was built
up in 1996 in anticipation of the temporary shutdown in 1997. Cost of sales in
Other Activities increased principally as a result of increased cost of sales in
the polyester staple and bottle resins business, the generic pharmaceuticals
business, the other chemicals business lines and the captive insurance
companies. The increase in the staple and bottle resins business was due
primarily to the introduction of additional production lines in late 1996 and
early 1997, compounded by exchange rate movements and rising feedstock costs.
The increase in cost of sales in the generic pharmaceuticals business and
captive insurance companies was due predominantly to exchange rate movements.
The increase in other chemicals was principally due to higher cost of sales in
the phosphorous and ethylene oxide/ethylene glycol businesses due to higher
volumes and higher raw material and manufacturing costs partially offset by
lower sales in the chlorine business.

     Selling, General and Administrative Expense.  Selling, general and
administrative expense increased by 23% to E655 million in 1997 from E531
million in 1996. After eliminating the effects of the selling, general and
administrative expense associated with the discontinuation of Hoechst Research
and Technology in the United States, selling, general and administrative expense
increased by 23% to E638 million in 1997 as compared to E518 million in 1996.
The increase is primarily related to currency movements (primarily the U.S.
dollar and British pound sterling to the Deutsche Mark), compounded by increased
implementation costs associated with financial computer systems as well as
additional administrative expenses incurred as some administrative functions
were no longer performed by Hoechst at the holding company level, but were
performed by the individual businesses.

     Research and Development Expense.  Research and development expense
increased by 4% to E149 million in 1997 from E143 million in 1996 primarily as a
result of the appreciation of the U.S. dollar against the DM. Research and
development expense as a percentage of sales remained flat at 3% for both
periods.

     Special Charges.  In 1997, Celanese recorded special charges totaling E103
million. As a result of Hoechst's reorientation of basic research, Celanese
recorded special charges of E45 million for fixed asset impairment and personnel
costs and E43 million resulting from the related impairment of goodwill
associated with the discontinuation of Hoechst Research & Technology in the
United States. Further special charges related to severance costs associated
with the downsizing of the former corporate headquarters of Celanese in the
United States (E8 million) and downsizing in the other chemicals business (E3
million) and an impairment charge related to the investment in Copley (E4
million). Annual cost savings from the 1997 downsizing of the former U.S.
corporate headquarters and the 1997 downsizing in the Other Chemicals business
are estimated to be approximately E6 million.

     In 1996, Celanese recorded special charges of E121 million, primarily
related to an impairment charge of E115 million associated with Celanese's
investment in Copley and E6 million related to a plant closure in the other
chemicals business line. Annual cost savings from this plant closure in 1996 is
estimated to be approximately E4 million.

     Other Operating Expense.  Other operating expense increased to E11 million
in 1997 from E9 million in 1996. Losses on dispositions of assets were E2
million in 1997 and E7 million in 1996. These lower losses were offset by
increased losses on foreign exchange transactions, which were E9 million in 1997
compared with E2 million in 1996.

     OPERATING PROFIT

     Acetyl Products.  Operating profit of the Acetyl Products segment increased
by 39% to E221 million in 1997 from E159 million in 1996 primarily as a result
of improved profit margins in methanol and acetyls and favorable exchange rate
movements discussed above, partially offset by reduced margins in the acetyl
derivatives business line as a result of increased raw material costs.

     Chemical Intermediates.  Operating profit of the Chemical Intermediates
segment decreased by 19% to E73 million in 1997 from E90 million in 1996
primarily as a result of increased information technology expenditures related
to software implementation, which were partially offset by a technology license
fee

                                       35
<PAGE>   37

received from Dow Chemical related to the acrylates project in eastern Germany.
Profit margins were reduced as raw material cost increases exceeded sales price
increases because of excess industry capacity, primarily in the acrylates and
oxo business lines, and product was purchased from third party producers to meet
ongoing market growth.

     Acetate Products.  Operating profit of the Acetate Products segment
decreased by 7% to E149 million in 1997 from E161 million in 1996 primarily
because of lower acetate filament volumes in the second half of 1997 associated
with changes in fashion trends as well as increased information technology
expenditures associated with new software implementation and expenditures
associated with a cost reduction program.

     Ticona.  Ticona's operating profit increased by 4% to E57 million in 1997
from E55 million in 1996. This increase was primarily attributable to favorable
exchange rate movements and higher volumes, offset in part by price decreases as
discussed above. However, these improved margins were partially offset by higher
expenses in 1997 related to the plumbing litigation (see "Legal
Proceedings -- Plumbing Actions") and a E5 million increase in costs related to
the implementation of new software. Ticona's 1996 operating profit included the
positive impact of E4 million in license fees and royalties from Ticona's
Japanese affiliate, Polyplastics for the technology and use of the Vectra(R)
trademark to manufacture and sell liquid crystal polymers.

     Performance Products.  Performance Products' operating profit decreased by
35% to E47 million in 1997 from E72 million in 1996. The OPP films business and
the separation products business had sharp declines in operating profit while
the operating profit of the food ingredients business was flat. Lower operating
profit in the OPP films business line resulted from higher costs associated with
the start-up of a new production line in Mexico, which came on stream in late
1997. Lower operating profit in the separation products business line was
primarily a result of increased marketing, administrative and research and
development costs compounded by a decline in prices.

     Other Activities.  Operating losses of Other Activities decreased by 17% to
an operating loss of E266 million in 1997 from an operating loss of E321 million
in 1996. As noted above, Other Activities operating losses in 1997 were
negatively affected by restructuring charges of E56 million, as well as goodwill
impairment charges of E43 million related to the discontinuation of Hoechst
Research & Technology in the United States and E4 million associated with
Celanese's investment in Copley. In 1996, operating losses of Other Activities
were negatively affected by a E115 million charge for the impairment of goodwill
associated with the investment in Copley and E6 million related to plant
closures in the other chemicals business. Excluding the effects of these special
charges, operating losses of Other Activities decreased primarily as a result of
lower operating losses in other chemicals, polyester staple and bottle resins
and Copley, which were partially offset by higher operating losses in Hoechst
Research & Technology in the United States and general corporate functions.

     EQUITY IN NET EARNINGS OF AFFILIATES

     Equity in net earnings of affiliates increased to E14 million in 1997 from
E3 million in 1996. This change was mainly attributable to Celanese's
investments in the unconsolidated InfraServ affiliates, which were formed in
1997, which were partially offset by lower earnings in Polyplastics.

     INTEREST EXPENSE

     Interest expense decreased to E138 million in 1997 from E139 million in
1996. Excluding the effect of the appreciation of the U.S. dollar against the
DM, interest expense would have decreased further as Celanese had less net
average U.S. dollar denominated debt outstanding during 1997 compared to 1996
and lower average interest rates on all debt during 1997 compared to 1996.

                                       36
<PAGE>   38

     INTEREST AND OTHER INCOME, NET

     Interest and other income, net increased by 9% to E47 million in 1997 from
E43 million in 1996. This increase was primarily attributable to higher interest
income on the loans to Hoechst and affiliates and interest income earned by the
captive insurance companies.

     INCOME TAXES

     Income taxes decreased by 38% to E93 million in 1997 from E149 million in
1996. The effective tax rate decreased from 121% in 1996 to 46% in 1997. The
decrease was mainly attributable to the decrease in goodwill amortization
resulting from the impairment charges discussed above and a settlement of open
tax years which resulted in a favorable adjustment of E31 million in 1997. See
Note 10 to the Combined Financial Statements.

     MINORITY INTERESTS

     Earnings attributable to minority interest increased by 14% to E64 million
in 1997 from E56 million in 1996. This increase is mainly attributable to
increased earnings in Celanese Canada and Copley, partially offset by reduced
earnings in Grupo Celanese.

     NET EARNINGS (LOSS)

     As a result of the factors mentioned above, Celanese realized net earnings
of E47 million in 1997 as compared with a net loss of E82 million in 1996.

LIQUIDITY AND CAPITAL RESOURCES

FIRST HALF 1999 COMPARED WITH FIRST HALF 1998

     NET CASH PROVIDED BY OPERATING ACTIVITIES

     Net cash provided by operating activities decreased to E58 million for the
six months ended June 30, 1999 from E91 million for the comparable period in
1998. This decrease is attributable to a decrease in earnings, which is
primarily attributable to a E177 million cash effect of special charges.

     NET CASH USED IN INVESTING ACTIVITIES

     Net cash used in investing activities decreased by 29% to E120 million in
the first half of 1999 from E170 million in the first half of 1998 primarily due
to the following:

          Capital Expenditures.  Capital expenditures decreased to E132 million
     in the first half of 1999 from E162 million in the first half of 1998. The
     decrease in capital expenditures was primarily attributable to declines in
     the Chemical Intermediates, Acetate Products, Ticona and Performance
     Products segments, partially offset by an increase in the Acetyl Products
     segment. The decrease in capital expenditures of the Chemical Intermediates
     segment to E22 million in the first half of 1999 from E43 million in the
     first half of 1998 was principally attributable to higher spending in the
     first half of 1998 related to the acrylic acid expansion at the Clear Lake,
     Texas facility. The decrease in capital expenditures of the Acetate
     Products segment to E17 million in the first half of 1999 from E29 million
     in the first half of 1998 was primarily due to the completion in 1998 of
     projects related to environmental, health and safety affairs and cost
     reduction efforts. The decrease in capital expenditures in the Ticona
     segment to E19 million in the first half of 1999 from E27 million in the
     first half of 1998 was primarily due to the delay in the timing of capital
     spending in 1999. The decrease in capital expenditures in the Performance
     Products segment to E8 million in the first half of 1999 from E21 million
     in the first half of 1998 was primarily due to the completion of the
     Mexican OPP films facility expansion in 1998. The increase in capital
     expenditures in the Acetyl Products segment to E45 million in the first
     half of 1999 from E24 million in the first half of 1998 was

                                       37
<PAGE>   39

     primarily due to the project costs associated with the acetic acid and
     acetate esters expansions in Singapore.

     Net Purchases and Sales Proceeds of Assets and Investments.  Net purchases
and sales proceeds of assets and investments increased to E15 million in net
cash provided for the six months ended June 30, 1999 from E4 million net cash
used during the six months ended June 30, 1998. The increase is primarily a
result of normal investing activities relating to Celanese's portfolio
management. Celanese's captive insurance companies maintain a portfolio of
marketable securities to cover contract losses. Accordingly, these marketable
securities are considered long-term. Celanese's marketable securities portfolio
is classified as available for sale.

     NET CASH PROVIDED BY FINANCING ACTIVITIES

     Net cash provided by financing activities increased to E90 million for the
first six months of 1999 from E74 million for the same period of 1998. Changes
in net cash provided by financing activities primarily relate to changes in
short-term borrowings and transactions resulting in positive cash flows with
Hoechst.

     For the six-month period ended June 30, 1999, net cash provided by
financing activities primarily consisted of E91 million of short-term borrowings
with third parties and E40 million of net cash activities with Hoechst. This
inflow of cash was partially offset by the repayment of E22 million of long-term
borrowings with third parties and E21 million net repayment of financing with
Hoechst.

     For the six-month period ended June 30, 1998, net cash provided by
financing activities amounted to E74 million. The activity during this interim
period included net short-term and long-term borrowings with third parties of
E155 million and E39 million, respectively. These borrowings were offset by net
payments to Hoechst of E121 million.

1998 COMPARED WITH 1997

     NET CASH PROVIDED BY OPERATING ACTIVITIES

     Net cash provided by operating activities decreased to E355 million in 1998
from E526 million in 1997. Net cash provided by operating activities decreased
primarily because of a decrease in earnings from operations of E91 million, as
well as by an increase in net third party receivables of E207 million, partially
offset by a E112 million increase in accounts payable and accrued liabilities.
The fluctuation in net receivables is attributable to a E108 million increase in
trade receivables and a E71 million increase in other receivables.

     NET CASH USED IN INVESTING ACTIVITIES

     Net cash used in investing activities decreased 25% to E334 million in 1998
from E443 million in 1997 primarily due to the following:

          Capital Expenditures.  Capital expenditures decreased to E373 million
     in 1998 compared with E408 million in 1997. The decrease in capital
     expenditures was primarily attributable to declines in the Chemical
     Intermediates and Performance Products segments and Other Activities,
     partially offset by increases in the Acetate Products and Ticona segments.
     The decrease in capital expenditures in the Chemical Intermediates segment
     to E97 million in 1998 from E120 million in 1997 was principally
     attributable to higher spending in 1997 related to an acrylic acid
     expansion at the Clear Lake, Texas facility. The decrease in capital
     expenditures in the Performance Products segment to E42 million in 1998
     from E58 million in 1997 was primarily attributable to higher capital
     expenditure in 1997 relating to the expansion of the Mexican OPP films
     facility. The decrease in capital expenditures in Other Activities to E29
     million in 1998 from E69 million in 1997 was principally attributable to a
     E20 million decline in corporate capital expenditures, a E4 million decline
     in capital expenditures in the other chemicals business and a E5 million
     decline related to the polyester staple and bottle resins

                                       38
<PAGE>   40

     business. In 1997, corporate capital expenditures were affected by costs
     associated with relocation to new office premises in the United States. The
     increase in capital expenditures in the Acetate Products segment to E69
     million in 1998 from E42 million in 1997 was primarily attributable to
     environmental health and safety affairs and cost reduction efforts. The
     increase in capital expenditures in the Ticona segment to E66 million in
     1998 from E44 million in 1997 was primarily attributable to the expansion
     of and improvement in the polyacetal product line. The Acetyl Products
     segment had capital expenditures of E70 million in 1998 and E75 million in
     1997 which include expenditures related to the construction of the vinyl
     acetate plant in 1997 and of the acetic acid plant in 1998, both of which
     are located in Singapore.

          Net Purchases and Sales Proceeds of Assets and Investments.  Net
     purchases and sales proceeds of assets and investments increased to E39
     million in net cash provided in 1998 from E35 million in net cash used
     during 1997. The increase is primarily attributable to increased sales of
     assets compounded by lower net purchases of marketable securities in 1998.
     Celanese's captive insurance companies maintain a portfolio of marketable
     securities to cover contract losses. Accordingly, such marketable
     securities are considered long-term. Celanese's marketable securities
     portfolio is classified as available for sale.

     NET CASH USED IN FINANCING ACTIVITIES

     Net cash used in financing activities decreased to E40 million in 1998 from
E66 million in 1997. Changes in net cash used in financing activities primarily
relate to changes in short-term and long-term borrowings and transactions with
Hoechst.

     In 1998, net cash used in financing activities of E40 million was a result
of payments to reduce debt of E506 million, which were offset by contributions
of E328 million received from Hoechst and net proceeds received from both third
parties and Hoechst of E98 million.

     In 1997, net cash used in financing activities of E66 million was a result
of net payments on third party long term debt of E103 million and net payments
on debt to Hoechst of E243 million offset by E78 million of proceeds received
from net short-term borrowings and E202 million net contributions with Hoechst.

WORKING CAPITAL

     Celanese's working capital (defined as total current assets minus total
current liabilities) decreased to E442 million at June 30, 1999 from E662
million at December 31, 1998. The change in Celanese's working capital was due
primarily to an increase in accounts payable and accrued liabilities of E354
million, an increase in short-term borrowings and current installments of
long-term debt of E116 million and an increase of E249 million in net third
party receivables.

     Celanese's working capital increased to E662 million at December 31, 1998
from E63 million at December 31, 1997. The change in Celanese's working capital
was due primarily to an increase in net receivables with Hoechst of E374
million, an increase in net third party receivables of E107 million, an increase
of E64 million in current deferred taxes and a decrease of E64 million in short
term borrowing and current installments of long-term debt. The decrease in short
term borrowings and current installments of long term debt is attributable to
the repayment of debt upon its maturity, and the early payment of long-term
debt.

SHORT TERM AND LONG TERM BORROWINGS

     Celanese's combined debt, defined as commercial paper, bank loans, term
notes, and pollution control and industrial revenue bonds, net of amounts with
Hoechst, represents an allocation of Hoechst consolidated debt. Hoechst
allocated debt to Celanese based on its assessment of the credit worthiness of
Celanese on a stand-alone basis, taking into account estimated future free cash
flows. The allocated debt consists of third party debt, some of which will be
refinanced by Celanese in connection with the

                                       39
<PAGE>   41

demerger. Based on the current interest rate environment, Celanese expects to
incur refinancing costs and other fees during 1999 associated with the
refinancing of the third party debt. Debt increased to E1,698 million at June
30, 1999 from E1,515 million at December 31, 1998. The increase is primarily
attributable to additional net short term borrowings with third parties of E91
million. Debt decreased to E1,515 million at December 31, 1998 from E1,895
million at December 31, 1997. This decrease in debt was primarily attributable
to repayment of long-term debt of E398 million, the payment of commercial paper
of E64 million, the payment of the current portion of long-term debt of E57
million, partially offset by a net increase in amounts due to Hoechst of E143
million.

COMBINED EQUITY

     Combined equity represents Celanese's historical equity in the businesses
and activities which were combined to form Celanese. See Note 4 to the Combined
Financial Statements. At June 30, 1999 combined equity amounted to E2,657
million, compared to E2,736 million at December 31, 1998. The decrease was
primarily attributable to the net loss for the six months ended June 30, 1999 of
E272 million which was partially offset by the increase resulting from net
transfers from Hoechst of E14 million and by the positive impact of foreign
currency translations of E188 million. On the basis of the Combined Financial
Statements, at December 31, 1998, combined equity amounted to E2,736 million,
compared to E1,250 million at December 31, 1997. This increase was due
principally to a positive impact of E1,617 million resulting from net
transactions with Hoechst, partially offset by the net loss for 1998 of E44
million. The Hoechst transactions principally included the contribution of the
Grupo Celanese S.A. minority interest which was not already owned by Celanese of
E643 million, the contribution of Hoechst receivables of E384 million, the
transfer of other businesses from Celanese to Hoechst of E350 million and the
recognition of a deferred tax asset in connection with the contribution of
Hoechst's investment in Dyneon of E109 million.

FUTURE CAPITAL EXPENDITURES

     Celanese had capital expenditures equivalent to approximately .76 times
depreciation and amortization in the first six months of 1999, 1.06 times
depreciation and amortization in 1998, and 1.25 times depreciation and
amortization in 1997. Celanese expects that its level of capital expenditures in
the last six months of 1999 will be similar to that in the first six months. For
the next few years, Celanese expects its total annual capital expenditures to be
less than its total annual depreciation and amortization expense.

OUTLOOK

     Celanese's results of operations for the first six months of 1999 have been
adversely affected by difficult market conditions in the chemicals industry as
well as by special charges, principally relating to restructuring and
litigation, which totaled E205 million in the first six months of 1999. Celanese
expects difficult market conditions to persist in the second half of 1999. Also,
Celanese may incur further significant special charges relating to litigation,
business restructuring and the disposal of some businesses.


     Celanese has entered into discussions with a potential buyer for its
chlorine and chlorine derivatives business lines, and under the proposed terms
of the agreement currently being negotiated would expect to record a loss in the
second half of 1999 of between E80 million and E90 million related to the
disposition of these business lines. However, Celanese is also internally
considering other options for these business lines. Celanese completed the sale
of its 52% interest in Copley to Teva Pharmaceutical Industries, Ltd. in
September 1999 and expects to dispose of several other businesses and activities
in the second half of 1999, notably substantially all of its separation products
business. On September 23, 1999 Celanese entered into a letter of intent to sell
its ethylene oxide and ethylene glycol businesses to Old World Industries Inc.,
and on October 8, 1999, entered into a letter of intent to sell to 3M its
ownership interest in Dyneon, a joint venture with 3M, from which gains are
expected but cannot be determined at this time since the sales are subject to
the conclusion of final agreements and certain approvals. These sales are
expected to close during the second half of 1999. Celanese expects to record
gains for financial reporting purposes on these sales which are expected to
offset fully the loss associated with the proposed sale of the chlorine and

                                       40
<PAGE>   42

chlorine derivatives business lines. Other possible dispositions during the
second half of 1999, such as the proposed sale of Celanese Canada's polyester
staple and bottle resins businesses, are also being negotiated, and it is
premature at this stage to estimate the amount of gain or loss to be associated
with these sales, but Celanese does not currently expect any material gain or
loss to be realized on such sales. All these transactions are subject to the
completion of negotiations and the satisfaction of conditions, and no assurance
can be given that any of these transactions will be completed on the terms
currently contemplated.

     In addition, Celanese is developing plans to reduce its workforce by 1,000
by the end of the year 2000, and Celanese expects to record some special charges
in connection with this workforce reduction before the end of 1999, the extent
of which are presently not quantifiable. Celanese also expects to incur special
charges in connection with prepayment penalties and other costs associated with
the refinancing of its indebtedness as well as other costs related to the
demerger of between E70 million and E80 million in the second half of 1999.
Based on the current refinancing commitments, Celanese believes that the costs
of refinancing its debt will be recovered to some extent in future periods
through lower costs of financing in the second half of 1999.


     As a result of the current difficult market conditions in the chemicals
industry, the anticipated net loss associated with the chlorine and chlorine
derivatives disposition contemplated for the second half of 1999, special
charges associated with the reduction of Celanese's workforce, the refinancing
of Celanese's indebtedness and other costs related to the demerger, Celanese
expects that it will incur significant losses in the second half of 1999.
However, the losses will be partially offset by the gains of the other
dispositions discussed above, assuming these dispositions are concluded by
year-end as currently contemplated.


ENVIRONMENTAL MATTERS

     In 1998, combined worldwide expenditures, including expenditures for third
party and divested sites, for compliance with environmental regulations and
internal company initiatives totaled E139 million of which E33 million was for
capital projects. In 1999, total annual environmental expenditures are expected
to be approximately E126 million of which E22 million is for capital projects.
In 2000, total annual environmental expenditures are expected to be
approximately E120 million, of which E20 million is for capital projects. It is
anticipated that stringent environmental regulations will continue to be imposed
on Celanese and the industry in general. Although Celanese cannot predict with
certainty future environmental expenditures, especially expenditure beyond 2000,
management believes that the current spending trends will continue.

     The total environmental costs charged to operations for remediation efforts
amounted to E94 million in 1998, E45 million in 1997, and E33 million in 1996.
The E94 million recorded in 1998 is net of E56 million, as a result of
discounting future outlays for fixed period remediation projects using a 6%
discount rate.

MARKET RISK

     The information provided below contains forward-looking statements that
involve inherent risks and uncertainties, principally with respect to
unanticipated changes in foreign exchange or interest rates and changes in the
level of Celanese's exposure to such market risks. Actual results may differ
from those set forth in these forward looking statements.

     DERIVATIVE FINANCIAL INSTRUMENTS

     Celanese is exposed to market risk through commercial and financial
operations. Celanese's market risk consists principally of exposure to currency
exchange rates and interest rates. Celanese has had in place, for many years,
policies of hedging against changes in foreign exchange rates and interest
rates.

                                       41
<PAGE>   43

     FOREIGN EXCHANGE RISK MANAGEMENT

     Prior to January 1, 1999, Celanese's functional currency was the DM, but
since the adoption of the euro by Germany and the other euro zone countries on
that date, Celanese's functional currency has been the euro. Celanese has
receivables and payables denominated in currencies other than the functional
currencies of the various subsidiaries of Celanese, which create foreign
exchange risk. With the introduction of the euro on January 1, 1999, the
exposure to exchange rate fluctuations is eliminated in relation to the euro
zone countries that have adopted the euro as their common currency, leaving the
U.S. dollar, Japanese yen, and British pound sterling as the most significant
sources of currency risk. Accordingly, Celanese enters into foreign currency
forwards and options to minimize its exposure to foreign currency fluctuations.
The foreign currency contracts are designated for firm fixed commitments and
anticipated transactions. The terms of these contracts are generally under one
year. Celanese will have a centralized hedging strategy in which foreign
currency denominated receivables or liabilities booked by the operating entities
will be hedged on a consolidated basis.

     INTEREST RATE RISK MANAGEMENT

     Celanese is primarily exposed to changes in interest rates for debt
instruments, primarily denominated in the U.S. dollar. To manage Celanese's
risks, Celanese enters into interest rate swap and cap agreements to reduce the
exposure of interest rate risk inherent in Celanese's debt portfolio. Celanese
uses interest rate swaps and caps for hedging purposes only. The maturity of the
swaps varies depending on the underlying debt portfolio.

     See "Quantitative and Qualitative Disclosures about Market Risk" below.

YEAR 2000

     The "Year 2000" or Y2K issue is a date related problem programmed into many
computer software systems and hardware components. Simply stated, computer
programmers frequently coded calendar years by their last two digits to conserve
memory space. Computer hardware and software may experience problems near the
end of and beyond the year 1999 as the year code changes from "99" to "00." The
logic of many computer systems assumes that the first two digits of a calendar
year are "19." As a result, it is not clear how computers will interpret the
year code change. If remedial actions are not taken, computer systems may
transfer information incorrectly, perform incorrectly or may cease to function
altogether. The prevalence of computers and embedded technology in virtually all
businesses means that Celanese also relies heavily on the Year 2000 preparation
of its principal suppliers, customers and other third parties with whom Celanese
has relationships.

     In order to determine whether the computer applications critical to
Celanese's operations would be Year 2000 compliant, Celanese followed an
approach which matches the devolution of operational responsibility to the
individual companies belonging to Celanese. Under this approach, each company
assumed responsibility for the evaluation and remediation process of its
computer systems for Year 2000 compliance. The major companies of Celanese
adopted similar structures and processes to identify and deal with their Year
2000 issues. In most of the countries of operation, project teams were
established whose activities are overseen and coordinated by global project
offices and steering committees.

     CELANESE'S Y2K REMEDIAL AND COMPLIANCE PROGRAM

     Celanese's Y2K remedial and compliance program is aimed at the following
four main categories of electronic components that may be affected by Y2K
problems:

     - The first category includes Celanese's information technology or IT
       computer systems, i.e., business operating systems software and hardware
       and applications for personal computers;

     - The second category includes production process control systems, i.e.,
       all manufacturing control systems, including systems with embedded
       components and supporting laboratory equipment;

                                       42
<PAGE>   44

     - The third category consists of the infrastructure systems, i.e.,
       communications, security, elevators, and similar systems; and

     - The fourth category includes customer, supplier and other third party
       interfaces, i.e., systems used for interaction with third parties that
       are necessary to perform an integrated business.

     Also, the Celanese companies have individually categorized their Y2K
efforts into phases, which, while not identical, comprise the following
components:

     - Compiling inventories of computer applications and devices that use or
       process date information. These inventories cover information technology
       computer systems, production process control systems and infrastructure
       systems;

     - Evaluating the business risk of all applications that could cause major
       disruptions due to Y2K failures, to allow critical processes to be
       identified and remedial resources allocated accordingly;

     - Assessing computer applications for date processing deficiencies and
       related implications;

     - Remediation of non-compliant applications by repair, replacement or
       upgrading;

     - Testing to determine or verify compliance status;

     - Identifying key customer, supplier and other third party interfaces to
       assess their Y2K readiness; and

     - Contingency planning.

     The Celanese companies have completed their inventories of IT computer,
production process and control, and infrastructure systems and applications and
have assigned priorities for the assessment, remediation and testing of their IT
and non-IT systems and applications. Compliance testing was completed and
confirmations were obtained from some computer software and hardware vendors
regarding the Y2K compliance of systems and applications. The repair or
replacement of material items that are determined not to be compliant is being
dealt with in different ways, depending on the nature of each company's project
plan and information technology computer, production process and control, and
infrastructure systems. In some cases, remediation has been or is in the course
of being effected by the installation of Y2K compliant computer systems.
Celanese's companies completed all remediation of the systems that were
determined to be non-compliant.

     In some cases, specific Y2K compliance issues, mostly in connection with
embedded chips and highly specialized software, have been identified that are
not expected to be remedied before October 1999. Celanese believes that it will
resolve its internal Y2K compliance issues in a timely manner and that it will
not incur costs in doing so that are material to Celanese's business and
financial results. However, no assurance can be given that Celanese will not
uncover additional Y2K compliance problems.

     Celanese's businesses are communicating with their critical suppliers,
customers and other key business partners to review with them their plans and
progress in addressing the Y2K problem. Integration tests and audits, where
deemed to be essential, have either been completed or are in their final stages
of completion. Additionally, Celanese's companies have programs in place to
obtain written confirmation from some suppliers confirming that they are
conducting reasonable investigations as to their Y2K compliance.

     By virtue of the unprecedented scope and complexity of the Y2K issue, it is
impossible to predict, with any degree of certainty, how the year code change
from "99" to "00" will affect computerized information systems generally and
those of Celanese in particular. Should a material Y2K problem not be remedied,
either by Celanese or any of its significant business partners, the consequences
could be material to the business and financial results of Celanese. For
example, it is possible that Y2K problems could cause disruptions to Celanese's
manufacturing activities resulting in products not being available or not
meeting the required quality standards. Additionally, the failure of computer
operated or monitored manufacturing processes may lead to unplanned production
shutdowns with safety or environmental consequences. Generally, the failure to
correct a material Y2K problem may lead to an interruption in or

                                       43
<PAGE>   45

failure of normal business data processing activities. Should critical suppliers
of resources (such as raw materials, utilities and the like), customers or other
third parties with whom Celanese has significant business relationships
experience Y2K problems, their problems could cause material adverse effects on
Celanese's business and financial results.

     Celanese's companies all have identified the systems and applications they
believe to be critical to their businesses. Contingency plans are being
developed to mitigate the possible effects of Y2K failures in critical business
processes or in the event of Y2K failures of third parties important to the
business of Celanese's companies. The plans may include the temporary cessation
of manufacturing activities or their transfer to functional sites; arranging
availability of alternative suppliers of essential resources and utilities;
manually performing production activities and data handling, and stockpiling of
critical raw materials and products. These measures will be supported by the
contingency and emergency procedures that are in place at all of Celanese's
manufacturing operations. In the event of significant problems experienced by
Celanese's major supplier or customers, there is little that can be done to
minimize the effects on the business of Celanese. Notwithstanding the
preparation of contingency plans, there can be no assurance that the
implementation of such plans will be successful in addressing all problems that
may arise from Y2K phenomena. Management believes that the measures it has taken
in anticipation of this event have notably reduced the level of uncertainty
inherent in dealing with a contingency of this magnitude. However, there can be
no assurance that all risks intrinsic to this type of uncertainty will have been
identified and, if identified, will completely have been remedied by the
measures that Celanese is implementing.

     The total costs of Celanese's Y2K compliance programs are currently
estimated to be in the order of E32 million. The total amount expended on these
programs through December 31, 1998 was approximately E13 million. These costs
include the direct costs incurred or currently expected to be incurred for all
consolidated entities, including the internal costs of personnel dedicated to
the Y2K programs, and are funded from operating cash flows. These costs do not
include internal costs of personnel who monitor Celanese's programs but who are
not dedicated entirely to achieving Y2K compliance. No projects material to
Celanese's business or its financial results have been deferred or delayed as a
result of the Y2K compliance programs.

INTRODUCTION OF THE EURO

     On January 1, 1999, the euro became a currency in its own right. Until
January 1, 2002, the euro can only be used as transaction currency but there
will be no euro bills. Beginning on January 1, 2002, the euro will be the
official currency of all euro zone countries. There will be a transition period
ending July 1, 2002 during which the local currencies of participating countries
may still be used alongside the euro. For a more detailed description of the
euro, see "Exchange Rate Information."

     In June 1997, an internal task force began coordinating the preparations
for the euro. In 1998, project organizations in all companies demerged to
Celanese adapted their business systems in order to start with euro-denominated
transactions as of January 1, 1999. This has given them the flexibility to
conduct all business transactions with customers, suppliers and other business
partners in euro if desired. Beginning January 1, 1999, Celanese has adopted the
euro as the currency in which it presents its financial statements.

     Every Celanese company has examined the risks of the euro for its
businesses and markets. Celanese does not expect the euro to lead to short-term
changes in business-specific cost structures or its market positions, although
Celanese believes that the euro may contribute to the ongoing convergence of
prices in Europe over the longer term.

     Celanese does not expect its exposure to currency risk to change materially
as a result of the introduction of the euro. The impact of exchange rate changes
of a non-euro currency such as the U.S.$, the British pound sterling or the
Japanese yen versus the euro will continue to depend on the actual exposure at
the time of the risk assessment.

                                       44
<PAGE>   46

           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The following tables present information regarding Celanese's use of
derivative financial instruments, and should be read together with "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Market Risk" and Notes 2(d) and 18 to the Combined Financial
Statements.

INTEREST RATE RISK MANAGEMENT

     The following tables provide information about Celanese's derivative
financial instruments and other financial instruments that are sensitive to
changes in interest rates as of December 31, 1998. For Celanese's fixed rate and
variable rate debt, the tables present principal amounts at the December 31,
1998 exchange rates and the related weighted average interest rates by expected
maturity date. Weighted average variable rates are based on implied zero coupon
rates in the yield curve. For interest rate swaps and options, the tables
present notional amounts and weighted average interest rates or strike rates by
expected maturity date. Weighted average variable rates are based on the implied
forward rates at December 31, 1998. The information is presented in equivalents
to the euro, which is Celanese's reporting currency. The instruments' actual
cash flows are denominated in U.S.$, Deutsche Mark, British pound sterling or
GBP, and Mexican peso or MXN.

                     INTEREST RATE RISK MANAGEMENT -- DEBT
                PRINCIPAL (NOTIONAL) AMOUNT BY EXPECTED MATURITY
                             AVERAGE INTEREST RATE
                               DECEMBER 31, 1998

<TABLE>
<CAPTION>
                                                                                               FAIR VALUE
                                                                                              DECEMBER 31,
                                    1999    2000   2001   2002   2003   THEREAFTER   TOTAL        1998
                                    -----   ----   ----   ----   ----   ----------   ------   ------------
                                                     (IN E MILLIONS, EXCEPT PERCENTAGES)
                                    ----------------------------------------------------------------------
<S>                                 <C>     <C>    <C>    <C>    <C>    <C>          <C>      <C>
DEBT, INCLUDING CURRENT PORTION
Fixed rate (U.S.$)................     15    15     74     148    14        536         802         915
Average interest rate.............    6.9%  6.9%   6.9%    6.9%  6.6%       6.6%          -           -
Variable rate (U.S.$).............    139    86    129      86     -          7         447         448
Average interest rate.............    5.1%  4.9%   5.1%    5.2%    -        5.3%          -           -

Fixed rate (DM)...................      -     -      -       -     -          -           -           -
Average interest rate.............      -     -      -       -     -          -           -           -
Variable rate (DM)................    140     -      -       -     -          -         140         140
Average interest rate.............    3.2%    -      -       -     -          -           -           -

Fixed rate (GBP)..................      -     -      -       -     -          -           -           -
Average interest rate.............      -     -      -       -     -          -           -           -
Variable rate (GBP)...............     44     -      -       -     -          -          44          44
Average interest rate.............    6.3%    -      -       -     -          -           -           -

Fixed rate (MXN)..................      -     -      -       -     -          -           -           -
Average interest rate.............      -     -      -       -     -          -           -           -
Variable rate (MXN)...............     44     -      -       -     -          -          44          44
Average interest rate.............   39.9%    -      -       -     -          -           -           -

Other currencies..................     51     1      1       1     1          6          61          61
Amounts to be settled with
  Hoechst.........................      -     -      -       -     -        (23)        (23)        (23)

TOTAL.............................    433   102    204     235    15        526       1,515       1,629
</TABLE>

Other currencies in which Celanese has issued debt are primarily the Dutch
guilder and the Belgian franc, both of which are euro zone currencies and
accordingly have fixed exchange rates with the euro.

                                       45
<PAGE>   47

                     INTEREST RATE RISK MANAGEMENT -- SWAPS
                PRINCIPAL (NOTIONAL) AMOUNT BY EXPECTED MATURITY
               AVERAGE INTEREST (SWAP) RATE / OPTION STRIKE PRICE
                               DECEMBER 31, 1998

<TABLE>
<CAPTION>
                                                                                                 FAIR VALUE
                                                                                                DECEMBER 31,
                                 1999   2000   2001   2002   2003   2004   THEREAFTER   TOTAL       1998
                                 ----   ----   ----   ----   ----   ----   ----------   -----   ------------
                                                     (IN E MILLIONS, EXCEPT PERCENTAGES)
                                 ---------------------------------------------------------------------------
<S>                              <C>    <C>    <C>    <C>    <C>    <C>    <C>          <C>     <C>
INTEREST RATE SWAPS:
U.S. dollar
Payer swap (variable to
  fixed).......................    -    257    274    257     -      26        85        898        (27)
Average pay rate (fixed).......    -    6.1%   6.4%   6.3%    -     5.7%      6.0%         -          -
Average receive rate
  (variable)...................    -    4.9%   5.1%   5.2%    -     5.3%      5.3%         -          -

DM
Receiver swap (fixed to
  variable)....................   23     15      -      -     -       -         -         38          1
Average receive rate (fixed)...  4.6%   4.3%     -      -     -       -         -          -          -
Average pay rate (variable)....  3.3%   3.3%     -      -     -       -         -          -          -
</TABLE>

FOREIGN EXCHANGE RISK MANAGEMENT

     The table below provides information about Celanese's significant
derivative financial instruments that are sensitive to changes in foreign
currency exchange rates as of December 31, 1998. For forward foreign currency
exchange agreements related to debt management and sale and purchase
transactions denominated in foreign currencies, the table presents the notional
amounts and the weighted average contractual foreign currency exchange rates.
The foreign currency forward contracts entered into by Celanese have a term of
less than one year. Celanese had E273 million notional amount of foreign
currency forward contracts outstanding in various currencies at December 31,
1998. For foreign currency options, the table presents the contract amounts and
the average foreign currency option strike prices.

<TABLE>
<CAPTION>
                                                                        AVERAGE
                                                                      CONTRACTUAL
                                                   CONTRACT AMOUNT      FORWARD         FAIR VALUE
                 CURRENCY PAIRS                      BUY (SELL)      EXCHANGE RATE   DECEMBER 31, 1998
                 --------------                    ---------------   -------------   -----------------
                                                               (IN E MILLIONS, EXCEPT FOR
                                                       AVERAGE CONTRACTUAL FORWARD EXCHANGE RATE)
                                                   ---------------------------------------------------
<S>                                                <C>               <C>             <C>
FOREIGN CURRENCY FORWARD CONTRACTS
DM
U.S. dollar......................................        59.6           1.6693              0.10
U.S. dollar......................................       (76.2)          1.6520             (0.62)
Japanese yen.....................................        (4.9)          1.4100             (0.18)
Italian lira.....................................        45.2           1.0100             (0.01)
British pound....................................        (4.9)          2.8145              0.06
Swedish krona....................................        (0.3)          0.2060              0.00

U.S. DOLLAR
British pound....................................         0.5           1.6571              0.00
Mexican peso.....................................       (81.2)          8.6000              0.00
</TABLE>

     There were no currency options outstanding at December 31, 1998.

     As a result of the introduction of the euro, outstanding currency
derivatives between currencies of the euro zone countries that have adopted the
euro as their common currency are risk neutral as of January 1, 1999.

                                       46
<PAGE>   48

                                    CELANESE

     Celanese traces its roots in the United States to 1918 when The American
Cellulose & Chemical Manufacturing Company was founded by two Swiss brothers,
Drs. Camille and Henry Dreyfus, to produce acetate fibers for fabrics used in
linings, apparel and home furnishings.

     Following the successful start-up of this company, Celanese expanded its
operations in the United States. In the mid-1940s, Celanese commenced operation
of facilities for the production of basic chemicals and chemical intermediates.
In the 1950s, Celanese became a supplier of acetate tow.

     In the 1960s, Celanese further expanded the scope of its activities.
Celanese started production of non-cellulosic fibers, such as polyester and
nylon, and developed and commercialized acetyl copolymer resin technology.

     Since the mid-1940s, Celanese constructed and acquired significant
production and research facilities in North America and abroad and also entered
into a number of joint ventures in North America, Europe and the Far East with
other acetates, basic chemicals and plastics producers. In particular, in the
technical polymers area, Celanese entered into two joint ventures, one with
Hoechst, which was named Ticona, and another with the Japanese company Daicel,
named Polyplastics, to manufacture and market acetyl copolymer resins based on
Celanese licensed technology.

     In 1987 Hoechst acquired Celanese Corporation. Following the acquisition,
Hoechst proceeded to integrate its complementary chemicals and technical
polymers operations with the businesses of Celanese, establishing a combined
basic chemicals, acetates and technical polymers business of global scale.

     In 1994, Hoechst embarked on a comprehensive review and re-evaluation of
its strategic goals. Hoechst decided to concentrate on life sciences and to
transfer operational responsibility for the different businesses to the
management of legally separate companies. As a result of this process, Hoechst's
basic chemicals and acetates businesses were combined and were reported by
Hoechst under its Celanese segment and Hoechst's technical polymers businesses
were combined and were reported by Hoechst under its Ticona segment.

     In implementing the strategy to realign and to change the focus of its
business, Hoechst has been restructuring and divesting many of its activities in
the industrial sector. As part of this process, Hoechst shareholders, at an
extraordinary general meeting on July 15 and 16, 1999, approved the demerger to
Celanese AG of the basic chemicals, acetates and technical polymer businesses,
that were reported by Hoechst in its Celanese and Ticona segments, as well as
the other businesses and activities described in this prospectus.

                                       47
<PAGE>   49

                                    BUSINESS

INTRODUCTION

     Celanese is a leading global industrial chemicals company with strong
competitive positions in its major products and production technologies.
Celanese's headquarters is currently located in Frankfurt am Main, Germany but
is expected to be relocated to Kronberg/Taunus, Germany in the near future. A
majority of its operations are in North America. Celanese also has facilities in
Europe, Asia and South America and operates through joint ventures in China,
Japan and Saudi Arabia. For the year ended December 31, 1998, Celanese had net
sales of approximately E5,159 million, operating profit of approximately E183
million and, at year end, had approximately 17,500 employees worldwide. For the
first six months of 1999, Celanese had net sales of E2,366 million and an
operating loss of E259 million.

     Celanese's leadership position is based on two key attributes:

     Significant Market Shares.  Significant market shares in its core products,
based on its share of total global production capacity, including in acetic
acid, vinyl acetate monomer, acetate filament, acetate tow, acrylates,
polyacetal resins, liquid crystal polymers, oriented polypropylene films,
artificial sweeteners and sorbates.

     Competitive Cost Structures.  Competitive cost structures in its core
products, based on economies of scale, vertical integration between many product
lines, technical know-how acquired through years of operation and advanced
technologies acquired through its own research and development activities as
well as under license.

     Celanese's business principally involves the upgrading of chemical raw
materials such as natural gas, ethylene, propylene and ammonia, and natural
products, including woodpulp or "cellulose," into higher value chemicals and
chemical-based products. Celanese believes it is one of the most efficient
chemical producers in the industry because of its leading technologies and
significant economies of scale. According to industry sources, Celanese was the
world's largest producer in 1997 of acetic acid, vinyl acetate monomer and
acetate filament and the largest producer of methanol in North America. Celanese
is also one of the world's leading producers of acetate tow, including
production by its joint ventures in China. Celanese's Ticona business segment,
together with its 45%-owned affiliate Polyplastics, is one of the leading
participants in the global technical polymers business. Celanese has a stable
customer base comprised principally of large industrial companies. In 1998,
sales to the 10 largest customers of Celanese accounted for less than 20% of its
total sales and the single largest customer of Celanese represented less than 5%
of total sales.

                                       48
<PAGE>   50
SEGMENT OVERVIEW

     Celanese is an integrated company that operates through five principal
business segments: Acetyl Products, Chemical Intermediates, Acetate Products,
Ticona and Performance Products.

     The following chart sets forth for each of Celanese's five business
segments, the percentage of Celanese's 1998 total net sales to external
customers sold by those segments; the segments' 1998 net sales to external
customers and operating profit (each expressed in millions of euro); and the
segments' major products. As indicated in the chart below, in addition to these
segments, Celanese is engaged in various Other Activities, including other
businesses as well as procurement and service activities.

            [PIE CHART SHOWING THE FOLLOWING IN CLOCKWISE DIRECTION]

9%  PERFORMANCE PRODUCTS
    1998 Sales:                    Eurodollar 455
    1998 Operating Profit (loss):  Eurodollar (7)
    -  OPP Films
    -  Sunett(R)
    -  Sorbates

16% OTHER ACTIVITIES

15% TICONA
    1998 Sales:                    Eurodollar 750
    1998 Operating Profit:         Eurodollar 53
    -  Polyacetal Resins
    -  Ultra High Molecular Weight Polyethylene
    -  Polyester Engineering Resins
    -  Liquid Crystal Polymers
    -  Polyphenylene Sulfide
    -  Celanese(R) Nylon 6/6

16% ACETATE PRODUCTS
    1998 Sales:                    Eurodollar 839
    1998 Operating Profit:         Eurodollar 94
    -  Acetate Filament
    -  Acetate Filter Products

16% CHEMICAL INTERMEDIATES
    1998 Sales:                    Eurodollar 850
    1998 Operating Profit:         Eurodollar 54
    -  Acrylic Acid
    -  Acrylates
    -  Amines
    -  Carboxylic Acids
    -  Oxo Alcohols

28% ACETYL PRODUCTS
    1998 Sales:                    Eurodollar 1,438
    1998 Operating Profit:         Eurodollar 152
    -  Methanol
    -  Acetic Acid
    -  Vinyl Acetate Monomer
    -  Acetic Anhydride
    -  Acetate Esters

     In general, the basic chemicals businesses in the Acetyl Products and
Chemical Intermediates segments are highly capital intensive, using
well-established technologies. In these commodity businesses, raw material costs
have virtually an immediate effect on results of operations. Efficient
production and facility utilization are critical to success. The principal
customers for basic chemicals tend to be large specialty chemical and other
chemical companies. Competitive pricing, service to customers and reliability of
supply are critical components of the marketing strategy for the basic chemicals
businesses. Textile and cigarette producers are the principal customers for the
Acetate Products segment. Application and market development in textiles,
reliability of supply, product improvements and cost reductions are critical
components of the Acetate Products business strategy.

     Ticona, the technical polymers segment, manufactures and markets
value-added technical polymers specifically designed for the needs of its
customers. Demand for Ticona's products principally depends on its ability to
develop new innovative products and applications as well as on the business
cycles of its major customers in the electronics and automotive industries.

     The Acetyl Products, Chemical Intermediates, Acetate Products and Ticona
segments are linked through an integrated value chain. In the acetyl chain,
Celanese purchases natural gas and produces methanol, the key raw material
required to produce acetic acid. Acetic acid is the key raw material in the
production of vinyl acetate monomer, acetic anhydride and acetate esters. Acetic
anhydride is used to produce cellulose acetate tow and filament. Methanol is
also used to produce formaldehyde, a key raw material for the polyols produced
by the Acetyl Products segment and the polyacetal resins produced by the Ticona
segment. Similarly, in oxo products, Celanese supplies key raw materials for
acetate esters, acrylate esters, polyols and alkylamines.

                                       49
<PAGE>   51

     The following flow chart is a simplified graphic representation of the
Celanese integrated value chain.

     The Performance Products segment consists of the oriented polypropylene, or
OPP, films business, the food ingredients business, which consists of food
protection ingredients and Sunett(R), a high intensity sweetener, and the
separation products business, which manufactures membranes for technical
products. The products of this segment are mainly used in packaging, food and
batteries. Key success factors in this segment are efficient production
technology, especially in OPP films, customer orientation and technology
innovation. The Performance Products businesses are characterized by relatively
stable demand and customer bases.

STRATEGY

     Celanese's management has identified the following five key strategies for
continuing growth and increasing value for Celanese's shareholders:

     Strengthen Celanese's established global presence.  Celanese operates
facilities throughout the Americas, Europe and Asia. Celanese intends to
leverage its existing local infrastructure and expertise to expand in growth
markets. Examples of this strategy in action include:

     - Celanese, through its Chinese joint ventures in the Acetate Products
       segment, has established a major manufacturing presence in China.
       Celanese believes this presence and its resulting relationships may
       extend Celanese's ability to pursue other opportunities in China.

                                       50
<PAGE>   52

     - In 1997, Celanese commenced production at its new vinyl acetate monomer
       facility in Singapore, establishing Celanese as a local low cost supplier
       of Acetyl Products in Asian markets, which are expected to grow
       significantly in the long term. Celanese is constructing an acetic acid
       and acetate esters facility at the same site in Singapore, which is
       scheduled to commence production in 2000. The new facility will supply
       the vinyl acetate monomer facility with its requirements for acetic acid
       and will also produce acetic acid for sale to third party customers.

     - In 1997, pursuant to a plant management contract, Celanese agreed to
       produce acrylic acid and esters in a production facility owned by Dow
       Chemical at a site in Saxony, Germany. Celanese will have a 50% interest
       in the offtake of this plant, which is scheduled to be completed by the
       end of 1999. Through this project Celanese expects to take advantage of
       growth in demand for acrylates in the European market, including Eastern
       Europe.

     Enhance leading production and engineering technology positions.  Celanese
holds leading production and technology positions in core products such as
acetic acid, vinyl acetate monomer, acrylic acid, as well as for a number of
performance polymers. Celanese will leverage this existing expertise in
achieving its strategic growth goals. Examples of this strategy in action
include:

     - The facility for the manufacture of modern metallocene catalyst based
       cycloolefin copolymers that Celanese is building in Germany will be the
       first commercial facility for these products and will expand Ticona's
       product range into new applications in barrier films, medical packaging
       and toner products.

     - Celanese believes its acetic acid facility at Clear Lake, Texas is one of
       the lowest cost acetic acid plants in the world. The acetic acid facility
       which Celanese is building in Singapore will utilize the same low-cost
       acid optimization technology.

     - Celanese's acrylic acid know-how and licensed technology was a critical
       factor enabling Celanese to participate in the new acrylic acid project
       with Dow Chemical in eastern Germany.


     - Celanese recently entered into an exclusive agreement with Symyx
       Technologies in Santa Clara, California for research and development of
       novel catalysts in the field of oxidation of hydrocarbons.


     Generate value-added solutions for customers.  Celanese's Ticona segment is
adept at developing new products that solve existing customer problems. Examples
of this strategy in action include:

     - Ticona, in collaboration with a leading automotive manufacturer,
       developed the technology for injection molding of very large surfaces and
       structural body panels. This breakthrough in design, materials and mold
       processing reduces the assembly time, weight and material cost in car
       body manufacturing.

     - Ticona has worked with a pharmaceutical company, a molder and a medical
       device manufacturer to develop a dispensing inhaler for a new medication
       which places extremely high demands on the materials and their mechanical
       precision for delivering precise dosages.

     Achieve cost efficiencies through rationalization.  Celanese is
implementing or intends to implement, in each of its businesses, programs
designed to:

     - Reduce global manufacturing costs;

     - Reduce selling, general and administrative costs;

     - Reduce purchasing costs; and

     - Optimize its chemical supply chain.

     For example, Celanese's Acetate Products segment initiated a "renewal"
program at one site in late 1996 and has since expanded the program to all
sites. "Renewal" is aimed at reducing overall manufacturing costs, improving
plant flexibility, reducing manufacturing cycle time and improving product

                                       51
<PAGE>   53

uniformity. Key aspects include improved process control, reduced process
interruptions, simplification of work flows and organizational structures and
relocation of production to the most efficient sites.

     Optimize Celanese's portfolio.  Acquisitions, divestitures and joint
ventures will be an integral component of managing Celanese's asset base to
increase shareholder value. Celanese has identified several assets for
divestiture, including Celgard and its Inorganics business line. Additional
assets may be divested as Celanese continues to monitor its business portfolio.
The chemical industry is in the midst of a restructuring wave of mergers,
acquisitions, joint ventures and alliances. Celanese intends to be an active
participant in this restructuring, whether through acquisitions, joint ventures
or alliances. Celanese participation in any such projects will be based upon an
assessment of project returns against cost of capital and the length of pay-back
periods.

ACETYL PRODUCTS

     The Acetyl Products segment consists of three business lines: Methyls,
Acetyls and Acetyl Derivatives. All business lines in this segment market their
products under the "Celanese" tradename. The following table lists key Acetyl
Products and their major markets.

<TABLE>
<CAPTION>
KEY ACETYL PRODUCTS                                                      MAJOR MARKETS
<S>                                                       <C>
Methanol                                                  Formaldehyde, Acetic Acid and Methyl
                                                          Tertiary Butyl Ether or MTBE, a gasoline
                                                          additive
Acetic Acid                                               Vinyl Acetate Monomer, Acetic Anhydride and
                                                          Purified Terephthalic Acid or PTA, an
                                                          intermediate used in the production of
                                                          polyester resins, films and fibers
Vinyl Acetate Monomer                                     Paints, Adhesives, Paper Coatings, Films
                                                          and Textiles
Acetic Anhydride                                          Cellulose Acetate and Pharmaceuticals
Acetate Esters                                            Coatings, Inks
</TABLE>

Business Lines

     Methyls.  The Methyls business line produces:

     - Methanol, a basic chemical building block used in the production of a
       variety of chemical intermediates;
     - Formaldehyde, a methanol derivative primarily used to produce adhesive
       resins for plywood, particle board, polyacetal engineering resins and a
       compound used in making polyurethane;
     - Paraformaldehyde, a solid form of formaldehyde used to make glyphosate
       herbicides and in coating applications;
     - Formcel(R), a water-free formaldehyde solution used in the production of
       linking agents for coatings; and
     - Polyol products such as pentaerythritol, used, for example, in coatings
       and synthetic lubricants; trimethylolpropane, used, for example, in
       synthetic lubricants; neopentyl glycol, used, for example, in powder
       coatings; and 1,3 butylene glycol, used, for example, in flavorings and
       plasticizers.

     Prices for most of the products in the Methyls business line are dependent
on world market prices for methanol, a commodity produced by numerous
manufacturers in all parts of the world. The principal raw material for these
products is natural gas, from which methanol is derived. Celanese purchases
natural gas from numerous sources and substantially all its North American
requirements of acetaldehyde, which is used in the making of polyols, from
Petroleos Mexicanos, the Mexican national oil company. Petroleos Mexicanos has
been a reliable supplier, but acetaldehyde is also available from other sources.
Celanese is a leading producer of acetaldehyde in Europe.

                                       52
<PAGE>   54

     A majority of Celanese's methanol production is used internally,
principally in the production of formaldehyde and acetic acid. The balance is
sold to the merchant market of which approximately one third is used for the
production of Methyl Tertiary Butyl Ether, or MTBE, which is a gasoline
additive.

     On March 25, 1999, the governor of California issued an executive order to
phase out the use of MTBE by December 31, 2002 in California, and other states
are considering whether to implement similar phase-out programs. Since then, a
Blue Ribbon Committee sponsored by the United States Environmental Protection
Agency (or EPA) recommended that usage of MTBE should be significantly reduced.
Since it is believed that the California order will require a waiver from the
Clean Air Act by the United States Congress, and other states have not yet
issued any orders, it is premature at this time to assess the future impact of
these measures on Celanese. However, these measures are likely to lead to
reduced usage of MTBE and therefore may result in increased overcapacity in
methanol and may adversely affect prices for methanol and Celanese's other
products in the methyl business line. Celanese does not manufacture MTBE but
sells methanol to customers who produce MTBE.

     Acetyls.  The Acetyls business line produces two principal products, acetic
acid and vinyl acetate monomer. Acetic acid is used to manufacture vinyl acetate
monomer and other acetyl derivatives. Celanese manufactures acetic acid for its
own use, for example, by the Acetyl Derivatives business line. Celanese also
sells acetic acid to third parties, including producers of purified terephthalic
acid, or PTA, and to other participants in the acetyl derivatives business.
Vinyl acetate monomer is used in a variety of adhesives, paints, films, coatings
and textiles.

     Celanese is the world's leading producer of acetic acid and is also the
world's leading producer of vinyl acetate monomer, according to the Tecnon
Consulting World Network Acetic Acid and Vinyl Acetate 1996-2006 World Survey.

     Acetyls, like other commodity products, are characterized by cyclicality in
pricing. The principal raw materials in this business line are ethylene, which
Celanese purchases from multiple suppliers; methanol, which Celanese
manufactures itself; carbon monoxide, most of which is manufactured by Celanese;
and butane, which is purchased from several suppliers. All these raw materials
are themselves commodities and are available from a wide variety of sources.

     Celanese's production of acetyl products employs leading proprietary and
licensed technologies, including acid-optimization technology. Management
believes that Celanese's Clear Lake, Texas facility, which uses these
technologies, is one of the world's lowest cost acetic acid plants.

     Acetyl Derivatives.  The Acetyl Derivatives business line produces a
variety of solvents and other products, which in turn are used primarily in the
manufacturing of cellulose acetate, paints and coatings, and adhesives.

     Many of the Acetyl Derivatives business line products are derivatives from
Celanese's production of acetic acid and oxo alcohols. Primary products in this
business line are:

     - Ethyl acetate, a solvent used in coatings, inks and adhesives and in the
       manufacture of, among other things, photographic films and coated papers;

     - Butyl acetate, a solvent used, for example, in inks, pharmaceuticals and
       perfume;

     - Propyl acetate, a solvent used, for example, for inks, lacquers and
       plastics;

     - Methyl ethyl ketone, a solvent used, for example, in the production of
       printing inks and magnetic tapes;

     - Acetic anhydride, an agent in the preparation of cellulose acetate,
       detergents and pharmaceuticals;

     - Acetaldehyde, a major feedstock for the production of polyols and acetic
       acid. Acetaldehyde is also used in other organic compounds such as
       pyridines, which are used in agricultural products;

     - Butyric acid, an intermediate for the production of esters used, for
       example, in artificial flavors;

                                       53
<PAGE>   55

     - Propionic acid, an organic acid used to protect and preserve grain; and

     - Formic acid, an organic acid, used, for example, in textile dyeing and
       leather tanning.

     Acetyl derivatives are commodity products characterized by pricing cycles.
The principal raw materials used in the Acetyl Derivatives business line are
acetic acid and various alcohols, all of which Celanese manufactures for its own
use as well as for sales to third parties, including its competitors in the
acetyl derivatives business.

Facilities

     The Acetyl Products segment has production sites in the United States,
Canada, Mexico, Singapore, Spain, France and Germany. Its production capacity
has expanded continuously over the last few years. For example, Celanese
recently built a vinyl acetate plant in Singapore, which started production in
the third quarter of 1997, with a nameplate capacity of 170,000 metric tons per
year. Celanese is also constructing an acetic acid plant with a nameplate
capacity of 500,000 metric tons per year, which will use leading
acid-optimization technology, and an acetate esters plant with a nameplate
capacity of 100,000 metric tons per year at the same site. Celanese also has a
joint venture in Saudi Arabia for this business segment.

Markets

     The following chart illustrates the 1998 sales by destination of Celanese's
Acetyl Products business segment by geographic region.
[Line Graph--Pie Chart]

<TABLE>
<CAPTION>
EUROPE                                               ASIA/AUSTRALIA               REST OF WORLD               NORTH AMERICA
- ------                                               --------------               -------------               -------------
<S>                                             <C>                         <C>                         <C>
33                                                        14.00                       6.00                        47.00
</TABLE>

     In the Methyls business line, the markets for the methanol and formaldehyde
product lines are highly regional and highly dependent on the demand for
products made from methanol and formaldehyde. In addition to its own production
demands for these chemicals, Celanese's production is used by manufacturers of
chemical intermediates and, to a lesser extent, by manufacturers in the wood
products industry. Methanol and formaldehyde are mainly sold into the merchant
market to a few regional customers. Celanese typically enters into short-term
contracts for the sale of methanol. The sale of formaldehyde, primarily to
customers in the chemical derivatives industry, is based on long-term
agreements. Polyols are sold globally to a wide variety of customers, primarily
in the coatings and resins and the specialty products industries.

     The Acetyls business line is a global business which has several large
customers, each of which purchases Celanese's products in different regions.
Generally, Celanese supplies these global customers under multi-year contracts.
The customers of the Acetyls business line produce polymers used in water

                                       54
<PAGE>   56

based paints, adhesives, paper coatings, film modifiers and textiles. Celanese
has long-standing relationships with most of these customers.

     Acetyl Derivatives are sold to a diverse group of regional and
multinational customers both under multi-year contracts and on the basis of
long-standing relationships. The customers of the Acetyl Derivatives business
line are primarily engaged in the production of paints and coatings and
adhesives. In addition to its own demand for acetyl derivatives to produce
cellulose acetate, Celanese sells acetyl derivatives to other participants in
the cellulose acetate industry.

Competition

     Principal competitors of Celanese in the Acetyl Products business segment
include Methanex, Perstorp and Borden Chemicals & Plastics in Methyls; Acetex,
BP Amoco, Daicel Chemical Industries, Eastman Chemical, Millennium and Union
Carbide in Acetyls; and Eastman Chemical, Union Carbide, BP Amoco and Showa
Denko in Acetyl Derivatives.

CHEMICAL INTERMEDIATES

     The Chemical Intermediates business segment consists of three business
lines: Acrylates, Oxo Products and Specialties. All business lines in this
segment market their products under the "Celanese" tradename. The following
table lists key Chemical Intermediates products and their major markets.

<TABLE>
<CAPTION>
KEY CHEMICAL INTERMEDIATES PRODUCTS                                      MAJOR MARKETS
<S>                                                       <C>
Acrylic Acid and Acrylates                                Superabsorbent Polymers, Coatings and
                                                          Adhesives
Amines                                                    Agricultural Products and Water Treatments
Carboxylic Acids                                          Lubricants, Detergents and Specialties
Oxo Alcohols                                              Plasticizers, Acrylates, Esters, Solvents
                                                          and Inks
</TABLE>

Business Lines

     Acrylates. The Acrylates business line produces and supplies:

     - Acrylic acid and a variety of acrylates, such as methyl acrylate, ethyl
       acrylate, butyl acrylate and 2-ethylhexyl acrylate.

     The primary end uses of acrylic acid and acrylates are in the manufacture
of:

     - Superabsorbent polymers that are used, for example, in diapers;

     - Paints and coatings;

     - Adhesives; and

     - Water treatment applications, such as flocculating agents.

     Prices for acrylate products are subject to the cyclical trends in the
basic chemicals industry.

     The primary raw materials for these products are propylene, which Celanese
purchases from a variety of sources, and oxo alcohols, which it produces itself.

     The expansion of acrylic acid annual production capacity at the Clear Lake,
Texas plant to 290,000 metric tons was completed in the first half of 1998. In
order to expand further into the European market, Celanese will operate a plant
owned by Dow Chemical at a site in eastern Germany, the construction of which is
scheduled to be completed by the end of 1999. Through this project, Celanese
will produce acrylic acid and esters, sharing 50% of the offtake with Dow
Chemical.

                                       55
<PAGE>   57

     Oxo. The Oxo business line produces organic solvents and intermediates such
as:

     - Butanol, used as a solvent for lacquers, dopes and thinners, and as an
       intermediate in the manufacture of chemicals, such as butyl acrylate;

     - Propanol, used as an intermediate in the production of amines for
       agricultural chemicals and as a solvent for inks, resins, insecticides
       and waxes;

     - Butyraldehyde, used, for example, in the production of polyols, alcohols,
       safety glass and fabric coatings, and as an intermediate for
       2-ethylhexanol and butanol;

     - Propionaldehyde, used, for example, in the manufacture of propanol, the
       synthesis of fertilizers, and in flavor and fragrance chemicals; and

     - 2-ethylhexanol, used as an intermediate, for example, for plasticizers
       and fuel additives, and in the production of 2-ethylhexyl acrylate, which
       in turn is used, for example, to manufacture water based resins for
       paint, textiles and paper coatings.

     Generally, demand for oxo products depends on developments in the
construction and automotive industries. Uses for this business line's products
are, to a large degree, in the manufacture of lacquers and paints, as well as in
plasticizers, which can be found in floorings, PVC flex cables, synthetic
leather and covers for car chassis. They are also used in smaller scale
automotive applications, such as safety glass, synthetic motor oils or as a
cetane enhancer.

     Prices for oxo products, like other basic chemical commodity prices, follow
cyclical trends.

     The primary raw materials for these products are ethylene and propylene,
both of which are purchased from a variety of sources, and synthesis gas, which
is manufactured from crude oil or natural gas.

     A substantial portion of the Oxo business line products is consumed by
other Celanese business lines.

     Specialties.  The Specialties business line produces:

     - Carboxylic acids such as pelargonic acid, used in detergents and
       synthetic lubricants, and heptanoic acid, used in plasticizers and
       synthetic lubricants;

     - Amines such as methyl amines, used in agro chemicals, monoisopropynol
       amines, used in herbicides, and butyl amines, used in the treatment of
       rubber and in water treatment;

     - Oxo derivatives and special solvents, such as crotonaldehyde, which is
       used by the Performance Products segment for the production of sorbates,
       as well as raw materials for the fragrance and food ingredients industry;
       and

     - The CelActiv(TM) catalyst product range, used in applications for
       hydrogenation reactions and related processes, as well as the Hoecat(R)
       catalyst product range, used in the hydrogenation of fatty acids, fats
       and oils.

     The prices for these products are relatively stable due to long-term
contracts with customers whose industries are not, generally, subject to the
cyclical trends of commodity chemicals.

     The primary raw materials for these products are olefins and ammonia, which
are sourced from the world market based on international prices.

Facilities

     The Chemical Intermediates segment has production sites for its business
lines in the United States, Germany and Mexico.

     In the past several years, Celanese has expanded production at its Bay
City, Texas, its Bucks, Alabama and its Oberhausen, Germany, sites. These have
been low cost, incremental expansions of butanol, 2-ethylhexanol, alkyl amines
and carboxylic acid capacities that were made in response to

                                       56
<PAGE>   58

increased demand for these products from both customers and other Celanese
business lines. These expansions have reduced average production unit costs for
all derivative products.

Markets

     The following chart illustrates the destination of the 1998 sales of
Celanese's Chemical Intermediates business segment by geographic region.
1998 Net Sales by Destination Pie Chart

<TABLE>
<CAPTION>
EUROPE                                               ASIA/AUSTRALIA               REST OF WORLD               NORTH AMERICA
- ------                                               --------------               -------------               -------------
<S>                                             <C>                         <C>                         <C>
29                                                        10.00                       8.00                        53.00
</TABLE>

     The market for Acrylates is characterized by a large number of medium and
small customers and only a few large customers. These customers are distributed
across a broad range of acrylate end users. Celanese focuses on the merchant
market, where it is a preferred supplier because other large suppliers are
integrated forward into acrylate derivatives and compete with many of these
customers. Celanese believes keys to success in this business include the
ability to be a competitive and reliable supplier investing in the business to
support long-term growth. Celanese's Oxo business line has a broad customer
base, and Celanese has long-standing relationships with most of these customers.

     The Specialities business line primarily serves global markets in the
synthetic lubricant, agrochemical, rubber processing and other specialty
chemical areas. Much of the Specialties business line involves "one customer,
one product" relationships, where the business develops customized products with
the customer, but the Specialties business line also sells chemicals which are
priced more like commodity chemicals.

Competition

     The Chemical Intermediates business segment competes with, among others,
BASF, Rohm & Haas, Atochem and Nippon Shokubai in Acrylates; and BASF, Eastman
Chemical and Union Carbide in Oxo and Specialties. Air Products and Chemicals is
also a significant competitor of the Specialties business line.

ACETATE PRODUCTS

     The Acetate Products business segment consists of two major business lines,
acetate filament and acetate filter products, and one small business line,
advanced fiber materials. All these business lines use

                                       57
<PAGE>   59

the "Celanese" brand to market their products. The following table lists key
products of the Acetate Products business segment and their major markets.

<TABLE>
<CAPTION>
KEY ACETATE PRODUCTS                                                     MAJOR MARKETS
<S>                                                       <C>
Acetate Filament                                          Fashion Apparel, Linings and Home
                                                          Furnishings
Acetate Filter Products                                   Cigarette Filters
</TABLE>

Business Lines

     Products from the two major business lines are found in fashion apparel,
linings and home furnishings and cigarette filters. Advanced fiber materials are
used in high temperature resistant products as well as in aerospace and in
industrial applications. According to the 1997 Stanford Research Institute
International Chemical Economics Handbook, Celanese was the world's leading
producer of both acetate tow, including production by its joint ventures, and
acetate filament.

     Acetate products are made by processing wood pulp with acetic anhydride to
form acetate flake. Celanese purchases from major suppliers wood pulp which is
made from reforested trees and produces acetic anhydride internally. The acetate
flake is then spun into acetate fiber in the form of a tow band or filament. The
Acetate Filament business line supplies products primarily to the textiles
industry. Demand for acetate filament is dependent on fashion trends and the
world economy. Recent fashion changes such as the trend to casual office wear
have negatively affected demand for lining and shell material. In addition,
depressed market conditions in Asia have significantly affected the overall
global textile business and negatively affected consumption of all fibers,
including acetate. Celanese is working more closely with downstream apparel
manufacturers and major retailers to increase awareness of acetate's suitability
for high end fashion apparel due to its breathable and luxurious qualities.
Celanese is also pursuing opportunities in other market segments such as men's
shirts and pants.

     The Acetate Filter Products business line produces acetate tow, which is
used primarily in cigarette filters. Celanese has a 30% interest in three
manufacturing joint ventures with Chinese state-owned enterprises that produce
cellulose acetate flake and tow in China. World demand for acetate tow increased
substantially during the early to mid-1990s, principally as a result of
decisions by state-owned tobacco enterprises in China to convert production from
unfiltered to filtered cigarettes. With the Chinese conversion to filtered
cigarettes being substantially complete, demand growth from this source has
slowed significantly. Currently, the acetate tow market is characterized by
oversupply and projected demand growth is low.

     The Acetate Products segment has been implementing a major cost reduction
and operations improvement program. Given the current difficult market
conditions, Celanese is expanding this program. The program has been directed
toward achieving higher productivity of employees and equipment. Management
believes this program has already achieved significant progress, with the
elimination of over 750 operational and administrative positions within the past
18 months.

Facilities

     The Acetate Products segment has production sites in the United States,
Canada, Mexico and Belgium. In addition, the Acetate Products segment
participates in three manufacturing joint ventures in China.

                                       58
<PAGE>   60

Markets

     The following chart illustrates the distribution of 1998 sales of
Celanese's Acetate Products business segment by geographic region.

<TABLE>
<CAPTION>
                                           NORTH AMERICA          REST OF WORLD              EUROPE             ASIA/AUSTRALIA
                                           -------------          -------------              ------             --------------
<S>                                     <C>                    <C>                    <C>                    <C>
                                               50.00                   5.00                  17.00                  28.00
</TABLE>

     Sales in the acetate filter products industry are principally to the major
tobacco companies that account for a majority of worldwide cigarette production.
Celanese typically enters into both long-term and short-term contracts with its
major customers. Celanese's contracts with its largest customer, with which it
has a long-standing relationship, have been entered into on a year-by-year
basis, and its second largest customer has been supplied under a long-term
contract that will expire in 2000. In recent years, the cigarette industry has
experienced consolidation. In the acetate filter products industry, changes in
the cigarette manufacturer customer base and shifts among suppliers to those
customers have had significant effects on acetate tow prices in the industry as
a whole.

     In the acetate filament industry, Celanese's sales are made to a limited
number of acetate filament customers as well as to a larger number of textile
mills. These customers in turn finish the materials or sell to dyers and
finishers, who in turn sell to converters and fabric makers, with the fabrics
then being cut and sewn by other manufacturers into apparel for retail stores.
The textile industry, in particular the apparel portion of the industry,
continues to undergo structural changes as production moves from high wage to
low wage countries. This has resulted in a changing customer base for all
participants in the textile chain from the yarn manufacturer to the retail
store. Depressed market conditions in Asia have reduced profitability in the
textile industry throughout the world, with many manufacturers in the textile
chain reducing capacity, vertically integrating with other manufacturers or
exiting from the business. Celanese's Acetates Products business has been
adversely affected by these trends in the industry.

Competition

     Principal competitors in the Acetate Products business segment include
Acordis International, Daicel Chemical Industries, Eastman Chemical, Rhodia,
Mitsubishi Rayon and Novaceta.

TICONA

     Ticona, the technical polymers segment, develops and supplies a broad
portfolio of high performance technical polymers.

                                       59
<PAGE>   61

     The following table lists key Ticona products, for which Ticona has
developed individual trademarks, and their major markets.

<TABLE>
<CAPTION>
KEY TICONA PRODUCTS                                                      MAJOR MARKETS
<S>                                                       <C>
Hostaform(R)/Celcon(R) (Polyacetals)                      Automotive, Electronics and Consumer
                                                          Products
GUR(R) (Ultra High Molecular Weight Polyethylene or       Profiles, Battery Separators and Industrial
PE-UHMW)                                                  Specialties
Celanex(R)/Vandar(R) (Polyester Engineering Resins)       Electrical, Electronics, Automotive,
                                                          Appliances and Consumer Products
Vectra(R) (Liquid Crystal Polymers)                       Electronics, Telecommunications and
                                                          Automotive
Fortron(R) (Polyphenylene Sulfide or PPS)                 Electronics, Automotive and Industrial
Celanese(R) Nylon 6/6                                     Automotive
</TABLE>

     Ticona's technical polymers have chemical and physical properties enabling
them, among other things, to withstand high temperatures, resist chemical
reactions with solvents and resist fracturing or stretching. These products are
used in a wide range of performance-demanding applications in the automotive and
electronics sectors and in other consumer and industrial goods, often replacing
metals or glass.

     Ticona is an innovation-oriented business. Ticona focuses its efforts on
developing new markets and applications for its product lines, often developing
custom formulations to satisfy the technical and processing requirements of a
customer's applications. Ticona's customer base consists primarily of a large
number of plastic molders and component suppliers, which are often the primary
suppliers to Original Equipment Manufacturers, or OEMs. Ticona works with these
molders and component suppliers as well as directly with the OEMs to develop and
improve specialized applications and systems.

     Prices for most of these products, especially specialized product grades
for targeted applications, reflect the value added in complex polymer chemistry,
precision formulation and compounding, and the extensive application development
services provided. The specialized product lines are not particularly
susceptible to cyclical swings in pricing. In standard grades, pricing is much
more competitive, with many small minimum-service providers competing for volume
sales.

Product Lines

     Following is a description of Ticona's principal product lines.

     Polyacetals are sold under Ticona's own trademarks, Celcon(R) in North
America and Hostaform(R) in Europe and the rest of the world. Polyacetals are
used for mechanical parts, including door locks and seat belt mechanisms, in
automotive applications and in electrical, consumer and industrial applications
such as keyboards, ski bindings, and gears for appliances.

     The primary raw material for polyacetals is formaldehyde, which is
manufactured from methanol. Ticona currently purchases formaldehyde in the
United States from Celanese's Acetyl Products business segment and, in Europe,
manufactures formaldehyde from purchased methanol. Methanol is a readily
available commodity. Ticona is considering expansion in this product line in
Asian markets.

     GUR(R), an ultra high molecular weight polyethylene or PE-UHMW, is an
engineered material used in heavy-duty automotive and industrial applications
such as car battery separator panels and industrial conveyor belts, as well as
in specialty medical and consumer applications, such as porous tips for marker
pens, sports equipment and artificial prostheses. Topas(R), a metallocene
catalyst technology-based cycloolefin copolymer, or COC, is a newly engineered
material. Topas(R) has been developed to be used in applications where
transparency, high temperature resistance and gas barrier properties are key
requirements, such as in optical applications and packaging films for sterile
medical devices and food storage. Ticona is building the first commercial plant
to produce Topas(R).

                                       60
<PAGE>   62

     The basic raw material for GUR(R) and Topas(R) is ethylene, a widely
available commodity chemical with cyclical pricing. Smaller volume specialty
co-monomers for COC production will be manufactured by Ticona.

     Polyesters such as Celanex(R) polybutylene terephthalate, or PBT, and
Vandar(R) are used in a wide variety of automotive, electrical and consumer
applications, including ignition system parts, radiator grilles, electrical
switches, appliance housings, boat fittings and perfume bottle caps. Impet-Hi(R)
polyethylene terephthalate, or PET, is a polyester which exhibits rigidity and
strength useful in large injection molded part applications. Riteflex(R) is a
co-polyester which adds flexibility to the range of high performance properties
offered by Ticona's other products. Liquid crystal polymers, or LCPs, such as
Vectra(R) are used in electrical and electronics applications and for precision
parts with thin walls and complex shapes. Fortron(R), a polyphenylene sulphide,
or PPS, product, is used in a wide variety of automotive and other applications,
especially those requiring heat resistance, including fuel system parts,
radiator pipes and halogen lamp housings, and often replaces metal in these
demanding applications. Fortron(R) is manufactured by Fortron Industries, a
50%-50% joint venture between Ticona and Kureha Chemicals Industry of Japan.
Celstran(R), Compel(R) and Fiberod(R) are long fiber reinforced thermoplastics,
which impart extra strength and stiffness, making them more suitable for larger
parts than conventional thermoplastics. Celanese(R) Nylon 6/6, a polyamide, is
resistant to lubricants and fuels, making it useful in automotive applications.

     Raw materials for these products vary. Base monomers for polyesters, such
as DMT and PTA, are widely available with pricing dependent on the broader
polyester fiber and packaging resins market conditions. Smaller volume specialty
co-monomers for these products are typically supplied by a few companies.
Celanese has entered into long-term contracts for the supply of intermediate raw
materials to produce Celanese(R) Nylon 6/6.

Facilities

     Ticona has polymerization, compounding and research and technology centers
in Germany and the United States, as well as additional compounding facilities
in the United Kingdom and Brazil. For the new COC materials, a new Topas(R)
production facility is being built in Oberhausen, Germany, and is expected to
commence production in the second half of 2000. Polyplastics, in which Ticona
holds a 45% interest, is completing the construction of a production facility
for polyacetals in Malaysia, due to become operational in 2000. Polyplastics is
a leading engineering resins supplier in the Asia/Pacific region.

Markets

     The following chart illustrates the destination of 1998 sales of the Ticona
segment by geographic region.
1998 Net Sales By Destination Pie Chart

<TABLE>
<CAPTION>
NORTH AMERICA                                         REST OF WORLD               EUROPE/AFRICA              ASIA/AUSTRALIA
- -------------                                         -------------               -------------              --------------
<S>                                             <C>                         <C>                         <C>
54                                                        1.00                        43.00                       2.00
</TABLE>

                                       61
<PAGE>   63

     Ticona's consolidated net sales do not include the sales of Polyplastics,
which is accounted for under the equity method. If Ticona's portion of the sales
made by Polyplastics were included in the chart above, the percentage of sales
sold in Asia/Australia would increase substantially, reflecting Polyplastics'
leading positions in those markets. Ticona's principal customers are suppliers
to the automotive industries as well as industrial suppliers. These customers
produce primarily engineered products, and Ticona works closely with its
customers to develop and improve specialized applications and systems. Ticona
has long-standing relationships with most of its major customers, but it also
uses distributors to reach a larger customer base. For most of Ticona's product
lines, contracts typically have a term of one to two years.

Competition

     Ticona, together with its affiliate Polyplastics, is one of the leading
participants in the global technical polymers business. Its principal
competitors include Bayer, Du Pont and General Electric. Smaller regional
competitors include Allied, Asahi, DSM, Mitsubishi, Phillips, Rhodia, Teijin and
Toray.

PERFORMANCE PRODUCTS

     The Performance Products business segment consists of:

     - the oriented polypropylene or OPP films business conducted by Trespaphan,

     - the food ingredients business conducted by Nutrinova, and

     - the separation products business conducted by Celgard.

     These businesses use their own names to market their products. The
following table lists key products of the Performance Products segment and their
major markets.

<TABLE>
<CAPTION>
KEY PERFORMANCE PRODUCTS                                                 MAJOR MARKETS
<S>                                                       <C>
OPP Films                                                 Packaging, Labelling and Electrical
                                                          Engineering (Capacitors)
Sunett(R)                                                 Beverages, Confections, Dairy Products and
                                                          Pharmaceuticals
Sorbates                                                  Dairy Products, Baked Goods, Beverages,
                                                          Animal Feeds, Spreads and Delicatessen
                                                          Products
</TABLE>

Business Lines

     OPP Films.  The OPP Films business line conducted by Trespaphan was formed
in 1969. It manufactures and markets OPP films and is a significant participant
in the world-wide OPP Films business and has a leading position in Europe. Its
OPP films are made from very pure polypropylene granules and are oriented, high
strength films which are very thin, ranging from 3.5em (0.0035mm) to 100 em
(0.1mm), which is about twice the diameter of a human hair. OPP films are used
in packaging of products such as foodstuffs and cigarette packs, in labels and,
because of their extreme purity, for highly technical purposes in the production
of capacitors.

     The primary raw material of this business line is polypropylene, which is
readily available and is purchased from several third party suppliers and from
Celanese's 50% owned affiliate Targor on an arm's length basis. Prices for the
majority of this business's products are extremely sensitive to demand, industry
capacity and the cost of key raw materials.

     Food Ingredients.  The food ingredients business conducted by Nutrinova was
formed in 1997. It conducts the food ingredients business of Hoechst's former
specialty chemicals division. Celanese's food ingredients business consists of
two strategic business lines: high intensity sweeteners and food protection
ingredients, such as sorbic acids and sorbates. Acesulfame K, an artificial
sweetener, marketed under the name Sunett(R) is used in a wide variety of
beverages, confections and dairy products throughout the world.

     The primary raw materials of this business line are diketene and sulfur
trioxide for Sunett(R) and ketene and crotonaldehyde for sorbic acids. Sunett(R)
pricing for targeted applications reflects the value

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<PAGE>   64

added in the precision formulations and extensive technical services provided.
Sorbates pricing is extremely sensitive to demand and industry capacity and is
not necessarily dependent on the prices of raw materials.

     In 1998, Nutrinova Inc., a U.S. subsidiary of Nutrinova, received a grand
jury subpoena from the United States District Court for the Northern District of
California in connection with a U.S. criminal antitrust investigation of the
sorbates industry. On May 3, 1999, Hoechst and the government of the United
States of America entered into an agreement pursuant to which Hoechst pled
guilty to a one-count indictment that charged Hoechst with participating in a
conspiracy to fix prices and allocate market shares of sorbates sold in the
United States. Hoechst and the government agreed to recommend that the U.S.
District Court fine Hoechst U.S.$36 million. Hoechst also agreed to cooperate
with the government's investigation and prosecutions related to the sorbates
industry. The U.S. District Court accepted this plea on June 18, 1999 and
imposed a penalty as recommended in the plea agreement.

     In addition, thirteen civil antitrust actions by consumers of sorbates,
seeking monetary damages and other relief for alleged conduct involving the
sorbates industry, have been filed in U.S. courts naming Hoechst, Nutrinova and
other Hoechst and Celanese subsidiaries as defendants. These actions are in the
early stages of litigation. (See "Relationship between Hoechst and Celanese
After the Demerger" and "Legal Proceedings").

     Separation Products.  The separation products business conducted by Celgard
manufactures and markets flat sheet membranes for use in lithium batteries;
hollow membranes for use in blood oxygenators, for example, in open heart
surgeries; modules for degassing liquids; and ultrafiltration membranes and
modules for filtration of water-based liquids. The primary raw materials for the
separation products business are polyethylene and polypropylene.

Facilities

     Trespaphan's primary activities are in Europe and North America, with
manufacturing plants in Germany, Mexico, the United Kingdom, France and South
Africa. Nutrinova has production facilities in Frankfurt, Germany. A joint
venture with Nanning Chemical, named Hoechst Nanning Food Ingredients Company
Ltd., produces sorbic acids in Nanning, China. Celgard has manufacturing
operations in Charlotte, North Carolina, and Wiesbaden, Germany.

Markets

     The following chart illustrates the destination of 1998 sales of the
Performance Products business segment by geographic region.
1998 Net Sales By Destination Pie Chart

<TABLE>
<CAPTION>
NORTH AMERICA                                         REST OF WORLD               EUROPE/AFRICA              ASIA/AUSTRALIA
- -------------                                         -------------               -------------              --------------
<S>                                             <C>                         <C>                         <C>
54                                                          1                          43                           2
</TABLE>

     The market for OPP films is highly fragmented. Trespaphan has customers
mainly in the food packaging and tobacco industries. Nutrinova markets Sunett(R)
directly, primarily to a limited number of large multinational and regional
customers in the beverage and food industry under long-term contracts.

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<PAGE>   65

Nutrinova markets food protection ingredients primarily through regional
distributors to small and medium customers and directly through regional sales
offices to large multinational customers in the food industry under contracts
which typically have one-year terms. Celgard's principal customers manufacture
lithium batteries and blood oxygenators. Other Celgard customers are involved in
water purification and waste water treatment.

Competition

     Principal competitors of Trespaphan are Mobil, AET, Formosa Plastics and
Moplefan; Nutrinova's principal competitors are Monsanto, Holland Sweetener,
Eastman Chemical, Daicel, several other Japanese manufacturers and several
Chinese manufacturers. Celgard's principal competitors are Asahi Chemical, Tonen
and Akzo Nobel.

OTHER ACTIVITIES

     The most significant of Celanese's Other Activities are:

     - Other Chemicals, consisting primarily of Inorganic Chemicals business and
       the Ethylene Oxide/ Ethylene Glycol business; and

     - The polyester staple and bottle resins business of Celanese Canada.

Inorganic Chemicals

     Inorganic Chemicals includes the Phosphorous and the Chlorine and Chlorine
Derivatives business lines. Prior to the demerger, these business lines were the
remaining portions of the inorganic chemicals business, previously reported by
Hoechst in its Celanese business segment. These business lines have been the
subject of an ongoing divestiture program.

     The Phosphorous activities are conducted by the Thermphos Group, which
produces phosphorous, phosphoric acid, phosphorous pentasulfide and sodium
tripolyphosphate and phosphorous chlorides. These products are used in detergent
and a variety of industrial and food applications as well as for agrochemical
applications. The majority of phosphorous products sales are to a highly
concentrated group of customers in Europe. Prices for these products are
relatively stable compared to other commodity chemicals.

     The Chlorine and Chlorine Derivatives business lines produce chlorine,
caustic soda, hydrogen, hydrochloric acid, ethylene dichloride and vinyl
chloride monomer, which are commodity products principally used in a variety of
specialty chemical applications. Celanese has entered into discussions with a
potential buyer for its Chlorine and Chlorine Derivatives business lines, and,
under the proposed terms of the agreement currently being negotiated would
expect to record a loss of between E80 million and E90 million related to the
disposition of these business lines. However, Celanese is also internally
considering other options for these business lines.

     Prices for these products follow the cyclical trends in the basic chemicals
industry.

     The Chlorine and Chlorine Derivatives business line has a relatively small
customer base, entirely in Europe, with the majority of sales to Hoechst group
companies and Celanese affiliates.

     The principal raw materials in the Phosphorous, Chlorine and Chlorine
Derivatives business lines are salt, phosphate rock and ethylene, all of which
are furnished by numerous suppliers.

     Principal competitors of the Phosphorous business are Albright & Wilson,
Akzo Nobel, Italmatch, Atochem and Rhodia. The Chlorine and Chlorine Derivatives
lines compete with, among others, Bayer, Dow Chemical, Solvay and Atochem.

     Celanese is considering various options for these business lines, including
divestitures through sales of plants, the formation of joint ventures with other
participants in the inorganic chemicals industry and plant shut-downs. As noted
above, the proposed sale of Celanese's Chlorine and Chlorine Derivatives
business line currently being negotiated would result in a substantial loss.
Celanese does not expect that it would realize any material loss upon the sale
of its Phosphorous business line. However, given the current state of the
worldwide inorganic chemicals businesses, there can be no assurance that any
sales could be achieved on satisfactory terms or that other attractive means of
exiting from the Chlorine and Chlorine Derivatives
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<PAGE>   66

and Phosphorous business lines will be available. If Celanese is unable to sell
the operations or find a suitable joint venture partner, the costs of plant
shutdowns, both in terms of employee severance costs and environmental costs
associated with permanently closing these facilities, could be significant. If
Celanese decides to continue to operate these businesses, significant capital
improvement will be needed to achieve a competitive position in the marketplace.

Ethylene Oxide/Ethylene Glycol -- EO/EG

     The EO/EG business includes ethylene oxide and its derivatives, ethylene
glycol, di-ethylene glycol or DEG and tri-ethylene glycol or TEG. A large
portion of Celanese's production goes into the downstream glycols, with the
remainder being used in surfactants. The downstream glycols, namely, EG, DEG and
TEG, are used primarily in the production of polyester and anti-freeze. Prices
for these products follow the cyclical trends in the basic chemicals industry.

     The EO/EG business line has a very small customer base located in the
United States, primarily polyester, surfactant, and anti-freeze manufacturers.
Principal competitors are Union Carbide, BASF, Huntsman and Dow Chemical.

     The principal raw materials for the EO/EG business are ethylene and oxygen,
which are furnished by a few strategic suppliers under long term supply
contracts. These suppliers also supply the same materials for Celanese's other
business lines.

     The EO/EG business is not strategic to Celanese, and, therefore, Celanese
is considering divestiture options through the sale of its operating facility in
Clear Lake, Texas. On September 23, 1999, Celanese entered into a letter of
intent to sell its EO/EG business through the sale of its Clear Lake Texas
operating facility to Old World Industries Inc. If Celanese is unable to sell
the operations in the near-term, it will continue to operate the EO/EG business
until an appropriate opportunity is identified.

Polyester Staple and Bottle Resins

     Celanese Canada conducts a polyester staple and bottle resins business at
its plant in Millhaven, Ontario. On March 24, 1999, Celanese Canada announced a
planned transaction with KoSa, a company owned by a consortium between Koch
Industries, a U.S. company, and a Mexican company owned by Isaac Saba, involving
the sale of these activities. KoSa is the same company that purchased in
December 1998 Hoechst's global polyester and resins business. Due diligence has
recently been completed and preliminary negotiations with respect to the
proposed sale have begun. In the interim, KoSa has taken preliminary steps to
rebrand the products of the Millhaven facility under the KoSa brand name.

EQUITY INVESTMENTS

     In addition to the above-described businesses and joint ventures, Celanese
has several equity investments in joint ventures which are not related to
businesses conducted by its other business segments. Because Celanese does not
have a controlling interest in these businesses, they are treated as equity
investments rather than consolidated in the Combined Financial Statements. The
following is a summary of the principal businesses conducted by those joint
ventures.

Targor

     Targor, a joint venture with BASF AG in which Celanese owns a 50% interest,
is treated as an equity investment. Targor produces polypropylene products such
as Hostalen(R), Hostacom(R), Novolen(R) and Procom(R). Targor started business
on July 1, 1997. Beginning January 2001, BASF has an option to acquire
Celanese's interest in Targor and Celanese has an option to sell its interest in
Targor to BASF. The price payable upon exercise of such options is approximately
E255 million, after giving effect to adjustments. In 1998, Targor had net sales
of E1,001 million.

Vinnolit

     Vinnolit, a joint venture with Wacker-Chemie GmbH in which Celanese owns a
50% interest, is treated as an equity investment. Vinnolit is a leading European
producer of high performance polyvinyl chloride or PVC products such as paste
and extender resins used for flooring, wall coverings and coatings.
                                       65
<PAGE>   67

Vinnolit also produces commodity PVC products such as thermoplastics used for
window profiles and films. Vinnolit has a large customer base that is mostly
concentrated in the construction, film and automotive industries. The PVC market
currently suffers from global overcapacity, and Vinnolit expects the current
trend of consolidation in the industry to continue. Vinnolit has production
units at four sites in Germany with an aggregate annual production capacity of
570,000 metric tons. In 1998, Vinnolit had net sales of E450 million.

Dyneon


     Dyneon, a joint venture with 3M in which Celanese has a 46% interest, is
treated as an equity investment. Dyneon produces fluoropolymer products that are
marketed to a variety of industrial sectors such as automotive chemical
processing, electronics, pollution control and wire and cable protection. In
1998, Dyneon had net sales of E312 million. On October 8, 1999 Celanese entered
into a letter of intent to sell 3M its ownership interest in Dyneon. See Note 8
to the Unaudited Interim Combined Financial Statements. 3M also has an existing
option to purchase Celanese's interest in Dyneon, provided non-binding notice of
intention to exercise is delivered between July and September 2002, for a fair
market value price to be determined at that time by an independent investment
banker.


RAW MATERIALS AND ENERGY

     Celanese purchases a variety of raw materials for use in its production
processes. Celanese has a policy of maintaining, when available, multiple
sources of supply for materials. Although some of Celanese's individual
businesses may have single suppliers for some of their raw materials, Celanese
is not dependent on a limited number of suppliers for essential raw materials.
Celanese obtains its supplies of raw materials from a number of countries.
Celanese has not experienced difficulty in obtaining sufficient supplies of raw
materials in recent years and believes that it will be able to obtain them in
sufficient quantities in the future. However, there can be no assurance that
Celanese's ability to obtain sufficient raw materials will not be adversely
affected by unforeseen developments. In addition, the price of raw materials may
vary, perhaps substantially, from year to year.

     Celanese's production facilities rely largely on coal, fuel oil, natural
gas and electricity for energy. In the United States, these raw materials and
energy are predominantly purchased directly by Celanese's operating businesses.
With respect to Celanese's European operations, most of these raw materials are
centrally purchased by special purpose subsidiaries of Celanese which also buy
raw materials on behalf of Hoechst and other third parties.

INTELLECTUAL PROPERTY

     Celanese attaches great importance to patents, trademarks, copyrights and
product designs in order to protect its investment in research and development,
manufacturing and marketing. Celanese's policy is to seek the widest possible
protection for significant product developments in its major markets. Patents
may cover products, processes, intermediate products and product uses.
Protection for individual products extends for varying periods in accordance
with the date of grant and the legal life of patents in the various countries.
The protection afforded, which may also vary from country to country, depends
upon the type of patent and its scope of coverage. In most industrial countries,
patent protection exists for new substances and formulations, as well as for
unique applications and production processes. Celanese monitors its competitors
and vigorously challenges patent and trademark infringement.

     As patents expire, the products and processes described and claimed in
those patents become generally available for use by the public. Celanese
believes that the loss of no single patent which may expire in the next several
years will materially adversely affect the business or financial results of
Celanese.

     Celanese also seeks to register trademarks extensively as a means of
protecting the brand names of its products, which brand names become more
important once the corresponding patents have expired. Celanese protects its
trademarks vigorously against infringement and also seeks to register design
protection where appropriate.

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<PAGE>   68

RESEARCH AND DEVELOPMENT

     Celanese conducts its own research and development activities to increase
its competitiveness. Celanese's United States research and development functions
are located in Corpus Christi, Texas -- Acetyl Products and Chemical
Intermediates; Charlotte, North Carolina -- Acetate Products; and Auburn Hills,
Michigan and Summit, New Jersey -- Ticona. Outside the United States, Celanese
has research facilities in Oberhausen, Germany -- Acetyl Products, Chemical
Intermediates and Ticona; and Frankfurt, Germany -- Ticona. Celanese entered
into an exclusive partnership with Symyx Technologies of Santa Clara, California
for research on the oxidation of hydrocarbons. Celanese also continues to source
some process technology development from Aventis Research & Technologies GmbH &
Co. KG, a subsidiary of Hoechst. Celanese expects to purchase the production
technology development division of Aventis Research & Technologies from Hoechst
in the second half of 1999.

     The Acetyl Products and Chemical Intermediates business segments have been
focusing on improving core production technologies, for example, in acetic acid,
oxo products, acrylic acid, vinyl acetate monomer and polyols, on improving
catalyst development, and supporting both debottlenecking and cost reduction
efforts. New business opportunities for amines and oxo derivatives are developed
in conjunction with research and development support from both Oberhausen and
Corpus Christi technical centers.

     The Acetate Products business segment has been focusing on developing new
fabrics using acetate filament and new applications, such as wound dressings,
for other acetate materials and have been actively filing patent applications
worldwide for such new applications.

     Research in the Ticona segment is focused on the development of new
formulations and applications for its products, improved manufacturing processes
and new polymer materials with varying chemical and physical properties. This
effort involves the entire value chain from improved polymerization and
compounding to working closely with end-users to identify new applications that
can take advantage of these high performance features. Ticona is continuously
improving compounding recipes to extend product properties and grades, while
offering grade consistency on a global basis. In addition, Ticona is developing
new polymerization and manufacturing technology in order to maintain low cost
leadership without sacrificing high quality processing. For example, Ticona has
developed a new technical material, Topas(R), a metallocene catalyst based
cycloolefin copolymer. Ticona's research efforts have focused on developing
manufacturing processes, and its market development efforts have focused on
specialized applications for Topas(R), in such areas as high-performance films,
electronics, optical storage media and medical devices and packaging.

     The research and development activities of the Performance Products segment
are conducted by the three businesses separately. Trespaphan's research and
development activities in Swindon, United Kingdom, Neunkirchen, Germany and
Mantes, France, have been focused on the development of new film types for
established and new applications. Trespaphan also has focused on improving the
manufacturing process in order to maintain low cost leadership as well as high
quality for its film products. Nutrinova's research and development focus has
been on expanding its existing technologies and to develop new applications for
existing products in close cooperation with its customers. Celgard conducts its
own research and development activities in Charlotte, North Carolina and in
Wiesbaden, Germany with a focus on new product development and process
improvement.

     Celanese owns, or is licensed under, more than 10,000 patents relating to
its products and manufacturing processes, some of which are important to
specific commercial operations. As patents expire, the products and processes
described and claimed in those patents become generally available for use by the
public. No single patent or group of patents is considered material to the
business as a whole. Celanese also has licenses under patents and other
intellectual property developed by third parties, including Hoechst's
affiliates.

     Celanese has developed and acquired technical information and owns patents,
some of which have been licensed to affiliates and others worldwide. Payments to
Celanese from these licenses in 1998 was E1 million.

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<PAGE>   69

     Research and development costs are included in expenses as incurred.
Celanese's research and development costs for 1998, 1997 and 1996, were E123
million, E149 million and E143 million, respectively. Copley licenses patents
from Hoechst and paid license fees of E30 million in 1998.

     In research and development activities, at June 30, 1999, Celanese employed
approximately 800 individuals, including approximately 400 professionals.

ENVIRONMENTAL AND OTHER REGULATION

     Obtaining, producing and distributing many of Celanese's products involves
the use, storage, transportation and disposal of toxic and hazardous materials.
Celanese is subject to extensive, evolving and increasingly stringent national
and local environmental laws and regulations, which address, among other things,
the following:

     - Emissions to the air;

     - Discharges to surface and subsurface waters;

     - Other releases into the environment;

     - Generation, handling, storage, transportation, treatment and disposal of
       waste materials; and

     - Maintenance of safe conditions in the workplace.

     Celanese is subject to environmental laws and regulations that may require
it to remove or mitigate the effects of the disposal or release of chemical
substances at various sites. Under some of these laws and regulations, a current
or previous owner or operator of property may be held liable for the costs of
removal or remediation of hazardous substances on, under, or in its property,
without regard to whether the owner or operator knew of, or caused the presence
of the contaminants, and regardless of whether the practices that resulted in
the contamination were legal at the time they occurred. As many of Celanese's
production sites have an extended history of industrial use, it is impossible to
predict precisely what effect these laws and regulations will have on Celanese
in the future. As is typical for chemical businesses, soil and groundwater
contamination has occurred in the past at some Celanese sites, and might occur
or be discovered at other sites.

     It is Celanese's policy to comply with all environmental, health and safety
requirements and to provide workplaces for employees that are safe and
environmentally sound. In some cases, compliance can be achieved only by
incurring capital expenditures. In 1998, combined worldwide expenditures,
including those with respect to third party and divested sites, for compliance
with environmental control regulations and internal company initiatives totaled
E139 million, of which E33 million was for capital projects. Celanese's 1999
budget calls for expenses, including capital projects, of E126 million. It is
anticipated that stringent environmental regulations will continue to be imposed
on Celanese and the industry in general. Although Celanese cannot predict with
certainty future expenditures, management believes that the current spending
trends will continue.

     Celanese is subject to claims brought by United States federal or state
regulatory agencies or private individuals regarding the cleanup of sites that
Celanese owns, owned, operated or where waste from its operations was disposed.
In particular, Celanese has a potential liability under the United States
Federal Comprehensive Environmental Response, Compensation, and Liability Act,
commonly known as Superfund, the United States Resource Conservation and
Recovery Act and related state laws for investigation and clean-up costs at
approximately 100 sites. At most of these sites, numerous companies, including
Celanese, or one of its predecessor companies, have been notified that the
United States Environmental Protection Agency or EPA, state governing body or
private individuals consider such companies to be potentially responsible
parties under Superfund or related laws. The proceedings relating to these sites
are in various stages. The clean-up process has not been completed at most
sites, and the status of the coverage under some insurance policies for many of
these proceedings is in litigation. Celanese regularly reviews the liabilities
for these sites and has accrued its best estimate of its ultimate liability for
investigation or clean-up costs, but, due to the many variables involved in such
estimation, the ultimate liability may vary from these estimates. Expenditures
for investigation, clean-up and related

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activities have been E18 million for the three years ended December 31, 1998,
with expenditures in no year greater than E10 million.

     One of Celanese's wholly owned subsidiaries is the general partner of the
InfraServ companies that provide on-site general and administrative services at
German sites in Frankfurt am Main-Hochst, Gendorf, Hurth-Knapsack, Wiesbaden,
Oberhausen, Kelsterbach and Munchsmunster. Producers at the sites, including
subsidiaries of Celanese, are owners of limited partnership interests in the
respective InfraServ companies. In connection with the demerger, Hoechst AG
transferred most of its limited partnership interests in InfraServ companies for
all of Hoechst's production sites except for Marburg, which is a life sciences
production site, to Celanese. All other arrangements and the activities
involving the InfraServ companies and their shareholders remain unchanged.

     InfraServ companies are liable for any residual contamination and other
pollution because they own the real estate on which the individual facilities
operate. In addition, Hoechst, as the responsible party under German public law,
is liable to third parties for all environmental damage that occurred while it
was still the owner of the plants and real estate. However, the InfraServ
companies have agreed to hold harmless Hoechst from all liability arising out of
or in connection with environmental pollution of any site. The partnership
agreements provide that, as between the partners, each partner is responsible
for any contamination caused predominantly by such partner. The limited partners
are also obligated to indemnify Celanese as the general partner against any such
liability. In view of this potential obligation to eliminate residual
contamination, the InfraServ companies have formed provisions totaling
approximately E259 million as of December 31, 1998, of which E57 million have
been included in the combined reserves for environmental liabilities of
Celanese. If the InfraServ companies default on their respective indemnification
obligations to eliminate residual contamination, the owners of the remaining
participations in the InfraServ companies have agreed to fund such liabilities,
subject to a number of limitations. To the extent that any liabilities were not
satisfied by either the InfraServ companies or their owners, these liabilities
were demerged to Celanese. As between Hoechst and Celanese, Hoechst has agreed
to indemnify Celanese for two-thirds of these demerged residual liabilities.

     Some of Celanese's facilities in Germany are over 100 years old, and there
may be significant contamination at these facilities. Consistent with German law
and with agreements with the relevant governmental entities, Celanese is
addressing this contamination at its German facilities. In Germany, Celanese
records a provision for environmental matters when it is obligated by law,
through irrevocable agreements with governmental authorities or through firm
commitments, to remediate the facilities. The provision includes all
undiscounted costs estimated to be incurred over the next 10 years that are
probable and can be reasonably estimated.

     Provisions are not recorded for potential soil contamination liability at
facilities still under operation, as German law does not currently require such
contamination to be remedied until the facility is closed and dismantled, unless
the authorities otherwise direct. If Celanese were to terminate operations at
one of its facilities or if German law were changed to require such removal or
clean-up, the cost could be material to Celanese. Celanese cannot accurately
determine the ultimate potential liability for investigation and clean-up at
such sites. Celanese adjusts provisions as new remedial commitments are made.
See Note 20 to the Combined Financial Statements.

     It is difficult to estimate the future costs of environmental protection
and remediation because of many uncertainties, including uncertainties about the
status of laws, regulations and information related to individual locations and
sites. Subject to the foregoing, but taking into consideration Celanese's
experience to date regarding environmental matters of a similar nature and facts
currently known, Celanese believes that capital expenditures and remedial
actions to comply with existing laws governing environmental protection will not
have a material adverse effect on Celanese's business and financial results.
Celanese had, as of December 31, 1998, reserved E320 million for environmental
matters.

     Celanese believes it is in substantial compliance with all environmental,
health and safety laws and regulations and continues to devote attention to the
health and safety of its employees and the protection of the public health and
the environment in the regions where it operates. Such compliance has not had an
adverse effect on Celanese's competitive position or business. Celanese cannot
predict the effect of
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regulations which may be adopted in the future by governmental bodies
responsible for air, water and solid waste pollution controls and employee and
community health and safety.

     In the demerger agreement, Celanese agreed to indemnify Hoechst against
environmental liabilities for environmental contamination that could arise under
some divestiture agreements regarding chemical businesses, participations or
assets that were entered into by Hoechst prior to the demerger. Celanese and
Hoechst have agreed that Celanese will indemnify Hoechst against those
liabilities up to an amount of E250 million. Hoechst will bear those liabilities
exceeding E250 million, but Celanese will reimburse Hoechst for one-third of
those liabilities for amounts that exceed E750 million.

EMPLOYEES

     As of December 31, 1998, Celanese had approximately 17,500 employees
worldwide. Celanese had about 8,000 employees in the United States, 5,500
employees in Europe, 3,800 in Mexico and Canada, 100 employees in Asia and 100
employees in Africa. Many of Celanese's employees are unionized, particularly in
Germany, Canada, Mexico and France. However, in the United States, fewer than
one quarter of Celanese's employees are unionized. Moreover, in Germany and
France, wages and general working conditions are often the subject of centrally
negotiated collective bargaining agreements. Within the limits established by
these agreements, the various subsidiaries of Celanese negotiate directly with
the unions and other labor organizations representing the employees. Collective
bargaining agreements between Celanese's German subsidiaries and unions relating
to remuneration typically have a term of one year, while in the United States a
three year term is typical. Celanese offers comprehensive benefit plans for
employees and their families and believes its relations with employees are
satisfactory.

PROPERTY

     Celanese's principal executive offices are currently located in Frankfurt
am Main, Germany but are expected to be relocated to Kronberg/Taunus, Germany in
the near future.

     As of December 31, 1998, Celanese had numerous production and manufacturing
facilities throughout the world. Celanese also owns or leases other properties,
including office buildings, warehouses, pipelines, research and development
facilities and sales offices.

                                       70
<PAGE>   72

     The following table sets forth a list of the principal production,
manufacturing and other facilities of Celanese throughout the world, including
its joint venture properties.

<TABLE>
<CAPTION>

<S>                                                    <C>
ACETYL PRODUCTS
SITE                                                   LEASED/OWNED
Bay City, Texas, USA                                   Owned
Bishop, Texas, USA                                     Owned
Cangrejera, Veracruz, Mexico                           Owned
Celaya, Guanajuato, Mexico                             Owned
Clear Lake, Texas, USA                                 Owned; the methanol operation of this facility is
                                                       owned by a joint venture
Edmonton, Alberta, Canada                              Owned
Frankfurt am Main, Germany                             Owned by InfraServ GmbH & Co. Hochst KG in which
                                                       Celanese holds a 27.2% limited partnership interest
Knapsack, Germany                                      Owned by InfraServ GmbH & Co. Knapsack KG in which
                                                       Celanese holds a 42.0% limited partnership interest
Pampa, Texas, USA                                      Owned
Singapore, Singapore                                   Owned
Tarragona, Spain                                       Owned
CHEMICAL INTERMEDIATES
SITE                                                   LEASED/OWNED
Bay City, Texas, USA                                   Owned
Bucks, Alabama, USA                                    Owned
Clear Lake, Texas, USA                                 Owned; the methanol operation of this facility is
                                                       owned by a joint venture
Oberhausen, Germany                                    Owned by InfraServ GmbH & Co. Oberhausen KG in which
                                                       Celanese holds an 84.0% limited partnership interest
ACETATE PRODUCTS
SITE                                                   LEASED/OWNED
Drummondville, Quebec, Canada                          Owned
Edmonton, Alberta, Canada                              Owned
Kunming, Yunnan, China                                 Leased by a joint venture in which Celanese has an
                                                       interest
Lanaken, Belgium                                       Owned
</TABLE>

                                       71
<PAGE>   73

<TABLE>
<CAPTION>

<S>                                                    <C>
ACETATE PRODUCTS
Nantong, Jiangsu, China                                Leased by a joint venture in which Celanese has an
                                                       interest
Narrows, Virginia, USA                                 Owned
Ocotlan, Jalisco, Mexico                               Owned
Rock Hill, South Carolina, USA                         Owned
Zhuhai, Guandang, China                                Leased by a joint venture in which Celanese has an
                                                       interest
TICONA
SITE                                                   LEASED/OWNED
Auburn Hills, Michigan, USA                            Leased
Bayport, Texas, USA                                    Leased
Bishop, Texas, USA                                     Owned
Florence, Kentucky, USA                                Owned
Frankfurt am Main, Germany                             Owned by InfraServ GmbH & Co. Hochst KG in which
                                                       Celanese holds a 27.2% limited partnership interest
Kelsterbach, Germany                                   Owned by InfraServ GmbH & Co. Kelsterbach KG in which
                                                       Celanese holds a 100.0% limited partnership interest
Oberhausen, Germany                                    Owned by InfraServ GmbH & Co. Oberhausen KG in which
                                                       Celanese holds a 84.0% limited partnership interest
Shelby, North Carolina, USA                            Owned
Summit, New Jersey, USA                                Owned
Wilmington, North Carolina, USA                        Owned by a joint venture in which Celanese has a
                                                       controlling interest
Winona, Minnesota, USA                                 Owned
PERFORMANCE PRODUCTS
SITE                                                   LEASED/OWNED
Charlotte, North Carolina, USA (Celgard)               Leased
Frankfurt am Main, Germany (Nutrinova)                 Owned by InfraServ GmbH & Co. Hochst KG in which
                                                       Celanese holds a 27.2% limited partnership interest
Neunkirchen, Germany (Trespaphan)                      Owned
Zacapu, Michoacan, Mexico (Trespaphan)                 Owned
</TABLE>

     Also, other affiliates of Celanese have production facilities in Saudi
Arabia, Taiwan, Japan and Malaysia. Polyplastics has its principal production
facilities in Japan and Taiwan.

     In 1998 Celanese and its consolidated subsidiaries, in the aggregate, had
capital expenditures for the expansion and modernization of production,
manufacturing, research and administrative facilities of

                                       72
<PAGE>   74

E373 million. In 1997 these expenditures amounted to E408 million. Celanese
believes that its current facilities and those of its consolidated subsidiaries
are adequate to meet the requirements of Celanese's present and foreseeable
future operations.

     For information on environmental issues associated with Celanese's
properties, see "Environmental and Other Regulation" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Environmental Protection." Additional information with respect to
Celanese's property, plant and equipment, and leases is contained in Notes 9 and
17 to the Combined Financial Statements.

LEGAL PROCEEDINGS

     Celanese is involved in a number of legal proceedings and claims incidental
to the normal conduct of its businesses, relating to such matters as product
liability, tax assessments, competition, past waste disposal practices and
release of chemicals into the environment.

Plumbing Actions

     CNA Holdings Inc., a company which previously operated under the HNA
Holdings, Inc. and Hoechst Celanese Corporation corporate names, became a United
States subsidiary of Celanese in the demerger and currently serves as a holding
company for Celanese's businesses in North America, including the United States
business now conducted by Ticona. CNA Holdings along with Shell Chemical Company
and E. I. du Pont de Nemours and Company among others have been the defendants
in a series of lawsuits alleging that plastics manufactured by these companies
that were utilized in the production of plumbing systems for residential
property were defective or caused such plumbing systems to fail. Based on, among
other things, the findings of outside experts and the successful use of Ticona's
acetal copolymer in similar applications, CNA Holdings does not believe Ticona's
acetal copolymer was defective or caused the plumbing systems to fail. In many
cases CNA Holdings's exposure may be limited by invocation of the statute of
limitations since Ticona ceased selling the acetal copolymer for use in the
plumbing systems in site built homes during 1986 and in manufactured homes
during 1989.

     CNA Holdings has been named a defendant in seven putative class actions, as
well as a defendant in other non-class actions filed in nine states and Canada.
In these actions, the plaintiffs typically have sought recovery for alleged
property damages and, in some cases, additional damages under the Texas
Deceptive Trade Practices Act. Damage amounts have not been specified. The
putative class actions are pending in

     - the Ninth Judicial Circuit Court of Common Pleas of South Carolina,
       Charleston County,

     - the Territorial Court of the Virgin Islands, St. Croix Division,

     - the Supreme Court of British Columbia, Canada, and

     - the Superior Court, Province of Quebec, Canada.

A conditionally certified class action (of recreational vehicle owners) is
pending in the Chancery Court of Tennessee, Weakley County.

     A putative class action (of insurance companies with respect to subrogation
claims), as well as an individual action (by Prudential Property & Casualty
Insurance Company with respect to its subrogation claims), are both pending in
the United States District Court for the District of New Jersey.

     A putative class action pending in the Circuit Court of the Fifth Judicial
Circuit, Florida, Marion County has been certified on behalf of homeowners who
claim to have opted out of the national settlement discussed below.

     In order to reduce litigation expenses and to provide relief to qualifying
homeowners, in November 1995, CNA Holdings, du Pont and Shell Chemical Company
entered into a national class action settlement, which has been approved by the
courts. The settlement calls for the replacement of plumbing systems of
claimants who have had qualifying leaks, as well as reimbursements for specified
leak damage. Furthermore, the three companies have agreed to fund these
replacements and reimbursements
                                       73
<PAGE>   75

up to E813 million. There are approximately 27 additional pending lawsuits in
approximately 26 jurisdictions not covered by this settlement; however, these
cases do not involve (either individually or in the aggregate) a large number of
homes and management does not expect the obligations arising from these lawsuits
to have a material adverse effect on CNA Holdings. The allocation of payments
already made to the claimants and future payments between the affected companies
has not been finally determined as between CNA Holdings and Shell Chemical
Company. This allocation is subject to a binding arbitration between CNA
Holdings and Shell Chemical Company, and arbitration proceedings were completed
in June 1999. The decision of the arbitrators allocated more responsibility to
CNA Holdings than had been anticipated. Under the arbitration agreement and the
Federal Arbitration Act, subject to limitations, both parties have the right to
appeal the award. Celanese has taken action to preserve its right to appeal and
intends to appeal the award unless an amicable settlement can be reached. In
light of the arbitral award and its reasoning, Celanese's other claims against
Shell Chemical Company, its experience to date in settling litigation claims,
its consideration of the pending cases and its own claims for reimbursement
under product liability insurance policies, Celanese has reviewed its accruals
for the plumbing litigation and recorded a charge to operations of E128 million
in the second quarter of 1999. Management believes this additional reserve is
sufficient to reflect the responsibility allocated to CNA Holdings by the
arbitrators.

     In 1995, CNA Holdings and Shell Chemical Company settled the claims
relating to individuals in Texas, owning 110,000 property units, who are
represented by a Texas law firm for an amount not to exceed E145 million. These
claimants will also be eligible for a replumb of their homes in accordance with
the terms of the national class action settlement. CNA Holdings' and Shell
Chemical Company's contributions under this settlement are subject to allocation
in the above binding arbitration.

     In addition, a lawsuit filed in November 1989, in Delaware Chancery Court
between CNA Holdings and various of its insurance companies relating to all
claims incurred and to be incurred for the product liability exposure resulted
in a partial declaratory judgment in CNA Holdings' favor. As a result,
settlements have been reached with a majority of CNA Holdings' insurers
specifying their responsibility for such claims.

     Management believes that the plumbing actions are either covered by
insurance or provided for in the financial statements and that they will not
have a material adverse effect on the financial position of Celanese but may
have a material adverse effect on the results of operations or cash flows in any
given year. No assurance can be given that Celanese's litigation reserves will
be adequate or that Celanese will fully recover claims under its insurance
policies. For further information on this matter, see also Note 19 to the
Historical Combined Financial Statements and Note 6 to the unaudited Condensed
Combined Financial Statements.

Fugitive Emissions Standards

     In 1990, the United States Environmental Protection Agency issued a notice
of violation to CNA Holdings alleging that its Rock Hill, South Carolina plant
was subject to fugitive emissions standard for benzene under the Clean Air Act
based upon the volume of benzene used at the facility. CNA Holdings contested
the notice of violation because it believed it had correctly determined in 1984
that the calculation of benzene usage for determining applicability of the
standard did not include amounts recirculated within the process after initial
use. By 1991, CNA Holdings met the fugitive emissions standard as interpreted by
EPA for its three facilities that used benzene: Rock Hill, South Carolina,
Narrows, Virginia and Bishop, Texas.

     In 1992, 1993 and 1995, the United States, on behalf of the EPA, filed
enforcement actions against CNA Holdings regarding the three plants in federal
district courts in South Carolina, Virginia and Texas seeking penalties of up to
$25,000 per day. The Virginia and Texas cases were, for most of the time, stayed
by consent of the parties while the South Carolina case was litigated through
denial of a petition for certiorari to the U.S. Supreme Court. The appellate
court in that case upheld EPA's interpretation of the standard but affirmed that
CNA Holdings did not have notice of that interpretation prior to August 1989.

                                       74
<PAGE>   76

Thus no penalties could be assessed prior to that date. The appellate court
remanded the case to the district court for a determination of what penalty, if
any, should be assessed for the period from August 1989 when CNA Holdings
received actual notice of EPA's interpretation through the plant's achievement
of compliance in September 1991. The parties have agreed to non-binding
mediation to aid settlement negotiations before resuming litigation in the
district court and are currently discussing the timetable for this non-binding
mediation.

Generic Pharmaceuticals Litigation

     Copley, a former subsidiary of Celanese Americas Corporation, or Celanese
Americas, formerly known as Hoechst Corporation, was a defendant in civil
litigation stemming from product liability claims related to physical injuries
allegedly sustained in connection with the use of the drug albuterol sulfate
inhalation solution 0.5%. Celanese sold its interest in Copley in September
1999. During 1995, Copley entered into a class action settlement agreement
whereby Copley and its insurers agreed to provide up to E128 million to settle
the majority of claims relating to albuterol. A substantial portion of this
settlement has been covered by insurance. Copley has set up provisions and
issued letters of credit for its share of the settlement and other claims.
Claims by persons who opted out of the class action in a timely manner are not
covered by the settlement. Copley has established provisions for these claims.

     In September 1994, Copley recalled Brompheril, an over-the-counter
decongestant. To date, Celanese is unaware of any claims in connection with this
product. In August 1994, the U.S. District Attorney's office informed Copley of
the commencement of a grand jury investigation of Copley and some of its
employees. In 1997, Copley pled guilty to a one count information charging a
violation of Title 18, United States Code, Section 371, a conspiracy to defraud
the United States and one of its agencies, the Food and Drug Administration or
FDA. As part of the plea, Copley paid a fine of U.S. $10.6 million of which U.S.
$7.5 million was accrued in 1996 and U.S. $3.1 million was accrued in 1997.
Copley also entered into an agreement with the FDA for an audit, to be conducted
by qualified outside auditors acceptable to the FDA, of 20 of Copley's approved
abbreviated new drug applications. Copley is cooperating with the FDA, which has
agreed to continue to review Copley's pending applications during the audit.

     In September 1998, Great Neck Capital Appreciation Partnership filed a
complaint derivatively on behalf of Copley in a Massachusetts Superior Court
against six of Copley's directors. Two of these directors are employees or
consultants of a Hoechst affiliate, and one of them is an employee of Celanese.
In October 1998, Great Neck Capital amended its complaint to add Celanese
Americas as a defendant. As a result of the demerger, Celanese Americas and
Copley became subsidiaries of Celanese.

     The amended complaint alleges that Celanese Americas used Copley for its
own benefit, injured Copley's ability to compete and compromised the
independence of Copley's independent directors. The complaint also alleges that
the six directors allowed Celanese Americas to use Copley and otherwise breached
their fiduciary duties to Copley. The plaintiff seeks damages in an amount in
excess of $100 million against all defendants, jointly and severally. The
directors and Celanese Americas have moved to dismiss this case. The motion is
still pending. The claims against Copley's directors have been submitted to
Copley's directors' and officers' liability insurance carriers.

     In May 1999, two Copley shareholders filed a complaint derivatively on
behalf of Copley in the Delaware Chancery Court against Celanese Americas,
Hoechst and five Copley directors. Two of these directors are employees or
consultants of a Hoechst affiliate and one of them is an employee of Celanese.
This complaint alleges that Celanese Americas breached various fiduciary duties
to Copley in connection with agreements between Celanese Americas and Copley and
also breached these agreements. It also alleges that Celanese Americas took
various actions with respect to the management of Copley and its efforts to find
a buyer for Copley and that it prevented Copley from developing a product that
would compete with a product sold by an affiliate of Hoechst. The plaintiffs
seek unspecified damages for Copley, to have a receiver appointed to manage
Copley and to have Celanese Americas enjoined from buying more shares in Copley.
The directors and Celanese Americas have moved to dismiss this case. The claims

                                       75
<PAGE>   77

against Copley's directors have been submitted to Copley's directors' and
officers' liability insurance carriers.

Antitrust

     In 1998, Nutrinova Inc., a U.S. subsidiary of Nutrinova Nutrition
Specialties & Food Ingredients GmbH, then a wholly owned subsidiary of Hoechst,
received a grand jury subpoena from the United States District Court for the
Northern District of California in connection with a criminal antitrust suit
relating to the sorbates industry. On May 3, 1999, Hoechst and the U.S. Federal
government entered into an agreement under which Hoechst pled guilty to a
one-count indictment charging Hoechst with participating in a conspiracy to fix
prices and allocate market shares of sorbates sold in the United States. Hoechst
and the government agreed to recommend that the U.S. District Court fine Hoechst
$36 million. Hoechst also agreed to cooperate with the Government's
investigation and prosecutions related to the sorbates industry. The U.S.
District Court accepted this plea on June 18, 1999 and imposed a penalty as
recommended in the plea agreement.

     In addition, the following fourteen civil antitrust actions by consumers of
sorbates, seeking monetary damages and other relief for alleged conduct
involving the sorbates industry, have been filed in California, Tennessee and
New York naming Nutrinova and other Hoechst and Celanese subsidiaries as
defendants.

     - Fruit Fillings, Inc. v. Nutrinova Nutrition Specialties & Food
       Ingredients GmbH, et. al. was filed November 18, 1998 in the United
       States District Court for the Northern District of California.

     - Two suits, C. Mondavi & Sons v. Eastman Chemical Company et al. (filed
       January 4, 1999) and Mozzarella Fresca, LLC v. Eastman Chemical Company,
       et al. (filed January 14, 1999) were filed in Superior Court of the State
       of California, City and County of San Francisco. A Petition for
       Coordination of these two Superior Court actions was served in February
       1999.

     - Orlando's Bakery v. Nutrinova Nutrition Specialties & Food Ingredients
       GmbH, et. al. was filed on February 24, 1999 in the 20th Judicial
       District, Chancery Court in Nashville, Tennessee.

     - Ranch v. Nutrinova Nutrition Specialties & Food Ingredients GmbH, et al.
       was filed on March 24, 1999 in the Superior Court of the State of
       California, County of San Francisco.

     - Tomaso's Specialty Foods v. Nutrinova Nutrition Specialties & Food
       Ingredients GmbH, et al. was filed on May 7, 1999, in the United States
       District Court for the Northern District of California.

     - Chem/Serv, Inc. v. Eastman Chemical Company, et al., was filed on May 14,
       1999, in the United States District Court for the Southern District of
       New York.

     - Consumer Cause, Inc. v. Eastman Chemical Company, et al. was filed on
       June 28, 1999, in the Superior Court of the State of California, County
       of San Francisco.

     - Mary Ann's Baking Company Inc. v. Eastman Chemical Company and others,
       filed on January 22, 1999 at the Superior Court of the State of
       California in and for the County of Sacramento.

     - Za-Za Inc. dba Silver Tray Cookies et al. v. Eastman Chemical Company and
       others, filed on December 28, 1998 at the United States District Court
       for the Northern District of California.

     - James Hodge, doing business as Golf View Market v. Eastman Chemical
       Company and others, filed on November 2, 1998 at the Circuit Court for
       Jefferson County, Tennessee.

     - Ohio Chemical Services Inc. v. Eastman Chemical Company and others, filed
       on May 20, 1999 at the United States District Court for the Northern
       District of California.

     - Nutri-Shield Inc. v. Eastman Chemical Company and others, filed March 19,
       1999 at the United States District Court for the Northern District of
       California.

     - Kraft Chemical Company et al. v. Eastman Chemical Company et al. was
       filed on September 15, 1999 in the United States District Court for the
       Northern District of California.

                                       76
<PAGE>   78

     These actions are in the early stages of litigation.

     Although the outcome of the foregoing proceedings and claims cannot be
predicted with certainty, Celanese believes that any resulting liabilities, net
of amounts recoverable from Hoechst, will not, in the aggregate, have a material
adverse effect on Celanese's financial position. In the demerger agreement,
Hoechst agreed to pay 80% of liabilities that may arise from the government
investigation and the civil antitrust actions related to the sorbates industry.

                                       77
<PAGE>   79

                                   MANAGEMENT

DIRECTORS AND OFFICERS OF CELANESE

     As required by the German Stock Corporation Act (Aktiengesetz), Celanese
has a two-tier board system consisting of a management board (Vorstand) and a
supervisory board (Aufsichtsrat). The Celanese management board is responsible
for managing Celanese and representing Celanese in its dealings with third
parties, while the Celanese supervisory board appoints and removes the members
of the Celanese management board and oversees the management of Celanese. Under
the German Stock Corporation Act, the Celanese supervisory board is not
permitted to make management decisions. Under the German Stock Corporation Act,
the Celanese supervisory board may resolve that the Celanese management board
must obtain the prior consent of the Celanese supervisory board for matters
specified in the Celanese supervisory board's resolution. Celanese expects that
the Celanese supervisory board will adopt a resolution requiring its prior
consent for matters that it considers are significant to Celanese. Examples of
matters for which supervisory boards typically require the management board to
obtain prior consent are material acquisitions and divestitures, joint ventures,
entry into new business areas, and, subject to minimum threshold amounts and
exceptions, the incurrence of indebtedness, issuance of guarantees and creation
of mortgages on real estate, where the specific matter is considered to be of
significance to a company.

     The Celanese management board must submit regular reports on the operations
of Celanese to the Celanese supervisory board, and the Celanese supervisory
board is also entitled to request special reports at any time. The German Stock
Corporation Act prohibits simultaneous membership on the management board and
the supervisory board of a company.

     In carrying out their duties, members of both the Celanese management board
and the Celanese supervisory board must exercise the standard of care of a
prudent and diligent businessman. Both the members of the Celanese management
board and the members of the Celanese supervisory board owe a duty of loyalty
and care to Celanese. The interests of Celanese are deemed to include the
interests of the shareholders, the interests of the work force and, to some
extent, the common interest, and both the Celanese management board and the
Celanese supervisory board must take all these interests into account when
taking actions or making decisions. Although there is no explicit obligation to
act solely in the interests of shareholders, the Celanese management board is
required to respect their rights to equal treatment and equal information.

     Under German law, shareholders, like other persons, are prohibited from
using their influence on Celanese to cause a member of the Celanese management
board or the Celanese supervisory board to act in a way that is harmful to
Celanese. A controlling enterprise may not cause Celanese to take measures that
are unfavorable to Celanese unless any resulting disadvantage is compensated. An
individual shareholder or any other person exerting influence on Celanese to
cause a member of the Celanese management board or of the Celanese supervisory
board or holders of special powers of attorney (Prokuristen or
Handlungsbevollmachtigte) to act in a way that is unfavorable to Celanese or its
shareholders is liable for damages to Celanese as well as to Celanese's
shareholders to the extent the shareholders have been directly damaged over and
beyond their damages resulting from the damage to Celanese. Board members who
have neglected their duties in taking the actions are likewise liable for
damages.

     As a general rule under German law, a shareholder has no direct recourse
against the members of the Celanese management board or the Celanese supervisory
board in the event that they are believed to have breached a duty to Celanese.
Only Celanese has the right to claim damages from the members of the two
Celanese boards. However, shareholders holding one-tenth or more of the nominal
share capital may request the enforcement of a claim. Celanese may only waive
damages or settle claims against the members of its two boards if at least three
years have passed and if the shareholders approve that waiver of settlement at a
shareholders' meeting with a simple majority of the votes; provided that the
opposing shareholders do not hold, in the aggregate, one tenth or more of the
nominal share capital of Celanese and

                                       78
<PAGE>   80

do not formally express their opposition at the shareholders' meeting by having
their opposition noted in the minutes of the meeting maintained by a German
notary (Notar).

Management Board

     The Celanese management board currently consists of five members who were
appointed on September 1, 1999 by the Celanese supervisory board with immediate
effect for a period of three years commencing upon the effectiveness of the
demerger in accordance with the German Stock Corporation Act.

     Under the Articles of Association (Satzung) of Celanese, any two members of
the Celanese management board or any member of the Celanese management board
together with the holder of a special power of attorney granted by the Celanese
management board, may bind Celanese. The Celanese management board must report
regularly to the Celanese supervisory board, in particular, on proposed business
policy and strategy, profitability and on the current business of Celanese as
well as on any exceptional matters which may arise from time to time.

     The members of the Celanese management board are appointed by the Celanese
supervisory board for a maximum term of five years. They may be reappointed or
have their term of office extended for one or more five year terms. Under some
circumstances, such as a serious breach of duty or a bona fide vote of no
confidence by a majority of the votes cast at a shareholders' meeting, a member
of the Celanese management board may be removed by the Celanese supervisory
board prior to the expiration of such term of office. A member of the Celanese
management board may not deal with, or vote on, matters relating to proposals,
arrangements or contracts between himself and Celanese.

     Celanese management board decisions are taken with simple majority of the
votes, if the law does not require a larger majority. In case of a tie, the vote
of the chairman of the Celanese management board is decisive.

     Celanese's management board is mainly comprised of persons who are
responsible for the management of Celanese's operating businesses. The current
members of the Celanese management board, their respective ages as of August 31,
1999 and their functions are as follows:

<TABLE>
<CAPTION>
                 NAME                   AGE                  FUNCTION
                 ----                   ---                  --------
<S>                                     <C>   <C>
Claudio Sonder........................  57    Chairman of the Celanese Management
                                              Board; member of the Board of
                                              Management of Hoechst AG, Germany
Perry W. Premdas......................  46    Chief Financial Officer
Knut Zeptner..........................  55    CEO, Celanese Chemicals and Acetates
                                              Responsible for the Acetyl Products,
                                              Chemical Intermediates and Acetate
                                              Products segments
Edward H. Munoz.......................  55    CEO, Ticona Responsible for the Ticona
                                              segment
Dr. Ernst Schadow.....................  57    Director of Personnel, Affiliates,
                                              Environmental Health and Safety
                                              Affairs, Infrastructure and Technology
</TABLE>

     All members were appointed in 1999, and their terms expire in 2002.

     Claudio Sonder has served, since 1996, on the Hoechst management board.
There he was responsible for the agricultural chemicals, animal health and
nutrition businesses, before becoming responsible for Hoechst's Celanese
business segment, which is now largely reported under the Acetyl Products,
Chemical Intermediates and Acetate Products segment, and Ticona. Mr. Sonder has
worked with Hoechst's industrial businesses for more than 30 years in Brazil and
Germany. He was the head of Hoechst's Plastics

                                       79
<PAGE>   81

and Films Division in Frankfurt, Germany from 1994 to 1996 and served as
chairman and chief executive officer of Hoechst do Brazil from 1983 to 1994.

     Perry W. Premdas was senior executive vice president and chief financial
officer of Centeon LLC, Hoechst's blood plasma protein joint venture with
Rhone-Poulenc, from 1997 to 1998. Since January 1, 1999, he has been on a
special assignment at Hoechst relating to the demerger. In his 23 years with the
company, Mr. Premdas has held financial and line positions mainly with the
industrial businesses of Hoechst and the former Celanese Corporation in the
United States, Germany and Mexico. He served as vice president and treasurer of
Hoechst Celanese Corporation from 1996 to 1997 and as vice president and general
manager of Hoechst Celanese Corporation's Printing Products Division from 1992
to 1995.

     Knut Zeptner has been president and CEO of Hoechst's Celanese Chemicals and
Acetate business segments, which are now largely reported under the Acetyl
Products, Chemical Intermediates and Acetate Products segments, based in the
United States, since 1998. Mr. Zeptner has worked with Hoechst's industrial
businesses for more than 30 years in Germany, the United Kingdom, Japan and the
United States. He was the head of Hoechst's Plastics and Films Division in
Frankfurt, Germany, from 1996 to 1998, chief executive officer of Hoechst
Diafoil, the former polyester film joint venture with Mitsubishi, based in
Wiesbaden, Germany, from 1993 to 1996, and executive managing director of
Hoechst Japan in Tokyo from 1990 to 1993.

     Edward H. Munoz has been the chief executive officer of Ticona since
January 1, 1999. Previously, he was the president of worldwide technical fibers
for Trevira, Hoechst's former global polyester fibers and resins business, where
he also led the strategy group for divesting Trevira. Mr. Munoz has worked with
the industrial businesses of Hoechst and the former Celanese Corporation for
almost 30 years in the United States, Mexico and Germany. He served as president
of Hoechst's Pigments strategic business unit in Frankfurt, Germany from 1995 to
1997, as director general of Celanese Mexicana from 1993 to 1995, and as
president of Hoechst Celanese Corporation's Advanced Materials Group from 1991
to 1993.

     Dr. Ernst Schadow has been a member of Hoechst's management board since
1988, serving as director of personnel and having responsibility for
environmental health and safety affairs, Aventis Research & Technology, Messer
and the InfraServ companies in Germany. From 1985 to 1988, he was head of
Hoechst's Chemicals Division. In his 25 years with Hoechst, he also held
positions in corporate planning for Hoechst and in production and technology for
the Chemicals Division.

Supervisory Board

     Celanese has approximately 4,100 employees in Germany. Therefore, under the
German Stock Corporation Act, the German Co-determination Law
(Mitbestimmungsgesetz) and the Articles of Association of Celanese, the Celanese
supervisory board will consist of 12 members of whom six are elected by the
shareholders and six are elected by representatives of the German based
employees. Four of the Celanese supervisory board members representing the
employee representatives must be employees of Celanese, whereas the remaining
two may be union representatives. Blue collar (Arbeiter) and white collar
(Angestellte) employees must be represented in accordance with the ratio of
employees who are entitled to vote in the elections.

     Any member elected by the shareholders in a general meeting may be removed
by a majority of the votes cast by the shareholders in a general meeting. Any
member of the Celanese supervisory board elected by a particular class of
employees may be removed by three-quarters of the votes cast by the
representatives of that class of employees.

     The Celanese supervisory board appoints a chairman (Vorsitzender des
Aufsichtsrats) and a deputy chairman (Stellvertretender Vorsitzender des
Aufsichtsrats) from among its members. The chairman of the Celanese supervisory
board must be elected by a majority of two-thirds of the members of the Celanese
supervisory board. If that majority is not reached in the first vote, the
chairman will be elected in a second vote solely by the representatives of the
shareholders. At least half the members of the Celanese supervisory board must
be present to constitute a quorum. Unless otherwise provided for by law,

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<PAGE>   82

resolutions are passed by a simple majority of the Celanese supervisory board.
In the event of a tie, another vote is held and the chairman then has the
deciding vote.

     The term of a Celanese supervisory board member ordinarily expires at the
end of the general meeting of shareholders in which the shareholders discharge
the Celanese supervisory board member for the fourth fiscal year following the
year in which such member was elected. The remuneration of the members of the
Celanese supervisory board is determined by resolution at the shareholder
meeting.

     Prior to the demerger, Celanese, as an inactive company, had a supervisory
board which consisted solely of employees of the Hoechst group who were
appointed by Hoechst.

     At the constituent meeting of the supervisory board of Celanese on
September 1, 1999, Gunter Metz was elected Chairman of the Celanese supervisory
board. Additional shareholder representatives appointed to the Celanese
supervisory board were: Khaled Saleh Buhamrah, Alan R. Hirsig, Dr. Joannes C.M.
Hovers, Dr. Alfons Titzrath, and Kendrick R. Wilson III. The business address of
the members of the Celanese supervisory board is the business address of
Celanese AG.

     The composition of the Celanese supervisory board under the German
Co-Determination Law must be confirmed in a special status proceeding
(Statusverfahren) according to Section 97 of the German Stock Corporation Act.
Subsequently, the employee representatives will be initially appointed to the
Celanese supervisory board under Section 104 of the German Stock Corporation Act
by the local court in Frankfurt for an interim period until Celanese's employees
in Germany have elected new representatives in accordance with the provisions of
the German Co-Determination Act. Employees of Celanese outside Germany are not
entitled to participate in these elections.

     The incumbent members of the supervisory board of Celanese, their
respective ages as of August 31, 1999 and their principal occupations are as
follows:

<TABLE>
<CAPTION>
           NAME             AGE              PRINCIPAL OCCUPATION
           ----             ---              --------------------
<S>                         <C>   <C>                                          <C>
Dr. Gunter Metz...........  63    Chairman of the Celanese Supervisory Board;
                                  former deputy chairman of the Supervisory
                                  Board of Hoechst AG, Germany
Khaled Saleh Buhamrah.....  55    Chairman and Managing Director of
                                  Petrochemical Industries Company, Kuwait
Alan R. Hirsig............  60    Former President and Chief Executive
                                  Officer of ARCO Chemical Company, United
                                  States
Dr. Joannes C. M.           56    Former Chief Executive Officer of Oce N.V.,
  Hovers..................        the Netherlands
Dr. Alfons Titzrath.......  67    Chairman of the Supervisory Board of
                                  Dresdner Bank AG, Germany
Kendrick R. Wilson III....  52    Managing Director, Financial Institutions
                                  Group, Goldman, Sachs & Co., New York
</TABLE>

COMPENSATION OF DIRECTORS AND OFFICERS

     The aggregate amount of compensation paid by Hoechst during the year ended
December 31, 1998 to the officers and directors of Celanese management board and
other officers of Celanese, including those officers of Celanese who have
primary responsibility for a Celanese corporate function and excluding members
of the Celanese supervisory board, for the positions they then held with Hoechst
was approximately E6.5 million.

     The aggregate amount of compensation paid by Hoechst during the year ended
December 31, 1998 to all members of the Celanese management board for the
positions they then held with Hoechst was approximately E2.9 million.

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<PAGE>   83

     It is currently anticipated that the compensation of the members of the
Celanese supervisory board in 1999 will be approximately as follows. In addition
to reimbursement of out-of-pocket expenses, members of the Celanese supervisory
board will receive a fixed annual payment which will amount to E62,000 for the
Chairman, E46,500 for the Deputy Chairman and E31,000 for all other members of
the Celanese supervisory board. In addition, for each Celanese supervisory board
meeting, they will receive a meeting fee of E3,000 for the Chairman, E2,250 for
the Deputy Chairman and E1,500 for all other members of the Celanese supervisory
board. Also, each member of the Celanese supervisory board will receive a
committee retainer for each membership in a committee of the Celanese
supervisory board. The committee retainer will amount to E3,000 for the chairman
of the committee and E1,500 for all other members of the committee. All members
of the Celanese supervisory board will also be reimbursed for value added tax on
these amounts. For those persons who were not members of the Supervisory Board
for the full fiscal year, the compensation will be prorated based on the time
period they served on the Celanese supervisory board. In addition, Celanese is
currently considering the implementation of a stock appreciation rights plan for
members of the Celanese supervisory board.

INCENTIVE PLANS

     An important component of Celanese's compensation programs is the provision
of additional encouragement for the attainment of Celanese's annual as well as
longer term objectives. These incentive plans are designed to attract, retain
and motivate executives and staff committed to achieving performance-related
targets that enhance in a sustainable manner the value of an investment in
Celanese AG shares.

     Employees will participate in the benefits of achieving financial and
business as well as individual performance targets through annual incentive
programs. From the outset, Celanese also intends to implement long term
incentive plans that include equity participation and stock option plans or
their equivalent. Celanese is currently in the process of completing the exact
structure and terms of these plans.

     The Celanese management board has approved equity participation and stock
appreciation rights plans which will take effect at the time the demerger
becomes effective and expects that their broad provisions will be as follows:

     The Celanese management board and executives of Celanese worldwide will be
eligible for the equity participation plan, a program that does not give the
participating persons a right to delivery of stock, but instead a right to
receive the cash difference between the base price and the price of the stock on
the day of exercise. For the equity participation plan, the participants must
invest a defined amount of money in Celanese shares. Two rights will be granted
for each share acquired in such investment. All members of the Celanese
management board and officers of Celanese who have primary responsibility for a
Celanese corporate function have already announced that they will take part in
this plan through a substantial investment in Celanese shares. This plan will be
only offered in 1999.

     Celanese AG board members and senior executives worldwide will participate
in the stock appreciation rights plan, which gives the participants the cash
difference between the base price and the price of the stock on the day of
exercise. The stock appreciation rights plan does not require an investment in
Celanese stock by the participants.

     Under both plans, every right entitles the eligible person to participate
in the long-term appreciation in the price of one share of Celanese AG. Rights
can be exercised either in full or in part for the first time after the
expiration of the two year vesting period which will begin upon the granting of
the rights. The term of the rights will end ten years after the start of the
respective plans.

     The rights may only be exercised if the performance of Celanese shares on
the last trading day before the rights are exercised (or on the next trading day
if Celanese shares are not traded on this day), exceeds the performance of a
certain share index. The share index is related to a group of defined peer
companies.

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<PAGE>   84

     In 2000, subject to shareholder approval required under German law,
Celanese plans to implement a stock option plan, the broad terms of which would
be similar to the stock appreciation rights plan described above.

                   RELATIONSHIPS AND THIRD PARTY TRANSACTIONS

RELATIONSHIPS WITH HOECHST

     There is no material ongoing relationship between Celanese and the Hoechst
group, although their individual businesses will continue to provide products
and services to each other on an arm's-length basis. The previous reorganization
of the Hoechst group into a group of independently operating entities simplified
the implementation of the demerger. Since employees, rights and contracts,
including intellectual property rights, allocable to Celanese's businesses were
transferred to the respective operating companies, Celanese's businesses do not
rely on the Hoechst group companies for material services.

     Transactions and balances with Hoechst for periods prior to the
effectiveness of the demerger are considered to be transactions and balances
with a related party. For details on these transactions and balances, see Note 4
to the Combined Financial Statements.

     Celanese financial statements include the results of two captive insurance
companies which have written insurance policies covering both businesses
operated by Celanese and businesses operated by the Hoechst group. Following the
demerger, Celanese expects that all or a substantial portion of the insurance
policies written with Hoechst will not be renewed. The total of premiums related
to insurance policies written with the Hoechst group businesses during 1998 was
E19 million. Had these insurance policies not been written with Hoechst in 1998,
there would have been a corresponding fall in the revenues from Other
Activities, but a negligible effect on operating profit.

     Celanese is obligated to indemnify Hoechst to the extent that Hoechst is
required to discharge liabilities in relation to assets included in the demerger
where such liabilities have not been demerged due to transfer or other
restrictions. In addition, Celanese and Hoechst have undertaken in the demerger
agreement (Spaltungs- und Ubernahmevertrag; the "Demerger Agreement") to
cooperate and assist each other in all matters relating to past events such as
tax audits, regulatory inquiries and sales of assets. Also, if transfers
contemplated in the demerger agreement do not occur because the companies do not
obtain required consents, approvals or registrations, Hoechst and Celanese have
agreed to place themselves in a position with respect to each other as if the
transfer had occurred.

     In connection with the demerger, the contracts relating to the sale of
substantially all of Hoechst's polyester fiber and bottle resin businesses were
transferred to Celanese. Therefore, Celanese has continuing obligations under
these contracts. However, to the extent that liabilities do not relate to the
portions of the businesses that were demerged to Celanese, Hoechst will retain
those liabilities and indemnify Celanese.

     Nutrinova has a reserve of E55 million as of June 30, 1999 for payments of
any kind in connection with the government investigations and litigation
associated with the sorbates industry. Hoechst has agreed to indemnify Celanese
for 80% of the liabilities arising from these investigations and associated
litigation.

     Celanese expects to acquire the production technology development division
of Aventis Research and Technologies GmbH & Co KG from Hoechst at fair market
value later this year. Celanese may enter into other similar arm's-length
arrangements with Hoechst with respect to further non-life sciences assets, none
of which is expected to be material.

     For a discussion of the site management and environmental services provided
by the InfraServ companies to Celanese and the Hoechst group, see
"Business-Environmental and Other Regulation."

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<PAGE>   85

                       PRINCIPAL AND SELLING SHAREHOLDERS

     Based on information provided to Hoechst, Celanese has been informed that
Kuwait Petroleum Corporation, which is controlled by the Government of Kuwait,
had direct or indirect shareholdings representing approximately 24.5% of the
outstanding Hoechst shares as of December 31, 1998. Hoechst subsequently
completed a share buy-back program which resulted in Kuwait Petroleum
Corporation's shareholding increasing to approximately 25.8%. In the demerger,
Kuwait Petroleum Corporation received a percentage interest in Celanese shares
equal to its percentage interest in Hoechst shares prior to the demerger.
Celanese is not aware of any voting agreements or other agreements of any kind
between Kuwait Petroleum Corporation and any of Celanese's other shareholders.
Kuwait Petroleum Corporation may have the ability, as a matter of German
corporate law, to block some corporate actions by Celanese which are subject to
approval by shareholders at a meeting with a majority of 75% of the votes cast
or, as the case may be, 75% of the share capital represented at the meeting.

     In connection with the redistribution, Petrochemical Resources Holdings
B.V., or PRH, which is a subsidiary of Kuwait Petroleum Corporation, has agreed
on its own behalf and on behalf of other companies under common control with
PRH, that it will not, without the prior written consent of the global
co-ordinators, directly or indirectly, offer, sell, contract to sell or
otherwise dispose of or otherwise enter into any transaction (including a
derivative transaction) having an economic effect similar to a sale of, or
announce the offering of, any shares of Celanese or any securities which are
convertible into or exchangeable for, or which otherwise represent the right to
acquire, shares of Celanese for a period of six months from the commencement of
official trading of Celanese shares on the Frankfurt Stock Exchange. The
foregoing restrictions will not apply in the case of sales or transfers in
private transactions to one or several strategic investors or to one or several
entities which are wholly-owned subsidiaries or parents of, or any corporation
or entity which is controlling, controlled by or under common control with PRH,
provided in each case that the transferees agree to be bound by the foregoing
restrictions.

     In consideration of the foregoing agreement, Celanese has entered into an
offering rights agreement with PRH. The obligations under the agreement will
remain in effect until three months after the holdings of PRH and companies
under common control with PRH fall below 10% of the outstanding Celanese shares
and independent United States counsel to Celanese provides an opinion that PRH
(considered together with companies under common control with PRH) is no longer
an "affiliate" within the meaning of that term under the Securities Act. The
agreement entitles PRH to effect up to a maximum of three demands on Form F-1,
provided that only one such demand may be exercised in the first year of trading
of the shares on the New York Stock Exchange, and up to a maximum of 10 demands
on Form F-3, or 11 demands on Form F-3 in the event that Celanese institutes a
capital increase other than a capital increase related solely to shares issuable
under an employee stock option plan or similar employee benefit plan, in each
case subject to a maximum of two demand registrations per year and a minimum
offering size of U.S.$75 million.

     PRH will also be entitled to unlimited incidental, or piggyback,
registration rights to register its shares whenever Celanese proposes to
register securities under the Securities Act, except:

     - where Celanese is solely registering stock issuable under an employee
       stock option plan or similar employee benefit plan;

     - a registration on Form S-4 or Form F-4 relating solely to a transaction
       designated as being within the terms of Rule 145 under the Securities
       Act; or

     - a registration on a registration statement on any other form which does
       not include substantially the same information as would have to be
       included in a registration statement covering the sale of Celanese
       shares.

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<PAGE>   86

     In advance of proceeding with a public offering of any equity securities
which would give rise to PRH's incidental registration rights, Celanese will
first consult with PRH as to its interest at that time in selling any of its
shares, and Celanese shall use its best efforts to cause the underwriter or
underwriters of that proposed underwritten public offering to permit inclusion
in that offering of the number of shares PRH requests. If the underwriter or
underwriters in that offering determine that for marketing reasons they cannot
sell all of the shares that Celanese, PRH and any other selling shareholders
with registration rights wish to sell and therefore decide to scale down the
size of the offering, the underwriter or underwriters may limit the number of
shares PRH and such other selling shareholders are allowed to sell. In such an
event, PRH will be given preference over any other selling shareholder and will
only be subject to a scale-down if necessary after all other selling shareholder
shares have been eliminated from the offering. However, PRH has agreed that,
when necessary to enable Celanese to complete a desirable transaction, it will
consider entering into an amendment to its registration rights agreement to
enable Celanese to grant registration rights to another shareholder that will
enable that shareholder to participate in an incidental registration subject
only to a scale-down which would be pro rata with that of PRH. In the event that
it is subject to a scale-down as a result of entering into an amendment of this
nature, PRH will receive an additional demand registration right exercisable in
the 12 month period following that registration.

     Celanese will pay all registration expenses (other than underwriting
discounts and commissions and fees and disbursements of any special counsel or
any other advisors retained by PRH or PRH's internal costs and expenses incurred
in connection with any registered offering). The offering rights agreement also
contains customary terms and provisions with respect to, among other things,
registration procedures and rights of indemnification and contribution granted
by parties thereunder in connection with the sale of shares.


     To the knowledge of Celanese, as of August 31, 1999, the six shareholder
representatives on Celanese's supervisory board hold 830 Hoechst shares, the
five members of Celanese's management board hold 300 Hoechst shares, and other
executives of Celanese hold 3,356 Hoechst shares. Based on the ten to one
exchange ratio, these persons received less than 1% of the Celanese shares
distributed to Hoechst shareholders in the demerger.


                   DESCRIPTION OF SECURITIES TO BE REGISTERED

     Following is a description of the material rights and restrictions
applicable to the Celanese shares, including brief descriptions of some of the
provisions contained in the Articles of Association of Celanese AG. This
description is a summary and does not purport to be complete.

     The share capital of Celanese AG consists of Celanese shares issued in
registered form. Record holders of Celanese shares will be registered in the
share register (Aktienbuch) administered on behalf of Celanese AG by a
subsidiary of Deutsche Bank AG, Celanese AG's transfer agent and registrar in
Germany under a Transfer Agency Agreement (Vertrag uber technische
Abwicklungsleistungen bei der Einrichtung und Fuhrung des Aktienbuches der
Celanese AG) and ChaseMellon Shareholder Services, Celanese AG's transfer agent
and registrar in New York, New York under the Transfer Agency Agreement. The
German transfer agent will maintain the global register of shareholders of
Celanese AG. Upon completion of the demerger, the issued and outstanding share
capital amounted to DM279,576,845, divided into 55,915,369 Celanese shares of no
par value.

     The share capital of Celanese AG may generally be increased for
consideration of contributions in cash or in property by a resolution passed at
a meeting (Hauptversammlung) of the shareholders of Celanese AG with a majority
of the share capital represented at the meeting of the shareholders at which the
resolutions are passed. In advance of each such meeting, the transfer agent in
the United States will forward material prepared by Celanese AG relating to that
meeting to holders of Celanese shares with addresses in the United States. If
the preemptive rights of the shareholders are excluded, the resolution requires
a majority of three quarters of the share capital represented with respect to
the vote taken on that resolution. The creation of an authorized capital
(Genehmigtes Kapital) or a conditional capital (Bedingtes
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<PAGE>   87

Kapital) also requires a majority of three quarters of the share capital
represented at the general meeting. By means of an authorized capital, the
Celanese AG management board may be authorized for a period of up to five years,
with the approval of the Celanese AG supervisory board, to increase the share
capital. By means of authorized and conditional capital, the Celanese AG
management board may be authorized, with the approval of the Celanese AG
supervisory board, to increase the share capital for purposes to be stipulated
in the shareholder resolution. These purposes may include employee stock option
plans, mergers and the issuance of shares to holders of option bonds and
convertible bonds. Upon completion of the demerger, Celanese AG had no
authorized or conditional capital. Authorized or conditional capital could be
created by shareholders resolution after the date the demerger was completed.

     The general meeting of shareholders of Celanese AG may also vote on the
issuance of preference shares. Upon completion of the demerger, Celanese AG will
not have any issued preference shares.


     The capital stock of Celanese AG consists of shares, which are issued in
registered form with no par value. Under the German Securities Trading Act
(Wertpapierhandelsgesetz), holders of voting securities of a German company
listed on a stock exchange within the European Union are obligated to notify
that company and the German Federal Agency for the Supervision of Securities
Trading of the level of their holding whenever that holding reaches, exceeds or
falls below thresholds, which have been set at 5%, 10%, 25% 50% and 75% of a
company's outstanding voting rights without delay, but in any event within seven
calendar days. In addition, all natural or juridical persons holding 5% or more
of the voting rights of a German listed stock corporation are required to
provide that company with an initial notification of the level of their holding
prior to the first public listing of the company at a stock exchange.



     The Company is obligated to publicize such notification in a public
newspaper chosen by the stock exchange within nine calendar days of the receipt
of such notice.


VOTING RIGHTS

     Because Celanese is issuing registered shares, each Celanese shareholder
must provide his name, address and profession (if a company, the name of the
company, its business address and corporate seat) as well as the number of
shares held so that this information can be recorded in the shareholder register
of Celanese. Each shareholder who has registered with Celanese on a timely
basis, by facsimile or mail, and is currently listed in the shareholder
register, is entitled to participate in and vote at the shareholders' meeting.
Timely registration must allow for at least two days to fall between the receipt
of the registration and the day of the shareholders' meeting. Transfers of
shares that are expected after the aforementioned date for time of registration
will not be recorded in the shareholder register until after the shareholders'
meeting.

     Each Celanese share entitles the holder thereof to one vote at general
meetings of shareholders of Celanese AG. Resolutions are passed at a general
meeting of the shareholders of Celanese AG with a majority of the votes cast,
or, in the event a majority of the share capital is required, with a majority of
the share capital represented with respect to the vote taken, unless another
majority is required by law. The German Stock Corporation Act and the Articles
of Association of Celanese AG require that, among other things, the following
significant resolutions be passed by a majority of the votes cast and at least
three-quarters of the issued share capital represented with respect to the vote
taken on such resolution:

     - Capital increases concerning contingent capital and authorized capital;

     - Capital decreases;

     - A dissolution of Celanese AG;

     - A merger of Celanese AG into or a consolidation of Celanese AG with
       another stock corporation;

     - A split or spin-off;

     - A transfer of all or substantially all of Celanese AG's assets;

     - A change of Celanese AG's corporate form;
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<PAGE>   88

     - The conclusion of inter company agreements (Unternehmensvertrage),
       including in particular corporate control and profit and loss absorption
       agreements; and

     - The exclusion of shareholders' preemptive rights.

     An extraordinary general meeting of the shareholders of Celanese AG may be
called by the Celanese AG management board, the Celanese AG supervisory board,
by shareholders holding in the aggregate at least 5% of the issued shares. The
right to attend and vote at a shareholders' meeting is accorded only to those
shareholders who are holders of record of Celanese shares on the date of the
meeting and who have notified Celanese that they wish to attend the shareholder
meeting no later than on the third day immediately preceding the meeting date.
Notice of shareholder meetings must be published in the German Federal Gazette
(Bundesanzeiger) at least one month prior to the last day on which the
shareholders may notify Celanese that they wish to attend the meeting.

     Although notice of the annual general meeting or an extraordinary meeting
is required to be given as described above, neither the German Stock Corporation
Act nor the Articles of Association of Celanese AG have any minimum quorum
requirement applicable to such meetings.

     A resolution amending the Articles of Association of Celanese AG must be
passed by a majority of the votes cast and at least a majority of the share
capital represented with respect to the vote taken on such resolution at the
meeting of shareholders at which the resolution is considered unless the German
Stock Corporation Act requires that the resolution be passed by at least
three-quarters of the share capital represented at the meeting, e.g., for an
amendment of the objects clause.

DIVIDENDS AND OTHER DISTRIBUTIONS

     Generally, dividends are declared at the annual general meeting of
shareholders, which must be held within eight months from the end of the fiscal
year. Dividends, if any, are paid once a year. For each fiscal year, the
Celanese AG supervisory board and the Celanese AG management board ratify the
financial statements and recommend the disposition of all unappropriated
profits, including the net profits of Celanese AG. Celanese AG's net profits may
be distributed by way of dividend among the holders of Celanese shares to the
extent that shareholders, by action at the annual general meeting, do not
specify any other use.

     Under German law, dividends may be declared and paid only from balance
sheet profits as shown in the unconsolidated annual financial statements of
Celanese AG, i.e., not from the consolidated profits of Celanese AG, as adopted
and approved by resolutions of the Celanese AG management board and the Celanese
AG supervisory board. In determining the distributable balance sheet profits,
the Celanese AG management board and the Celanese AG supervisory board are
permitted, in their own discretion, to allocate to the profit reserves up to 50%
of the annual surplus (Jahresuberschuss) that remains after the deductions of
the amounts to be allocated to the statutory reserves and losses carried
forward. The annual surplus may be increased by withdrawals from the profit
reserves and from profits carried forward in previous years. The shareholder
meeting which votes on the distribution of profits is entitled to allocate
additional amounts to the profit reserves or to carry forward the profits in
part or in full. Profits carried forward may be fully used for dividends in
later years, whereas amounts allocated to the profit reserves are available for
dividends only if and to the extent the profit reserves have been dissolved
thereby increasing the annual surplus.

     Dividends approved at the shareholders' meetings are payable promptly after
such meeting, unless otherwise decided at the shareholders' meeting. U.S.
registered shareholders will be entitled to elect whether to receive payments of
dividends in E or U.S.$. Generally, if a U.S. registered shareholder elects to
receive payments of dividends in U.S.$, the U.S. transfer agent must convert
cash dividends and other cash distributions which it receives for that
shareholders into U.S.$, prior to payment to that shareholder. The amount
distributed to that shareholder will be reduced by any amounts required to be
withheld by Celanese AG or the U.S. transfer agent on account of taxes or other
governmental charges. If, however, the U.S. transfer agent, in its judgment and
following consultation with Celanese AG, determines that any

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<PAGE>   89

foreign currency received by it cannot be converted into U.S.$ and transferred
to that shareholder, the U.S. transfer agent may distribute the foreign
currency, an appropriate document evidencing the right to receive such currency
or hold the foreign currency for the account of the shareholder entitled to
receive the same.

     Whenever the transfer agents receive any distribution other than cash,
Celanese shares or rights, the transfer agents will cause these securities or
property to be distributed to holders of Celanese shares in proportion to their
holdings. If the transfer agents determine that any such distribution cannot be
made proportionately among the holders of Celanese shares entitled thereto or if
for any other reason, including any withholding on account of taxes or other
governmental charges or securities law requirements, the transfer agents
determine that such distribution is not feasible or may not be legally made, the
transfer agents may, following consultation with Celanese AG, adopt a method
they deem equitable and practicable for the purpose of effecting such
distribution, including the public, or private sale of all or a portion of such
securities or property and the distribution by the transfer agents of the net
proceeds from any such sale as in the case of a distribution of cash.

     In the event that the transfer agents determine that any distribution in
cash or property is subject to any tax or governmental charges which the
transfer agents are obligated to withhold, the transfer agents may use such cash
or dispose, including by public or private sale, of all or a portion of such
property in such amounts and in such manner as the transfer agents deem
necessary and practicable to pay such taxes or governmental charges, and the
transfer agents shall distribute the net proceeds of any such sale or the
balance of any such cash or property after deduction of such taxes or
governmental charges to the holders of Celanese shares entitled thereto in
proportion to their holdings.

RECORD DATES

     In accordance with the German Stock Corporation Act, the record date to
determine the holders of Celanese shares entitled to the payment of dividends or
any other distributions will be the date of the general meeting of shareholders
at which such dividends or other distributions are declared. The record date to
determine the holders of Celanese shares entitled to vote at a general meeting
will be the date of that general meeting. However, holders of Celanese shares
who are registered in the share register on the date of the meeting will be
entitled to attend and vote at the meeting only if those holders have given
Celanese AG notice of their desire to attend that meeting no later than the
third day immediately preceding the date of that meeting.

LIQUIDATION RIGHTS

     In accordance with the German Stock Corporation Act, upon a liquidation of
Celanese AG, any liquidation proceeds remaining after paying off all of Celanese
AG's liabilities would be distributed among the holders of Celanese shares in
proportion to the total number of shares held by each holder.

PREEMPTIVE RIGHTS

     Under the German Stock Corporation Act, an existing shareholder in a stock
corporation has a preferential right to subscribe for any issue by such
corporation of shares, debt instruments convertible into shares and
participating debt instruments in proportion to the shares held by such
shareholder in the existing capital of such corporation. The German Stock
Corporation Act provides that this preferential right can only be excluded by a
shareholders' resolution passed at the same time as the resolution authorizing
the capital increase. A majority of at least three quarters of the nominal
capital represented at the meeting is required for the exclusion. The exclusion
of preemptive rights is permitted if it is objectively justified, in particular
if a capital increase against contributions in cash does not exceed 10% of
Celanese AG's capital stock and the issue price is not materially below the
market price.

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<PAGE>   90

NOTICES AND REPORTS

     Upon Celanese AG giving notice, by publication or otherwise, of any meeting
of holders of Celanese shares or any adjourned meeting of those holders, or
taking any action with respect to any cash or other distributions or the
offering of any rights, Celanese AG will transmit to the U.S. transfer agent a
copy of the notice thereof in the form given or to be given to holders of
Celanese shares. The U.S. transfer agent will, depending on the nature of the
communication, arrange for the prompt mailing of copies of those notices and
other reports and communications which are received by the U.S. transfer agent
to all U.S. registered shareholders to the extent not previously mailed.

     The transfer agents will make available for inspection by the holders of
Celanese shares at their principal offices any notices, reports and
communications, including any proxy soliciting materials, received from Celanese
AG which are both received by the transfer agents or their nominees and made
generally available to the holders of Celanese shares by Celanese AG. The U.S.
transfer agent will also send to U.S. registered shareholders copies of those
notices, reports and communications when furnished by Celanese AG.

SHARE REGISTER

     The share register of Celanese AG will be maintained, on behalf and under
the responsibility of the Celanese AG management board, by Registra Services
GmbH, Eschborn/Ts., Germany, a subdivision of Deutsche Bank AG, Frankfurt am
Main Germany, for registration of any holder of Celanese shares as a shareholder
of Celanese AG, upon that shareholder's request. The share register will be open
for inspection by the shareholders of Celanese AG during normal business hours
at the principal offices of Celanese AG.

TRANSFER AGENTS

     The transfer agents who will maintain the German and U.S. sub-share
registers will be paid customary fees for their services under the transfer
agents agreements. Holders of Celanese shares will not be required to pay any
fees or charges incident to the transfer and registration of their shares on the
share register of Celanese AG in connection with the demerger, nor will those
holders be required to pay any fees or charges incident to the conversion of
dividends from euro to U. S. dollars. Neither the transfer agents nor Celanese
AG will be liable to the holders of Celanese shares if prevented or delayed by
law or by reason of any provision of the Articles of Association of Celanese or
by any circumstances beyond their control from performing their obligations.

GOVERNING LAW

     The agreement regarding maintenance of the share register will be governed
by the laws of the Federal Republic of Germany.

EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY HOLDERS

     The DM is a fully convertible currency. There are, except in limited
embargo circumstances, no legal restrictions in Germany on international capital
movements and foreign exchange transactions. For statistical purposes only,
every individual or corporation residing in Germany must report to the German
Central Bank (Deutsche Bundesbank), subject only to immaterial exceptions, any
payment received from or made to an individual or a corporation resident outside
Germany if such payment exceeds DM 5,000 or the equivalent in a foreign currency
or in E. In addition, German residents must report any claims against or any
liabilities payable to non-residents if such claims or liabilities, in the
aggregate, exceed DM 3 million or the equivalent in a foreign currency during
any one month. German residents must also report any direct investment outside
Germany if such investment exceeds DM 100,000 or the equivalent in a foreign
currency or in E.

     Neither German law nor the Articles of Association of Celanese imposes any
limitations on the right of non-resident or non-German owners to hold or vote
the Celanese shares.

                                       89
<PAGE>   91

                            NATURE OF TRADING MARKET

GENERAL


     In connection with the demerger, the Celanese shares are listed on the
Frankfurt Stock Exchange and on the New York Stock Exchange. As Celanese shares
are in registered form, they were listed directly on the New York Stock Exchange
without the creation of a depositary receipt facility. The Celanese shares trade
on the New York Stock Exchange under the symbol "CZ" and on the Frankfurt Stock
Exchange under the symbol "CZZ" and under the German securities code number
(Wertpapierkennummer) 575 300.


     At June 30, 1999, based on information supplied by The Bank of New York,
the depositary for Hoechst's American depositary receipt program, approximately
less than 5% of Hoechst's then outstanding share capital, was held in the form
of American depositary shares. Since Hoechst's shares, other than those that are
held in the form of American depositary shares, are in bearer form, it is not
possible to determine how many Hoechst shares are held by residents of the
United States or, therefore, how many Celanese shares received in the demerger
will initially be held by residents of the United States. However based on
Hoechst's internal analysis of its shareholder base, Celanese believes that it
is unlikely that the percentage of Celanese shares to be received by United
States residents in the demerger will initially exceed 10%. The foregoing
percentage does not reflect any effects in the Celanese shareholder base which
may result from the redistribution or in subsequent trading.

TRADING ON THE FRANKFURT STOCK EXCHANGE

     The Frankfurt Stock Exchange, which is operated by Deutsche Borse AG, is
the most significant of the eight German stock exchanges and accounted for
approximately 78% of the turnover in exchange-traded shares in Germany in 1998.
As of December 31, 1998, the equity securities of 1,958 corporations, including
1,418 foreign corporations, were traded on the Frankfurt Stock Exchange.

     Trading on the floor of the Frankfurt Stock Exchange begins every business
day at 9:00 a.m. and ends at 5:30 p.m., Central European Time. Securities listed
on the Frankfurt Stock Exchange are generally traded in the auction market, but
such securities also change hands in interbank dealer markets.

     On behalf of the Frankfurt Stock Exchange, the Association of Members of
the Frankfurt Stock Exchange (Kursmaklerkammer Frankfurt am Main) publishes an
official daily list of quotations (Amtliches Kursblatt) containing the fixed
prices as well as the yearly high and low prices for all traded securities.

     A computerized trading system now known as Xetra is operated by Deutsche
Borse. Trading may be conducted only by banks and securities dealers who have
been admitted to trading on at least one German stock exchange. Trading through
the Xetra system takes place from 9:00 a.m. to 5:30 p.m., Central European Time,
on each business day. Celanese has been advised by Deutsche Borse that the
Celanese shares will be traded through the Xetra system.

     Transactions on the Frankfurt Stock Exchange, including transactions
through the Xetra system, are settled on the second business day following the
trade. Transactions off the Frankfurt Stock Exchange, e.g. some large trades or
trades with a non-German party, are generally also settled on the second
business day following the trade, although a different period may be agreed to
by the parties. Under the German banks' standard terms and conditions for
securities transactions, customers' orders for listed securities must be
executed on a stock exchange unless the customer gives specific instructions to
the contrary.

     A quotation can be suspended by the Frankfurt Stock Exchange if orderly
trading is temporarily endangered or if a suspension is deemed to be necessary
in order to protect the public. Trading activities on the German stock exchanges
are monitored by the German Federal Supervisory Authority for Securities Trading
(Bundesaufsichtsamt fur den Wertpapierhandel), the respective German state stock
exchange supervisory authorities and the respective supervisory authorities for
securities trading at the individual stock exchanges.
                                       90
<PAGE>   92

     Celanese's management believes that Celanese shares will meet the M-DAX
Index criteria and will be included in the M-DAX index either at the time of the
next index review or at a later time of review. The M-DAX is a continuously
updated, capital-weighted performance index of the lower 70 of the top 100
German highly capitalized companies. In principle, the shares included in the
M-DAX are selected on the basis of their stock exchange turnover and their
market capitalization.

                                       91
<PAGE>   93

                 MATERIAL UNITED STATES FEDERAL INCOME TAX AND
                           GERMAN TAX CONSIDERATIONS

TAX CONSEQUENCES OF HOLDING SHARES OF CELANESE SHARES

     The following is a discussion of the material United States federal income
and German tax consequences to Qualified Holders holding Celanese shares. This
discussion is based upon existing United States federal income and German tax
law, including legislation, regulations, administrative rulings and court
decisions, as in effect on the date of this prospectus, all of which are subject
to change, possibly with retroactive effect. For purposes of this discussion, in
general, a "Qualified Holder" means a beneficial owner of Celanese shares which
(1) is a resident of the United States for purposes of the United States-
Germany Income Tax Treaty, which generally includes an individual United States
resident, a corporation created or organized under the laws of the United
States, any state thereof or the District of Columbia and a partnership, estate
or trust, to the extent its income is subject to taxation in the United States
as the income of a United States resident, either in its hands or in the hands
of its partners or beneficiaries, (2) does not hold Celanese shares as part of
the business property of a permanent establishment located in Germany or as part
of a fixed base of an individual located in Germany and used for the performance
of independent personal services, (3) if not an individual, is not subject to
the limitation on benefits restrictions in the Income Tax Treaty and (4) owns,
directly or indirectly, less than 10% of the Celanese shares. This discussion
assumes that the Qualified Holder holds Celanese shares as a capital asset. This
discussion does not address all aspects of United States federal income and
German taxation that may be relevant to all Qualified Holders in light of their
particular circumstances, such as Qualified Holders whose stock was acquired
under the exercise of an employee stock option or otherwise as compensation or
Qualified Holders who are subject to special treatment under United States
federal income tax laws, for example, financial institutions, insurance
companies, tax-exempt organizations and broker-dealers. This discussion also
does not address any aspects of state, local or non-United States tax law.

     EACH QUALIFIED HOLDER IS STRONGLY URGED TO CONSULT HIS OR HER TAX ADVISORS
AS TO THE UNITED STATES FEDERAL INCOME AND GERMAN TAX CONSEQUENCES OF HOLDING
CELANESE SHARES, INCLUDING THE PARTICULAR FACTS AND CIRCUMSTANCES THAT MAY BE
UNIQUE TO SUCH QUALIFIED HOLDER, AND AS TO ANY OTHER TAX CONSEQUENCES OF HOLDING
CELANESE SHARES.

TAXATION OF DIVIDENDS

     Under German law, German corporations are required to withhold tax on
dividends in an amount equal to 25% of the gross amount paid to resident and
nonresident shareholders. Subject to limitations, a partial refund of this 25%
withholding tax can be obtained by Qualified Holders under the Income Tax
Treaty. Qualified Holders are generally subject to United States federal income
tax on dividends paid by German corporations. Subject to applicable limitations
of United States federal income tax law, Qualified Holders may be able to claim
a foreign tax credit for German income taxes paid. The amount of the refund of
German withholding tax and the determination of the foreign tax credit allowable
against United States federal income tax generally depend on whether or not the
Qualified Holder is a United States corporation owning at least 10% of Celanese
shares.

     In the case of any Qualified Holder, the German withholding tax is
partially refunded under the Income Tax Treaty, effectively reducing the
withholding tax to 15% of the gross amount of the dividend. In addition, so long
as the German imputation system provides German resident individual shareholders
with a tax credit in respect of dividends paid by German corporations, the
Income Tax Treaty provides that Qualified Holders are entitled to an additional
refund equal to 5% of the gross amount of the dividend. For United States
federal income tax purposes, the benefit resulting from this additional 5%
treaty refund is treated as a refund received by the Qualified Holder with
respect to German corporate taxes equal to 5.88% of the gross amount of the
dividend, subject to a German withholding tax of 0.88% (15% of 5.88%). Qualified
Holders will not be entitled to the dividends received deduction with respect to
dividends paid by Celanese.
                                       92
<PAGE>   94

     Thus, for each $100 of gross dividend paid by Celanese to a Qualified
Holder, the dividend after partial refund of the 25% withholding tax under the
Income Tax Treaty will be subject to a German withholding tax of $15. If the
Qualified Holder also applies for the additional 5% treaty refund, German
withholding tax is effectively reduced to $10; the cash received per $100 of
gross dividend is $90. For United States federal income tax purposes, the
Qualified Holder is generally treated as receiving a total dividend of $105.88
(to the extent paid out of current or accumulated earnings and profits of
Celanese as determined for United States federal income tax purposes),
consisting of the $100 gross dividend and the deemed refund of German corporate
tax of $5.88. The notional $105.88 dividend is deemed to have been subject to
German withholding tax of $15.88. Thus, for each $100 of gross dividend, the
Qualified Holder will include $105.88 in gross income and may be entitled to a
foreign tax credit of $15.88, subject to applicable limitations of United States
federal income tax law.


     A German government-appointed commission recently proposed the repeal,
effective January 1, 2001, of the German imputation system that provides German
resident individual shareholders with a tax credit in respect of dividends paid
by German corporations. If the proposed repeal of the German imputation system
were enacted, Qualified Holders would not thereafter be entitled to the
additional 5% treaty refund. Celanese AG cannot predict whether this proposal
will be enacted into law in Germany.


     Dividends paid in DM (or E) to a Qualified Holder of Celanese shares will
be included in income in a dollar amount calculated by reference to the exchange
rate in effect on the date the dividends (including any deemed refund of German
corporate tax) are received or treated as received by such holder. If dividends
paid in DM (or E) are converted into dollars on the date received or treated as
received, Qualified Holders generally should not be required to recognize
foreign currency gain or loss in respect of each dividend.

     A surtax on the German withholding tax is currently levied on dividend
distributions paid by a German resident company. Effective January 1, 1998, the
rate of this surtax has been reduced from 7.5% to 5.5%. Based on the new rate,
the surtax amounts to 1.375% (5.5% x 25%) of the gross dividend amount. Under
the Income Tax Treaty, Qualified Holders are entitled to a full refund of this
surtax.

REFUND PROCEDURES

     To claim the refund reflecting the reduction of the German withholding tax
from 25% to 15%, the additional 5% treaty refund and the refund of the 5.5%
German surtax, when applicable, a Qualified Holder must submit (either directly
or, if arrangements are made with a depositary, through a depositary) a claim
for refund to the German tax authorities, with the original bank voucher (or
certified copy thereof) issued by the paying entity documenting the tax withheld
within four years from the end of the calendar year in which the dividend is
received. Claims for refunds are made on a special German claim for refund form,
which must be filed with the German tax authorities: Bundesamt fur Finanzen
10117 Berlin, Germany. The German claim for refund forms may be obtained from
the German tax authorities at the same address where the applications are filed,
from the Embassy of the Federal Republic of Germany, 4645 Reservoir Road, N.W.,
Washington, D.C. 20007-1998 or from the Office of International Operations,
Internal Revenue Service, 1325 K Street, N.W., Washington, D.C. 20225,
Attention: Taxpayer Service Division, Room 900.

     Qualified Holders must also submit to the German tax authorities
certification (IRS Form 6166) of their last filed United States federal income
tax return. That certification is obtained from the office of the Director of
the Internal Revenue Service Center by filing a request for certification with
the Internal Revenue Service Center in Philadelphia, Pennsylvania, Foreign
Certificate Request, P.O. Box 16347, Philadelphia, PA 19114-0447. Requests for
certification are to be made in writing and must include the Qualified Holder's
name, social security number or employer identification number, tax return form
number and tax period for which certification is requested. The Internal Revenue
Service will send the certification directly to the German tax authorities. This
certification is valid for three years and need only be resubmitted in a fourth
year in the event of a subsequent application for refund.

                                       93
<PAGE>   95

     In accordance with arrangements under the U.S. Transfer Agent Agreement,
the Celanese shares held by Qualified Holders will be registered with the U.S.
Transfer Agent, which will receive and distribute dividends to Qualified Holders
of Celanese shares and perform administrative functions necessary to claim the
refund reflecting the reduction in German withholding tax from 25% to 15% (to 5%
for 10% Holders), the additional 5% treaty refund and the refund of the 5.5%
German surtax, when applicable, for those holders. These arrangements may be
amended or revoked at any time in the future.

     The U.S. Transfer Agent will prepare the German claim for refund forms on
behalf of the Qualified Holders of Celanese shares and file them with the German
tax authorities. In order for the U.S. Transfer Agent to file the claim for
refund forms, the U.S. Transfer Agent will prepare and mail to the Qualified
Holders of those Celanese shares, and those holders will be requested to sign
and return to the U.S. Transfer Agent, (i) a statement authorizing the U.S.
Transfer Agent to perform these procedures and agreeing that the German tax
authorities may inform the IRS of any refunds of German taxes and (ii) a written
authorization to remit the refund of withholding to an account other than that
of the Qualified Holder. Qualified Holders must also submit to the U.S. Transfer
Agent certification (IRS Form 6166) of their last filed United States federal
income tax return. The U.S. Transfer Agent will attach the signed statement, the
IRS Form 6166 and the documentation issued by the paying agency documenting the
dividend paid and the tax withheld to the claim for refund form and file them
with the German tax authorities.

     To the extent Qualified Holders own Celanese shares registered with brokers
participating in the Depository Trust Company, it is expected that such brokers
will assist the U.S. Transfer Agent in performing the procedures described above
and, in particular, prepare and forward the German claim for refund forms
together with the required documentation to the U.S. Transfer Agent. The U.S.
Transfer Agent will then file the German claim for refund forms and any
attachments thereto with the German tax authorities.

     The German tax authorities will issue refunds denominated in DM or E. In
the case of Celanese shares held by Qualified Holders, the refunds will be
issued in the name of the U.S. Transfer Agent, which will convert the refunds to
dollars and issue corresponding refund checks to the Qualified Holders of such
Celanese shares and brokers. Those brokers, in turn, will remit corresponding
refund amounts to the Qualified Holders holding Celanese shares registered with
such brokers. Qualified Holders of Celanese shares who receive a refund
attributable to reduced withholding taxes under the Income Tax Treaty may be
required to recognize foreign currency gain or loss, which will be treated as
ordinary income or loss, to the extent that the dollar value of the refund
received or treated as received by the Qualified Holder differs from the U.S.$
equivalent of the refund on the date the dividend on which such withholding
taxes were imposed was received or treated as received by the Qualified Holder.

TAXATION OF CAPITAL GAINS

     Under the Income Tax Treaty, a Qualified Holder will not be liable for
German tax on capital gains realized or accrued on the sale or other disposition
of Celanese shares.

     Upon a sale or other disposition of Celanese shares, a Qualified Holder
will recognize capital gain or loss for United Sates federal income tax purposes
equal to the difference between the amount realized and the Qualified Holder's
adjusted tax basis in Celanese shares. In the case of an individual Qualified
Holder of Celanese shares, any such capital gain will be subject to a maximum
United States federal income tax rate of 20%, if the individual Qualified
Holder's holding period in these Celanese shares is more than 12 months.

GERMAN GIFT AND INHERITANCE TAXES

     The United States-Germany estate tax treaty provides that an individual
whose domicile is determined to be in the United States for purposes of such
treaty will not be subject to German inheritance and gift tax (the equivalent of
the United States federal estate and gift tax) on the individual's death or
making of a gift unless the Celanese shares (1) are part of the business
property of a permanent
                                       94
<PAGE>   96

establishment located in Germany or (2) are part of the assets of a fixed base
of an individual located in Germany and used for the performance of independent
personal services. An individual's domicile in the United States, however, does
not prevent imposition of German inheritance and gift tax with respect to an
heir, donee or other beneficiary who is domiciled in Germany at the time the
individual died or the gift was made.

     The United States-Germany estate tax treaty also provides a credit against
United States federal estate and gift tax liability for the amount of
inheritance and gift tax paid in Germany, subject to limitations, in a case
where the Celanese shares are subject to German inheritance or gift tax and
United States federal estate or gift tax.

GERMAN CAPITAL TAX (VERMOGENSTEUER)

     The Income Tax Treaty provides that a Qualified Holder will not be subject
to German capital tax (Vermogensteuer) with respect to the Celanese shares. As a
result of a judicial decision, the German capital tax (Vermogensteuer) presently
is not imposed.

UNITED STATES INFORMATION REPORTING AND BACKUP WITHHOLDING

     Dividends on Celanese shares, and payments of the proceeds of a sale of
Celanese shares, paid within the United States or through U.S.-related financial
intermediaries are subject to information reporting and may be subject to backup
withholding at a 31% rate unless the Qualified Holder (1) is a corporation or
other exempt recipient or (2) provides a taxpayer identification number and
certifies that no loss of exemption from backup withholding has occurred.

                               THE REDISTRIBUTION


     Celanese, formerly a subsidiary of Hoechst, became an independent company
in a German demerger, or spin-off, on October 22, 1999. In the demerger, Hoechst
distributed all the outstanding shares of Celanese to Hoechst shareholders, with
each Hoechst shareholder receiving one Celanese share for every 10 Hoechst
shares owned.



     In order to facilitate the matching of supply and demand for Celanese
shares prior to the start of trading of Celanese shares, Celanese has retained
redistribution managers to manage the redistribution in the United States,
including Credit Suisse First Boston and Dresdner Kleinwort Benson, as joint
global co-ordinators and bookrunners. Accordingly,           Celanese shares are
offered hereby in the United States. Any sales in the United States will be made
through the Redistribution Managers' U.S. broker-dealer affiliates acting as
agent for the Redistribution Managers.



<TABLE>
<CAPTION>
       REDISTRIBUTION MANAGERS' U.S. AFFILIATES             REDISTRIBUTION MANAGERS' ROLES
       ----------------------------------------             ------------------------------
<S>                                                     <C>
Credit Suisse First Boston (Europe) Limited             Joint Global Coordinator and Bookrunner
Dresdner Bank AG                                        Joint Global Coordinator and Bookrunner
Bayerische Landesbank Girozentrale                      Co-lead
Deutsche Bank AG                                        Co-lead
DG Bank Deutsche Genossenschaftsbank AG                 Co-lead
Goldman Sachs International                             Co-lead
Helaba Landesbank Hessen-Thuringen Girozentrale         Co-lead
J.P. Morgan Securities Ltd.                             Co-lead
</TABLE>



     Hoechst shareholders who did not wish to retain the Celanese shares they
were entitled to receive in the demerger were invited to participate in the
redistribution by providing their custodian bank (Depotbank) with an irrevocable
commitment (each a "Commitment") to sell all or a portion of the Celanese shares
they were entitled to receive in the demerger during the period from October 11
to


                                       95
<PAGE>   97


October 20, 1999 (inclusive). Hoechst ADS holders who did not wish to retain the
Celanese shares they were entitled to receive in the demerger were invited to
participate in the redistribution by providing The Bank of New York, the
depositary for the Hoechst ADS program, with an irrevocable commitment (each
also a "Commitment") during the period from October 11 to October 19, 1999
(inclusive). This was necessary to enable The Bank of New York to collate these
commitments and take the necessary action with respect to the underlying Hoechst
shares held by the depositary in respect of Hoechst ADSs on October 20, 1999.



     The redistribution managers are using their best efforts to find purchasers
for those Celanese shares for which Commitments from Hoechst shareholders have
been received. Accordingly, the redistribution managers have taken indications
of interest (each an "Indication") in purchasing Celanese shares during the
period from October 11 to October 22, 1999 (inclusive).



     The redistribution managers are not obligated to take and pay for any of
the Celanese shares for which Hoechst shareholders have provided irrevocable
commitments. The obligations of the redistribution managers are subject to the
approval of various legal matters by their counsel and to other conditions. The
redistribution managers are acting as intermediaries between Hoechst
shareholders who provide Commitments and prospective purchasers who provide
Indications and neither Hoechst shareholders who provide Commitments nor
prospective purchasers who provide Indications have a right to execution based
upon their Commitments and indications, respectively.


     On or around October 25, 1999, the Hoechst AG shares will be traded and
listed "ex-Celanese".


     The net proceeds from the sale of Celanese shares (redistribution price
times redistributed shares less any commissions charged by the selling
shareholders' custodian banks (Depotbank)) is expected to be received on October
27, 1999, two days after the first day of trading of Celanese shares. The
delivery of allocated shares against payment of the redistribution price per
share will occur on the same day. All Celanese shares will be evidenced through
a Global Share Certificate which will be deposited with Deutsche Borse Clearing
AG. The Articles of Association of Celanese do not allow for physical delivery
of shares.



     As compensation for their services, Celanese has agreed to pay to the
redistribution managers selling commissions in the amount of 2% of the aggregate
redistribution amount (the redistribution price times the number of shares
redistributed) subject to minimum selling commissions in the amount of
approximately E3 million in aggregate. The Redistribution Managers in their
discretion may pay their U.S. affiliated broker-dealer a selling commission not
to exceed 2% of the aggregate redistribution amount (the redistribution price
times the number of shares redistributed in the U.S.). Celanese has agreed to
indemnify the joint global co-ordinators against designated liabilities,
including liabilities under the federal securities laws, or to contribute to
payments that the joint global co-ordinators may be required to make with
respect to those liabilities.


     The joint global co-ordinators reserve the right to terminate the
redistribution after consultation with Celanese AG, if its implementation is no
longer advisable, for example, because of turbulence in the international
capital markets. A notice of termination will be published in the electronic
media and the newspapers where the redistribution announcement is published.
Commitments and Indications will not remain valid in the event of termination.

     In connection with the redistribution, each of Celanese and PRH, on its own
behalf and on behalf of other companies under common control with PRH, have
agreed that they will not, without the prior written consent of the global
co-ordinators, directly or indirectly, offer, sell, contract to sell or
otherwise dispose of or otherwise enter into any transaction (including a
derivative transaction) having an economic effect similar to a sale of, or
announce the offering of, any shares of Celanese or any securities which are
convertible into or exchangeable for, or which otherwise represent the right to
acquire, shares of Celanese for a period of six months from the commencement of
official trading of the Celanese shares on the Frankfurt Stock Exchange. In the
case of Celanese, the foregoing restrictions will not apply in the case of any
securities offered pursuant to an employee benefit plan and, in the case of PRH,
the foregoing

                                       96
<PAGE>   98

restrictions will not apply in the case of sales or transfers in private
transactions to one or several strategic investors or to one or several entities
which are wholly owned subsidiaries or parents of, or any corporation or entity
which is controlling, controlled by or under common control with PRH, provided
in each case that the transferees agree to be bound by the foregoing
restrictions.

                                       97
<PAGE>   99

                             AVAILABLE INFORMATION

     Celanese will furnish its U.S. shareholders with annual reports in English.
These annual reports will include a review of operations and annual audited
combined financial statements prepared in conformity with U.S. GAAP. Celanese
will also furnish its U.S. shareholders quarterly reports in English in
accordance with U.S. GAAP that will include unaudited interim combined financial
information. Celanese will also furnish to its U.S. shareholders in English, all
notices of shareholders' meetings and other reports and communications that are
made generally available to shareholders. Celanese will transmit English
versions of these notices, reports and announcements to ChaseMellon Shareholder
Services, Celanese AG's transfer agent and registrar in New York, New York. The
transfer agent will arrange for the prompt mailing of copies of these materials
to all of Celanese AG's U.S. shareholders. As a foreign private issuer, Celanese
is exempt under the Exchange Act from the proxy rules and the short-swing profit
recovery provisions of Section 16 of the Exchange Act.

     Celanese has filed a Form F-1 registration statement with the Securities
and Exchange Commission. This prospectus includes all material information
relating to the redistribution. You will find additional information about
Celanese and its shares in the registration statement. For example, in this
prospectus, Celanese has summarized or referred to some contracts, agreements
and other documents that have been filed as exhibits to the registration
statement.


     As a result of registering its shares, Celanese became subject to the
informational requirements of the Exchange Act, and will file reports and other
information with the Securities and Exchange Commission. You may examine the
reports and other information filed by Celanese AG, without charge, at the
public reference facilities maintained by the Securities and Exchange Commission
at Room 1024, 450 Fifth Street, N.W., Washington, D.C., 20549, and at the
Securities and Exchange Commission's regional offices located at Suite 1400,
Northwest Atrium Center, 500 West Madison Street (Suite 1400), Chicago,
Illinois, 60661-2551 and Room 1300, Seven World Trade Center, New York, New York
10048. You may also receive copies of these materials by mail from the
Securities and Exchange Commission's Public Reference Branch at 450 Fifth
Street, N.W., Washington, D.C. 20549. For more information on the public
reference rooms, call the Securities and Exchange Commission at 1-800-SEC-0330.
The Commission also maintains a Web site (http:\\www.sec.gov) that contains
reports, proxy and information statements and other information regarding
registrants, such as Celanese AG, that file electronically with the Commission.
The shares of Celanese will be traded on the New York Stock Exchange, and the
materials will be available for inspection and copying at their offices at 20
Broad Street, New York, New York 10005.


            SERVICE OF PROCESS AND ENFORCEMENT OF CIVIL LIABILITIES

     Celanese is a German corporation. In addition, a majority of the members of
the Celanese supervisory board, a majority of the members of the Celanese
management board, some of the officers of Celanese and some experts named in
this prospectus will reside outside the United States. As a result, you may not
be able to effect service of process within the United States upon Celanese and
those persons or to enforce against them, both in the United States and outside
the United States, judgments of U.S. courts, including judgments based on the
civil liability provisions of the U.S. federal securities laws. Also, a
substantial portion of the assets of Celanese and those persons is located
outside the United States, so you may not be able to collect a judgment within
the United States. Celanese's legal department advises you that German courts
will generally enforce judgments of United States courts for liquidated damages
in civil matters, including judgments predicated upon the civil liability
provisions of the federal securities laws of the United States. However, courts
in Germany will not enforce a judgment obtained in a United States court if
enforcement of the judgment would violate fundamental principles of German law,
such as the right to a fair trial. The Celanese legal department also does not
express an opinion as to whether the enforcement by a German court of a judgment
would be effected in any currency other than in E or the determination of the
applicable exchange rate from U.S. dollars to DM. Celanese's legal department
also advises you that there may be doubt as to the enforceability, in original
actions in German courts, of liabilities based

                                       98
<PAGE>   100

solely upon the federal securities laws of the United States. Furthermore, under
German law there may be doubt as to the enforceability of judgments awarding
punitive damages.

                                 LEGAL MATTERS


     The validity under German law of the Celanese shares offered by this
prospectus was passed upon by Hengeler Mueller Weitzel Wirtz, German counsel to
Celanese. Additional legal matters under U.S. laws relating to the
redistribution were passed upon for Celanese by Skadden, Arps, Slate, Meagher &
Flom LLP and for the redistribution managers by Shearman & Sterling.


                                    EXPERTS

     The combined financial statements and schedule of Celanese as of and for
the years ended December 31, 1998 and 1997 have been included in this prospectus
and in the registration statement in reliance upon the report of KPMG Deutsche
Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprufungsgesellschaft,
independent certified public accountants, appearing elsewhere in this
prospectus, and upon the authority as of said firm as experts in accounting and
auditing.

                                       99
<PAGE>   101

                     INDEX TO COMBINED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
HISTORICAL COMBINED FINANCIAL STATEMENTS
     Independent Auditors' Report...........................   F-2
     Combined Statements of Operations
       for the years ended December 31, 1998 and 1997.......   F-3
     Combined Balance Sheets as of December 31, 1998 and
      1997..................................................   F-4
     Combined Statements of Equity
       for the years ended December 31, 1998 and 1997.......   F-5
     Combined Statements of Cash Flows
       for the years ended December 31, 1998 and 1997.......   F-6
     Notes to Combined Financial Statements.................   F-7
COMBINED FINANCIAL STATEMENT SCHEDULE
     Schedule II -- Valuation and Qualifying Accounts.......  F-40
UNAUDITED INTERIM COMBINED FINANCIAL STATEMENTS
     Combined Statements of Operations
       for the six months ended June 30, 1999 and 1998
      (unaudited)...........................................  F-41
     Combined Balanced Sheets as of June 30, 1999
      (unaudited) and
       December 31, 1998....................................  F-42
     Combined Statements of Equity
       for the six months ended June 30, 1999 (unaudited)...  F-43
     Combined Statements of Cash Flows
       for the six months ended June 30, 1999 and 1998
      (unaudited)...........................................  F-44
     Notes to Unaudited Interim Combined Financial
      Statements............................................  F-45
</TABLE>

                                       F-1
<PAGE>   102

                          INDEPENDENT AUDITORS' REPORT

To the Management Board and Shareholders
Celanese AG:

We have audited the accompanying combined balance sheets of Celanese AG
("Celanese") as of December 31, 1998 and 1997, and the related combined
statements of operations, equity, and cash flows for each of the years then
ended. In connection with our audits of the combined financial statements, we
also have audited the combined financial statement schedule as listed in the
accompanying index. These combined financial statements and schedule are the
responsibility of Celanese's management. Our responsibility is to express an
opinion on these combined financial statements and the combined financial
statement schedule based on our audits.

We conducted our audits in accordance with German and United States generally
accepted auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of Celanese as of
December 31, 1998 and 1997, and the results of its operations and its cash flows
for each of the years then ended in conformity with United States generally
accepted accounting principles. Also in our opinion, the related combined
financial statement schedule, when considered in relation to the basic combined
financial statements taken as a whole, presents fairly, in all material
respects, the information set forth therein.

Frankfurt am Main, Germany
February 26, 1999, except for
paragraph 1 of footnote 1,
which is as of May 11, 1999
and footnote 23, which is as
of August 10, 1999

KPMG Deutsche Treuhand-Gesellschaft

Aktiengesellschaft Wirtschaftsprufungsgesellschaft



<TABLE>
<S>                         <C>
Kutin                       Dr. Bottcher
Wirtschaftsprufer           Wirtschaftsprufer
</TABLE>


                                       F-2
<PAGE>   103

                                    CELANESE
                       COMBINED STATEMENTS OF OPERATIONS
                        FOR THE YEARS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
                                                                     1998           1998       1997
                                                              ------------------   -------    -------
                                                              (IN $ MILLIONS(1)    (IN E MILLIONS(2)
                                                                EXCEPT FOR PER       EXCEPT FOR PER
                                                                 SHARE DATA)          SHARE DATA)
                                                              ------------------   ------------------
<S>                                                           <C>                  <C>        <C>
Net sales...................................................        5,319           5,159      5,775
Cost of sales...............................................        4,298           4,169      4,576
Selling, general and administrative expenses................          619             600        655
Research and development expenses...........................          127             123        149
Special charges.............................................          102             100        103
Foreign exchange losses.....................................           (2)             (2)        (9)
Gain (loss) on disposition of assets........................           18              18         (2)
                                                                    -----           -----      -----
     Operating profit.......................................          189             183        281
Equity in net earnings of affiliates........................           21              20         14
Interest expense............................................          139             135        138
Interest and other income, net..............................           49              48         47
                                                                    -----           -----      -----
     Earnings before income taxes and minority interests....          120             116        204
Income taxes................................................          121             117         93
                                                                    -----           -----      -----
     Earnings (loss) before minority interests..............           (1)             (1)       111
Minority interests..........................................           44              43         64
                                                                    -----           -----      -----
     Net earnings (loss)....................................          (45)            (44)        47
                                                                    -----           -----      -----
Basic and diluted net earnings (loss) per share.............         (.80)           (.79)       .84
                                                                    =====           =====      =====
</TABLE>

- ---------------
(1) Amounts shown in U.S.$ are unaudited and have been converted, solely for the
    convenience of the reader, from E at an exchange rate of U.S.$1.0310 per
    E1.00, the noon buying rate of the Federal Reserve Board of New York on June
    30, 1999.

(2) All balances have been restated from Deutsche Mark into euro using the
    Official Fixed Exchange Rate as of January 1, 1999.

See the accompanying notes to the combined financial statements.
                                       F-3
<PAGE>   104

                                    CELANESE

                            COMBINED BALANCE SHEETS
                               AS OF DECEMBER 31,

<TABLE>
<CAPTION>
                                                                     1998           1998       1997
                                                              ------------------   -------    -------
                                                              (IN $ MILLIONS)(1)   (IN E MILLIONS)(2)
                                                              ------------------   ------------------
<S>                                                           <C>                  <C>        <C>
ASSETS
Current assets:
  Cash and cash equivalents.................................            7               7         25
  Marketable securities.....................................           27              26         18
  Receivables, net..........................................        1,219           1,182      1,075
  Receivables from Hoechst..................................          844             819        436
  Inventories...............................................          673             653        668
  Deferred income taxes.....................................          160             155         91
  Other assets..............................................           64              62         58
                                                                    -----           -----      -----
          Total current assets..............................        2,994           2,904      2,371
Investments.................................................          619             600        592
Property, plant and equipment, net..........................        1,993           1,933      2,041
Deferred income taxes.......................................          227             220        106
Other assets................................................          695             674        589
Intangible assets, net......................................        1,273           1,235        704
                                                                    -----           -----      -----
          Total assets......................................        7,801           7,566      6,403
                                                                    =====           =====      =====
LIABILITIES AND COMBINED EQUITY
Current liabilities:
  Short-term borrowings and current installments of
     long-term debt.........................................          446             433        497
  Accounts payable and accrued liabilities..................        1,443           1,400      1,451
  Liabilities to Hoechst....................................           88              85         76
  Deferred income taxes.....................................           19              18         18
  Income taxes payable......................................          315             306        266
                                                                    -----           -----      -----
          Total current liabilities.........................        2,311           2,242      2,308
Long-term debt..............................................        1,116           1,082      1,398
Deferred income taxes.......................................           92              89         90
Other liabilities...........................................        1,261           1,223      1,082
Minority interests..........................................          200             194        275
Combined equity:
  Combined equity...........................................        2,939           2,851      1,278
  Accumulated other comprehensive loss......................         (118)           (115)       (28)
                                                                    -----           -----      -----
          Total combined equity.............................        2,821           2,736      1,250
                                                                    -----           -----      -----
          Total liabilities and combined equity.............        7,801           7,566      6,403
                                                                    =====           =====      =====
</TABLE>

- ---------------
(1) The 1998 figures are unaudited and have been translated solely for the
    convenience of the reader at an exchange rate of U.S.$1.0310 per E1.00, the
    noon buying rate of the Federal Reserve Board of New York on June 30, 1999.

(2) All balances have been restated from Deutsche Mark into euro using the
    Official Fixed Exchange Rate as of January 1, 1999.

See the accompanying notes to the combined financial statements.
                                       F-4
<PAGE>   105

                                    CELANESE

                         COMBINED STATEMENTS OF EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997

<TABLE>
<CAPTION>
                                                                          ACCUMULATED OTHER    TOTAL
                                               COMBINED   COMPREHENSIVE     COMPREHENSIVE     COMBINED
                                                EQUITY       INCOME             LOSS           EQUITY
                                               --------   -------------   -----------------   --------
                                                                 (IN E MILLIONS)(1)
                                               -------------------------------------------------------
<S>                                            <C>        <C>             <C>                 <C>
Balance as of December 31, 1996..............   1,082            -               (56)          1,026
Net earnings.................................      47           47                 -              47
Net transfers from Hoechst...................     149            -                 -             149
Other comprehensive income:
  Foreign currency translation, net of tax of
     E23 million.............................       -           28                28              28
                                                              ----
Comprehensive income.........................                   75
                                                -----         ====              ----           -----
Balance as of December 31, 1997..............   1,278                            (28)          1,250
                                                -----                           ----           -----
Net loss.....................................     (44)         (44)                -             (44)
Net transfers from Hoechst...................   1,617            -                 -           1,617
Other comprehensive income (loss):
  Unrealized gains on securities, net of tax
     of E4 million...........................       -            9                 -               -
  Foreign currency translation, net of tax of
     E38 million.............................       -          (45)                -               -
  Minimum pension liability, net of tax of
     E24 million.............................       -          (51)                -               -
                                                              ----
Other comprehensive loss.....................       -          (87)              (87)            (87)
                                                              ----
Comprehensive loss...........................                 (131)
                                                -----         ====              ----           -----
Balance as of December 31, 1998..............   2,851                           (115)          2,736
                                                =====                           ====           =====
</TABLE>

- ---------------
(1) All balances have been restated from Deutsche Mark into euro using the
    Official Fixed Exchange Rate as of January 1, 1999.

See the accompanying notes to the combined financial statements.
                                       F-5
<PAGE>   106

                                    CELANESE

                       COMBINED STATEMENTS OF CASH FLOWS
                        FOR THE YEARS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
                                                                     1998          1998    1997
                                                              ------------------   ----    ----
                                                                                      (IN E
                                                              (IN $ MILLIONS)(1)   MILLIONS)(2)
                                                              ------------------   ------------
<S>                                                           <C>                  <C>     <C>
Operating activities:
  Net earnings (loss).......................................          (45)          (44)     47
  Adjustments to reconcile net earnings (loss) to net cash
     provided by operating activities:
     Special charges, net of amounts used...................            6             6     (14)
     Depreciation and amortization..........................          362           351     327
     Change in equity of affiliates.........................            3             3     (12)
     Deferred income taxes..................................          (95)          (92)      3
     (Gain) loss on sale of assets, net.....................          (19)          (18)      6
     Changes in operating assets and liabilities:
       Receivables, net.....................................          (55)          (53)    154
       Inventories..........................................          (20)          (19)    (66)
       Accounts payable, accrued liabilities and other
          liabilities.......................................          142           137      25
       Income taxes payable.................................           67            65      37
       Other, net...........................................           20            19      19
                                                                     ----          ----    ----
     Net cash provided by operating activities..............          366           355     526
Investing activities:
  Capital expenditures......................................         (384)         (373)   (408)
  Proceeds from sale of assets..............................           43            42      21
  Purchases of marketable securities........................         (324)         (314)   (228)
  Proceeds from sale of marketable securities...............          321           311     172
                                                                     ----          ----    ----
     Net cash used in investing activities..................         (344)         (334)   (443)
Financing activities:
  Short-term borrowings with third parties, net.............           41            40      78
  Proceeds from long-term debt due to third parties.........           49            48     126
  Payment of debt due to third parties......................         (522)         (506)   (229)
  Proceeds from debt due to Hoechst.........................           92            89     191
  Payment of debt due to Hoechst............................          (40)          (39)   (434)
  Other net activity with Hoechst...........................          338           328     202
                                                                     ----          ----    ----
     Net cash used in financing activities..................          (42)          (40)    (66)
The effect of exchange rate changes on cash.................            1             1       6
                                                                     ----          ----    ----
     Net increase (decrease) in cash and cash equivalents...          (19)          (18)     23
                                                                     ----          ----    ----
Cash and cash equivalents at beginning of year..............           26            25       2
                                                                     ----          ----    ----
Cash and cash equivalents at end of year....................            7             7      25
                                                                     ====          ====    ====
</TABLE>

- ---------------
(1) The 1998 figures are unaudited and have been translated solely for the
    convenience of the reader at an exchange rate of U.S.$1.0310 per E1.00, the
    noon buying rate of the Federal Reserve Board of New York on June 30, 1999.

(2) All balances have been restated from the Deutsche Mark into euro using the
    Official Fixed Exchange Rate as of January 1, 1999.

See the accompanying notes to the combined financial statements.
                                       F-6
<PAGE>   107

                                    CELANESE

                     NOTES TO COMBINED FINANCIAL STATEMENTS

1.  BASIS OF COMBINATION AND PRESENTATION

     On May 11, 1999, the Supervisory Board of Hoechst Aktiengesellschaft and
its affiliates ("Hoechst") approved the spin-off of its industrial chemicals
business to its shareholders (the "Demerger") as an independent publicly traded
company, Celanese AG, the new company ("Celanese"). The primary business of
Celanese is to conduct the worldwide operations of Hoechst basic chemical,
acetates, technical polymer and other industrial businesses (collectively, the
"Businesses"). Celanese sells principally to industrial customers.

     The accompanying combined financial statements have been prepared in
accordance with United States ("U.S.") generally accepted accounting principles
("U.S. GAAP") on a basis which reflects the combined results of operations,
financial position and changes in equity and cash flows of the Businesses that
will be transferred to Celanese as if Celanese were a separate entity for all
periods presented. All transactions between and among Celanese's Businesses have
been eliminated.

     Hoechst allocated a portion of its corporate expenses to the Businesses.
These expenses, totaling E36 million in 1998 and 1997, include, but are not
limited to, benefit administration, risk management administration, tax
services, finance services, treasury management services, environmental
services, litigation support services, intellectual property management services
and executive functions. Allocations and charges are based on either a direct
identification or an allocation for such services based on factors such as
employment levels or floor space. Management believes that the basis used for
the allocation of corporate services is reasonable and that the terms of these
transactions would not materially differ from those among unrelated parties. The
actual capitalization of Celanese and the actual expenses which would have been
incurred may be different from these allocated amounts. The income tax provision
was calculated based on each Business's contributions to the total provision for
income taxes of the multiactivity legal entity within a tax jurisdiction.
Celanese's future effective tax rate will be dependent upon its legal structure
and tax strategies as an independent company. As such, the accompanying combined
financial statements may not necessarily reflect the financial position and
results of operations that would have occurred had the Businesses operated as a
stand-alone entity on the dates, and for the periods, indicated.

     With the introduction of the European Monetary Union euro ("E") on January
1, 1999, Celanese has elected to present the accompanying combined financial
statements in euro. Accordingly, the combined financial statements as of and for
the years ended December 31, 1998 and 1997 have been restated into euro using
the euro/Deutsche Mark ("DM") exchange rate as of January 1, 1999 of DM 1.95583
to one (1) euro. The restated euro combined financial statements depict the same
trends as would have been presented had Celanese continued to present its
combined financial statements and notes thereto in DM. The combined financial
statements for periods prior to January 1, 1999 are not comparable to those of
other companies reporting in euro which have restated amounts from currencies
other than the DM. All amounts in the accompanying combined financial statements
are shown in millions of euro and for 1998 are also presented in U.S. dollars,
on an unaudited basis, solely for the convenience of the reader at the exchange
rate of U.S.$1.0310 to one (1) euro, which represents the noon buying rate of
the Federal Reserve Board of New York on June 30, 1999.

     Celanese is subject to a number of risks, including, but not limited to,
operating in a cyclical industry, uncertainties related to environmental matters
pertaining to manufacturing, storage and transportation of chemical products,
uncertainties related to the volatility of raw material pricing and
availability, and overcapacity of products in the market, uncertainties related
to continued acceptance of existing products, and intense competition within the
chemical industry.

                                       F-7
<PAGE>   108
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

2.  SIGNIFICANT ACCOUNTING POLICIES

     - REVENUE RECOGNITION

      Revenues are recorded at the time of shipment of products.

     - CASH AND CASH EQUIVALENTS

     All highly liquid investments with maturities of three months or less from
the date of acquisition are considered cash equivalents.

     Some of Celanese's Businesses have participated in centralized cash
management programs. Under these programs, excess cash was invested, and
disbursements were funded, by Hoechst on behalf of the Businesses.

     - INVESTMENTS IN MARKETABLE SECURITIES

     Celanese has classified its investments in debt and equity securities as
"available-for-sale" and has reported those investments at their fair or market
value in the combined balance sheets as marketable securities and other assets.
Unrealized holding gains or losses net of the related tax effect on
available-for-sale securities are excluded from earnings and are reported as a
component of accumulated other comprehensive loss until realized.

     - FINANCIAL INSTRUMENTS

     As a matter of principle, Celanese does not use derivative financial
instruments for trading purposes. Celanese is party to a variety of interest
rate caps, swaps and floors as well as foreign currency forward contracts and
options in the management of its interest rate and exchange rate exposures.
Celanese generally utilizes interest rate derivative contracts in order to fix
or limit the interest paid on existing variable rate debt. Celanese utilizes
currency derivative financial instruments to eliminate or reduce the exposure of
its foreign currency denominated receivables and payables.

     Differences between amounts paid or received on interest rate swap
agreements are recognized as adjustments to interest expense over the life of
each swap, thereby adjusting the effective interest rate on the hedged
obligation. Realized gains and losses and unrealized losses on instruments not
meeting the criteria for hedge accounting treatment, or that cease to meet hedge
accounting criteria, are included as income or expense currently.

     Foreign exchange contracts relating to accounts receivable or accounts
payable are accounted for as hedges. The gain or loss arising from the
settlement of the contracts is recognized as income or expense at the same time
the transaction being hedged is settled.

     Financial instruments which potentially subject Celanese to concentrations
of credit risks are primarily receivables concentrated in various geographic
locations and cash equivalents. Celanese performs ongoing credit evaluations of
its customers' financial condition. Generally, collateral is not required from
customers. Allowances are provided for specific risks inherent in receivables.

     - INVENTORIES

     Inventories held for resale are stated at the lower of cost or market. Cost
is primarily determined using the first-in, first-out or FIFO method, although
some of the Businesses, primarily in the U.S., have opted to utilize the
last-in, first-out or LIFO method. Such cost includes raw materials, direct
labor and manufacturing overhead.

     The cost of stores and supplies are valued at cost or market, whichever is
lower. Cost is generally determined by the average cost method.

                                       F-8
<PAGE>   109
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

2.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
     - INVESTMENTS AND EQUITY IN NET EARNINGS OF AFFILIATES

     Investments in which Celanese owns a voting interest of between 20% and
50%, are accounted for using the equity method. Investments in which Celanese
holds a voting interest of less than 20% are carried at cost.

     The excess of cost over underlying equity in net assets acquired is
amortized over the anticipated life of the investment, not to exceed 20 years.

     - LONG-LIVED ASSETS

     Long lived assets include:

     PROPERTY, PLANT AND EQUIPMENT -- Property, plant and equipment are
capitalized at cost. Depreciation is calculated on a straight-line basis over
the following estimated useful lives of the assets:

<TABLE>
<S>                                                           <C>
Land Improvements...........................................  20 years
Buildings...................................................  30 years
Building and Leasehold Improvements.........................  10 years
Machinery and Equipment.....................................  10 years
</TABLE>

     Leasehold improvements are amortized over 10 years or the remaining life of
the respective lease, whichever is shorter.

     Repair costs that do not extend the useful life of the asset are charged
against earnings as incurred. Major replacements, renewals and significant
improvements are capitalized.

     Interest costs incurred during the construction period of assets are
estimated using a weighted average percentage applied to the average value of
constructed assets. The interest capitalized is amortized over the life of the
asset.

     INTANGIBLE ASSETS -- The excess of purchase price over fair value of net
identifiable assets and liabilities acquired ("Goodwill"), of E1,964 million at
December 31, 1998 and E1,453 million at December 31, 1997 is amortized on a
straight line basis over the expected periods to be benefited, not to exceed 40
years. Amortization expense charged against earnings amounted to E31 million in
1998 and E30 million in 1997. Accumulated amortization at December 31, 1998 was
E734 million and E754 million at December 31, 1997.

     Patents and trademarks of E16 million at December 31, 1998 and E14 million
at December 31, 1997 are being amortized on a straight line basis over their
estimated economic or legal life, whichever is shorter. Amortization expense
charged against earnings amounted to E2 million in both 1998 and 1997.
Accumulated amortization at December 31, 1998 was E11 million and E9 million at
December 31, 1997.

     IMPAIRMENT OF LONG-LIVED ASSETS -- Celanese assesses the recoverability of
the carrying value of its long-lived assets, including goodwill, whenever events
or changes in circumstances indicate that the carrying amount of the asset may
not be fully recoverable. Recoverability of assets to be held and used is
measured by a comparison of the carrying amount of an asset to future net
undiscounted cash flows expected to be generated by the asset. If such assets
are considered to be impaired, the impairment to be recognized is measured by
the amount by which the carrying value of the assets exceeds the fair value of
the assets.

                                       F-9
<PAGE>   110
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

2.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
     - INCOME TAXES

     The provision for income taxes has been determined using the asset and
liability approach of accounting for income taxes. Under this approach, deferred
income taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes, net operating loss and tax credit
carryforwards. The amount of deferred taxes on these temporary differences is
determined using the tax rates that are expected to apply to the period when the
asset is realized or the liability is settled, as applicable, based on tax
rates, and tax laws, in the respective tax jurisdiction then in effect.

     Income tax expense or benefit has been determined based on each of the
Businesses' contribution to the total provision for income taxes of the
multiactivity legal entity within a tax jurisdiction on an "as-if separate
return" basis. As the Businesses in the combined financial statements are
included in multiple consolidated tax returns and in multiple tax jurisdictions,
the effective tax rate does not reflect the structure and tax strategies that
could be in place if the Businesses were conducted by a separate independent
company. The Businesses' future effective tax rate will largely depend on
Celanese's structure and tax strategies as a separate independent company.

     - ENVIRONMENTAL LIABILITIES

     Celanese manufactures and sells a highly diversified line of chemical
products throughout the world. Accordingly, Celanese's operations are subject to
various hazards incidental to the production of industrial chemicals including
the use, handling, processing, storage and transportation of certain hazardous
materials. Celanese recognizes losses and accrues liabilities relating to
environmental matters if available information indicates that the event of loss
is probable and reasonably estimable. If the event of loss is neither probable
nor reasonably estimable, but is reasonably possible, Celanese provides
appropriate disclosure in the notes to its combined financial statements if such
contingency is material. Celanese estimates environmental liabilities on a case
by case basis using available information. Environmental liabilities in which
the remediation period is fixed and associated costs are readily determinable
are recorded at their net present value. It is Celanese's policy not to record
as an asset any anticipated recoveries from third parties relating to
environmental matters. (See Note 20)

     - MINORITY INTERESTS

     Minority interests in the equity and results of the entities controlled by
Celanese are shown as a separate item in the combined financial statements. The
entities included in the combined financial statements that have minority
interests at December 31, 1998 are as follows:

<TABLE>
<CAPTION>
                                                              OWNERSHIP
                                                              PERCENTAGE
                                                              ----------
<S>                                                           <C>
Celanese Canada, Inc........................................     56%
Copley Pharmaceutical, Inc..................................     51%
Edmonton Methanol Company...................................     76%
InfraServ GmbH & Co. Oberhausen KG..........................     84%
InfraServ GmbH & Co. Munchsmunster KG.......................     79%
Synthesegasanlage Ruhr GmbH.................................     50%
</TABLE>

     For the year ended December 31, 1997, Celanese owned 51% of the outstanding
voting shares of Grupo Celanese, S.A. and exercised management control. In
December 1998, Hoechst acquired the remaining interest in Grupo Celanese, S.A.
and subsequently contributed the interest to Celanese. (See Note 4)

                                      F-10
<PAGE>   111
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

2.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
     For the year ended December 31, 1997, Celanese owned 72% of Trespaphan
GmbH. During 1998, Hoechst acquired the remaining 28% of Trespaphan GmbH and
subsequently contributed the interest to Celanese. (See Note 4)

     Celanese has a 60% voting interest and the right to appoint a majority of
the management board of Synthesegasanlage Ruhr GmbH, which results in Celanese
controlling this entity, and, accordingly, Celanese consolidates the results of
this entity in its combined financial statements.

     - RESEARCH AND DEVELOPMENT

     The costs of research and development are charged as an expense in the
period in which they are incurred.

     - FUNCTIONAL CURRENCIES

     For most of Celanese's international operations, assets and liabilities,
where the functional currency is other than DM, are generally translated using
period end exchange rates while the statement of operations is translated using
average exchange rates during the period. Differences arising from the
translation of assets and liabilities in comparison with the translation of the
previous periods are included as a separate component of accumulated other
comprehensive loss. For international operations in hyperinflationary economies,
primarily Mexico, designated financial statement amounts are translated at
historical exchange rates with all other assets and liabilities translated at
current exchange rates and the resultant translation adjustments for these
operations recorded in earnings.

     As of January 1, 1999, based on cumulative inflation over the preceding
3-year period of less than 100%, Mexico will no longer be considered a
hyperinflationary economy for accounting purposes.

     - ESTIMATES AND ASSUMPTIONS

     The preparation of combined financial statements in conformity with U.S.
GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, allocated balances and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues, expenses and allocated charges during the
reporting period. Actual results could differ from those estimates.

     - EARNINGS PER SHARE

     Basic and diluted earnings per share are computed based on the net earnings
(loss) for all periods presented divided by the anticipated number of shares
that is expected to be issued upon the Demerger. Upon the effective date of the
Demerger, Hoechst shareholders will receive a special dividend from Hoechst in
the form of Celanese common shares. Each Hoechst shareholder will receive one
(1) share of Celanese for every ten (10) shares of Hoechst they hold. Management
estimates that 55,915,369 common shares of Celanese will be issued upon the
Demerger.

     - STOCK-BASED COMPENSATION

     Celanese applies the intrinsic value-based method of accounting prescribed
by Accounting Principles Board ("APB") Opinion No. 25, Accounting for Stock
Issued to Employees, and related interpretations, in accounting for stock
options. Celanese utilizes the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 123, Accounting for Stock-based Compensation, which
allows entities to continue to apply the provisions of APB Opinion No. 25 and
provide pro forma net earnings disclosures for employee stock option grants as
if the fair value based method defined in SFAS No. 123 had been applied.

                                      F-11
<PAGE>   112
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

2.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
     - NEW ACCOUNTING PRONOUNCEMENTS

     On January 1, 1998, Celanese adopted SFAS No. 130, Reporting Comprehensive
Income. SFAS No. 130 established standards for reporting and presentation of
comprehensive income and its components in a full set of financial statements.
Comprehensive income consists of net earnings, net foreign currency translation
adjustments, net minimum pension liability adjustments, and net unrealized gains
(losses) on securities. SFAS No. 130 requires only additional disclosures in the
combined financial statements; it does not affect Celanese's financial position
or results of operations.

     On December 31, 1998, Celanese adopted SFAS No. 131, Disclosures about
Segments of an Enterprise and Related Information. SFAS No. 131 established
standards for reporting and presenting Celanese's segments. SFAS No. 131
requires only additional disclosures in the combined financial statements; it
does not affect Celanese's financial position or results of operations.

     On January 1, 1998, Celanese adopted SFAS No. 132, Employers' Disclosures
about Pensions and Other Postretirement Benefits. SFAS No. 132 revises the
employers' disclosures regarding pension and other postretirement benefits.
However, it does not change the method of accounting for such plans.

     In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities. This statement
standardizes the accounting for derivative instruments including certain
derivative instruments embedded in other contracts. Celanese must adopt this
statement by January 1, 2001. Celanese has not determined the impact this
statement will have on its combined financial statements and believes that such
determination will not be meaningful until closer to the date of adoption.

3.  SUPPLEMENTAL CASH FLOW INFORMATION

<TABLE>
<CAPTION>
                                                              1998    1997
                                                              ----    ----
                                                                 (IN E
                                                                MILLION)
                                                              ------------
<S>                                                           <C>     <C>
Cash paid during the year for:
     Taxes..................................................  245     103
     Interest, net of amounts capitalized...................  151     197
Noncash investing and financing activities:
     Contribution by Hoechst of net receivables to Celanese
     (see Note 4)...........................................  384       -
     Contribution by Hoechst of Grupo Celanese S.A. minority
     interest (see Note 4)..................................  643       -
     Contribution by Hoechst of Trespaphan GmbH minority
     interest (see Note 4)..................................   24       -
     Contribution by Hoechst of investments (see Note 4)....    7      57
     Contribution by Hoechst of Dyneon GmbH deferred tax
     asset (see Note 4).....................................  109       -
     Recognition of additional minimum pension liability
     (see Note 14)..........................................  116       4
     Acquisition of plant and equipment through capital
     leases.................................................    3      15
     Fair value adjustment to securities available for sale
     (see Note 5)...........................................    9       -
     Income tax effect related to fair value adjustment.....    4       -
</TABLE>

4.  TRANSACTIONS WITH HOECHST

     Celanese is a party to transactions with Hoechst. Transactions and balances
with Hoechst are considered to be related party (affiliate) transactions and
balances. Under the Demerger Agreement, if the transfer of assets and
liabilities to Celanese reflected below as contributions from Hoechst do not
occur

                                      F-12
<PAGE>   113
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

4.  TRANSACTIONS WITH HOECHST (CONTINUED)
because Hoechst and Celanese do not obtain required consents, approvals or
registrations, Hoechst and Celanese have agreed to place themselves in a
position with respect to each other as if the transfer had occurred.

<TABLE>
<CAPTION>
                                                              1998        1997
                                                              -----       ----
                                                              (IN E MILLIONS)
                                                              ----------------
<S>                                                           <C>         <C>
INCOME STATEMENT TRANSACTIONS
  Purchases from Hoechst(1).................................     73       165
  Sales to Hoechst(1).......................................    189       445
  Interest income from Hoechst..............................      8        16
  Interest expense paid to Hoechst..........................      9        21
  License fees paid to Hoechst(2)...........................     30        26
  Expenses allocated from Hoechst(3)........................     36        36
BALANCE SHEET TRANSACTIONS
  Trade and other receivables from Hoechst(4)...............    794       416
  Current notes receivable (including interest) from
     Hoechst................................................     25        20
  Long-term notes receivable from Hoechst(5)................     23       121
                                                              -----       ---
     Total receivables with Hoechst.........................    842       557
  Accounts payable and other liabilities due Hoechst(4).....     82        72
  Accrued interest payable from Hoechst.....................      3         4
  Short-term borrowings from Hoechst(5).....................    241       196
                                                              -----       ---
     Total due Hoechst......................................    326       272
                                                              -----       ---
     Net receivables from Hoechst...........................    516       285
                                                              =====       ===
EQUITY TRANSACTIONS(6)
  Contribution of net receivables to Celanese(4)............    384         -
  Contribution of Grupo Celanese S.A. minority
     interest(7)............................................    643         -
  Contribution of Trespaphan GmbH minority interest(8)......     24         -
  Contribution of investments(9)............................     13        57
  Transfer of certain other activities from Celanese to
     Hoechst(10)............................................    350         -
  Contribution of Dyneon GmbH deferred tax asset(11)........    109         -
  Net other activity with Hoechst...........................     94        92
                                                              -----       ---
     Net transfers from Hoechst.............................  1,617       149
                                                              =====       ===
</TABLE>

(1) Purchases/Sales from/to Hoechst

     Purchases and sales from/to Hoechst are accounted for at prices
approximating those charged to third party customers for similar goods.

(2) License fees paid to Hoechst

     Copley Pharmaceutical, Inc., a Celanese subsidiary, licenses patents owned
by Hoechst.

(3) Expenses allocated from Hoechst

     Hoechst provides certain services to Celanese including, but not limited
to, benefit administration, risk management administration, tax services,
finance services, treasury management services, environmental services,
litigation support services, intellectual property management services and
executive functions. Fees

                                      F-13
<PAGE>   114
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

4.  TRANSACTIONS WITH HOECHST (CONTINUED)
are based on either a direct identification or an allocation for such services
based on factors such as employment levels or floor space. Expenses allocated to
Celanese from Hoechst totaled E36 million in 1998 and 1997.

(4) Receivables and Payables with Hoechst

     Net receivables from Hoechst amounted to E516 million and E285 million at
December 31, 1998 and December 31, 1997, respectively. During 1998, Hoechst
contributed net receivables totaling E384 million to Celanese. Such receivables
and payables with Hoechst are considered short term and will be settled through
net cash payments to Celanese within one year.

     Certain of the Businesses have participated in centralized cash management
programs. Under these programs, excess cash was invested, and disbursements were
funded, by Hoechst on behalf of the Businesses. Receivables and payables with
Hoechst are recorded to reflect this activity.

(5) Debt with Hoechst (see Note 12)

     Celanese has offset its long-term debt with long-term notes receivables
from Hoechst of E23 million. It is management's intention that upon the Demerger
of Celanese from Hoechst, Celanese will use the receipt of such funds to pay
down its long-term debt.

     Celanese has various short-term note obligations payable to Hoechst.
Interest rates on these loans are adjusted monthly.

(6) Combined Equity

     Combined equity represents the historical equity of the Businesses and
activities combined as Celanese. Combined equity represents equity less
accumulated other comprehensive loss items of combined companies and the effects
of transfers between Celanese and Hoechst which do not give rise to normal
receivables or payables intended to be settled between these two groups of
companies.

(7) Investment in Grupo Celanese S.A.

     For the year ended December 31, 1997, Celanese owned 51% of the outstanding
voting shares of Grupo Celanese, S.A. and exercised management control. On
December 10, 1998, Hoechst exchanged substantially all of its polyester fiber
and bottle resin businesses in the U.S., Europe and Mexico for the 49% minority
interest in Grupo Celanese, S.A., which was not already owned by Celanese. On
December 10, 1998, Hoechst contributed this interest to Celanese. As a result of
the acquisition of the minority interest in Grupo Celanese, S.A., the
unallocated purchase price over the net assets acquired and liabilities assumed
related to the acquisition totaled E592 million. Celanese is currently
performing an appraisal of the underlying assets and liabilities of Grupo
Celanese, S.A. to determine the amount of the unallocated purchase price
pertaining to these items. This process will be finalized within one year.
Celanese does not anticipate any material adjustments as a result of the
finalization of this purchase price allocation with the exception of the
allocation to fixed assets. At December 31, 1998, Celanese is unable to
reasonably quantify this adjustment or its effect on future operating results.

     This transaction is reflected as a capital contribution, totaling E643
million, net of a E51 million tax benefit, from Hoechst. Accordingly, the
historical results of operations of the polyester fiber and bottle resin
businesses have been excluded from the accompanying combined financial
statements. Celanese would have recognized additional amortization expense of
E30 million for fiscal 1998 had this capital contribution been made on January
1, 1998.

                                      F-14
<PAGE>   115
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

4.  TRANSACTIONS WITH HOECHST (CONTINUED)
(8) Investment in Trespaphan GmbH

     For the year ended December 31, 1997, Celanese owned 72% of Trespaphan
GmbH. On March 31, 1998, Hoechst acquired the remaining 28% of Trespaphan GmbH
and contributed the interest to Celanese in connection with the Demerger. The
unallocated purchase price over the net assets acquired and liabilities assumed
related to the acquisition totaled E10 million. This transaction is reflected as
a capital contribution, totaling E24 million, net of an E11 million tax benefit,
from Hoechst.

(9) Contribution of Investments

     During 1998, Hoechst contributed certain cost investments totaling E13
million to Celanese. In July 1997, Hoechst acquired a 50% interest in Targor
GmbH and contributed its E57 million equity investment to Celanese. All
investments have been contributed at their historical basis.

(10) Non-Celanese activities transferred to Hoechst

     During 1998, in anticipation of the Demerger, Celanese Americas Corporation
("Celanese Americas") transferred other activities to Hoechst. These activities
were excluded from the scope of combination of Celanese, as they are not managed
or controlled by Celanese. As a result of this transfer, Celanese Americas
received capital contributions totaling E350 million in 1998 which is included
as a transfer from Hoechst in the combined statement of equity and as net
activity with Hoechst in the financing section of the combined statement of cash
flows.

(11) Dyneon Deferred Tax Asset

     For all periods presented, the Celanese combined financial statements
include an investment in Dyneon GmbH, the worldwide fluoropolymer joint venture
between Hoechst and 3M. The contribution of this investment to Celanese resulted
in a step-up to the tax basis of the investment. The differential in tax basis
versus book basis resulted in a deferred tax asset totaling E109 million. This
deferred tax asset was contributed to Celanese in 1998 and is shown as an
increase to combined equity. The contribution of this deferred tax asset is a
non-cash item in the combined statement of cash flows.

OTHER MATTERS

Consolidation of Hoechst Procurement Olefin

     Hoechst Procurement Olefin ("HPO"), an entity included in the scope of
combination of Celanese, acts as a purchasing agent on behalf of Celanese and on
behalf of third parties. HPO enters into sale and purchase agreements for raw
materials on a commission type basis. Accordingly the commission fee on these
sales is classified as other operating income. This income amounted to E1
million in 1998 and 1997. The raw material sales volume commissioned by HPO
between refineries and third parties and Celanese amounted to E444 million in
1998 and E565 million in 1997.

                                      F-15
<PAGE>   116
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

4.  TRANSACTIONS WITH HOECHST (CONTINUED)
Demerger Agreement

     In connection with the Demerger, Celanese and Hoechst executed and
delivered the Demerger and Transfer Agreement (the "Demerger Agreement"). The
Demerger Agreement, among other things, provides for the following:

Demerger Costs

     Demerger costs and real estate transfer tax, which are estimated to be E52
million and E21 million, respectively, will be equally shared between Celanese
and Hoechst.

Environmental Liabilities

     Celanese will indemnify Hoechst up to E250 million against future
environmental liabilities arising from certain previously divested Hoechst
entities. If such future liabilities exceed E250 million, Hoechst will bear such
excess up to an additional E500 million. Thereafter, Celanese will bear one
third and Hoechst will bear two-thirds percent of any further liabilities. Where
Celanese is unable to reasonably determine the probability of loss or estimate
such loss under this indemnification, Celanese has not recognized any accrued
liabilities relative to this indemnification.

Capital

     Upon the effective date of the Demerger, Hoechst shareholders will receive
a special dividend from Hoechst in the form of Celanese shares. Each Hoechst
shareholder will receive one (1) share of Celanese for every ten (10) shares of
Hoechst they hold. Hoechst will not receive Celanese shares upon the
distribution.

5.  SECURITIES AVAILABLE FOR SALE

     At December 31, 1998 and 1997, Celanese had E163 million and E152 million
of marketable securities, respectively, of which E137 million and E134 million
were included as a component of other assets at December 31, 1998 and 1997,
respectively. These securities are held by Celanese's captive insurance
businesses. The remaining E26 million and E18 million in 1998 and 1997,
respectively, are classified as short term and are held by Copley
Pharmaceutical, a Celanese subsidiary. Net realized gains included in earnings
in 1998 were E3 million. There were no realized gains or losses in 1997. The
amortized cost, gross unrealized holding gains, gross unrealized holding losses
and fair value for available-for-sale securities by major security type at
December 31, 1998 and 1997, were as follows:

<TABLE>
<CAPTION>
                                                  AMORTIZED   UNREALIZED   UNREALIZED   FAIR
                                                    COST        GAINS        LOSSES     VALUE
                                                  ---------   ----------   ----------   -----
                                                                (IN E MILLIONS)
                                                  -------------------------------------------
<S>                                               <C>         <C>          <C>          <C>
AT DECEMBER 31, 1998
Debt Securities
  U.S. Government...............................      44          -             -         44
  U.S. municipal................................       3          -             -          3
  Other government..............................       8          -             -          8
  U.S. corporate................................      73          2             -         75
                                                     ---          --           --        ---
Total debt securities...........................     128          2             -        130

Bank certificates of deposit....................      12          -             -         12
Equity securities...............................       6          1             -          7
Mortgage-backed securities......................      14          -             -         14
                                                     ---          --           --        ---
                                                     160          3             -        163
                                                     ===          ==           ==        ===
</TABLE>

                                      F-16
<PAGE>   117
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

5.  SECURITIES AVAILABLE FOR SALE (CONTINUED)

<TABLE>
<CAPTION>
                                                  AMORTIZED   UNREALIZED   UNREALIZED   FAIR
                                                    COST        GAINS        LOSSES     VALUE
                                                  ---------   ----------   ----------   -----
                                                                (IN E MILLIONS)
                                                  -------------------------------------------
<S>                                               <C>         <C>          <C>          <C>
AT DECEMBER 31, 1997
Debt Securities
  U.S. Government...............................      16          -             -         16
  U.S. municipal................................       7          -             -          7
  Other government..............................      17          -             -         17
  U.S. corporate................................      82          2            (1)        83
                                                     ---          --           --        ---
Total debt securities...........................     122          2            (1)       123

Bank certificates of deposit....................       6          -             -          6
Equity securities...............................       5          -             -          5
Mortgage-backed securities......................      18          -             -         18
                                                     ---          --           --        ---
                                                     151          2            (1)       152
                                                     ===          ==           ==        ===
</TABLE>

     Fixed maturities at December 31, 1998 by contractual maturity are shown
below. Actual maturities could differ from contractual maturities because
borrowers may have the right to call or prepay obligations, with or without call
or prepayment penalties.

<TABLE>
<CAPTION>
                                                              AMORTIZED   FAIR
                                                                COST      VALUE
                                                              ---------   -----
                                                               (IN E MILLIONS)
                                                              -----------------
<S>                                                           <C>         <C>
Within one year.............................................     45        45
From one to five years......................................     34        35
From six to ten years.......................................     46        47
Greater than ten years......................................     29        29
</TABLE>

6.  RECEIVABLES, NET

<TABLE>
<CAPTION>
                                                               1998     1997
                                                              ------   ------
                                                              (IN E MILLIONS)
                                                              ---------------
<S>                                                           <C>      <C>
Trade.......................................................    818      744
Reinsurance receivables.....................................    204      221
Other.......................................................    212      149
                                                              -----    -----
     Subtotal...............................................  1,234    1,114
Allowance for doubtful accounts.............................    (52)     (39)
                                                              -----    -----
     Net receivables........................................  1,182    1,075
                                                              =====    =====
</TABLE>

     As of December 31, 1998 and 1997, Celanese had no significant
concentrations of credit risk. Concentrations of credit risk with respect to
trade receivables are limited since Celanese's customer base is dispersed across
many different industries and geographies.

                                      F-17
<PAGE>   118
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

7.  INVENTORIES

<TABLE>
<CAPTION>
                                                              1998    1997
                                                              ----    ----
                                                                 (IN E
                                                               MILLIONS)
                                                              ------------
<S>                                                           <C>     <C>
Finished goods..............................................  506     499
Work-in-process.............................................   30      50
Raw materials and supplies..................................  118     139
                                                              ---     ---
     Subtotal...............................................  654     688
LIFO reserve................................................   (1)    (20)
                                                              ---     ---
     Total inventories......................................  653     668
                                                              ===     ===
</TABLE>

     At December 31, 1998 and 1997, E251 million and E284 million, respectively,
of total inventories were valued by the LIFO method. Celanese realized E19
million and E2 million for the fiscal years ended December 31, 1998 and 1997,
respectively, from the liquidation of LIFO reserves.

8.  INVESTMENTS

     Celanese has investments in a number of affiliates, which are accounted for
on the equity method. Significant equity affiliates include:

<TABLE>
<CAPTION>
                                                             PERCENT
                        AFFILIATE                           OWNERSHIP
                        ---------                           ---------
<S>                                                         <C>
Clear Lake Methanol Co., LLC..............................    50.0%
Dyneon GmbH...............................................    46.0%
Fortron Industries........................................    50.0%
InfraServ GmbH & Co. Gendorf KG...........................    39.0%
InfraServ GmbH & Co. Hochst KG............................    27.2%
InfraServ GmbH & Co. Knapsack KG..........................    42.0%
InfraServ GmbH & Co. Wiesbaden KG.........................    29.0%
Polyplastics Co., Ltd.....................................    45.0%
Targor GmbH...............................................    50.0%
Vinnolit GmbH.............................................    50.0%
</TABLE>

<TABLE>
<CAPTION>
                                                               1998      1997
                                                              ------    ------
                                                              (IN E MILLIONS)
                                                              ----------------
<S>                                                           <C>       <C>
Affiliates totals:
  Net sales.................................................  3,722     2,084
  Net earnings..............................................     57        41
Celanese's share:
  Net earnings..............................................     20        14
  Dividends.................................................     17         2
Total assets................................................  3,011     2,691
Total liabilities...........................................  1,586     1,292
Interests of others.........................................    855       835
                                                              -----     -----
  Celanese's equity.........................................    570       564
Excess of cost over underlying equity in net assets
  acquired..................................................     30        28
                                                              -----     -----
  Celanese's investment.....................................    600       592
                                                              =====     =====
</TABLE>

                                      F-18
<PAGE>   119
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

8.  INVESTMENTS (CONTINUED)
     Beginning January 2001, BASF, a 50% owner of Targor GmbH, has an option to
acquire Celanese's interest in Targor GmbH and Celanese has an option to sell
its interest in Targor GmbH to BASF. The price payable upon exercise of such
options is approximately E255 million, after considering certain adjustments.

9.  PROPERTY, PLANT AND EQUIPMENT, NET

<TABLE>
<CAPTION>
                                                               1998     1997
                                                              ------   ------
                                                              (IN E MILLIONS)
                                                              ---------------
<S>                                                           <C>      <C>
Land and land improvements..................................     152      167
Buildings, building improvements and leasehold
  improvements..............................................     405      410
Machinery and equipment.....................................   2,784    2,801
Construction in progress....................................     258      251
Capitalized interest........................................      98      100
                                                              ------   ------
  Subtotal..................................................   3,697    3,729
Accumulated depreciation and amortization...................  (1,764)  (1,688)
                                                              ------   ------
  Property, plant and equipment, net........................   1,933    2,041
                                                              ======   ======
</TABLE>

     Interest costs capitalized in 1998 were E7 million and E9 million in 1997.
Depreciation and amortization expense on plant and equipment was E318 million in
1998 and E295 million in 1997.

10.  INCOME TAXES

     Celanese will be headquartered in Germany. Germany has both a federal
corporate tax and a trade income tax. The trade income tax rate varies based
upon location. German federal corporate tax law applies a split-rate imputation
with regard to the taxation of the income of a corporation and its shareholders.
In accordance with the tax law in effect for fiscal 1998 and 1997, retained
corporate income is initially subject to a German federal corporation tax of 45%
plus a solidarity surcharge of 5.5% and 7.5%, respectively, on the German
federal corporate tax payable. Including the impact of the surcharge, the German
federal corporate tax rate amounted to 48% in 1998 and 47% in 1997. Upon
distribution of certain retained earnings to shareholders, the corporate income
tax rate on the earnings is adjusted to 30%, plus a solidarity surcharge of 6%
in 1998 and 8% in 1997, by means of a refund for taxes previously paid.
Including the impact of the surcharge, the German federal corporate distribution
tax rate amounted to 32% in 1998 and 31% in 1997. Upon distribution of retained
earnings in the form of a dividend, shareholders who are taxpayers in Germany
are entitled to a tax credit in the amount of German federal income taxes
previously paid by the corporation.

     Current and deferred taxes for the German companies are being provided for
at a 45% rate, which represents a combined German federal corporate tax rate
plus the trade income tax, net of federal benefit.

                                      F-19
<PAGE>   120
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

10.  INCOME TAXES (CONTINUED)
Current and deferred taxes are being provided on all other companies at the tax
rate currently in effect in the local tax jurisdictions.

<TABLE>
<CAPTION>
                                                              1998       1997
                                                              ----       ----
                                                              (IN E MILLIONS)
                                                              ---------------
<S>                                                           <C>        <C>
Earnings (loss) before income taxes and minority interests:
     Germany................................................  (64)        33
     United States..........................................   28        (38)
     Other..................................................  152        209
                                                              ---        ---
     Total..................................................  116        204
                                                              ---        ---
Provision (benefit) for income taxes:
     Current:
          Germany...........................................    6         15
          United States.....................................  157         18
          Other.............................................   49         59
                                                              ---        ---
     Total current..........................................  212         92
     Deferred:
          Germany...........................................  (15)        (5)
          United States.....................................  (85)        (8)
          Other.............................................    5         14
                                                              ---        ---
     Total deferred.........................................  (95)         1
                                                              ---        ---
     Income tax provision...................................  117         93
                                                              ===        ===
Effective income tax rate reconciliation:
Income tax computed at statutory tax rates..................   52         92
Increase (decrease) in taxes resulting from:
     Change in valuation allowance..........................   35         11
     Equity income..........................................  (11)        (6)
     Non-deductible depreciation and amortization...........    5         23
     Settlement of open tax years...........................    -        (31)
     Taxes on net earnings of investments...................    7         24
     Import/export activities...............................   12         20
     Additional U.S. tax provision..........................   13          2
     United States foreign tax credit.......................    -        (39)
     United States tax rate differentials...................   (3)         4
     Other foreign tax rate differentials...................   (6)       (11)
     Other..................................................   13          4
                                                              ---        ---
     Income tax provision...................................  117         93
                                                              ===        ===
</TABLE>

                                      F-20
<PAGE>   121
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

10.  INCOME TAXES (CONTINUED)
     The tax effects of the temporary differences which give rise to a
significant portion of deferred tax assets and liabilities as of December 31,
1998 and 1997 are as follows:

<TABLE>
<CAPTION>
                                                              1998       1997
                                                              ----       ----
                                                              (IN E MILLIONS)
                                                              ---------------
<S>                                                           <C>        <C>
Postretirement obligations..................................  229        226
Accrued expenses............................................  197        119
Net operating loss carryforwards............................   97         72
Basis difference related to an equity investment............  109          -
Other.......................................................   38         31
                                                              ---        ---
  Subtotal..................................................  670        448
Valuation allowance.........................................  (70)       (40)
                                                              ---        ---
  Deferred tax assets.......................................  600        408
                                                              ---        ---
Depreciation................................................  233        205
Interest....................................................    4          5
Inventory...................................................   48         56
Basis difference related to an equity investment............    -         12
Other.......................................................   47         41
                                                              ---        ---
  Deferred tax liabilities..................................  332        319
                                                              ---        ---
     Net deferred tax asset.................................  268         89
                                                              ===        ===
</TABLE>

     A valuation allowance is provided when it is more likely than not that some
portion or all of the deferred tax assets will not be realized. Accordingly,
Celanese has established a valuation allowance for German and U.S. state net
operating loss carryforwards which may not be realizable. Based on Celanese's
historical and current pretax earnings, management believes it is more likely
than not that Celanese will realize the benefit of the remaining deferred tax
assets existing at December 31, 1998 and 1997.

11.  ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

<TABLE>
<CAPTION>
                                                               1998      1997
                                                              ------    ------
                                                              (IN E MILLIONS)
                                                              ----------------
<S>                                                           <C>       <C>
Accounts payable trade......................................    442       404
Accrued salaries and benefits...............................    141       165
Accrued environmental.......................................     55        56
Accrued restructuring.......................................     46        43
Insurance loss reserves.....................................    315       420
Other.......................................................    401       363
                                                              -----     -----
     Total accounts payable and accrued liabilities.........  1,400     1,451
                                                              =====     =====
</TABLE>

12.  DEBT

     Celanese's combined financial statements include an allocation of Hoechst
consolidated debt and related interest expense. Hoechst allocated debt to
Celanese based on its assessment of the creditworthiness of Celanese on a
stand-alone basis, taking into account estimated future free cash flows. Due to
ownership clauses in the third party debt instruments, certain instruments will
have to be refinanced by Celanese in connection with the Demerger. Accordingly,
Celanese expects to incur fees

                                      F-21
<PAGE>   122
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

12.  DEBT (CONTINUED)
during 1999 associated with the refinancing of third party debt. Celanese
believes these allocations are reasonable estimates of the cost of financing
Celanese's assets and operations in the past. However, Celanese may not be able
to obtain financing with interest rates as favorable as those received by
Hoechst, with the result that Celanese's cost of capital could be higher than
that reflected in its historical combined financial statements.

SHORT-TERM BORROWINGS AND CURRENT INSTALLMENTS OF LONG-TERM DEBT

<TABLE>
<CAPTION>
                                                                               WEIGHTED
                                                                               AVERAGE
                                                                            INTEREST RATES
                                                                            --------------
                                                          1998       1997    1998    1997
                                                          ----       ----   ------   -----
                                                          (IN E MILLIONS)
                                                          ---------------   --------------
<S>                                                       <C>        <C>    <C>      <C>
Current installments of long-term debt..................   16         57       7.3%    7.4%
Commercial paper........................................    -         64         -     6.0%
Bank loans..............................................  176        176      10.3%    6.5%
Notes and revolver with Hoechst (see Note 4)............  241        196       6.0%    6.3%
Other...................................................    -          4         -     5.1%
                                                          ---        ---
     Total short-term borrowings and current
       installments of long-term debt...................  433        497
                                                          ===        ===
</TABLE>

     Celanese has two commercial paper programs at December 31, 1998 aggregating
E941 million of which E428 million is guaranteed by Hoechst. Celanese has
revolving credit agreements with several banks that provide for loans up to E941
million under various terms through June 1999. Subsequently, Celanese has
renewed these loan agreements up to U.S.$800 million (E684 million) under
various terms between September 1999 and June 2000. These credit lines provide
the credit backup for Celanese's commercial paper programs. The credit lines
were unused at December 31, 1998 and 1997. Celanese had outstanding letters of
credit amounting to E231 million at December 31, 1998 and E253 million at
December 31, 1997. Bank loans are principally denominated in Mexican pesos, U.S.
dollars and Dutch guilders.

                                      F-22
<PAGE>   123
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

12.  DEBT (CONTINUED)
LONG-TERM BORROWINGS

<TABLE>
<CAPTION>
                                                              AT DECEMBER 31,
                                                              ----------------
                                                               1998      1997
                                                              ------    ------
                                                              (IN E MILLIONS)
                                                              ----------------
<S>                                                           <C>       <C>
Term notes:
     6.125% notes, due 2004.................................    213       228
     8.23% notes, due 2002..................................    103       110
     7.125% medium-term notes, due 2009.....................     85        92
     7.37% bank loan, due 1998..............................      -        46
     7.39% bank loan, due 1999-2004.........................     60        68
     7.86% notes, due 2001..................................     43        46
     8.24% notes, due 2002..................................     26        27
     7.5% medium-term notes, due 2004.......................     26        27
     8.48% senior promissory notes, due 1999-2002...........     17        23
     9.8% medium-term notes, due 2013 and 2018..............     21        23
Variable rate loans with interest rates as of December 31,
  1998, adjusted periodically:
     Due in 2000, interest rate of 5.19%....................     85       213
     Due in 2001, interest rates of 5.19% and 5.70%.........    128       213
     Due in 2002, interest rate of 5.19%....................     85       214
Pollution control and industrial revenue bonds, interest
  rates ranging from 5.2% to 9.0% (as adjusted annually),
  due at various dates through 2026.........................    187       201
Obligations under capital leases, due 1999-2012.............     20        22
Other.......................................................     22        23
Amounts to be settled with Hoechst..........................    (23)     (121)
                                                              -----     -----
       Subtotal.............................................  1,098     1,455
Less: Current installments of long-term debt................     16        57
                                                              -----     -----
     Total long-term debt...................................  1,082     1,398
                                                              =====     =====
</TABLE>

     All of the above long-term borrowings, except for the amount to be settled
with Hoechst, are denominated in U.S. dollars. Certain of Celanese's debt
instruments, which are legally held by certain Celanese entities, include
tangible net worth and other covenants that limit their ability to enter into
certain transactions. These entities are in compliance with all debt covenants
at December 31, 1998.

     Celanese has decreased its long-term debt by certain amounts due from
Hoechst as of December 31, 1998 and 1997. It is management's intention that upon
the Demerger from Hoechst, Celanese will use the receipt of such funds to pay
down its long-term debt.

                                      F-23
<PAGE>   124
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

12.  DEBT (CONTINUED)
     The maturities in 1999 and thereafter are as follows:

<TABLE>
<CAPTION>
                                                                   TOTAL
                                                              ---------------
                                                              (IN E MILLIONS)
                                                              ---------------
<S>                                                           <C>
1999........................................................         433
2000........................................................         102
2001........................................................         204
2002........................................................         235
2003........................................................          15
Thereafter..................................................         526
                                                                   -----
  Total.....................................................       1,515
                                                                   =====
</TABLE>

13.  OTHER LIABILITIES

<TABLE>
<CAPTION>
                                                               1998     1997
                                                              ------   ------
                                                              (IN E MILLIONS)
                                                              ---------------
<S>                                                           <C>      <C>
Pension and postretirement medical and life obligations (see
  Note 14)..................................................    732      628
Environmental liabilities (see Note 20).....................    265      217
Other.......................................................    226      237
                                                              -----    -----
     Total other liabilities................................  1,223    1,082
                                                              =====    =====
</TABLE>

14.  BENEFIT OBLIGATIONS

     PENSION OBLIGATIONS -- Provisions for pension obligations are established
for benefits payable in the form of retirement, disability and surviving
dependent pensions. The benefits offered vary according to the legal, fiscal and
economic conditions of each country. The commitment results from participation
in defined contribution and defined benefit plans, primarily in the United
States. Benefits are dependent on years of service and the employee's
compensation. Supplemental retirement benefits provided to certain employees are
nonqualified for U.S. tax purposes. Separate trusts are sometimes established
for nonqualified plans.

     Defined benefit pension plans also exist at certain Businesses in Europe
and North America. Independent trusts or insurance companies administer the
majority of these benefit plans. Actuarial valuations for these plans are
prepared annually. The remaining plans are valued at least every three years.

     The Businesses participate in various defined contribution plans in the
United States, Mexico, Canada and Europe covering certain employees. Employees
may contribute to these plans and the Businesses may match these contributions
in varying amounts. Celanese's contributions to the defined contribution plans
are based on specified percentages of employee contributions and aggregated E26
million in 1998 and E34 million in 1997.

     OTHER POSTRETIREMENT BENEFIT PLANS -- Certain retired employees receive
postretirement health care and life insurance benefits under plans established
by the Businesses. Nearly all employees of the United States and Canada are
eligible to receive such benefits after reaching normal retirement age with a
minimum of 10 years of service. Generally, the medical plans pay a stated
percentage, based upon years of service, of qualifying medical expenses reduced
for any deductible and payments made by government programs and other group
coverage. Celanese is generally self-insured for these costs and the plans are
not funded. Provisions of the plans include caps which limit future
contributions for medical coverage.

                                      F-24
<PAGE>   125
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

14.  BENEFIT OBLIGATIONS (CONTINUED)

<TABLE>
<CAPTION>
                                                           PENSION BENEFITS    OTHER BENEFITS
                                                           -----------------   ---------------
                                                            1998      1997      1998     1997
                                                           -------   -------   ------   ------
                                                                     (IN E MILLIONS)
                                                           -----------------------------------
<S>                                                        <C>       <C>       <C>      <C>
CHANGE IN BENEFIT OBLIGATION
  Benefit obligation at beginning of year................   1,957     1,525      346      278
  Service cost...........................................      49        51        6        6
  Interest cost..........................................     146       129       28       27
  Participant contributions..............................       1         1        4        4
  Plan amendments........................................       -        30        -        -
  Actuarial losses.......................................     213        67       30       14
  Acquisitions...........................................       2         -        -        -
  Divestitures...........................................      (1)       (4)       -        -
  Settlements............................................     (16)        -        -       (6)
  Curtailments...........................................     (11)        -        -        -
  Benefits paid..........................................    (107)      (74)     (33)     (26)
  Foreign currency exchange rate changes.................    (151)      232      (29)      49
                                                            -----     -----     ----     ----
  Benefit obligation at end of year......................   2,082     1,957      352      346
                                                            =====     =====     ====     ====
CHANGE IN PLAN ASSETS
  Fair value of plan assets at beginning of year.........   1,738     1,179        -        -
  Actual return (loss) on plan assets....................     (59)      330        -        -
  Company contributions..................................     149       113       29       22
  Participant contributions..............................       1         1        4        4
  Divestitures...........................................      (1)        -        -        -
  Settlements............................................     (17)        -        -        -
  Benefits paid..........................................    (107)      (74)     (33)     (26)
  Foreign currency exchange rate changes.................    (126)      189        -        -
                                                            -----     -----     ----     ----
  Fair value of plan assets at end of year...............   1,578     1,738        -        -
                                                            =====     =====     ====     ====
  Funded status..........................................    (504)     (219)    (352)    (346)
  Unrecognized prior service cost........................      80       104        -        1
  Unrecognized actuarial (gain) loss.....................     280       (88)      54       27
  Unrecognized net transition asset......................     (12)      (18)       -        -
  Contributions..........................................       2         2        6        6
  Curtailment recognized.................................     (19)        -        -        -
  Settlement recognized..................................     (23)        -       (7)       -
                                                            -----     -----     ----     ----
  Net amount recognized..................................    (196)     (219)    (299)    (312)
                                                            =====     =====     ====     ====
AMOUNTS RECOGNIZED IN THE ACCOMPANYING COMBINED BALANCE
  SHEET
  Accrued benefit cost...................................    (328)     (235)    (299)    (312)
  Intangible asset.......................................      57        16        -        -
  Accumulated other comprehensive income.................      75         -        -        -
                                                            -----     -----     ----     ----
  Net amount recognized..................................    (196)     (219)    (299)    (312)
                                                            =====     =====     ====     ====
</TABLE>

                                      F-25
<PAGE>   126
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

14.  BENEFIT OBLIGATIONS (CONTINUED)

<TABLE>
<CAPTION>
                                                        PENSION BENEFITS    OTHER BENEFITS
                                                        -----------------   ---------------
                                                         1998      1997      1998     1997
                                                        -------   -------   ------   ------
<S>                                                     <C>       <C>       <C>      <C>
WEIGHTED-AVERAGE ASSUMPTIONS AS OF SEPTEMBER 30,
Discount rate.........................................   6.75%     7.25%    6.75%    7.25%
Expected long-term rate of return on plan assets......   9.25%     9.00%
Rate of increase in future compensation levels........   3.40%     3.40%
</TABLE>

     For measurement purposes, a 7.5% annual rate of increase in the per capita
cost of covered health care benefits was assumed in 1998. The rate was assumed
to decrease gradually to 5.5% in 2001 and remain at that level thereafter.

<TABLE>
<CAPTION>
                                                                PENSION        OTHER
                                                               BENEFITS      BENEFITS
                                                              -----------   -----------
                                                              1998   1997   1998   1997
                                                              ----   ----   ----   ----
                                                                   (IN E MILLIONS)
                                                              -------------------------
<S>                                                           <C>    <C>    <C>    <C>
COMPONENTS OF NET PERIODIC BENEFIT COST
Service cost................................................    49     51     4      4
Interest cost...............................................   146    129    25     25
Expected return on plan assets..............................  (117)  (102)    -      -
Amortization of prior service costs.........................    11      9     -      -
Recognized actuarial loss (gain)............................     3     (1)    -      -
Amortization of the unamortized obligation..................    (2)    (6)    -      -
Curtailment loss............................................    15      -     -      -
Settlement loss.............................................    24      -     -      -
                                                              ----   ----    --     --
Net periodic benefit cost...................................   129     80    29     29
                                                              ====   ====    ==     ==
</TABLE>

     The projected benefit obligation, accumulated benefit obligation, and fair
value of plan assets for the pension plans with accumulated benefit obligations
in excess of plan assets were E1,971 million, E1,790 million, and E1,453 million
as of December 31, 1998, and E184 million, E169 million, and E0 as of December
31, 1997, respectively.

     Assumed health care cost trend rates have a significant effect on the
amounts reported for the health care plans. A one-percentage-point change in
assumed health care cost trend rates would have the following effects:

<TABLE>
<CAPTION>
                                                                ONE         ONE
                                                              PERCENT     PERCENT
                                                              INCREASE    DECREASE
                                                              --------    --------
                                                                (IN E MILLIONS)
                                                              --------------------
<S>                                                           <C>         <C>
Effect on total of service and interest cost components.....      1          (1)
Effect on postretirement obligation.........................     17         (16)
</TABLE>

<TABLE>
<CAPTION>
                                                              1998    1997
                                                              ----    ----
                                                                 (IN E
                                                               MILLIONS)
                                                              ------------
<S>                                                           <C>     <C>
OTHER OBLIGATIONS
Long-term disability........................................   69      61
Other.......................................................   36      20
                                                              ---      --
                                                              105      81
                                                              ===      ==
</TABLE>

                                      F-26
<PAGE>   127
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

15.  COMBINED EQUITY

     Combined equity represents the historical equity of the Businesses and
activities combined as Celanese. Combined equity represents equity less
accumulated other comprehensive income items of combined companies and the
effects of transfers between Celanese and Hoechst companies which do not give
rise to normal receivables or payables intended to be settled between these two
groups of companies. (See Note 4)

16.  STOCK-BASED COMPENSATION

     Celanese has adopted the disclosure-only provisions of SFAS No. 123 and
applies APB Opinion No. 25 and related interpretations in accounting for options
granted to employees. During fiscal 1998 and 1997, certain employees of Celanese
were granted 160,900 and 93,400 options in the Hoechst 1997 Stock Appreciation
Rights Plan (the "1997 Plan") and Hoechst 1998 Stock Option Plan (the "1998
Plan"), respectively. These options remain outstanding at December 31, 1998 and
1997. Celanese recognized no compensation expense related to these option
grants.

     Rights granted under the 1997 Plan have a five-year term and generally will
be exercisable in whole or in part, subject to certain limitations, at any time
during the period between September 9, 1999 and September 9, 2002, provided that
at the time of exercise, the closing price of an Ordinary Share of Hoechst on
the Frankfurt Stock Exchange must be at least 125% of the Grant Price. The Grant
Price of these options was E37.73. Rights remaining unexercised as of September
9, 2002 will be deemed to have been exercised as of that date.

     Options granted under the 1998 Plan have a five-year term and generally
will be exercisable in whole or in part, subject to certain limitations, at any
time during the period between September 30, 2001 until September 30, 2003,
provided that at the time of exercise, the closing price of an Ordinary Share of
Hoechst on the Frankfurt Stock Exchange must be at least 125% of the Grant Price
and the Hoechst share price must exceed the performance of the share price of
eight out of seventeen peer group companies as defined by the Board of
Management of Hoechst. The Grant Price of these options was E34.88. Options
remaining unexercised as of September 30, 2003 will be deemed to have been
exercised as of that date.

     The weighted average per share fair value of the options referred to above
was E15.67 on the date of grant using the Black Scholes option-pricing model
with the following assumptions: dividend yield of 3%, risk-free interest rate of
4.08%, a life of 5 years and volatility of 36%. Had Celanese determined
compensation cost based on the fair value at the grant date for these options
under SFAS No. 123, Celanese's net earnings (loss) would have been as follows:

<TABLE>
<CAPTION>
                                                              1998       1997
                                                              ----       ----
                                                              (IN E MILLIONS)
                                                              ---------------
<S>                                                           <C>        <C>
Net earnings (loss) as reported.............................  (44)        47
Pro forma net earnings (loss)...............................  (46)        46
</TABLE>

                                      F-27
<PAGE>   128
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

17.  LEASES

     Total minimum rent charged to operations under all operating leases was E60
million in 1998 and E57 million in 1997. Future minimum lease payments under
rental and lease agreements which have initial or remaining terms in excess of
one year at December 31, 1998 are as follows:

<TABLE>
<CAPTION>
                                                              CAPITAL   OPERATING
                                                              -------   ---------
                                                                (IN E MILLIONS)
                                                              -------------------
<S>                                                           <C>       <C>
1999........................................................     3          68
2000........................................................     3          77
2001........................................................     3          75
2002........................................................     3          73
2003........................................................     3          73
Later years.................................................    16         180
Sublease income.............................................     -          (9)
                                                                --         ---
Minimum lease commitments...................................    31         537
                                                                           ===
Less amounts representing interest..........................     9
                                                                --
Present value of net minimum lease obligations..............    22
                                                                ==
</TABLE>

     The related assets for capital leases are included in machinery and
equipment in the combined balance sheets.

     Management expects that, in the normal course of business, leases that
expire will be renewed or replaced by other leases.

18.  FINANCIAL INSTRUMENTS

     Celanese does not hold derivatives for trading or speculative purposes.

Interest Rate Risk Management

     Celanese enters into interest rate swap and cap agreements to reduce the
exposure of interest rate risk inherent in Celanese's debt portfolio. Celanese's
derivative policy provides the ability to lock in borrowing rates and promotes
the achievement of a desired level of fixed/floating rate mix. Celanese had open
interest rate swaps and cap positions with a notional amount of E936 million at
December 31, 1998. Celanese's credit risk exposure related to counterparty
default on instruments is not material.

     Hoechst manages its interest rate risk exposure on a worldwide basis, of
which Celanese is a component for the periods presented in the accompanying
combined financial statements. Pursuant to the Demerger Agreement, Celanese will
maintain certain interest rate swaps that currently are used to hedge variable
rate debt of Celanese as well as other Hoechst affiliates. The excess notional
values of these swaps over the variable rate debt being maintained by Celanese
have not been marked to market in the accompanying combined financial statement.
On or about the effective date of incorporation of Celanese, it expects to
increase its variable rate debt portfolio to a level consistent with the
notional amount of the interest rate swaps. Celanese expects to enter into new
interest rate swaps or re-designate its existing interest rate swaps, to
effectively manage its interest rate risk associated with its variable rate debt
portfolio and will recognize any necessary mark to market adjustment upon
completion of the Demerger. Celanese recognized total interest expense
associated with its interest rate swaps of E5 million for 1998 and 1997.
Celanese does not believe the cash flows from the excess swap position are
material to Celanese's financial position and results of operations.

                                      F-28
<PAGE>   129
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

18.  FINANCIAL INSTRUMENTS (CONTINUED)
As a result of the introduction of the euro, outstanding currency derivatives
between currencies of the countries that have adopted the euro as their common
currency are risk neutral as of January 1, 1999.

Foreign Exchange Risk Management

     The Businesses have certain receivables and payables denominated in
currencies other than the functional currencies of Celanese, which create
foreign exchange risk. Accordingly, Celanese enters into foreign currency
forwards and options to minimize its exposure to foreign currency fluctuations.
The foreign currency contracts are designated for firm commitments. Gains and
losses on these contracts are offset against the change in the value of the
related exposures. Contracts totaling approximately E273 million at December 31,
1998 are predominantly in DM, Mexican pesos, U.S. dollars and Italian lira.

Fair Value of Financial Instruments

     Summarized below are the carrying values and estimated fair values of
Celanese's financial instruments as of December 31, 1998 and 1997. For purposes
of the following disclosure, the fair value of a financial instrument is the
amount at which the instrument could be exchanged in a current transaction
between willing parties.

<TABLE>
<CAPTION>
                                                             1998               1997
                                                       ----------------   ----------------
                                                       CARRYING   FAIR    CARRYING   FAIR
                                                        AMOUNT    VALUE    AMOUNT    VALUE
                                                       --------   -----   --------   -----
                                                                 (IN E MILLIONS)
                                                       -----------------------------------
<S>                                                    <C>        <C>     <C>        <C>
Other assets - investments...........................     272       272      244       244
Long-term debt.......................................   1,082     1,196    1,398     1,438
Debt related derivative instruments..................       -       (27)       -       (19)
Foreign exchange related derivative instruments......       -         4        -        27
</TABLE>

     At December 31, 1998 and 1997, the fair values of cash and cash
equivalents, receivables, commercial paper, notes payable, trade payables, and
the current installments of long-term debt approximate carrying values due to
the short-term nature of these instruments. Accordingly, these items have been
excluded from the table.

     Included in other assets are certain investments accounted for under the
cost method and long-term marketable securities classified as available for
sale. In general, the cost investments are not publicly traded; however,
Celanese believes that the carrying value approximates the fair value.

     The fair value of Celanese's long-term debt and debt-related financial
instruments is estimated based upon quotations from investment bankers and on
current rates of debt for similar types of issues. The fair value of foreign
currency contracts is estimated based upon the spot rate at the balance sheet
date.

19.  COMMITMENTS AND CONTINGENCIES

     Celanese is involved in a number of legal proceedings and claims incidental
to the normal conduct of its Businesses, relating to such matters as product
liability, competition, past waste disposal practices and release of chemicals
into the environment. While it is impossible at this time to determine with
certainty the ultimate outcome of these lawsuits, management believes, based on
the advice of legal counsel, that adequate provisions have been made and that
the ultimate outcome will not have a material adverse effect on the financial
position of Celanese, but may have a material adverse effect on the results of
operations or cash flows in any given year. (See Note 20)

                                      F-29
<PAGE>   130
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

19.  COMMITMENTS AND CONTINGENCIES (CONTINUED)
Plumbing Actions

     CNA Holdings Inc. ("CNA Holdings"), formerly known as HNA Holdings, Inc.
and Hoechst Celanese Corporation, became a United States subsidiary of Celanese
in the Demerger and currently serves as a holding company for the Businesses in
North America, including the United States business now conducted by Ticona. CNA
Holdings along with Shell Chemical Company ("Shell") and E. I. du Pont de
Nemours ("DuPont") among others have been the defendants in a series of
lawsuits, alleging that plastics manufactured by these companies that were
utilized in the production of plumbing systems for residential property were
defective or caused such plumbing systems to fail. Based on, among other things,
the findings of outside experts and the successful use of Ticona's acetal
copolymer in similar applications, CNA Holdings does not believe Ticona's acetal
copolymer was defective or caused the plumbing systems to fail. In many cases
CNA Holdings' exposure may be limited by invocation of the statute of
limitations since CNA Holdings ceased selling the resin for use in the plumbing
systems in site built homes during 1986 and in manufactured homes during 1989.

     CNA Holdings has been named a defendant in seven putative class actions as
well as a defendant in other non-class actions filed in nine states and Canada.
In these actions, the plaintiffs typically have sought recovery for alleged
property damages, and, in certain cases, additional damages under the Texas
Deceptive Trade Practices Act. Damage amounts have not been specified. The
putative class actions are pending in the Ninth Judicial Circuit Court of Common
Pleas of South Carolina, Charleston County, the Territorial Court of the Virgin
Islands, St. Croix Division, the Supreme Court of British Columbia, Canada,
Superior Court, Province of Quebec, Canada.

     A conditionally certified class action (of recreational vehicle owners) is
pending in the Chancery Court of Tennessee, Weakley County. A putative class
action (of insurance companies with respect to subrogation claims), as well as
an individual action (by Prudential Property & Casualty Insurance Company with
respect to its subrogation claims), are both pending in the United States
District Court for the District of New Jersey. A putative class action pending
in the Circuit Court of the Fifth Judicial Circuit, Florida, Marion County has
been certified on behalf of homeowners who claim to have opted out of the
national settlement described below.

     In November 1995, CNA Holdings, DuPont and Shell entered into a national
class action settlement, which has been approved by the courts. The settlement
calls for the replacement of plumbing systems of claimants who have had
qualifying leaks, as well as reimbursements for certain leak damage.
Furthermore, the three companies have agreed to fund such replacements and
reimbursements up to E813 million. There are approximately 27 additional pending
lawsuits in approximately 26 jurisdictions not covered by this settlement;
however, these cases do not involve (either individually or in the aggregate) a
large number of homes, and management does not expect the obligations arising
from these lawsuits to have a material adverse effect on CNA Holdings. The
allocation of payments already made to the claimants and future payments between
the affected companies has not yet been finally determined between CNA Holdings
and Shell. This allocation is subject to a binding arbitration between CNA
Holdings and Shell, and arbitration proceedings were completed in June 1999 (See
Note 23). In 1995, CNA Holdings and Shell settled the claims of certain
individuals, owning 110,000 property units, who are represented by a Texas law
firm for an amount not to exceed U.S. $170 million (E145 million). These
claimants will also be eligible for a replumb of their homes in accordance with
the terms of the national class action settlement. CNA Holdings' and Shell's
contributions under this settlement are subject to allocation in the above
binding arbitration. In addition, a lawsuit filed in November 1989, in Delaware
Chancery Court between CNA Holdings and certain of its insurance companies
relating to all claims incurred and to be incurred for the product liability
exposure resulted in a partial declaratory judgment in CNA Holdings' favor. As a
result,
                                      F-30
<PAGE>   131
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

19.  COMMITMENTS AND CONTINGENCIES (CONTINUED)
settlements have been reached with a majority of CNA Holdings' insurers
specifying their responsibility for such claims.

     CNA Holdings has accrued its best estimate of its share of the plumbing
actions. At December 31, 1998, Celanese had accrued E213 million for this
matter. Management believes that the plumbing actions are either covered by
insurance or provided for in the combined financial statements. However, if
Celanese were to incur an additional charge for this matter, such a charge will
not have a material adverse effect on the financial position of Celanese, but
may have a material adverse effect on the results of operations or cash flows in
any given year. Celanese has recorded receivables relating to the anticipated
recoveries from third party insurance carriers relating to this product
liability matter. These receivables are based on the probability of collection,
an opinion of external counsel, the settlement agreements reached with a
majority of Celanese's insurance carriers whose coverage level exceeds the
receivables and the status of current discussions with other insurance carriers.
As of December 31, 1998, Celanese had recorded E193 million in outstanding
insurance claim receivables that are expected to be collected within the next
five years. Collectability could vary depending on the financial status of the
insurance carriers.

Fugitive Emissions Standards

     In 1990, the United States Environmental Protection Agency ("EPA") issued a
notice of violation to CNA Holdings alleging that its Rock Hill, South Carolina
plant, located in the United States, was subject to fugitive emissions standard
for benzene under the Clean Air Act based upon the volume of benzene used at the
facility. CNA Holdings contested the notice of violation because it believed it
had correctly determined in 1984 that the calculation of benzene usage for
determining applicability of the standard did not include amounts recirculated
within the process after initial use. By 1991, CNA Holdings met the fugitive
emissions standard as interpreted by the EPA for its three U.S. facilities that
used benzene.

     In 1992, 1993 and 1995, the United States, on behalf of the EPA, filed
enforcement actions against CNA Holdings regarding the three plants in federal
district courts in South Carolina, Virginia and Texas seeking penalties of up to
U.S. $25,000 per day. The Virginia and Texas cases were, for most of the time,
stayed by consent of the parties while the South Carolina case was litigated
through denial of a petition for certiorari to the U.S. Supreme Court. The
appellate court in that case upheld the EPA's interpretation of the standard but
affirmed that CNA Holdings did not have notice of that interpretation prior to
August 1989, thus no penalties could be assessed prior to that date. The
appellate court remanded the case to the district court for a determination of
what penalty, if any, should be assessed for the period from August 1989, when
CNA Holdings received actual notice of the EPA's interpretation, through the
plant's achievement of compliance in September 1991. The parties have agreed to
nonbinding mediation to aid settlement negotiations before resuming litigation
in the district court and are currently discussing the timetable for this
nonbinding mediation. Management believes a material loss from this matter is
remote.

Generic Pharmaceutical Litigation

     Copley Pharmaceutical Inc. ("Copley"), a subsidiary of Celanese Americas,
formerly known as Hoechst Corporation, was a defendant in civil litigation
stemming from product liability claims related to physical injuries allegedly
sustained in connection with the use of the drug Albuterol sulfate inhalation
solution 0.5% ("Albuterol"). During 1995, Copley entered into a class action
settlement agreement whereby Copley and its insurers agreed to provide up to
U.S. $150 million (E128 million) to settle the majority of claims relating to
Albuterol. Through December 31, 1998, Copley's insurers have paid approximately
E86 million in connection with this settlement. Copley has set up provisions and
issued letters of credit for its share of the settlement. At December 31, 1998,
Copley had accrued E3.6 million in this respect. Claims by persons who opted out
of the class action in a timely manner are not covered by
                                      F-31
<PAGE>   132
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

19.  COMMITMENTS AND CONTINGENCIES (CONTINUED)
the settlement. Copley has established provisions for these claims. Material
additional losses are not reasonably possible. Although the outcome of the
foregoing proceedings cannot be predicted with certainty, at December 31, 1998,
management's best estimate of the range of possible additional losses is between
E0 and E11 million.

     In September 1994, Copley recalled Brompheril, an over-the-counter
decongestant. To date, Copley is unaware of any claims in connection with this
product. In August 1994, the U.S. District Attorney's office informed Copley of
the commencement of a grand jury investigation of Copley and certain employees.
In May 1997, Copley pled guilty to a one count information charging a violation
of Title 18, United States Code, Section 371, a conspiracy to defraud the United
States and one of its agencies, the Food and Drug Administration ("FDA"). As
part of the plea, Copley agreed to pay a fine of U.S. $10.6 million of which
U.S. $7.5 million was accrued in 1996 and U.S. $3.1 million was accrued in 1997.
Copley also entered into an agreement with the FDA for an audit, to be conducted
by qualified outside auditors acceptable to the FDA, of 20 of Copley's approved
abbreviated new drug applications. Copley is cooperating with the FDA, which has
agreed to continue to review Copley's pending applications during the audit.

     In September 1998, Great Neck Capital Appreciation Partnership filed a
complaint derivatively on behalf of the directors of Copley in a Massachusetts
Superior Court against six of Copley's directors. Two of these directors are
employees or consultants of Hoechst, and one of them is an employee of Celanese.
In October 1998, Great Neck Capital amended its complaint to add Celanese
Americas as a defendant.

     The amended complaint alleges that Celanese Americas used Copley for its
own benefit, injured Copley's ability to compete and compromised the
independence of Copley's independent directors. The complaint also alleges that
the six directors allowed Celanese Americas to use Copley and otherwise breached
their fiduciary duties to Copley. The plaintiff seeks damages in an amount in
excess of U.S. $100 million (E85 million) against all defendants, jointly and
severally. The directors and Celanese Americas have moved to dismiss this case.
Celanese Americas believes the possibility of a loss related to this matter is
remote. This motion is still pending. The claims against Copley's directors have
been submitted to the companies providing Copley's directors and officers
insurance.

Antitrust

     In 1998, Nutrinova Inc., a U.S. subsidiary of Nutrinova Nutrition
Specialties & Food Ingredients GmbH, then a wholly-owned subsidiary of Hoechst,
received a grand jury subpoena from the U.S. District Court for the Northern
District of California in connection with a U.S. criminal antitrust
investigation of the sorbates industry. Based on the advice of external counsel
and a review of the existing facts and circumstances relating to the matter,
Celanese has recorded accrued liabilities of E27 million at December 31, 1998
for the estimated loss relative to this matter. Pursuant to the Demerger
Agreement, Hoechst has agreed to indemnify Celanese for 80% of any costs
Celanese may incur relative to this matter. Accordingly, Celanese has recognized
a receivable from Hoechst and a corresponding contribution of capital from this
indemnification. Celanese's accrued liability, noted above, for this matter is
gross of any recovery from Hoechst. Although the outcome of this matter cannot
be predicted with certainty, Celanese believes that any resulting liabilities,
net of amounts recoverable from Hoechst, will not, in the aggregate, have a
material adverse effect on Celanese's financial position. In addition, during
1999, eleven civil antitrust actions, seeking monetary damages and other relief
for alleged conduct involving the sorbates industry have been filed and are in
the early stages of litigation. (See Note 23)

                                      F-32
<PAGE>   133
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

19.  COMMITMENTS AND CONTINGENCIES (CONTINUED)
Other Matters

     In 1998, Celanese received a substantial settlement in connection with a
patent infringement lawsuit. This is included as a component of selling, general
and administrative expenses.

     In the normal course of business, Celanese enters into commitments to
purchase goods and services over a fixed period of time. Celanese maintains a
number of "take-or-pay" contracts for the purchase of raw materials and
utilities. At December 31, 1998, Celanese does not expect to incur any losses
under these contractual arrangements. Additionally, at December 31, 1998, there
were outstanding commitments relating to capital projects of approximately E83
million.

20.  ENVIRONMENTAL

     General -- The worldwide Businesses are subject to environmental laws and
regulations which impose limitations on the discharge of pollutants into the air
and water and establish standards for the treatment, storage and disposal of
solid and hazardous wastes. Celanese believes that it is in substantial
compliance with all applicable environmental laws and regulations.


     U.S. Superfund Sites -- In the United States, the Businesses may be subject
to substantial claims brought by U.S. Federal or state regulatory agencies or
private individuals pursuant to statutory authority or common law. In
particular, Celanese has a potential liability under the U.S. Federal
Comprehensive and Liability Act ("Superfund") and related state laws for
investigation and cleanup costs at approximately 100 sites. At most of these
sites, numerous companies, including certain companies comprising the
Businesses, or one of its predecessor companies, have been notified that the
EPA, state governing bodies or private individuals consider such companies to be
potentially responsible parties ("PRP") under Superfund or related laws. The
proceedings relating to these sites are in various stages. The cleanup process
has not been completed at most sites and the status of the insurance coverage
for most of these proceeds is uncertain. Consequently, Celanese cannot determine
accurately its ultimate liability for investigation or cleanup costs at these
sites. At December 31, 1998 and 1997, Celanese had provisions totaling E9
million and E11 million, respectively, for U.S. Superfund sites and utilized E2
million and E5 million of these reserves in 1998 and 1997, respectively.
Celanese did not record any additional provisions for U.S. Superfund sites
during 1998 and 1997.


     As events progress at each site for which it has been named a PRP, Celanese
accrues, as appropriate, a liability for site cleanup. Such liabilities include
all costs that are probable and can be reasonably estimated. In establishing
these liabilities, Celanese considers its shipment of waste to a site, its
percentage of total waste shipped to the site, the types of wastes involved, the
conclusions of any studies, the magnitude of any remedial actions that may be
necessary, and the number and viability of other PRPs. Often Celanese will join
with other PRPs to sign joint defense agreements that will settle, among PRPs,
each party's percentage allocation of costs at the site. Although the ultimate
liability may differ from the estimate, Celanese routinely reviews the
liabilities and revises the estimate, as appropriate, based on the most current
information available.

     German InfraServs -- The Businesses in Germany have manufacturing
operations at five locations in Germany: Oberhausen, Hochst, Gendorf,
Kelsterbach and Knapsack. On January 1, 1997, coinciding with a reorganization
of the Hoechst businesses in Germany, real estate service companies
("InfraServs") were created to own directly the land and property and to provide
various technical and administrative services at each of the manufacturing
locations.

     InfraServs are liable for any residual contamination and other pollution
because they own the real estate on which the individual facilities operate. In
addition, Hoechst, as the responsible party under

                                      F-33
<PAGE>   134
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

20.  ENVIRONMENTAL (CONTINUED)
German public law, is liable to third parties for all environmental damage that
occurred while it was still the owner of the plants and real estate. However,
the InfraServs have agreed to indemnify Hoechst against any environmental
liability arising out of or in connection with environmental pollution of any
site. The partnership agreements provide that, as between the partners, each
partner is responsible for any contamination caused predominantly by such
partner. The limited partners are also obligated to indemnify Hoechst against
any such liability. In view of this potential obligation to eliminate residual
contamination, the InfraServs have recorded provisions totaling about E259
million as of December 31, 1998, of which E57 million has been included in the
combined reserves for environmental liabilities of Celanese. The provision of
E57 million was recorded for measures ordered by German authorities, mainly for
land fill and land reclamation activities of InfraServ GmbH & Co. Knapsack
Deponie KG. Those measures were verified by third-party appraisals determining
the amount of provision. Based on the facts and circumstances at December 31,
1998, no additional charges are expected. If the InfraServ companies default on
their respective indemnification obligations to eliminate residual
contamination, the owners of the remaining participations in the InfraServ
companies have agreed to fund such liabilities, subject to a number of
limitations. To the extent that any liabilities were not satisfied by either the
InfraServs or their owners, these liabilities were demerged to Celanese. Hoechst
has agreed to indemnify Celanese for two-thirds of such residual liabilities. In
accordance with the Demerger Agreement, Celanese has agreed to indemnify Hoechst
for the remaining one-third of such residual liabilities.

     The German InfraServs are owned partially by Celanese, as noted below, and
the remaining ownership is held by various other companies. Celanese's ownership
interest and environmental liability participation percentages were as follows
at December 31, 1998:

<TABLE>
<CAPTION>
                            SITE                              OWNERSHIP %   LIABILITY %
                            ----                              -----------   -----------
<S>                                                           <C>           <C>
InfraServ GmbH & Co. Gendorf KG.............................     39.0%         10.0%
InfraServ GmbH & Co. Oberhausen KG..........................     84.0%         75.0%
InfraServ GmbH & Co. Knapsack KG............................     42.0%         47.0%
InfraServ GmbH & Co. Knapsack Deponie KG....................    100.0%        100.0%
InfraServ GmbH & Co. Kelsterbach KG.........................    100.0%        100.0%
InfraServ GmbH & Co. Hochst KG..............................     27.2%         33.0%
InfraServ GmbH & Co. Munchsmunster KG.......................     79.0%         79.0%
InfraServ Verwaltungs GmbH..................................    100.0%        100.0%
InfraServ GmbH & Co. Wiesbaden KG...........................     29.0%         10.0%
</TABLE>

     Celanese also has certain obligations related to previously divested
entities and has provided for such obligations, when the event of loss is
probable and reasonably estimable. (See Note 4)

     In 1998 and 1997, the total environmental costs charged to operations for
remediation efforts amounted to E94 million and E45 million, respectively. The
E94 million recorded in 1998 is net of E56 million, as a result of discounting
future outlays for certain fixed period remediation projects using a 6% discount
rate. Celanese has no other discounted environmental reserves.

     Management believes that the environmental costs will not have a material
adverse effect on the financial position of Celanese, but may have a material
adverse effect on the results of operations or cash flows in any given year.

21.  SPECIAL CHARGES

     Special charges on the accompanying combined statements of operations
include provisions for restructuring which represent costs related to severance
and other benefit programs, as well as costs

                                      F-34
<PAGE>   135
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

21.  SPECIAL CHARGES (CONTINUED)
incurred in connection with a decision to exit non-strategic businesses and the
related closure of facilities. These measures are based on formal management
decisions, establishment of agreements with the employees' representative or
individual agreements with the affected employees as well as the public
announcement of the restructuring plan. The components of the 1998 and 1997
restructuring charges were as follows:

<TABLE>
<CAPTION>
                                                           EMPLOYEE
                                                          TERMINATION   PLANT/OFFICE
                                                           BENEFITS       CLOSURES     TOTAL
                                                          -----------   ------------   -----
                                                                   (IN E MILLIONS)
                                                          ----------------------------------
<S>                                                       <C>           <C>            <C>
Restructuring reserve at December 31, 1996..............        -             3           3
                                                              ---           ---         ---
Restructuring expense recorded in 1997..................       22            34          56
Cash and noncash uses during 1997.......................      (12)           (4)        (16)
                                                              ---           ---         ---
Restructuring reserve at December 31, 1997..............       10            33          43
Restructuring expense recorded in 1998..................       34            39          73
Other additions.........................................       12             -          12
Cash and noncash uses during 1998.......................      (30)          (42)        (72)
                                                              ---           ---         ---
Restructuring reserve at December 31, 1998..............       26            30          56
                                                              ===           ===         ===
</TABLE>

     In 1997, Celanese recorded special charges totaling E103 million, of which
E56 million was recorded as an addition to the restructuring reserve. The E56
million included a Hoechst Research & Technology restructuring reserve of E45
million related to the impairment of laboratory assets at three U.S. locations
(E29 million) and the termination of related employees (E16 million);
restructuring costs of E8 million associated with severance benefits for the
downsizing of the corporate headquarters of Celanese's U.S. subsidiaries and E3
million related to restructuring of certain European facilities. In addition to
the E56 million reserve, with the reorientation of Hoechst Research & Technology
during 1997, Celanese management determined the portion of goodwill allocated to
this division from the acquisition of Celanese in 1987 by Hoechst was impaired
and accordingly E43 million was written off. Further, Celanese recognized a
charge of E4 million for the further impairment of its investment in Copley
Pharmaceuticals, Inc. due to the continued decline in the fair market value of
its stock price.

     In 1998, Celanese recorded special charges totaling E100 million, of which
E73 million was recorded as an addition to the restructuring reserve. The
increase to the restructuring reserve of E73 million pertained primarily to
employee termination severance costs of E34 million, of which E33 million
related to downsizing in the businesses. The E33 million was comprised of E21
million resulting from Hoechst's reorientation of basic research, E6 million
associated with two U.S. acetate facilities, E5 million associated with the U.S.
corporate headquarters and E1 million related to a European plant facility. The
remaining balance of E1 million is related to the shutdown of an OPP production
line at a European plant. Additionally, Celanese recognized E39 million
restructuring costs for plant and office closures, of which E18 million
pertained to the estimated loss on the lease for the U.S. corporate
headquarters, E6 million for the impairment of fixed assets primarily associated
with the lease for the U.S. corporate headquarters, E9 million of estimated
contractual losses on a service agreement associated with the shutdown of an
acetic acid unit in Europe, E4 million for the closure of a European chlorine
plant and E2 million for the impairment of fixed assets associated with the
shutdown of an OPP production line at a European plant. The remaining special
charge in 1998 of E27 million pertained to the recognition of a E27 million
reserve related to the Nutrinova antitrust actions (See Note 19).

                                      F-35
<PAGE>   136
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

21.  SPECIAL CHARGES (CONTINUED)
     Additionally, in 1998 Celanese recorded other additions of E12 million
associated with Hoechst's exchange of substantially all of its polyester fiber
and bottle resins business in the U.S., Europe and Mexico for the 49% minority
interest in Grupo Celanese, S.A., which was not already owned by Celanese. As a
result of this transaction, Celanese is responsible for the payment of severance
and other benefits associated with the elimination of polyester fiber and bottle
resin business employees. This transaction was reflected as a capital
contribution in 1998; accordingly, the reserve was established against the
capital contribution. (See Note 4)

     In 1998 and 1997, Employee Termination Benefits primarily represented
severance and other benefits associated with the elimination of approximately
675 positions worldwide, of which approximately 525 positions had been
eliminated as of December 31, 1998. At December 31, 1998, the remaining Employee
Termination Benefits reserve of E26 million pertained primarily to employee
severance payments related to the polyester fiber and bottle resins business
formerly conducted by Hoechst of E12 million and the U.S. corporate headquarters
of E8 million. These severance payments are scheduled to be remitted within the
next 12 months. The remaining Plant/Office Closures reserve of E30 million at
December 31, 1998 pertains primarily to a reserve related to the estimated loss
on the lease resulting from the closure of the U.S. corporate headquarters,
which is scheduled to take place by the end of 1999, of E18 million and E9
million of estimated contractual losses on a service agreement associated with
the 1998 shutdown of an acetic acid unit in Europe.

22.  BUSINESS AND GEOGRAPHICAL SEGMENTS

     Effective January 1, 1998, Celanese adopted SFAS No. 131, Disclosures about
Segments of an Enterprise and Related Information. Information with respect to
Celanese's industry segments follows:

Business Segments

     ACETYL PRODUCTS, the methyls, acetyls and acetyl derivatives segment,
primarily produces and supplies methanol, formaldehyde, polyols, acetic acid,
vinyl acetate monomer, acetic anhydride and acetate esters;

     CHEMICAL INTERMEDIATES, the acrylates, oxo products and specialties
segment, produces and supplies acrylic acid, acrylates, amines, carboxylic acids
and oxo alcohols;

     ACETATE PRODUCTS produces and supplies cellulose acetate filament and
staple, acetate filter products and advanced fiber material;

     TICONA, the technical polymers segment, develops and supplies a broad
portfolio of high performance technical polymers products; and

     PERFORMANCE PRODUCTS includes Trespaphan, the oriented polypropylene
("OPP") film business, Nutrinova, the high intensity sweetener and food
protection ingredients business, as well as Celgard, the separation products
business.

     The segment management reporting and controlling systems is substantially
the same as those described in the summary of significant accounting policies
(U.S. GAAP). Celanese measures the performance of its operating segments through
"Operating Profit" as defined on the accompanying combined statements of
operations.

                                      F-36
<PAGE>   137
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

22.  BUSINESS AND GEOGRAPHICAL SEGMENTS (CONTINUED)
     Sales and revenues related to transactions between segments are generally
recorded at values that approximate third-party selling prices. Revenues and
long-term assets are allocated to countries based on the location of the
business. Capital expenditures represent the purchase of property, plant and
equipment.

<TABLE>
<CAPTION>
                              ACETYL      CHEMICAL      ACETATE             PERFORMANCE    TOTAL
                             PRODUCTS   INTERMEDIATES   PRODUCTS   TICONA    PRODUCTS     SEGMENTS   RECONCILIATION    COMBINED
                             --------   -------------   --------   ------   -----------   --------   ---------------   --------
                                                                      (IN E MILLIONS)
                             --------------------------------------------------------------------------------------------------
<S>                          <C>        <C>             <C>        <C>      <C>           <C>        <C>               <C>
1998:
Sales to external
  customers................   1,438           850         839        750        455        4,332            827         5,159
Inter-segment revenues.....      80            70           -          -          -          150           (150)            -
Operating profit (loss)....     152            54          94         53         (7)         346           (163)          183
Depreciation and
  amortization.............      85            56          54         62         37          294             57           351
Capital expenditures.......      70            97          69         66         42          344             29           373
Special charges............       9             1           6          -         30           46             54           100
Total assets...............   1,541         1,070         808      1,352        417        5,188          2,378         7,566
1997:
Sales to external
  customers................   1,661         1,051         994        742        479        4,927            848         5,775
Inter-segment revenues.....      96            72           -          -          -          168           (168)            -
Operating profit...........     221            73         149         57         47          547           (266)          281
Depreciation and
  amortization.............      77            50          44         60         30          261             66           327
Capital expenditures.......      75           120          42         44         58          339             69           408
Special charges............       -             -           -          -          -            -            103           103
Total assets...............   1,239           806         748      1,408        386        4,587          1,816         6,403
</TABLE>

     The reconciliation column includes (a) operations of certain other
operating entities and their related assets, liabilities, revenues and expenses,
(b) the elimination of inter-segment sales and net receivables and payables, (c)
assets and liabilities not allocated to a segment, and (d) corporate center
costs for support services such as legal, accounting and treasury functions.
Additionally, Celanese recognized a special charge in 1998 and 1997 related to
restructuring costs, write-off of fixed assets, shutdown of a facility, and
impairment of goodwill. (See Note 21) Other operating entities consist primarily
of other chemical businesses, as well as a polyester staple and bottle resin
business, generic pharmaceuticals, and companies which provide infrastructure
and procurement services.

     The following table presents financial information based on the geographic
location of the manufacturing facilities of Celanese:

<TABLE>
<CAPTION>
                        NORTH    THEREOF   THEREOF   THEREOF            THEREOF          REST OF
                       AMERICA     USA     CANADA    MEXICO    EUROPE   GERMANY   ASIA    WORLD    COMBINED
                       -------   -------   -------   -------   ------   -------   ----   -------   --------
                                                         (IN E MILLIONS)
                       ------------------------------------------------------------------------------------
<S>                    <C>       <C>       <C>       <C>       <C>      <C>       <C>    <C>       <C>
1998:
Total assets.........   5,048     4,334      345       369     2,178     1,814    131      209      7,566
Long-lived assets....   1,339     1,056      160       123       482       362    101       11      1,933
Operating profit
  (loss).............     256       118       83        55       (74)      (89)     4       (3)       183
Net sales............   3,052     2,463      407       182     1,954     1,174     91       62      5,159
Depreciation and
  amortization.......     249       207       25        17        90        68     10        2        351
Capital
  expenditures.......     246       192       14        40       109        81     16        2        373
1997:
Total assets.........   4,420     3,767      369       284     1,604     1,225    134      245      6,403
Long-lived assets....   1,460     1,143      197       120       466       348    102       13      2,041
Operating profit
  (loss).............     249        28      127        94        45        35     (9)      (4)       281
Net sales............   3,504     2,809      403       292     2,174     1,279     39       58      5,775
Depreciation and
  amortization.......     240       206       22        12        81        63      4        2        327
Capital
  expenditures.......     291       226       15        50        80        51     35        2        408
</TABLE>

                                      F-37
<PAGE>   138
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

23.  SUBSEQUENT EVENTS

     In 1998, Nutrinova Inc. received a grand jury subpoena from the United
States District Court for the Northern District of California in connection with
a criminal antitrust investigation of the sorbates industry. On May 3, 1999,
Hoechst and the Government of the United States of America entered into an
agreement pursuant to which Hoechst will plead guilty to a one-count indictment
charging Hoechst with participating in a conspiracy to fix prices and allocate
market shares of sorbates sold in the United States. Hoechst and the U.S.
Government agreed to recommend that the Government's District Court fine Hoechst
E31 (U.S. $36) million. Hoechst also agreed to cooperate with the Government's
investigation and prosecutions related to the sorbates industry. The U.S.
District Court accepted this plea on June 18, 1999 and imposed a penalty as
recommended in the plea agreement. In addition, fourteen civil antitrust class
actions, seeking monetary damages and other relief for alleged conduct involving
the sorbates industry have been filed in California, Tennessee and New York
naming Nutrinova and certain other Hoechst and Celanese entities as defendants.
These actions are in the early stages of civil litigation. Celanese recorded an
additional accrual of E38 million during the first six months of 1999 related to
this matter. The additional accrual recognized during the six months ended June
30, 1999 is management's best estimate based on the advice of external counsel
and a review of the evolving facts and circumstances relating to the matter,
including new claims filed and the penalty related to the U.S. criminal
antitrust case imposed in June 1999. Although the outcome of this matter cannot
be predicted with certainty, management's best estimate of the range of possible
future losses (in addition to the amounts already recorded in the financial
statements) as of June 30, 1999 is between E0 and E90 million. The estimated
range of such possible future losses is management's best estimate based on the
advice of external counsel taking into consideration potential fines and claims
that may be imposed or made in other jurisdictions. Pursuant to the Demerger
Agreement, Hoechst has agreed to indemnify Celanese for 80% of any costs
Celanese may incur relative to this matter. Accordingly, Celanese has recognized
a receivable from Hoechst and a corresponding contribution of capital from this
indemnification. The additional reserve recognized during the six month period
ended June 30, 1999 and the estimated range of possible future losses, noted
above, for this matter are gross of any recovery from Hoechst. Celanese believes
that any resulting liabilities, net of amounts recoverable from Hoechst, will
not, in the aggregate, have a material adverse effect on Celanese's financial
position.

     On March 24, 1999, Celanese Canada announced a planned transaction with
KoSa, a company owned by a consortium between Koch Industries, a U.S. company,
and a Mexican company owned by Isaac Saba, involving the sale of the Canadian
polyester staple and bottle resins business. KoSa is the same company that
purchased in December 1998 Hoechst's global polyester and resins business. Due
diligence has recently been completed and preliminary negotiations with respect
to the proposed sale have begun. Additionally, in August 1999, Celanese pursuant
to a tender offer at E17.41 (CAD 27.25) per share became the owner of 97.7% of
the common stock of Celanese Canada, Inc., and through its affiliate exercised
the statutory rights to acquire all the remaining shares and on September 3,
1999 became the owner of all such remaining shares, thereby giving Celanese 100%
ownership of Celanese Canada. Celanese Canada had approximately 40.7 million
shares outstanding at December 31, 1998.

     In June 1999 the arbitration proceedings relating to the plumbing actions,
between CNA Holdings and Shell, were completed. The decision of the arbitrators
allocated more responsibility to CNA Holdings than had been anticipated. Under
the arbitration agreement and the Federal Arbitration Act, subject to certain
limitations, both parties have the right to appeal the award. Celanese has taken
action to preserve its right to appeal and intends to appeal the award unless an
amicable settlement can be reached. In light of the arbitral award and its
reasoning, Celanese's other claims against Shell, its experience to date in
settling litigation claims, its consideration of the pending cases and its own
claims for reimbursement under product liabilities insurance policies, Celanese
has reviewed its accruals for the plumbing litigation and recorded a charge to
operations of E128 million in the second quarter of 1999. Management believes
that
                                      F-38
<PAGE>   139
                                    CELANESE

               NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

23.  SUBSEQUENT EVENTS (CONTINUED)
this additional reserve is sufficient to reflect the responsibility allocated to
CNA Holdings by the arbitrators.

     On August 10, 1999, Teva Pharmaceutical Industries, Ltd. announced an
agreement to purchase all the outstanding shares of Copley Pharmaceuticals Inc.,
of which Celanese owned 52 percent, for U.S.$220 million or U.S.$11 per share.
The transaction closed in mid-September 1999. Celanese expects to recognize a
book gain of approximately E18 million related to this transaction.

                                      F-39
<PAGE>   140

                                  CELANESE AG

                SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS

                ALLOWANCE FOR DOUBTFUL ACCOUNTS (IN E MILLIONS)

<TABLE>
<S>                                                           <C>
  Balance as of December 31, 1996...........................     31
     Provisions.............................................     11
     Recoveries.............................................     (3)
     Charge-offs............................................     (3)
     Translation Adjustments................................      3
                                                                ---
  Balance as of December 31, 1997...........................     39
     Provisions.............................................     16
     Recoveries.............................................      -
     Charge-offs............................................      -
     Translation Adjustments................................     (3)
                                                                ---
  Balance as of December 31, 1998...........................     52
                                                                ===
</TABLE>

                                      F-40
<PAGE>   141

                                    CELANESE

                       COMBINED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                         SIX MONTHS ENDED JUNE 30,
                                                                  ----------------------------------------
                                                                         1999             1999       1998
                                                                  ------------------      -----      -----
                                                                    (IN $ MILLIONS         (IN E MILLIONS
                                                                      EXCEPT PER             EXCEPT PER
                                                                    SHARE DATA)(1)          SHARE DATA)
                                                                  ------------------      ----------------
<S>                                                               <C>                     <C>        <C>
  Net sales.................................................            2,439             2,366      2,755
  Cost of sales.............................................            2,111             2,047      2,217
  Selling, general and administrative expenses..............              325               315        365
  Research and development expenses.........................               48                47         63
  Special charges...........................................              211               205         15
  Foreign exchange losses...................................              (14)              (14)        (7)
  Gain on disposition of assets.............................                3                 3         13
                                                                        -----             -----      -----
       Operating profit (loss)..............................             (267)             (259)       101
  Equity in net earnings of affiliates......................               15                14         12
  Interest expense..........................................               62                60         66
  Interest and other income, net............................               43                42         33
                                                                        -----             -----      -----
       Earnings (loss) before income taxes and minority
          interests.........................................             (271)             (263)        80
  Income taxes..............................................                9                 9         65
                                                                        -----             -----      -----
       Earnings (loss) before minority interests............             (280)             (272)        15
  Minority interests........................................                -                 -         24
                                                                        -----             -----      -----
       Net earnings (loss)..................................             (280)             (272)        (9)
                                                                        -----             -----      -----
  Basic and diluted net earnings (loss) per share...........            (5.01)            (4.86)     (0.16)
                                                                        =====             =====      =====
</TABLE>

- ---------------
(1) The 1999 figures are unaudited and have been translated solely for the
    convenience of the reader at an exchange rate of U.S.$1.0310 per E1.00, the
    noon buying rate of the Federal Reserve Board of New York on June 30, 1999.

See the accompanying notes to the unaudited interim combined financial
statements.
                                      F-41
<PAGE>   142

                                    CELANESE

                            COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                              JUNE 30,         JUNE 30,     DECEMBER 31,
                                                                1999             1999           1998
                                                         ------------------   -----------   ------------
                                                         (IN $ MILLIONS)(1)        (IN E MILLIONS)
                                                         ------------------   --------------------------
                                                            (UNAUDITED)       (UNAUDITED)    (AUDITED)
<S>                                                      <C>                  <C>           <C>
ASSETS
Current assets:
     Cash and cash equivalents.........................           37                36             7
     Marketable securities.............................           31                30            26
     Receivables, net..................................        1,475             1,431         1,182
     Receivables from Hoechst..........................          890               863           819
     Inventories.......................................          667               647           653
     Deferred income taxes.............................          132               128           155
     Other assets......................................           34                33            62
                                                               -----             -----         -----
          Total current assets.........................        3,266             3,168         2,904
Investments............................................          650               630           600
Property, plant and equipment, net.....................        2,174             2,109         1,933
Deferred income taxes..................................          324               314           220
Other assets...........................................          700               678           674
Intangible assets, net.................................        1,401             1,359         1,235
                                                               -----             -----         -----
          Total assets.................................        8,515             8,258         7,566
                                                               =====             =====         =====
LIABILITIES AND COMBINED EQUITY
Current liabilities:
     Short-term borrowings and current installments
       of long-term debt...............................          566               549           433
     Accounts payable and accrued liabilities..........        1,808             1,754         1,400
     Liabilities to Hoechst............................          115               112            85
     Deferred income taxes.............................           33                32            18
     Income taxes payable..............................          288               279           306
                                                               -----             -----         -----
          Total current liabilities....................        2,810             2,726         2,242
Long-term debt.........................................        1,184             1,149         1,082
Deferred income taxes..................................           91                87            89
Other liabilities......................................        1,468             1,423         1,223
Minority interests.....................................          223               216           194
Combined equity:
     Combined equity...................................        2,673             2,593         2,851
     Accumulated other comprehensive income (loss).....           66                64          (115)
                                                               -----             -----         -----
          Total combined equity........................        2,739             2,657         2,736
                                                               -----             -----         -----
     Total liabilities and combined equity.............        8,515             8,258         7,566
                                                               =====             =====         =====
</TABLE>

- ---------------
(1) The 1998 figures are unaudited and have been translated solely for the
    convenience of the reader at an exchange rate of U.S$1.0310 per E1.00, the
    noon buying rate of the Federal Reserve Board of New York on June 30, 1999.

See the accompanying notes to the unaudited interim combined financial
statements.
                                      F-42
<PAGE>   143

                                    CELANESE

                         COMBINED STATEMENTS OF EQUITY
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                              ACCUMULATED
                                                                                 OTHER        TOTAL
                                                  COMBINED   COMPREHENSIVE   COMPREHENSIVE   COMBINED
                                                   EQUITY        LOSS            LOSS         EQUITY
                                                  --------   -------------   -------------   --------
                                                                  (IN E MILLIONS)(1)
                                                  ---------------------------------------------------
<S>                                               <C>        <C>             <C>             <C>
Balance as of December 31, 1998.................   2,851                         (115)        2,736
                                                   -----                         ----         -----
Net loss........................................    (272)        (272)              -          (272)
Net transfers from Hoechst......................      14            -               -            14
Other comprehensive income (loss):
  Unrealized gains on securities, net of tax of
     E(4) million...............................       -           (9)              -             -
  Foreign currency translation, net of tax of
     E31 million................................       -          188               -             -
                                                                 ----
Other comprehensive income......................       -          179             179           179
                                                                 ----
Comprehensive loss..............................                  (93)
                                                   -----         ====            ----         -----
Balance as of June 30, 1999.....................   2,593                           64         2,657
                                                   =====                         ====         =====
</TABLE>

- ---------------
(1) All balances have been restated from Deutsche Mark into euro using the
    Official Fixed Exchange Rate as of January 1, 1999.

See the accompanying notes to the unaudited interim combined financial
statements.
                                      F-43
<PAGE>   144

                                    CELANESE

                       COMBINED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                    SIX MONTHS ENDED
                                                                        JUNE 30,
                                                              -----------------------------
                                                                   1999         1999   1998
                                                              ---------------   ----   ----
                                                                                   (IN E
                                                              ($ MILLIONS)(1)    MILLIONS)
                                                              ---------------   -----------
<S>                                                           <C>               <C>    <C>
Operating activities:
  Net earnings (loss).......................................       (280)        (272)    (9)
  Adjustments to reconcile net earnings (loss) to net cash
     provided by operating activities:
     Special charges, net of amounts used...................        182          177    (27)
     Depreciation and amortization..........................        178          173    178
     Change in equity of affiliates.........................          3            3     (5)
     Deferred income taxes..................................        (38)         (37)    35
     Gain on sale of assets, net............................         (3)          (3)   (13)
     Changes in operating assets and liabilities:
       Receivables, net.....................................       (105)        (102)  (102)
       Inventories..........................................         66           64    (18)
       Accounts payable, accrued liabilities and other
        liabilities.........................................         84           82     33
       Income taxes payable.................................        (74)         (72)    27
       Other, net...........................................         47           45     (8)
                                                                   ----         ----   ----
  Net cash provided by operating activities.................         60           58     91
Investing activities:
  Capital expenditures......................................       (136)        (132)  (162)
  Proceeds from sale of assets..............................         19           19     23
  Purchases of marketable securities........................        (38)         (37)  (158)
  Proceeds from sale of marketable securities...............         34           33    131
  Other.....................................................         (3)          (3)    (4)
                                                                   ----         ----   ----
     Net cash used in investing activities..................       (124)        (120)  (170)
Financing activities:
  Short-term borrowings with third parties, net.............         94           91    155
  Proceeds from long-term debt due to third parties.........          2            2     46
  Payment of debt due to third parties......................        (23)         (22)    (6)
  Short-term borrowings from Hoechst, net...................        (22)         (21)   116
  Other net activity with Hoechst...........................         42           40   (237)
                                                                   ----         ----   ----
     Net cash provided by financing activities..............         93           90     74
The effect of exchange rate changes on cash.................          1            1      -
                                                                   ----         ----   ----
     Net increase (decrease) in cash and cash equivalents...         30           29     (5)
                                                                   ----         ----   ----
  Cash and cash equivalents at beginning of year............          7            7     25
                                                                   ----         ----   ----
  Cash and cash equivalents at end of year..................         37           36     20
                                                                   ====         ====   ====
</TABLE>

- ---------------
(1) The 1998 figures are unaudited and have been translated solely for the
    convenience of the reader at an exchange rate of E1.0310 per U.S. $1.00, the
    noon buying rate of the Federal Reserve Board of New York on June 30, 1999.

See the accompanying notes to the unaudited interim combined financial
statements.
                                      F-44
<PAGE>   145

                                    CELANESE

            NOTES TO UNAUDITED INTERIM COMBINED FINANCIAL STATEMENTS

1.  BASIS OF PRESENTATION

     The unaudited combined financial statements included herein have been
prepared by Celanese in accordance with the basis of combination and accounting
policies stated in the December 31, 1998 combined financial statements appearing
elsewhere herein. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the Securities
and Exchange Commission rules and regulations. The statements should be read in
conjunction with the audited December 31, 1998 combined financial statements and
notes.

     In the opinion of management, the unaudited combined financial statements
included herein reflect all adjustments necessary for a fair statement of the
information presented as of June 30, 1999 and for the six months ended June 30,
1999 and 1998. Such adjustments are of a normal, recurring nature. The unaudited
combined statement of operations for the six months ended June 30, 1999 is not
necessarily indicative of the results to be expected for the full year.

2.  RECENTLY ISSUED STATEMENTS OF FINANCIAL ACCOUNTING STANDARDS

     In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities". This statement,
as amended, which becomes effective for Celanese beginning January 1, 2000,
establishes accounting and operating standards for hedging activities and
derivative instruments, including certain derivative instruments embedded in
other contracts. Celanese is reviewing the potential impact, if any, of SFAS 133
on its consolidated results of operations, financial position or cash flow.

3.  SUPPLEMENTAL CASH FLOW INFORMATION

<TABLE>
<CAPTION>
                                                                SIX MONTHS
                                                                   ENDED
                                                                 JUNE 30,
                                                              ---------------
                                                              1999       1998
                                                              ----       ----
                                                              (IN E MILLIONS)
                                                              ---------------
<S>                                                           <C>        <C>
Cash paid during the year for:
  Taxes.....................................................   97         81
  Interest, net of amounts capitalized......................   54         73
Noncash investing and financing activities:
  Contribution by Hoechst of net receivables to Celanese....   50          -
  Contribution by Hoechst of Trespaphan GmbH minority
     interest...............................................    -         24
  Fair value adjustment to securities available for sale....   (9)         1
  Income tax effect related to fair value adjustment........    4          -
</TABLE>

                                      F-45
<PAGE>   146
                                    CELANESE

      NOTES TO UNAUDITED INTERIM COMBINED FINANCIAL STATEMENTS (CONTINUED)

4.  SUPPLEMENTAL EQUITY INFORMATION

<TABLE>
<CAPTION>
                                                                           ACCUMULATED OTHER    TOTAL
                                                COMBINED   COMPREHENSIVE     COMPREHENSIVE     COMBINED
                                                 EQUITY       INCOME             LOSS           EQUITY
                                                --------   -------------   -----------------   --------
                                                                  (IN E MILLIONS)(1)
                                                -------------------------------------------------------
<S>                                             <C>        <C>             <C>                 <C>
Balance as of December 31, 1997...............   1,278                            (28)          1,250
Net loss......................................      (9)          (9)                -              (9)
Net transfers from Hoechst....................       8            -                 -               8
Other comprehensive income (loss), net of tax:
  Unrealized gains on securities..............       -            1                 -               -
  Foreign currency translation................       -          (12)                -               -
Other comprehensive loss......................       -          (11)              (11)            (11)
Comprehensive loss............................                  (20)
                                                 -----          ===               ---           -----
Balance as of June 30, 1998...................   1,277                            (39)          1,238
                                                 =====                            ===           =====
</TABLE>

5.  SPECIAL CHARGES

     Special charges on the accompanying combined statements of operations
include provisions for restructuring which represent costs related to severance
and other benefit programs, as well as costs incurred in connection with a
decision to exit non-strategic businesses and the related closure of facilities.
These measures are based on formal management decisions, establishment of
agreements with the employees' representative or individual agreements with the
affected employees as well as the public announcement of the restructuring plan.
The components of the first six months of 1999 restructuring charges were as
follows:

<TABLE>
<CAPTION>
                                                           EMPLOYEE
                                                          TERMINATION   PLANT/OFFICE
                                                           BENEFITS       CLOSURES     TOTAL
                                                          -----------   ------------   -----
                                                                   (IN E MILLIONS)
                                                          ----------------------------------
<S>                                                       <C>           <C>            <C>
Restructuring reserve at December 31, 1998..............       26            30          56
Restructuring expense recorded in the first six months
  of 1999...............................................       18            16          34
Cash and noncash uses during the first six months of
  1999..................................................      (20)           (5)        (25)
                                                              ---            --         ---
Restructuring reserve at June 30, 1999..................       24            41          65
                                                              ===            ==         ===
</TABLE>

     In 1999, Celanese recorded special charges totaling E205 million, of which
E34 million was recorded as an addition to the restructuring reserve. The
increase to the restructuring reserve of E34 million pertained primarily to
employee termination severance costs of E18 million, of which E4 million
resulted from the final reorientation of Hoechst's basic research function in
the U.S. and E5 million resulted from an acetaldehyde plant closure in Europe.
Additional employee termination severance costs of E9 million were incurred for
downsizing at two U.S. Acetate facilities (E6 million) and a European plant
facility (E3 million). Celanese also recognized E16 million of restructuring
costs for plant and office closures, of which E10 million resulted from
estimated contractual losses on service agreements (E6 million) and the
impairment of fixed assets (E4 million) related to the planned closure of an
acetaldehyde plant in Europe. The remaining reserve for Plant/Office Closures
principally relate to the planned closure of the U.S. corporate headquarters.
The remaining E6 million related to the writeoff of assets resulting from the
final closure associated with Hoechst's reorientation of its basic research
function. The remaining special charges in 1999 of E171 million pertained to a
special charge of E128 million incurred related to the Plumbing Actions (see
Note 6), E38 million relating to the Nutrinova antitrust actions, E3 million
relating
                                      F-46
<PAGE>   147
                                    CELANESE

      NOTES TO UNAUDITED INTERIM COMBINED FINANCIAL STATEMENTS (CONTINUED)

5.  SPECIAL CHARGES (CONTINUED)
to Demerger costs and E2 million relating to the impairment of goodwill
resulting from the closure of the acetaldehyde plant in Europe.

     For the six month period ended June 30, 1999, Celanese recorded employee
termination benefit expense of E18 million. Such amounts represent the severance
and other benefit costs associated with the elimination of approximately 225
positions. During the first six months of 1999, Celanese eliminated
approximately 155 positions, which related to the 1999 plan as well as prior
year plans.

6.  COMMITMENTS AND CONTINGENCIES

     Celanese is involved in a number of legal proceedings and claims incidental
to the normal conduct of its Businesses, relating to such matters as product
liability, competition, past waste disposal practices and release of chemicals
into the environment. While it is impossible at this time to determine with
certainty the ultimate outcome of these lawsuits, management believes, based on
the advice of legal counsel, that adequate provisions have been made and that
the ultimate outcome will not have a material adverse effect on the financial
position of Celanese, but may have a material adverse effect on the results of
operations or cash flows in any given year. (See Notes 19 and 20 of the December
31, 1998 combined financial statements for details regarding Celanese's
commitments and contingencies.)

     Plumbing Actions

     In June 1999 the arbitration proceedings relating to the plumbing actions,
between CNA Holdings and Shell Chemical Company, were completed. The decision of
the arbitrators allocated more responsibility to CNA Holdings than had been
anticipated. Under the arbitration agreement and the Federal Arbitration Act,
subject to certain limitations, both parties have the right to appeal the award.
Celanese has taken action to preserve its right to appeal and intends to appeal
the award unless an amicable settlement can be reached. In light of the arbitral
award and its reasoning, Celanese's other claims against Shell Chemical Company,
its experience to date in settling litigation claims, its consideration of the
pending cases and its own claims for reimbursement under product liabilities
insurance policies, Celanese recognized a special charge of E128 million during
the six months ended June 30, 1999. Management believes that this additional
reserve is sufficient to reflect the responsibility allocated to CNA Holdings by
the arbitrators. Although the outcome of this matter cannot be predicted with
certainty, at June 30, 1999, management's best estimate of the range of possible
additional losses for the plumbing actions is between E0 and E109 million.
Celanese has recorded receivables relating to the anticipated recoveries from
third-party insurance carriers relating to the plumbing actions. These
receivables are based on the probability of collection, an opinion of external
counsel, the settlement agreements reached with a majority of Celanese's
insurance carriers whose coverage level exceeds the receivables and the status
of current discussions with other insurance carriers. As of June 30, 1999,
Celanese had recorded E184 million in outstanding insurance claim receivables
that are expected to be collected within the next five years. Collectability
could vary depending on the financial status of the insurance carriers.

     Antitrust

     During the six month period ended June 30, 1999, Nutrinova Inc., a U.S.
subsidiary of Nutrinova Specialities & Food Ingredients GmbH, received eleven
additional notices of civil antitrust class action suits, seeking monetary
damages and other relief for alleged conduct involving the sorbates industry.
Celanese recorded an additional accrual of E38 million in the six month period
ended June 30, 1999 related to this matter (See Note 5). The additional accrual
recognized during the six months ended June 30, 1999 is management's best
estimate based on the advice of external counsel and a review of the evolving
facts and circumstances relating to the matter, including new claims filed and
the penalty related
                                      F-47
<PAGE>   148
                                    CELANESE

      NOTES TO UNAUDITED INTERIM COMBINED FINANCIAL STATEMENTS (CONTINUED)

6.  COMMITMENTS AND CONTINGENCIES (CONTINUED)
to the U.S. criminal antitrust case imposed in June 1999. Celanese has an
accrual for this matter of E55 million at June 30, 1999. At June 30, 1999,
management's best estimate of the range of possible future losses related to
this matter is between E0 and E90 million. The estimated range of such possible
future losses is management's best estimate based on the advice of external
counsel taking into consideration potential fines and claims that may be imposed
or made in other jurisdictions. Pursuant to the Demerger Agreement, Hoechst has
agreed to indemnify Celanese for 80% of any costs Celanese may incur relative to
this matter. Accordingly, Celanese has recognized a receivable from Hoechst and
a corresponding contribution of capital from this indemnification. The
additional reserve recognized during the six month period ended June 30, 1999
and the estimated range of possible future losses, noted above, for this matter
are gross of any recovery from Hoechst. Although the outcome of this matter
cannot be predicted with certainty, Celanese believes that any resulting
liabilities, net of amounts recoverable from Hoechst, will not, in the
aggregate, have a material adverse effect on Celanese's financial position.

     Celanese has entered into discussions with a potential buyer for its
chlorine and chlorine derivatives business lines, and under the proposed terms
of the agreement currently being negotiated would expect to record a loss in the
second half of 1999 of between E80 million and E90 million related to the
disposition of these business lines. However, Celanese is also internally
considering other options for these business lines.

7.  BUSINESS AND GEOGRAPHICAL SEGMENTS

     Summarized segment information for Celanese's five reportable segments for
the six months ended June 30, 1999 and 1998 was as follows:

<TABLE>
<CAPTION>
                                ACETYL      CHEMICAL      ACETATE              PERFORMANCE    TOTAL
                               PRODUCTS   INTERMEDIATES   PRODUCTS   TICONA     PRODUCTS     SEGMENTS   RECONCILIATION   COMBINED
                               --------   -------------   --------   -------   -----------   --------   --------------   --------
                                                                        (IN E MILLIONS)
                               --------------------------------------------------------------------------------------------------
                                                                          (UNAUDITED)
<S>                            <C>        <C>             <C>        <C>       <C>           <C>        <C>              <C>
Six months ended June 30,
  1999:
Sales to external
  customers..................    700           387          356        384         221        2,048           318         2,366
Inter-segment revenues.......     27            30            -          -           -           57           (57)            -
Operating profit (loss)......    (31)           (4)          11       (102)        (33)        (159)         (100)         (259)
Six months ended June 30,
  1998:
Sales to external
  customers..................    784           476          436        394         239        2,329           426         2,755
Inter-segment revenues.......     50            36            -          -           -           86           (86)            -
Operating profit (loss)......     67            22           51         35          15          190           (89)          101
</TABLE>

     The reconciliation column includes (a) operations of certain other
operating entities and their related assets, liabilities, revenues and expenses,
(b) the elimination of inter-segment sales and net receivables and payables, (c)
assets and liabilities not allocated to a segment, and (d) corporate center
costs for support services such as legal, accounting and treasury functions.
Additionally, Celanese recognized a special charge in 1999 and 1998 related to
settlements, arbitration and restructuring costs, write-off of fixed assets,
shutdown of a facility, and impairment of goodwill. (See Note 5) Other operating
entities consist primarily of other chemical businesses, as well as a polyester
staple and bottle resin business, generic pharmaceuticals, and companies which
provide infrastructure and procurement services.

     Celanese is considering various options for some of the businesses reported
within other activities, including divestitures through sales of plants, the
formation of joint ventures and plant shut-downs. Given the current state of
these businesses, there can be no assurance that any divestitures could be
achieved on satisfactory terms or that other attractive means of exiting from
these business lines will be available. If Celanese is unable to sell the
operations or find suitable joint venture partners, the costs of plant
shutdowns, both in terms of employee severance costs and environmental costs
associated with
                                      F-48
<PAGE>   149
                                    CELANESE

      NOTES TO UNAUDITED INTERIM COMBINED FINANCIAL STATEMENTS (CONTINUED)

permanently closing these facilities, could be significant. If Celanese decides
to continue to operate these businesses, significant capital improvements will
be needed to achieve a competitive position in the market place.

8.  SUBSEQUENT EVENTS

     On August 13, 1999, CNA Holdings announced that its proposed tender offer,
made on July 14, 1999, of E17.41 (CAD 27.25) per share to acquire all of the
common shares of Celanese Canada, Inc., not currently held by CNA Holdings, was
accepted. In August 1999 CNA Holdings became the owner of 17,230,188 common
shares which increased its ownership to 97.7 percent and through its affiliate
exercised the statutory rights to acquire all the remaining shares. On September
3, 1999, Celanese Canada became the owner of all such remaining shares, thereby
giving Celanese 100% ownership of Celanese Canada. Additionally, Celanese Canada
has announced a planned transaction to sell the Canadian polyester staple and
bottle resins business.

     On August 10, 1999, Teva Pharmaceutical Industries, Ltd. announced an
agreement to purchase all the outstanding shares of Copley Pharmaceuticals Inc.,
of which Celanese owned 52 percent, for U.S.$220 million or U.S.$11 per share.
The transaction closed in mid-September 1999. Celanese expects to recognize a
book gain of approximately E18 million related to this transaction.


     On October 8, 1999, Celanese entered into a letter of intent to sell to 3M
its ownership interest in Dyneon, a joint venture with 3M. Celanese expects to
generate gross proceeds in excess of U.S.$300 million and to recognize a gain
from this transaction. Celanese is unable to determine the amount of this gain
since the sale is subject to the conclusion of final agreements, due diligence
and certain approvals. The sale is expected to be completed by the end of the
year.


                                      F-49
<PAGE>   150

                                [Celanese Logo]
<PAGE>   151

                                    PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

                  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

     The following table sets forth the estimated expenses to be incurred in
connection with the redistribution described in this Registration Statement:


<TABLE>
<CAPTION>
                                                                 US$
<S>                                                           <C>
Securities and Exchange Commission registration fees........     75,386
NASD filing fee.............................................     28,000
Blue Sky fees and expenses..................................     15,000
New York Stock Exchange listing fee.........................    100,000
Frankfurt Stock Exchange Filing Fee.........................      8,000
Printing and engraving expenses.............................    650,000
Legal fees and expenses.....................................  1,500,000
Transfer agent's fees.......................................         --
Accounting fees and expenses................................    600,000
Miscellaneous...............................................    123,614
                                                              ---------
TOTAL.......................................................  3,100,000
                                                              =========
</TABLE>


     Expenses of issuance and distribution relating to securities sold by the
selling shareholders will be paid by Celanese.

                   INDEMNIFICATION OF DIRECTORS AND OFFICERS

     Celanese maintains liability insurance for members of the Supervisory Board
and the Management Board and officers of Celanese, including insurance against
liability under the Securities Act.

                    RECENT SALES OF UNREGISTERED SECURITIES

     As discussed under "The Redistribution" in the prospects included in this
Registration Statement, a portion of the Celanese shares being offered in the
redistribution are being offered concurrently in offshore transactions pursuant
to the exemption provided under Regulation S under the Securities Act of 1933.
Details as to the redistribution and the commissions payable to the
redistribution managers are set forth under such section. Celanese will not
receive any proceeds from any of the shares sold in the redistribution. There
have been no sales of unregistered securities of Celanese prior to the date of
this Registration Statement.

                                      II-1
<PAGE>   152

                   EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

     a) The following Exhibits, are filed as part of this Registration
Statement:


<TABLE>
<CAPTION>
EXHIBIT
  NO.                            DESCRIPTION
- -------                          -----------
<S>      <C>
 1.1     Form of Redistribution Agreement
 2.1*    Demerger Agreement (Spaltungs-und Ubernahmevertrag) between
         Celanese and Hoechst dated June 29, 1998, together with an
         English-language translation thereof
 3.1*    Form of Articles of Association (Satzung) of Celanese AG
         together with an English-language translation thereof
 4.1     Temporary share certificate
 4.2     Form of Offering Rights Agreement between Celanese AG and
         Petroleum Resources Holdings B.V.
 5.1*    Opinion of Hengeler, Muller, Weitzel & Wirtz
21.1*    List of Subsidiaries of Celanese AG
23.1     Consent of KPMG Deutsche Treuhand-Gesellschaft
         Aktiengesellschaft Wirtschaftsprufungsgesellschaft
23.2*    Consent of Hengeler, Muller, Weitzel & Wirtz (included in
         Exhibit 5.1)
24.1     Power of Attorney (see signature page)
</TABLE>


- ---------------
 * Previously filed.


                                  UNDERTAKINGS


     Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to directors, officers and controlling
persons of the registrant under the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

     The undersigned registrant hereby undertakes that:

          (1) For purposes of determining any liability under the Securities Act
     of 1933, the information omitted from the form of prospectus filed as part
     of this Registration Statement in reliance upon Rule 430A and contained in
     a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
     (4) or 497(h) under the Securities Act shall be deemed to be part of this
     Registration Statement as of the time it was declared effective; and

          (2) For the purpose of determining any liability under the Securities
     Act of 1933, each post-effective amendment that contains a form of
     prospectus shall be deemed to be a new registration statement relating to
     the securities offered therein, and the offering of such securities at that
     time shall be deemed to be the initial bona fide offering thereof.

                                      II-2
<PAGE>   153

                                   SIGNATURES


     Under the requirements of the Securities Act of 1933, Celanese AG certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form F-1 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Frankfurt, Federal Republic of Germany, on October 22, 1999.


                                          CELANESE AG

                                          By: /s/ CLAUDIO SONDER
                                            ------------------------------------
                                          Claudio Sonder
                                          Chairman of the Management Board

                                          By: /s/ PERRY W. PREMDAS
                                            ------------------------------------
                                          Perry W. Premdas
                                          Member of the Management Board
                                          and Chief Financial Officer

     Under the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.


<TABLE>
<CAPTION>
                SIGNATURE                                  TITLE                         DATE
                ---------                                  -----                         ----
<S>                                         <C>                                   <C>
/s/ CLAUDIO SONDER                          Chairman of the Management Board       October 22, 1999
- ------------------------------------------  (Chief Executive Officer)
Claudio Sonder

/s/ PERRY W. PREMDAS                        Member of the Management Board         October 22, 1999
- ------------------------------------------  (Principal Financial Officer)
Perry W. Premdas

*                                           Principal Accounting Officer           October 22, 1999
- ------------------------------------------
Peter Jakobsmeier

*                                           Member of the Management Board         October 22, 1999
- ------------------------------------------
Ernst Schadow

*                                           Member of the Management Board         October 22, 1999
- ------------------------------------------
Edward H. Munoz
</TABLE>


                                      II-3
<PAGE>   154


<TABLE>
<CAPTION>
                SIGNATURE                                  TITLE                         DATE
                ---------                                  -----                         ----
<S>                                         <C>                                   <C>
*                                           Member of the Management Board         October 22, 1999
- ------------------------------------------
Knut Zeptner

  Authorized Representative in the United States
  Celanese Americas Corporation

By: *                                                                              October 22, 1999
- -----------------------------------------
    Julie K. Chapin

*By: /s/ CLAUDIO SONDER
- -----------------------------------------
     Attorney in Fact
</TABLE>


                                      II-4
<PAGE>   155

                                 EXHIBIT INDEX


<TABLE>
<CAPTION>
EXHIBIT
  NO.                              DESCRIPTION
- --------                           -----------
<C>        <S>                                                           <C>
   1.1     Form of Redistribution Agreement
   2.1*    Demerger Agreement (Spaltungs-und Ubernahmevertrag) between
           Celanese and Hoechst dated June 29, 1998, together with an
           English-language translation thereof
   3.1*    Form of Articles of Association (Satzung) of Celanese AG
           together with an English-language translation thereof
   4.1     Temporary share certificate
   4.2     Form of Offering Rights Agreement between Celanese AG and
           Petroleum Resources Holdings B.V.
   5.1*    Opinion of Hengeler, Muller, Weitzel & Wirtz
  21.1*    List of Subsidiaries of Celanese AG
  23.1     Consent of KPMG Deutsche Treuhand-Gesellschaft
           Aktiengesellschaft
           Wirtschaftsprufungsgesellschaft
  23.2*    Consent of Hengeler, Muller, Weitzel & Wirtz (included in
           Exhibit 5.1)
24.1..     Power of Attorney (see signature page)
</TABLE>


- ---------------

 * Previously filed.




<PAGE>   1





                                   CELANESE AG

                                [________] SHARES

                            (NO PAR VALUE PER SHARE)

                            REDISTRIBUTION AGREEMENT



                                                                October __, 1999



CREDIT SUISSE FIRST BOSTON                           DRESDNER BANK AG
  (EUROPE) LIMITED                                   Global Corporate Finance
  One Cabot Square                                   Transaction Services
  London E14 4QJ                                     60301 Frankfurt am Main,
  United Kingdom                                     Germany





         1. Introductory. Celanese AG, a company existing under the laws of
Germany (the "Company") became an independent company in a demerger from Hoechst
Aktiengesellschaft ("Hoechst"), on or about October 22, 1999 (the "Demerger").
Pursuant to the Demerger, Hoechst shareholders will receive all of Celanese AG's
outstanding shares, no par value per share (the "Shares"). The Company has
retained the redistribution managers named in Schedule A hereto (the
"Redistribution Managers"), including Credit Suisse First Boston (Europe)
Limited ("CSFB") and Dresdner Bank AG ("DB" and, together with CSFB, the "Joint
Global Co-ordinators and Bookrunners"), each of whom is a party to this
Agreement, to procure purchasers for the Shares that Hoechst shareholders or
holders of Hoechst American Depositary Shares (the "Selling Shareholders") will
receive in the Demerger and elect to sell ("Redistribution Shares") through the
Redistribution Managers (the "Redistribution"). The Redistribution will occur in
a public offering in the United States that is registered under the Securities
Act of 1933, as amended (the "Act") and outside the United States in reliance on
Regulation S under the Act to persons other than U.S. Persons as defined in
Regulation S. The Redistribution Shares to be sold as part of the Redistribution
in Germany will be sold in a public offering under German law, and in the rest
of the world in private offerings. The Company hereby agrees with the several
Redistribution Managers as follows:

         2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Redistribution Managers
that:
<PAGE>   2
               (a) The Company has prepared and filed (i) with the Frankfurt
          Stock Exchange (the "FSE") a German selling and listing prospectus
          relating to the Redistribution Shares and the Shares; and (ii) with
          the Securities and Exchange Commission (the "Commission") a
          registration statement on Form F-1 (Registration No. 333-87889)
          covering the registration under the Act of the Redistribution Shares
          being sold in the United States, including the related preliminary
          prospectus, or prospectuses, and either (A) has prepared and proposes
          to file, prior to the effective date of such registration statement
          (the "Effective Time"), an amendment to such registration statement,
          including a final prospectus, promptly after execution and delivery of
          this Agreement or (B) if the Company has elected to rely upon Rule
          430A ("Rule 430A") of the rules and regulations of the Commission
          under the Act (the "Rules and Regulations"), will prepare and file a
          prospectus, in accordance with the provisions of Rule 430A and Rule
          424(b) ("Rule 424(b)") of the Rules and Regulations. The information,
          if any, included in such prospectus that was omitted from the
          prospectus included in such registration statement at the Effective
          Time but that is deemed, pursuant to paragraph (b) of Rule 430A, to be
          part of such registration statement at the Effective Time is referred
          to herein as the "Rule 430A Information." Each prospectus used before
          the Effective Time, and any prospectus that omits the Rule 430A
          Information that is used after the Effective Time and prior to the
          execution and delivery of this Agreement, is herein called a
          "Preliminary Prospectus." Such registration statement, including the
          exhibits thereto, as amended at the Effective Time and including the
          Rule 430A Information, if applicable, is herein called the
          "Registration Statement." The prospectus included in the Registration
          Statement, including the Rule 430A Information, if applicable, is
          herein called the "U.S. Prospectus," any preliminary U.S. Prospectus
          is call "Preliminary U.S. Prospectus," the form of selling and listing
          prospectus relating to the Redistribution Shares and the Shares filed
          with the FSE is herein called the "German Prospectus," and the form of
          prospectus relating to private offerings in the rest of the world is
          herein called the "International Prospectus," except that, if the
          final prospectus first furnished to the Redistribution Managers after
          the execution of this Agreement for use in connection with the
          offering of the Redistribution Shares differs from (i) the prospectus
          included in the Registration Statement (whether or not such prospectus
          is required to be filed pursuant to Rule 424(b)); or (ii) an earlier
          dated German Prospectus or International Prospectus, the terms "U.S.
          Prospectus," "German Prospectus," and "International Prospectus,"
          shall refer to the final version of each of such prospectuses first
          furnished to the Redistribution Managers after the execution of this
          Agreement for such use. In all cases, the term "Preliminary
          Prospectus" shall collectively refer to any preliminary U.S.
          Prospectus (the "U.S. Preliminary Prospectus"), any preliminary German
          Prospectus (the "German Preliminary Prospectus") and any preliminary
          International Prospectus (the "International Preliminary Prospectus").
          In all cases, the term "Prospectus" shall collectively refer to the
          final U.S. Prospectus, final German Prospectus and final International
          Prospectus and any amendments or supplements thereto.

               (b) At the Effective Time, and at all times subsequent thereto up
          to the Closing Date (as defined in Section 4), (i) the Registration
          Statement and any
<PAGE>   3
          amendments thereto will comply in all material respects with the
          requirements of the Act and the Rules and Regulations thereunder; (ii)
          neither the Registration Statement nor any amendment thereto will
          contain an untrue statement of a material fact or omit to state a
          material fact required to be stated therein or necessary to make the
          statements therein not misleading; and (iii) neither the Prospectus
          nor any amendment or supplement thereto will include an untrue
          statement of a material fact or omit to state a material fact
          necessary in order to make the statements therein, in light of the
          circumstances under which they were made, not misleading, except that
          this representation and warranty does not apply to statements or
          omissions made in reliance upon and in conformity with written
          information furnished to the Company by or on behalf of any
          Redistribution Manager expressly for use in the Registration Statement
          or the Prospectus.

               (c) To the best of the Company's knowledge, after consultation
          with the Commission`s staff and oral confirmation from CT Corporation
          System, as agent for service of process, no stop order suspending the
          effectiveness of the Registration Statement is in effect (if it has
          been declared effective), and no proceedings for such purpose are
          pending before or threatened by the Commission, and any request on the
          part of the Commission for additional information has been complied
          with.

               (d) The Company has been duly organized and is validly existing
          as a corporation under the laws of Germany, with power and authority
          to own its properties and conduct its business as described in the
          Prospectus; and the Company is duly qualified to do business as a
          foreign corporation in good standing in all other jurisdictions in
          which its ownership or lease of property or the conduct of its
          business requires such qualification, except such failures to be so
          qualified as would not, individually or in the aggregate, result in a
          material adverse effect on the financial condition, business,
          properties or results of operations of the Company and its
          subsidiaries taken as a whole (a "Material Adverse Effect").

               (e) Each of the subsidiaries of the Company listed in Schedule B
          hereto (the "Material Subsidiaries") has been duly incorporated and is
          an existing corporation under the laws of the jurisdiction of its
          incorporation, with power and authority (corporate and other) to own
          its properties and conduct its business as described in the
          Prospectus; and each Material Subsidiary is duly qualified to do
          business as a foreign corporation in all other jurisdictions in which
          its ownership or lease of property or the conduct of its business
          requires such qualification, except such failures to be so qualified
          as would not, individually or in the aggregate, have a Material
          Adverse Effect; all of the issued and outstanding capital stock of
          each Material Subsidiary has been duly authorized and validly issued
          and is fully paid and nonassessable; and the capital stock of each
          Material Subsidiary owned by the Company, directly or through
          subsidiaries, is owned free from liens, encumbrances and defects,
          except where the failure to be so owned would not have a Material
          Adverse Effect.

               (f) Except as disclosed in the Prospectus, there are no
          contracts, agreements or understandings between the Company and any
          person granting such person the right to
<PAGE>   4
          require the Company to file a registration statement under the Act
          with respect to any securities of the Company owned or to be owned by
          such person or to require the Company to include such securities in
          the securities registered pursuant to the Registration Statement or in
          any securities being registered pursuant to any other registration
          statement filed by the Company under the Act.

               (g) The Demerger has been registered in the commercial register
          (Handelsregister), and the Shares are duly and validly issued, fully
          paid and non-assessable and in all material respects conform to the
          description thereof contained in the Prospectus in the section
          entitled "Description of Securities to Be Registered."

               (h) The Shares have been approved for listing on the New York
          Stock Exchange (the "NYSE") and for official quotation on the FSE,
          subject to official notice of issuance, and such approvals have not
          been withdrawn.

               (i) This Agreement has been duly authorized, executed and
          delivered by the Company, and the Company has full power and authority
          to engage in the Redistribution, as contemplated by this Agreement.

               (j) No consent, approval, authorization, or order of, or filing
          with, any governmental agency or body or any court is required for the
          Redistribution except such as have been obtained and made under the
          laws of Germany, the Act, the Securities Exchange Act of 1934, as
          amended (the "Exchange Act") and such as may be required under state
          securities or Blue Sky laws in connection with the Redistribution
          provided, however, that this representation shall not apply to any
          such consents, approvals, authorizations, orders, registrations or
          qualifications as may be required by the laws of jurisdictions other
          than Germany and the United States.

               (k) The execution, delivery and performance of this Agreement,
          and the compliance with the terms and provisions of this Agreement,
          will not result in a breach or violation of any of the terms and
          provisions of the organizational documents of the Company or any
          subsidiary of the Company.

               (l) The execution, delivery and performance of this Agreement,
          and the compliance with the terms and provisions of this Agreement
          will not result in a breach or violation of any of the terms and
          provisions of, or constitute a default under, any statute, any rule,
          regulation or order of any governmental agency or body or any court,
          domestic or foreign, having jurisdiction over the Company or any
          Material Subsidiary or any of their properties, or any agreement,
          instrument or obligation to which the Company or any such Material
          Subsidiary is a party or by which the Company or any such Material
          Subsidiary is bound or to which any of the properties of the Company
          or any such Material Subsidiary is subject, except for any such
          breaches, violations or defaults which, individually or in the
          aggregate, would not have a Material Adverse Effect.

               (m) The Company and its Material Subsidiaries (i) possess
          adequate
<PAGE>   5
          certificates, authorizations or permits issued by appropriate
          governmental agencies or bodies necessary to conduct the business now
          operated by them, except for such certificates, authorizations or
          permits the failure to obtain which, will not, individually or in the
          aggregate, have a Material Adverse Effect, and (ii) to the best of the
          Company's knowledge, have not received any notice of proceedings
          relating to the revocation or modification of any such certificate,
          authority or permit that, if determined adversely to the Company or
          any of its Material Subsidiaries, would individually or in the
          aggregate have a Material Adverse Effect.

               (n) To the knowledge of the Company, no labor dispute with the
          employees of the Company or any subsidiary exists or, to the knowledge
          of the Company, is imminent or contemplated that is reasonably likely
          to have a Material Adverse Effect.

               (o) Except as disclosed in the Prospectus, there are no pending
          or, to the best of the Company's knowledge, threatened or contemplated
          actions, suits or proceedings against or affecting the Company, any of
          its respective subsidiaries or properties that, if determined
          adversely to the Company or any of its respective subsidiaries, would
          individually or in the aggregate have a Material Adverse Effect, or
          would materially and adversely affect the ability of the Company to
          perform its obligations under this Agreement, or which otherwise would
          have a material adverse effect on the Redistribution.

               (p) Except as described in the Prospectus, (i) there are no
          outstanding warrants or options issued by the Company to purchase any
          shares of the capital stock of the Company, (ii) there are no
          statutory, contractual, preemptive or other rights applicable to the
          Company to subscribe for or to purchase any Shares from the Company
          that do not by their terms terminate on or after the first day of
          trading of the Shares on the NYSE or FSE (the "Trading Date"), and
          (iii) there are no restrictions upon transfer of the Shares pursuant
          to the Company's organizational documents (except for those applicable
          to registered shares under German law and the Articles of Association
          of the Company).

               (q) Since the date as of which information is given in the
          Prospectus through the date hereof, and except as may otherwise be
          disclosed in the Prospectus, the Company has not (i) issued securities
          or granted options on any securities, (ii) incurred any liabilities or
          obligations, direct or contingent, other than those liabilities and
          obligations which, individually or in the aggregate, would not have a
          Material Adverse Effect, (iii) entered into any transactions not in
          the ordinary course of business which would, individually or in the
          aggregate, have a Material Adverse Effect or (iv) declared or paid any
          dividend on any class of its capital stock.

               (r) Neither the Company nor any of its Material Subsidiaries (i)
          is in violation of its organizational documents, except for any
          defaults or events that, individually or in the aggregate, would not
          have a Material Adverse Effect, (ii) is in default in any material
          respect, and no event has occurred which, with notice or lapse of time
          or both, would constitute such a default, in the due performance or
          observance of any term, covenant or
<PAGE>   6
          condition contained in any indenture, mortgage, deed of trust, loan
          agreement or other agreement or instrument to which it is a party or
          by which it is bound or to which any of its properties or assets is
          subject, except for any such defaults that would not, individually or
          in the aggregate, have a Material Adverse Effect, or (iii) except for
          any violations or failures to obtain that, individually or in the
          aggregate, would not have a Material Adverse Effect, is in violation
          in any material respect of any law, ordinance, governmental rule,
          regulation or court decree to which it or its property or assets may
          be subject or has failed to obtain any material license, permit,
          certificate, franchise or other governmental authorization or permit
          necessary to the ownership of its property or to the conduct of its
          business.

               (s) Except as disclosed in the Prospectus, to the best of the
          Company's knowledge, neither the Company nor any of its subsidiaries
          is in violation of any statute, any rule, regulation, decision or
          order of any governmental agency or body or any court, domestic or
          foreign, relating to the use, disposal or release of hazardous or
          toxic substances or relating to the protection or restoration of the
          environment or human exposure to hazardous or toxic substances, owns
          or operates any real property contaminated with any substance that is
          subject to any environmental laws, is liable for any off-site disposal
          or contamination pursuant to any environmental laws, or is subject to
          any claim relating to any environmental laws, which violation,
          contamination, liability or claim would, individually or in the
          aggregate, have a Material Adverse Effect; and the Company is not
          aware of any pending investigation which would reasonably be expected
          to lead to such a claim.

               (t) The combined financial statements and the related notes
          included in the Registration Statement and the Prospectus present
          fairly, in all material respects, the financial position of the
          Company as of the dates shown and its combined results of operations
          and cash flows for the periods shown, and such financial statements
          have been prepared in conformity with United States generally accepted
          accounting principles applied on a consistent basis. The schedule
          included in the Registration Statement presents fairly, when
          considered in relation to the combined financial statements taken as a
          whole, the information required to be stated forth therein.

               (u) Except as disclosed in the Prospectus, since the date of the
          latest audited combined financial statements included in the
          Prospectus there has been no material adverse change, nor any
          development or event involving a prospective material adverse change,
          in the financial condition, business, properties or results of
          operations of the Company and its subsidiaries taken as a whole, and
          except as disclosed in the Prospectus, since the date of the latest
          unaudited combined financial statements included in the Prospectus
          there has been no material adverse change, nor any development or
          event involving a prospective material adverse change, in the
          financial condition, business, properties or results of operations of
          the Company and its subsidiaries taken as a whole.

                  (v) The Company is not and, after giving effect to the
         issuance of the Shares as described in the Prospectus, will not be
         required to register as an "investment company" under the Investment
         Company Act of 1940.
<PAGE>   7
                  (w) Except as disclosed in the Prospectus, there are no
         contracts, agreements or understandings between the Company and any
         person that would give rise to a valid claim against the Company or any
         Redistribution Manager for a brokerage commission, finder's fee or
         other like payment in respect of the Redistribution Shares.

         3. Redistribution of Shares. On the basis of the representations and
warranties contained in this Agreement, and subject to its terms and conditions,
each Redistribution Manager agrees, severally and not jointly, to use its best
efforts to procure purchasers for all, or a portion of the Redistribution
Shares. The Redistribution Managers have procured purchasers for [ ]
Redistribution Shares at the price of euro [ ] per Redistribution Share. On the
Trading Date, the Redistribution Managers shall arrange for the purchase from
the Selling Shareholders of all, or a portion of, the Redistribution Shares
which the Selling Shareholders are committed to sell at the Redistribution Price
and on the same date shall arrange for the sale to purchasers of such
Redistribution Shares at the same Redistribution Price. Notwithstanding the
foregoing sentence, (i) if the Redistribution Managers procure purchasers for a
number of Redistribution Shares that is less than the number of Redistribution
Shares which the Selling Shareholders are committed to sell at the
Redistribution Price, the Redistribution Managers shall arrange for the purchase
from the Selling Shareholders, on a pro rata basis, of the number of such
Redistribution Shares equal to the number of Redistribution Shares for which the
Redistribution Managers have procured purchasers, subject to adjustment to avoid
the sale of fractional Shares and (ii) if the Redistribution Managers procure
purchasers for a number of Redistribution Shares greater than the number of
Redistribution Shares which the Selling Shareholders are committed to sell at
the Redistribution Price, the allocation of the Redistribution Shares to
purchasers shall be at the discretion of the Joint Global Co-ordinators and
Bookrunners on behalf of the Redistribution Managers. The redistribution price
at which the Redistribution Shares will be redistributed will be based on the
price at which the maximum number of Redistribution Shares would be
redistributed as determined by the Joint Global Co-ordinators and Bookrunners,
each investor's indications will be limited to a maximum of 5% of the
outstanding share capital of Celanese AG in the aggregate. In the event that
there is more than one price maximising the number of Celanese shares to be
redistributed, the Redistribution will be set at the lowest price.

         The Joint Global Co-ordinators and Bookrunners, on behalf of the
Redistribution Managers, will have sole discretion to determine and resolve any
questions about the validity, form, eligibility (including time of receipt) or
acceptance of any irrevocable commitments provided by the Selling Shareholders.
Their determination will be final and binding. The Joint Global Co-ordinators
and Bookrunners reserve the absolute right to reject irrevocable commitments
provided by the Selling Shareholders if they are not in the proper form or if
payment would, in the opinion of the Joint Global Co-ordinators and Bookrunners
or their counsel, be unlawful. The Joint Global Co-ordinators and Bookrunners
also reserve the right to waive any defect or irregularity in the irrevocable
commitments provided by the Selling Shareholders, and the Joint Global
Co-ordinators and Bookrunners' interpretations of the terms and conditions of
the Redistribution will be final and binding.

         Each Redistribution Manager acknowledges that no action has been taken
by the Company that would permit the offer or sale of the Redistribution Shares
or the distribution of the Prospectus in any jurisdiction where action for that
purpose is required, other than the United States and Germany. The Company will
not assume any responsibility with respect to the right of any Redistribution
Manager or other person to offer or sell the Redistribution Shares or distribute
the Prospectus in any jurisdiction except under circumstances that will result
in
<PAGE>   8
compliance with applicable law. Each Redistribution Manager agrees for itself
that it will obtain any consent, approval or authorization required to offer or
sell the Redistribution Shares or to distribute the Prospectus under the laws or
regulations of any jurisdiction, other than the United States or Germany, where
such Redistribution Manager proposes to make offers or sales of Redistribution
Shares or to distribute the Prospectus.

         4. Compensation of the Redistribution Managers. As compensation for the
services rendered by the Redistribution Managers pursuant to this Agreement, the
Company agrees to pay to each Redistribution Manager, pro rata for the number of
Redistribution Shares sold by such Redistribution Manager, selling commissions
in the amount of 2% of the Redistribution Price times the number of
Redistribution Shares allocated by the Joint Global Co-ordinators and
Bookrunners, in consultation with the Company, to each Redistribution Manager
(the "Selling Commissions"), provided that if the Selling Commissions so
allocated to any Redistribution Manager are less than the Minimum Selling
Commissions (as defined below) the Company will pay such Redistribution Manager
its Minimum Selling Commission (as defined below). The Minimum Selling
Commissions payable to the Redistribution Managers are deutsche mark 2 million
payable to each of the Joint Global Co-ordinators and Bookrunners; and deutsche
mark 333,333 to each of the six Co-Lead Managers (as named in Schedule A to the
Redistribution Agreement) (the "Minimum Selling Commissions"). The Company may
request such information from the Redistribution Managers as it deems necessary
or appropriate for the purpose of the foregoing consultation, but the Joint
Global Co-ordinators' and Bookrunners' determination of the allocations to the
Redistribution Managers shall be final and binding on all Redistribution
Managers. Payment of the Selling Commissions and, if applicable, the Minimum
Selling Commissions, due to the Redistribution Managers shall be made by the
Company in same day funds by wire transfer at 9:30 a.m., October 27, 1999
(Frankfurt time) to accounts previously designated to the Company by the Joint
Global Co-ordinators and Bookrunners, or at such other time not later than seven
full business days after the Trading Date as the Company and the Joint Global
Co-ordinators and Bookrunners determine, such time being referred to as the
"Closing Date."

         5. Certain Agreements of the Company. The Company agrees with the
several Redistribution Managers that:

               (a) The Company will file the U.S. Prospectus with the Commission
          pursuant to and in accordance with subparagraph (1) (or, if
          applicable, subparagraph (4)) of Rule 424(b) not later than the
          earlier of (A) the second business day following the execution and
          delivery of this Agreement or (B) the fifteenth business day after the
          Effective Date of the Registration Statement.

               The Company will advise the Joint Global Co-ordinators and
          Bookrunners promptly of any such filing pursuant to Rule 424(b).

               (b) The Company will advise the Joint Global Co-ordinators and
          Bookrunners promptly of any proposal to amend or supplement the
          Registration Statement or the Prospectus and, unless legally required,
          will not effect such amendment or
<PAGE>   9
          supplementation without the Joint Global Co-ordinators and Bookrunners
          consent which will not be unreasonably withheld; and the Company will
          also advise the Joint Global Coordinators and Bookrunners promptly
          after it receives notice thereof, of the effectiveness of the
          Registration Statement (if its Effective Time is subsequent to the
          execution and delivery of this Agreement) and of any amendment or
          supplementation of the Registration Statement or the U.S. Prospectus
          and of the institution by the Commission of any stop order proceedings
          in respect of the Registration Statement and will use its reasonable
          best efforts to prevent the issuance of any such stop order and to
          obtain as soon as possible its lifting, if issued.

               (c) If, at any time when a U.S. Prospectus relating to the
          Redistribution Shares is required to be delivered under the Act in
          connection with the Redistribution by any Redistribution Manager or
          dealer, any event occurs as a result of which the U.S. Prospectus as
          then amended or supplemented would include an untrue statement of a
          material fact or omit to state any material fact necessary to make the
          statements therein, in light of the circumstances under which they
          were made, not misleading, or if for any other reason it is necessary
          at any time to amend the U.S. Prospectus to comply with the Act, the
          Company will promptly notify the Joint Global Co-ordinators and
          Bookrunners of such event and will promptly prepare and file with the
          Commission, at its own expense, an amendment or supplement which will
          correct such statement or omission or an amendment which will effect
          such compliance. The Company also will promptly prepare, at its own
          expense, a conforming amendment or supplement to the German Prospectus
          and the International Prospectus. Neither the Joint Global
          Co-ordinators and Bookrunners consent to, nor the Redistribution
          Managers' delivery of, any such amendment or supplement shall
          constitute a waiver of any of the conditions set forth in Section 6.

               (d) The Company will furnish to the Redistribution Managers
          copies of the Registration Statement (three of which will be signed
          and will include all exhibits), each related Preliminary U.S.
          Prospectus, and, so long as a U.S. Prospectus relating to the
          Redistribution Shares is required to be delivered under the Act in
          connection with sales by any Redistribution Manager or dealer, the
          U.S. Prospectus and all amendments and supplements to such documents,
          in each case in such quantities as the Joint Global Coordinators and
          Bookrunners reasonably request. The Company also will furnish to the
          Redistribution Managers copies of each German Prospectus and
          International Prospectus relating to and used in connection with the
          Redistribution and all amendments and supplements to such documents,
          in each case in such quantities as the Joint Global Coordinators and
          Bookrunners each reasonably request. The U.S. Prospectus shall be so
          furnished on or prior to 3:00 P.M., New York time, on the business day
          following the later of the execution and delivery of this Agreement or
          the Effective Time of the Registration Statement. All other documents
          shall be so furnished as soon as available. The Company will pay the
          expenses of printing and distributing to the Redistribution Managers
          all such documents.

               (e) The Company will promptly from time to time take such action
          as the
<PAGE>   10
          Joint Global Co-ordinators and Bookrunners may reasonably request to
          qualify the Redistribution Shares for offer and sale under the
          securities laws of such jurisdictions in the United States and Germany
          and to comply with such laws of such jurisdictions for as long as may
          be necessary to complete the Redistribution, provided that in
          connection therewith the Company shall not be required to qualify as a
          foreign corporation or to file a general consent to service of process
          in the United States or any other jurisdiction, and no such action
          shall be required if, as a result thereof, the Company would be
          subject to taxation in any jurisdiction which the Company is not
          currently so subject.

               (f) During the period of five years hereafter, the Company will
          furnish to the Redistribution Managers, as soon as practicable after
          the end of each fiscal year and in accordance with applicable law, a
          copy of its annual report (in English) to stockholders for such year;
          and the Company will furnish to the Redistribution Managers (i) as
          soon as available, a copy of each report and any definitive proxy
          statement of the Company filed with the Commission under the
          Securities Exchange Act of 1934 or mailed to stockholders and (ii)
          from time to time, such other information concerning the Company as
          the Joint Global Co-ordinators and Bookrunners may each reasonably
          request.

               (g) The Company will pay (i) all expenses incident to the
          performance of its obligations under this Agreement and will reimburse
          the Redistribution Managers (if and to the extent incurred by them)
          for any filing fees, any fees and disbursements of counsel to the
          Registrar, Co-Registrar and any Paying Agents (as defined in the
          Registration Statement), (ii) for other reasonably and documented
          expenses to the extent agreed to by the Company, which agreement shall
          not be unreasonably withheld, incurred by the Redistribution Managers
          in connection with qualification of the Redistribution Shares for sale
          and determination of their eligibility for investment under the state
          securities or Blue Sky laws of such states of the United States as the
          Joint Global Co-ordinators and Bookrunners may reasonable request,
          (iii) for all expenses relating to marketing activities agreed to by
          the Company incident to the Redistribution, including but not limited
          to, expenses associated with the procurement of purchasers, and (iv)
          for expenses incurred in distributing the Preliminary Prospectus and
          the Prospectus (including any amendments and supplements thereto) to
          the Redistribution Managers.

               (h) The Company will pay any stamp, transfer or other similar tax
          imposed by Germany or the United States in connection with (i) the
          execution, delivery and performance of this Agreement, and (ii) the
          execution, authentication, issuance, delivery and sale of the
          Redistribution Shares or otherwise in connection with the
          Redistribution Shares.

               (i) The Company will indemnify and hold harmless the
          Redistribution Managers against any documentary, stamp, registration
          or similar issuance tax, including any interest or penalties, other
          than any interest or penalties incurred as a result of the negligence
          of the Redistribution Managers, payable in Germany or the United
          States on or in connection with the sale of the Shares and on the
          execution and delivery of this Agreement.
<PAGE>   11
               (j) The Company will not, without the prior written consent of
          the Global Coordinators and Bookrunners, directly or indirectly,
          offer, sell, contract to sell or otherwise dispose of or otherwise
          enter into any transaction (including a derivative transaction) having
          an economic effect similar to a sale of, or announce the offering of,
          any of its Shares or any securities which are convertible into or
          exchangeable for, or which otherwise represent the right to acquire,
          its Shares for a period of six months from the commencement of
          official trading of its Shares on the Frankfurt Stock Exchange. The
          foregoing restrictions will not apply in the case of sale or transfers
          in private transactions to one or several strategic investors or to
          one or several entities which are wholly-owned subsidiaries or parents
          of, or any corporation or entity which is controlling, controlled by
          or under common control with the Company, provided that in each case
          the transfees agree to be bound by the foregoing restrictions.

         6. Conditions of the Obligations of the Redistribution Managers. The
obligations of the several Redistribution Managers to redistribute the
Redistribution Shares on the Closing Date will be subject to the accuracy of the
representations and warranties on the part of the Company herein, to the
accuracy of the statements of Company officers made pursuant to the provisions
hereof, to the performance by the Company of its obligations hereunder and to
the following additional conditions precedent:

               (a) The Redistribution Managers shall have received a letter,
          dated the date of delivery thereof (which, if the Effective Time of
          the Registration Statement is prior to the execution and delivery of
          this Agreement, shall be on or prior to the date of this Agreement or,
          if the Effective Time of the Registration Statement is subsequent to
          the execution and delivery of this Agreement, shall be prior to the
          filing of the amendment or post-effective amendment to the
          registration statement to be filed shortly prior to such Effective
          Time), of KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft
          Wirtschaftprufungsgesellschaft (the "Auditors") in relation to the
          Company, in form and substance satisfactory to the Joint Global
          Co-ordinators and Bookrunners, containing statements and information
          of the type ordinarily included in accountants' "comfort letters" to
          underwriters with respect to the financial statements and certain
          financial information contained in the Registration Statement and
          Prospectus.

               (b) At Closing Date, the Redistribution Managers shall have
          received from the Auditors a letter, dated as of the Closing Date, to
          the effect that they reaffirm the statements made in the letter
          furnished to the Redistribution Managers pursuant to paragraph (a) of
          this Section 6.

               (c) If the Effective Time of the Registration Statement is not
          prior to the execution and delivery of this Agreement, such Effective
          Time shall have occurred not later than 10:00 P.M., New York time, on
          the date of this Agreement or such later date as shall have been
          consented to by the Joint Global Co-ordinators and Bookrunners. If the
          Effective Time of the Registration Statement is prior to the execution
          and delivery of this Agreement, the U.S. Prospectus shall have been
          filed with the Commission in accordance
<PAGE>   12
          with the Act and the rules and regulations and Section 5(a) of this
          Agreement. Prior to the Closing Date, no stop order suspending the
          effectiveness of the Registration Statement shall have been issued and
          no proceedings for that purpose shall have been instituted or, to the
          knowledge of the Company or the Redistribution Managers, shall be
          contemplated by the Commission.

               (d) Subsequent to the execution and delivery of this Agreement
          and prior to the Closing Date, there shall not have occurred (i) any
          change, or any development or event involving a prospective change, in
          the financial condition, business, properties or results of operations
          of the Company or its subsidiaries, taken as a whole, which, in the
          judgment of the Redistribution Managers, is so material and adverse as
          to make it impractical or inadvisable to proceed with completion of
          the public offering or the sale of and payment for the Redistribution
          Shares; (ii) any downgrading in the rating of any debt securities of
          the Company by any "nationally recognized statistical rating
          organization" (as defined for purposes of Rule 436(g) under the Act),
          or any public announcement that any such organization has under
          surveillance or review its rating of any debt securities of the
          Company (other than an announcement with positive implications of a
          possible upgrading, and no implication of a possible downgrading, of
          such rating); (iii) any suspension or limitation of trading in
          securities generally on the NYSE or the FSE, or any setting of minimum
          prices for trading on such exchange, or any suspension of trading of
          any securities of the Company on any exchange or in the
          over-the-counter market; (iv) any banking moratorium declared by U.S.
          federal, New York or German authorities; (v) any outbreak or
          escalation of major hostilities in which the United States or Germany
          is involved, any declaration of war by Congress or the relevant German
          authorities or any other substantial national or international
          calamity or emergency if, in the judgment of the Redistribution
          Managers, the effect of any such outbreak, escalation, declaration,
          calamity or emergency makes it impractical or inadvisable to proceed
          with completion of the public offering or the sale of and payment for
          the Redistribution Shares; (vi) any change in currency exchange rates
          between either the U.S. dollar and the deutsche mark or the U.S.
          dollar and the euro, or the imposition by the United States or Germany
          of exchange controls, as would in any such case, in the reasonable
          judgment of the Redistribution Managers, be so material and adverse as
          to make it impracticable to proceed with the sale of and payment for
          the Redistribution Shares. Further, the Joint Global Co-ordinators and
          Bookrunners, on behalf of the Redistribution Managers, reserve the
          right to terminate the Redistribution after consultation with the
          Company, if its implementation is no longer advisable, for example,
          because of turbulence in the international capital markets.

               (e) The Redistribution Managers shall have received an opinion,
          dated such Closing Date, of Hengeler Mueller Weitzel Wirtz, German
          Counsel to the Company, to the effect that:

                    (i) The Company is a stock corporation (Aktiengesellschaft)
               duly established and validly existing under the laws of Germany
               with corporate power and authority to own its properties and
               conduct its business as described in the
<PAGE>   13
               Prospectus. The Company is duly registered in the commercial
               register (Handelsregister) of the local court of Frankfurt am
               Main under HRB 42283;

                    (ii) The Shares to be issued by the Company in the Demerger
               have been duly and validly authorized and, upon registration of
               the Demerger in the commercial register of Hoechst AG and of the
               Company, will be duly and validly issued, fully paid and will
               conform to the description thereof contained in the German
               Prospectus under the caption "Beschreibung der Aktien;"

                    (iii) The Demerger has become effective and, by operation of
               law, title to all assets belonging to the demerged businesses
               have been transferred to the Company;

                    (iv) The German Prospectus corresponds as to content to the
               Registration Statement and is a fair translation thereof except
               for immaterial adjustments necessary to comply with the listing
               requirements of the FSE;

                    (v) Upon the publication of the German Prospectus and the
               listing and admission for trading of the shares on the FSE no
               regulatory or governmental authorization, consent, approval,
               order or registration is required in Germany for the
               Redistribution Agreement and the performance by the Company of
               its obligations thereunder;

                    (vi) The German Prospectus on its face complies with all
               listing requirements of the FSE;

                    (vii) The Company has taken all actions and made all filings
               and publications necessary to have the Shares listed on the FSE;

                    (viii) Neither the Redistribution of the Redistribution
               Shares nor the execution and delivery of the Redistribution
               Agreement by the Company nor the performance by the Company of
               its obligations thereunder conflict with or result in a violation
               of any provision of the Articles of Association of the Company or
               any applicable law or regulation of Germany;

                    (ix) The statements set forth in the German Prospectus under
               the captions "Einfuhrung des Euro," "Geschaftsbeziehungen und
               Transactionen mit Dritten," "Hauptaktionare," "Allgemeine
               Informationen uber die Gesellschaft," "Organe und Mitarbeiter,"
               and "Besteuerung in der Bundesrepublik Deutschland," in each case
               in so far as they purport to constitute a summary of German law
               or the provisions of documents described therein which are
               governed by German law, fairly summarize the position under
               relevant German law and of such documents;

               The statements set forth in the Registration Statement under the
               captions "Exchange Rate Information," "Management,"
               "Relationships and Third Party
<PAGE>   14
               Transactions," "Principal and Selling Shareholders," "Description
               of Securities to be Registered," "Material United States Federal
               Income Tax and German Tax Considerations," and "Service of
               Process and Enforcement of Civil Liberties," in each case in so
               far as they purport to constitute a summary of German law or the
               provisions of documents described therein which are governed by
               German law, fairly summarize the position under relevant German
               law and of such documents;

                    (x) The Redistribution Agreement has been duly executed and
               delivered by duly authorized officers of the Company and
               constitutes a valid and legally binding obligation of the Company
               enforceable against the Company in accordance with its terms
               (subject to customary exclusions regarding bankruptcy and
               insolvency laws; and the customary qualification regarding
               enforceability of the indemnification provisions under Section 57
               et seq. of the German Stock Corporation Act );

                    (xi) No stamp duties or registration, issue, documentary or
               similar taxes or duties are payable in Germany in connection with
               the Redistribution of the Redistribution Shares and the execution
               and delivery of the Redistribution Agreement;

                    (xii) All dividends declared and payable on the Shares may
               under the laws and regulations of Germany be paid in euros; and

                    (xiii) Under the laws of Germany, the Redistribution
               Managers would be permitted to commence proceedings against the
               Company in German courts based on actions under or in connection
               with the Redistribution Agreement; and such courts would accept
               jurisdiction over any such proceedings.

               In rendering such opinion, such counsel may, without independent
          investigation, rely, subject to the assumptions, qualifications or
          limitations therein, (A) as to all matters of United States federal
          laws and state securities laws (if any), upon the opinion of Skadden,
          Arps, Slate, Meagher & Flom LLP referred to below; and (B) solely as
          to matters of fact set forth therein and to the extent he deems
          proper, upon certificates of responsible officers of the Company and
          public officials.

               (f) The Redistribution Managers shall have received an opinion,
          dated the Closing Date, of Dr. Joachim Kaffanke, General Counsel of
          the Company, to the effect that, except as disclosed in the
          Prospectus, to the best of such counsel's knowledge and belief, there
          are no pending or threatened or contemplated actions, suits or
          proceedings against or affecting the Company, any of its subsidiaries
          or properties that, if determined adversely to the Company or any of
          its subsidiaries, would individually or in the aggregate, reasonably
          be expected to have a Material Adverse Effect, or would reasonably be
          expected to materially and adversely affect the ability of the Company
          to perform its obligations under this Agreement, or which would
          otherwise be reasonably expected to have a material adverse effect on
          the Redistribution.
<PAGE>   15
               (g) The Redistribution Managers shall have received an opinion,
          dated such Closing Date, of Skadden, Arps, Slate, Meagher & Flom LLP,
          United States counsel for the Company, to the effect that:

                    (i) The agreement of the Redistribution Managers to
               redistribute the Redistribution Shares pursuant to the
               Redistribution Agreement and the performance by the Company of
               its obligations in the Redistribution Agreement do not require
               any consent, approval, authorization, registration or
               qualification of or with any governmental authority of the United
               States, except such as have been obtained or effected under the
               Act and except for the qualification of the Shares for listing on
               the NYSE under the Exchange Act (but such counsel need express no
               opinion as to any consent, approval, authorization, registration
               or qualification that may be required under state securities or
               Blue Sky laws).

                    (ii) The statements set forth in the U.S. Prospectus under
               "Material United States Federal Income Tax and German Tax
               Considerations," insofar as such statements purport to summarize
               certain federal income tax laws of the United States, constitute
               a fair summary of the principal United States federal income tax
               consequences of an investment in the Shares.

                    (iii) The Company, after giving effect to the issuance of
               the Shares, will not be required to register as an "investment
               company" under the Investment Company Act of 1940.

                    (iv) The Prospectus either was filed with the Commission
               pursuant to the subparagraph of Rule 424(b) specified in such
               opinion on the date specified therein or was included in the
               Registration Statement and based solely upon a telephonic
               confirmation from a representative of the Commission, the
               Registration Statement was declared effective under the Act as of
               the date and time specified in such opinion, no stop order
               suspending the effectiveness of the Registration Statement has
               been issued and no proceedings for that purpose have been
               instituted or are pending or contemplated under the Act, and the
               Registration Statement and the Prospectus, and each amendment or
               supplement thereto, as of their respective effective or issue
               dates, complied as to form in all material respects with the
               requirements of the Act and the Rules and Regulations thereunder.

                    (v) The statements in the U.S. Prospectus in the Sections
               entitled "Service of Process and Enforcement of Civil
               Liabilities," and "Material United States Federal Income Tax and
               German Tax Considerations" (insofar as such statements constitute
               summaries of United States federal legal and regulatory
               provisions) fairly present in all material respects the
               information called for with respect to such United States legal
               and regulatory provisions.
<PAGE>   16
                    (vi) The Shares are duly authorized for listing on the NYSE,
               subject only to official notice of issuance.

                         (vii) Counsel has no reason to believe that the
                    Registration Statement or any amendment or supplement
                    thereto, as of its effective date or as of the Closing Date,
                    contained any untrue statement of a material fact or omitted
                    to state any material fact required to be stated therein or
                    necessary to make the statements therein not misleading or
                    that the U.S. Prospectus or any amendment or supplement
                    thereto, as of its issue date or as of the Closing Date,
                    contained any untrue statement of a material fact or omitted
                    to state any material fact necessary in order to make the
                    statements therein, in light of the circumstances under
                    which they were made, not misleading; it being understood
                    that such counsel need express no opinion as to the
                    financial statements or other financial and statistical data
                    contained in the Registration Statement or the U.S.
                    Prospectus, as to the information set forth in the U.S.
                    Prospectus under the caption "The Redistribution," other
                    than the information set forth in the first and second
                    paragraphs thereto, and the information set forth in the
                    Prospectus in the second-to-last paragraph of the cover
                    page. With respect to such statements, such counsel may
                    state that such belief is based upon such counsel's
                    participation in the preparation of the Registration
                    Statement and the U.S. Prospectus and review and discussion
                    of the contents thereof and of such other documents as such
                    counsel shall deem appropriate. Such counsel may state that
                    they do not express any opinion or belief as to the
                    statements, insofar as they relate to matters of German law,
                    made in the U.S. Prospectus.

                    In rendering such opinions, such counsel may, without
               independent investigation, rely, subject to the assumptions,
               qualifications or limitations therein, (A) as to all matters of
               German law, upon the opinion of Hengeler Mueller Weitzel Wirtz,
               German Counsel to the Company referred to above; and (B) on the
               accuracy of each document they have reviewed (including, without
               limitation, the accuracy of the representations and warranties of
               the Company in this Agreement) as to matters of fact stated in
               any such document.

                    (g) The Redistribution Managers shall have received from
               Shearman & Sterling, counsel for the Redistribution Managers,
               such opinion or opinions, dated the Closing Date, with respect to
               the incorporation of the Company, the validity of the
               Redistribution Shares delivered on such Closing Date, the
               Registration Statement, the Prospectus and other related matters
               as the Redistribution Managers may require, and the Company shall
               have furnished to such counsel such documents as they reasonably
               request for the purpose of enabling them to pass upon such
               matters. In rendering such opinion, Shearman & Sterling may rely
               as to the incorporation of the Company and all other matters
               governed by German law upon the opinions of Hengeler Mueller
               Weitzel Wirtz, German Counsel to the Company referred to above.

                    (h ) The Redistribution Managers shall have received a
               certificate, dated the
<PAGE>   17
               Closing Date, of the Chairman of the Company's Management Board
               or any Management Board Member and a principal financial or
               accounting officer of the Company in which such officers, to the
               best of their knowledge after reasonable investigation, shall
               state that: the representations and warranties of the Company in
               this Agreement are true and correct; the Company has complied
               with all agreements and satisfied all conditions on its part to
               be performed or satisfied hereunder at or prior to such Closing
               Date; and, subsequent to the date of the most recent financial
               statements included in the Prospectus, there has been no material
               adverse change, nor any development or event involving a
               prospective material adverse change, in the financial condition,
               business, properties or results of operations of the Company and
               its subsidiaries taken as a whole, except as set forth in or
               contemplated by the Prospectus.

                    (i) The Redistribution Managers shall have received a
               letter, dated the Closing Date, of the Auditors which meets the
               requirements of subsection (a) of this Section, except that the
               specified date referred to in such subsection will be a date not
               more than 5 days prior to such Closing Date for the purposes of
               this subsection.

The Company will furnish the Redistribution Managers with such conformed copies
of such opinions, certificates, letters and documents as the Redistribution
Managers reasonably request. The Joint Global Co-ordinators and Bookrunners may
in their sole discretion waive on behalf of the Redistribution Managers
compliance with any conditions to the obligations of the Redistribution Managers
hereunder.

         7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Redistribution Manager, its partners, directors and officers
and each person, if any, who controls such Redistribution Manager within the
meaning of Section 15 of the Act, against any losses, claims, damages or
liabilities, joint or several, to which such Redistribution Manager may become
subject, under the Act, the German Stock Exchange Act (Borsengesetz) or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement,
the Prospectus, or any amendment or supplement thereto, or any related
Preliminary Prospectus, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
each Redistribution Manager for any legal or other expenses reasonably incurred
by such Redistribution Manager in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with
written information furnished to the Company by any Redistribution Manager
specifically for use therein, it being understood and agreed that the only such
information furnished by any Redistribution Manager consists of the information
described as such in subsection (b) below; and provided further that the Company
shall not be liable to any Redistribution Manager under the indemnity in this
subsection (a) with respect to any Preliminary Prospectus used in connection
with sales of Shares in the United States to the extent
<PAGE>   18
that any loss, claim, damage or liability of such Redistribution Manager results
from the fact that such Redistribution Manager sold Redistribution Shares to a
person as to whom it shall be established that there was not sent or given, at
or prior to the written confirmation of such sale, a copy of the U.S. Prospectus
or of the U.S. Prospectus as then amended or supplemented in any case where such
delivery is required by the Act, if the Company had previously furnished copies
thereof in sufficient quantity to such Redistribution Manager and the loss,
claim, damage or liability of such Redistribution Manager results from an untrue
statement or omission of a material fact contained in the Preliminary Prospectus
used in connection with sales of Redistribution Shares in the United States
which was identified in writing at such time to such Redistribution Manager and
corrected in the U.S. Prospectus or in the Prospectus as then amended or
supplemented.

         (b) Each Redistribution Manager will severally, and not jointly,
indemnify and hold harmless the Company, its directors and officers, and each
person, if any who controls the Company within the meaning of Section 15 of the
Act, against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, the Prospectus, or any amendment or
supplement thereto, or any related Preliminary Prospectus, or arise out of or
are based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished to
the Company by such Redistribution Manager specifically for use therein, and
will reimburse any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred, it being understood and
agreed that the only such information furnished by any Redistribution Manager
consists of the following information in the Prospectus furnished on behalf of
each Redistribution Manager: the fourth paragraph and the list of Redistribution
Managers at the bottom of the cover page concerning the terms of the offering by
the Redistribution Managers and the information set forth under the caption "The
Redistribution," (or "Die Umplazierung" in the German Prospectus) except for the
first paragraph.

         (c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party in writing will
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a) or (b) above. In case any such action is
brought against any indemnified party and it notifies the indemnifying party in
writing of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and
after notice from the indemnifying
<PAGE>   19
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified party
under this Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement or compromise of, or
consent to the entering of any judgment with respect to, any pending or
threatened action or claim in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement, compromise or consent (i) includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action or claim and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act by
or on behalf of an indemnified party.

         (d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities or actions in respect thereof referred to in subsection (a) or (b)
above in such proportion as is appropriate to reflect the relative fault of the
Company on the one hand, and the Redistribution Managers on the other, in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities or actions in respect thereof as well as any
other relevant equitable considerations. The relative fault of the Company, on
the one hand, and the Redistribution Managers, on the other hand, shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the
Redistribution Managers and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities or actions in respect thereof referred to
in the first sentence of this subsection (d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any action or claim which is the
subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), no Redistribution Manager shall be required to contribute any
amount in excess of the commissions received by such Redistribution Manager. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Redistribution Managers'
obligations in this subsection (d) to contribute are several based upon the
Redistribution Managers' proportionate share of the aggregate Selling
Commissions paid by the Company.

         (e) The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Redistribution Manager within the meaning of the Act; and the obligations of the
Redistribution Managers under this Section shall be in addition to any liability
which the respective Redistribution Managers may otherwise have and shall
extend, upon the same terms and conditions, to each director of the Company, to
each officer of the Company who has signed the Registration Statement and to
each person, if any, who controls the Company within the meaning of the Act.
<PAGE>   20
         8. Default of the Redistribution Managers. If on the Closing Date any
Redistribution Manager defaults in its obligations with respect to the
Redistribution Shares allocated to it on the Trading Date, the Joint Global
Co-ordinators and Bookrunners will first use their best efforts to arrange for
such Redistribution Shares to be redistributed by other persons, including any
of the Redistribution Managers. If arrangements satisfactory to the Joint Global
Co-ordinators and Bookrunners and the Company for the redistribution of such
Redistribution Shares by other persons are not made after such default, the
non-defaulting Redistribution Managers shall be obligated severally, in
proportion to their respective quota (calculated on the minimum Selling
Commissions set forth in Section 2), to take up the Redistribution Shares that
such defaulting Redistribution Manager or Redistribution Managers failed to
redistribute on such Closing Date. The total number of additional Redistribution
Shares to be allocated to each non-defaulting Redistribution Manager will be pro
rata to the number of Redistribution Shares being otherwise sold by such
Redistribution Manager. The Company shall not pay Selling Commissions on any
Redistribution Shares not sold. As used in this Agreement, the term
"Redistribution Manager" includes any person substituted for a Redistribution
Manager under this Section. Nothing herein will relieve a defaulting
Redistribution Manager from liability for its default.

         9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Redistribution Managers set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made by
or on behalf of any Redistribution Manager, the Company or any of their
respective representatives, officers or directors or any controlling person, and
will survive delivery of the Redistribution Shares. If this Agreement is
terminated pursuant to Section 8 or if for any reason the agreement to
redistribute the Redistribution Shares by the Redistribution Managers is not
consummated, the Company shall remain responsible for the expenses to be paid or
reimbursed by it pursuant to Section 5 and the respective obligations of the
Company and the Redistribution Managers pursuant to Section 7 shall remain in
effect, and if any Redistribution Shares have been purchased hereunder the
representations and warranties in Section 2 and all obligations under Section 5
shall also remain in effect. If the agreement to redistribute the Redistribution
Shares by the Redistribution Managers is not consummated for any reason other
than solely because of the termination of this Agreement pursuant to Section 8
or the occurrence of any event specified in clause (iii), (iv) or (v) of Section
6(d), the Company will reimburse the Redistribution Managers for all
out-of-pocket expenses (including fees and disbursements of counsel) reasonably
incurred by them in connection with the Redistribution.

         10. Notices. All communications hereunder will be in writing and, if
sent to the Redistribution Managers, will be mailed, delivered or telegraphed
and confirmed to the Redistribution Managers, c/o Credit Suisse First Boston
(Europe) Limited, One Cabot Square, London E144QJ, United Kingdom, Attention:
Investment Banking Department--Equity Capital Markets; Dresdner Bank AG, Global
Corporate Finance, Transaction Services, 60301 Frankfurt am Main, Germany; or,
if sent to the Company, will be mailed, delivered or telegraphed and confirmed
to it at Celanese AG, Building F-821, Industriepark Hochst, D-65926, Frankfurt
am Main, Germany; provided, however, that any notice to a Redistribution Manager
pursuant to
<PAGE>   21
Section 7 will be mailed, delivered or telegraphed and confirmed to such
Redistribution Manager.

         11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7, and no other
person will have any right or obligation hereunder.

         12. Representation of Redistribution Managers. The Joint Global
Co-ordinators and Bookrunners will act for the several Redistribution Managers
in connection with this Redistribution, and any action under this Agreement
taken by the Joint Global Co-ordinators and Bookrunners will be binding upon all
the Redistribution Managers.

         13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
<PAGE>   22
         14. Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the Federal Republic of Germany, without regard
to principles of conflicts of laws.

         If the foregoing is in accordance with the Redistribution Managers'
understanding of our agreement, kindly sign and return to the Company one of the
counterparts hereof, whereupon it will become a binding agreement between the
Company and the several Redistribution Managers in accordance with its terms.




         CELANESE AG


                                               By:
                                                  Name:
                                                  Title:



         The foregoing Redistribution Agreement is hereby confirmed and accepted
         as of the date first above written.

           CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED Acting on behalf of
                  itself and the other Redistribution Managers named in
                  Schedule A

         By:      _______________________________
                  Attorney-in-fact


         DRESDNER BANK AG
                  Acting on behalf of itself and the other
                  Redistribution Managers named in
                  Schedule A

         By:      ________________________________
                  Attorney-in-fact




                                   SCHEDULE A
                         LIST OF REDISTRIBUTION MANAGERS
<PAGE>   23
JOINT GLOBAL CO-ORDINATOR AND BOOKRUNNER                        MINIMUM SELLING
                                                                  COMMISSIONS
Credit Suisse First Boston (Europe) Limited                     DM 2,000,000
Dresdner Bank AG                                                DM 2,000,000
CO-LEAD MANAGER
- ---------------
Bayerische Landesbank Girozentrale                                DM 333,333
Deutsche Bank AG                                                  DM 333,333
DG Bank Deutsche Genossenschaftsbank AG                           DM 333,333
Goldman Sachs International                                       DM 333,333
Helaba Landesbank Hessen-Thuringen Girozentrale                   DM 333,333
J.P. Morgan Securities Ltd.                                       DM 333,333
<PAGE>   24
                                   SCHEDULE B

                              Material Subsidiaries

                              Celanese Canada Inc.
                                CNA Holdings Inc.
                 Diogenes Dreizehnte Vermogensverwaltungs, GmbH
                                   Ticona LLC
                                  Celanese Ltd.
                              Celanese Acetate LLC
                                Grupo Celanese SA




<PAGE>   1
                    TEMPORARY CERTIFICATE - EXCHANGEABLE FOR
            DEFINITIVE ENGRAVED CERTIFICATE WHEN READY FOR DELIVERY.

                                [Celanese Logo]

[NUMBER CERTIFICATE GRAPHIC]                        [SHARES CERTIFICATE GRAPHIC]
                                          WKN 575 300 ISIN Nr./No. DE 0005753008
                                          CINS Nr./No. D1497A 101

                                  CELANESE AG
                              Deutschland/Germany

ist mit
is the owner of



voll eingezahlten, nicht nachschusspflichtigen, AUF DEN NAMEN LAUTENDEN
STUECKAKTIE(N) an der Celanese AG, Deutschland, nach Massgabe ihrer Satzung in
der jeweiligen Fassung, die bei der Gesellschaft erhaeltlich ist, als Aktionaer
beteiligt.
Die Stuecknummer(n) der in dieser Urkunde verbrieften Aktie(n)
ergibt/ergeben sich aus dem Aktienbuch.
Erwerber dieser Aktie(n) werden auf


Antrag im Aktienbuch eingetragen, sofern diese Urkunde entweder ordnungsgemaess
indossiert oder zusammen mit einer unterschriebenen Abtretungserklaerung
vorgelegt wird.
Die in dieser Urkunde verbriefte(n) Aktie(n) kann/koennen bei der
REGISTRAR SERVICES GMBH, Frankfurt am Main und in den Vereinigten Staaten von
Amerika bei der CHASEMELLON SHAREHOLDER SERVICES, L.L.C., New Jersey
umgeschrieben werden.


fully paid and non-assessable NO PAR VALUE REGISTERED SHARE(S) of Celanese AG,
Germany, pursuant to the terms of its Articles of Association and amendments
thereto (copies of which are on file with the US Transfer Agent).
The number(s) identifying the share(s) represented by this certificate is/are
noted in the share register.

A transfer of the share(s) represented by this certificate will be registered in
the share register upon application and surrender of this certificate properly
endorsed or accompanied by a duly executed form of assignment.

The share(s) represented by this certificate is/are transferable at the
REGISTRAR SERVICES GmbH, Frankfurt am Main and in the United States of America
at the offices of CHASEMELLON SHAREHOLDER SERVICES, L.L.C., New Jersey.



      Datum/Date

Vorstand/Board of Management



Vorstand/Board of Management



Aufsichtsrat/Supervisory Board



     COUNTERSIGNED AND REGISTERED;
     CHASEMELLON SHAREHOLDER SERVICES, L.L.C.



                                        TRANSFER AGENT
                                        AND REGISTRAR



BY


                                        AUTHORIZED SIGNATURE

                      Kontrollunterschrift/Control Signature



<PAGE>   2




TRANSFERS IN THE UNITED STATES OF AMERICA
UEBERTRAGUNGEN IN DEN VEREINIGTEN STAATEN VON AMERIKA


The following form of endorsement is intended for share transfers in the
United States of America and may be used in other jurisdictions where accepted
as a valid endorsement.


Das folgende Indossament ist fuer die Uebertragung von Aktien in den Vereinigten
Staaten von Amerika bestimmt. Es kann in anderen Staaten verwendet werden, die
es als wirksames Indossament anerkennen.


For value received, the undersigned hereby sells, assigns and transfers unto

- --------------------------------------------------------------------------------
(Please print or typewrite name, occupation and address including postal/zip
code of assignee)

Please insert social security number, tax identification number or other
identification number of assignee

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------


______________________________ no par value registered shares represented by
the within Certificate and does hereby irrevocably constitute and appoint


______________________________ Attorney to transfer the said shares on the
share register of Celanese AG with full power of substitution in the premises.

Date                       Signature
- -------------------------- -------------------------------------------------

Notice: The signature to this assignment must correspond with the name written
        upon the face of this certificate in every particular, without
        alteration or enlargement or any change whatever. The signature must be
        guaranteed by an Eligible Guarantor Institution such as a commercial
        bank, trust company, securities broker/dealer, credit union or a savings
        association participating in a Medallion program approved by the
        Securities Transfer Association, Inc.


Uebertragung in der Bundesrepublik Deutschland
Transfers in the Federal Republic of Germany



Uebertragung aller in dieser Urkunde verbrieften Aktien
Transfer of all shares represented by this certificate



Das folgende Indossament ist fuer die Uebertragung der Aktien in der
Bundesrepublik Deutschland bestimmt, wenn saemtliche umseitig genannten Aktien
uebertragen werden. Es kann ausser in den Vereinigten Staaten von Amerika in
anderen Staaten verwendet werden, die es als wirksames Indossament anerkennen.



The following form of endorsement is intended for share transfers in the
Federal Republic of Germany if all the shares stated on the face hereof are
transferred. It may be used in other jurisdictions, other than the United
States of America, where accepted as a valid endorsement.



Ich/wir uebertrage(n) saemtliche in dieser Urkunde verbrieften, auf den Namen
lautenden Stueckaktien der Celanese AG auf


Name
- --------------------------------------------------------------------------------

Adresse
- --------------------------------------------------------------------------------

Beruf
- --------------------------------------------------------------------------------

Datum
- --------------------------------------------------------------------------------


Unterschrift
- --------------------------------------------------------------------------------

Uebertragung von weniger als der Gesamtzahl der in dieser Urkunde verbrieften
Aktien



Transfer of less than all of the shares represented by this certificate



Die nachfolgende Erklaerung is zusaetzlich zur Vorlage der Abtretungserklaerung
abzugeben, wenn ein Aktionaer ausserhalb der Vereinigten Staaten von Amerika
weniger als die umseitig genannten Aktien uebertragen hat.


The following statement must be provided in addition to presenting the form of
assignment if a shareholder has effected a transfer outside the United States
of America of less than all of the shares stated on the face hereof.


Ich/wir zeige(n) hiermit an, _______________________ Stueck auf den Namen
lautende Stueckaktien der Celanese AG an


Name
- --------------------------------------------------------------------------------

Adresse
- --------------------------------------------------------------------------------

Beruf
- --------------------------------------------------------------------------------


(nachfolgende "Zessionar(e)" abgetreten zu haben und beantrage(n), auf den/die
Namen des Zessionars/der Zessionare eine Aktienurkunde ueber die genannte Anzahl
abgetretener Aktien sowie eine weitere Aktienurkunde auf meinen/unseren Namen
ueber die weiterhin von mir/uns gehaltenen auf den Namen lautenden Stueckaktien
der Celanese AG auszustellen. Beide Aktienurkunden sollen mir/uns persoenlich
uebergeben oder an folgende Anschrift (auch bei Personenmehrheit nur eine
Anschrift angeben) uebersandt werden:


Datum
- --------------------------------------------------------------------------------

Unterschrift
- --------------------------------------------------------------------------------


<PAGE>   1
                                                                     Exhibit 4.2
                           OFFERING RIGHTS AGREEMENT


THIS OFFERING RIGHTS AGREEMENT (the "Agreement"), is made and entered into as of
the 8th day of October, 1999 by and among Celanese AG, a German joint stock
corporation ("the Company"), and Petrochemical Resources Holdings B.V., a
corporation organized under the laws of the Kingdom of the Netherlands ("PRH").


RECITALS

WHEREAS, PRH is the indirect holder of a significant shareholding in Hoechst AG.

WHEREAS, Hoechst AG is contemplating a restructuring including the demerger or
spin-off to its shareholders of shares of Celanese AG, the listing of those
shares on the Frankfurt and New York Stock Exchanges and a public offering of
certain shares which shareholders of Celanese AG may wish to sell immediately
subsequent to the demerger or spin-off (the "Redistribution Offering").

WHEREAS, PRH has agreed to enter into a Lock-up Agreement in relation to its
shareholding in Celanese AG, in consideration of which Celanese AG has agreed
to enter into this Offering Rights Agreement.

NOW THEREFORE, in consideration of the foregoing and of the mutual promises and
covenants contained herein, the parties hereto hereby agree as follows:

1.   DEFINITIONS

      As used in this Agreement, the following terms shall have the following
      respective meanings:

      (a)  The terms "register", "qualify" and "list" and any terms deriving
           from such terms refer to: (a) a registration effected by preparing
           and filing a registration statement


                                       1
<PAGE>   2


           in compliance with the United States Securities Act of 1933, as
           amended (the "Securities Act"), and the declaration or ordering by
           the Commission of the effectiveness of such registration statement;
           (b) the qualification of any securities for sale, or of any
           offering document in relation thereto, with any securities
           regulatory authority; and (c) the listing on any stock exchange,
           quotation system or other securities market in Europe, the United
           States or elsewhere, respectively.

      (b)  The term "Securities" means all of the following to the
           extent the same have not been resold to the public (i) ordinary
           shares of Celanese AG held by PRH upon completion of the demerger
           referred to in the first recital to this Agreement or acquired
           thereafter; (ii) all ordinary shares of Celanese AG issued in
           respect of such Securities, including, without limitation, as a
           result of any stock split, stock dividend, recapitalization or the
           like; and (iii) any depositary shares or depositary receipts
           representing or evidencing the ordinary shares of Celanese AG
           referred to in (i) and (ii) hereof.

      (c)  The term "Commission" means the United States Securities and
           Exchange Commission.

      (d)  The term "Offering Expenses" means all expenses incurred by
           the Company in complying with this Agreement, including, without
           limitation, all registration, qualification and listing fees, filing
           and quotation fees and expenses, printing expenses, escrow fees,
           accounting fees, fees and disbursements of counsel for the Company,
           Blue Sky fees and expenses and roadshow expenses. The term "Offering
           Expenses" does not include any fees and disbursements of any special
           counsel or any other advisors retained by PRH or PRH's internal
           costs and expenses incurred in connection with this Agreement
           (collectively, the "Excluded Expenses").

      (e)  The term "Selling Expenses" means all underwriting discounts
           and selling commissions applicable to the sale of the Securities.
           and any reimbursable

                                       2


<PAGE>   3


           expenses incurred by underwriters related to the sale of the
           Securities.

2.   REQUESTED OFFERING

2.1  Demand for Offering

     In the event the Company receives from PRH a written request that the
     Company effect a registration, qualification or listing with respect to all
     or a part of the Securities (other than, in the case of an offering in the
     United States, a registration on Form S-3 or F-3 or any successor form
     regardless of its designation) the Company will as soon as practicable,
     effect all such registrations, qualifications or listings (including, in
     the case of a registered offering in the United States, without limitation,
     the execution of an undertaking to file post-effective amendments,
     appropriate qualification under applicable Blue Sky or other state
     securities laws and appropriate compliance with applicable requirements or
     regulations) in the relevant jurisdiction in accordance with applicable
     securities laws and the rules of the relevant stock exchange as may be so
     requested and as would permit or facilitate the sale and distribution of
     all or such portion of such Securities as are specified in such request,
     provided that the Company shall not be obligated to take any action to
     effect any such registration, qualification or listing pursuant to this
     paragraph 2.1 or, in the case of clause A below, pursuant to paragraph 4
     below:

           A.   in any particular jurisdiction, other than the United States,
                Germany and any other jurisdiction in which the class of the
                Company's ordinary shares of which the Securities form a part
                may then be registered, qualified or listed, in which (i) the
                Company would be required to subject itself to an ongoing
                disclosure obligation or regulatory oversight compliance which
                does not involve measures substantially duplicative of those to
                which the Company is then subject in the United States, Germany
                or any other jurisdiction in which its shares are then
                registered, qualified or listed or to which it is not already so
                subject or (ii) the Company would be required to execute a
                general consent to service of process in effecting such

                                       3
<PAGE>   4


                registration, qualification or listing, unless the Company is
                already subject to service in such jurisdiction;

           B.   after the Company has effected three (3) such registrations,
                qualifications or listings pursuant to this paragraph 2.1, which
                have been declared or ordered effective, qualified or listed and
                the securities offered pursuant to such registration,
                qualification or listing have been sold; provided, that during
                the first year after the effective date of the listing of the
                Company's shares on the New York Stock Exchange, PRH shall be
                entitled to make only one (1) demand pursuant to this paragraph
                2.1; and provided further that if after the first anniversary of
                the effective date of the listing of the Company's shares on the
                New York Stock Exchange, the Company is for any reason
                ineligible to qualify for registration of its securities for
                offer or sale in the United States on Form S-3 (or F-3) the
                number of registrations the Company may be required to undertake
                pursuant to this section shall be the number specified in
                paragraph 4(c) less the number of registrations previously made
                hereunder.

     Subject to the foregoing clauses A and B, the Company shall file or submit
     with the appropriate securities regulatory authority(ies) a registration
     statement, listing particulars or an offering document as soon as
     practicable after receipt of the request or requests of PRH hereunder and
     in relation to any registration, qualification or listing in connection
     with which an offering is being made in the United States, the Company
     shall use its best efforts to do so within forty-five (45) days of such
     request if such offer and sale is registered on Form S-1 (F-1) and thirty
     (30) days of such request if such offer and sale is registered on Form S-3
     (F-3), and in all events shall do so within sixty (60) days of such request
     if registered on Form S-1 (F-1) and forty-five (45) days of such request if
     registered on Form S-3 (F-3).

2.2  Underwriting

                                       4
<PAGE>   5


     If PRH intends to distribute the Securities covered by their request by
     means of an underwriting, it shall so advise the Company as a part of its
     request made pursuant to this paragraph 2.  The underwriter(s), global
     coordinator(s), bookrunner(s) and lead manager(s) (collectively,
     "Underwriter" or "Underwriters") shall be selected by PRH, which
     Underwriter shall be an internationally recognized investment bank of good
     standing and reputation with substantial knowledge of the German and United
     States markets and a proven track record in lead managing international
     equity issues and in serving as lead underwriter of initial public
     offerings on the exchange(s) on which it is proposed the relevant
     Securities will be listed. provided that PRH shall first consult with the
     Company and consider the Company's view with respect of the appropriateness
     of PRH's chosen Underwriter in light of such circumstances as mandates such
     Underwriter may have which the Company considers to be conflicting with an
     offering of its securities and any actual or potential disputes between the
     Company and such Underwriters. The Company shall (together with PRH) enter
     into an underwriting agreement in customary form and consistent with
     international market practice with the Underwriter or Underwriters selected
     as above provided.

3.   COMPANY OFFERING

3.1  Incidental Offering Rights

     If at any time or from time to time, the Company shall determine to make a
     public offering of any of its securities, for its own account or the
     account of any of its shareholders, other than (i) in the United States by
     way of a registration on Form S-1 (or F-1) or S-8 relating solely to
     employee stock option or purchase plans, or a registration on Form S-4 (or
     F-4) relating solely to a transaction designated as being within the terms
     of Rule 145 under the Securities Act, or any successor to such forms, or a
     registration on any other form (other than Form S-1 (or F-1), S-2 (or F-2)
     or S-3 (or F-3), or their successor forms) which does not include
     substantially the same information as would be required to be included in a
     registration statement covering the sale of Securities, or (ii) a
     registration statement, listing particulars or any offering documents filed
     or submitted

                                       5
<PAGE>   6


     pursuant to paragraphs 2 or 4 hereof, the Company will:

     (i)  within ten (10) days of such determination, which shall be deemed to
          occur, without limitation, upon the earlier of the authorization
          thereof by the Company's supervisory or management board, the
          mandating by the Company of an underwriter for the offering and an
          organizational meeting for the offering, give to PRH written notice
          thereof; and


     (ii) include in such registration, qualification or listing (and any
          related qualification under state, regional or local securities laws),
          and in any underwriting involved therein, all the Securities specified
          in a written request or requests by PRH, given within twenty (20) days
          after receipt of such written notice from the Company, except as set
          forth in paragraph 3.2 below.


3.2  Underwriting

     If the registration, qualification or listing of which the Company gives
     notice pursuant to this paragraph 3 is for a public offering involving an
     underwriting, the Company shall so advise PRH as part of the written notice
     given pursuant to subparagraph 3.1(i).  In such event, the right of PRH to
     participate in an offering pursuant to paragraph 3 shall be conditional
     upon PRH's participation in such underwriting and the inclusion of PRH's
     Securities in the underwriting to the extent provided herein.  PRH shall
     (together with the Company) enter into an underwriting agreement in
     customary form and consistent with international market practice with the
     underwriter or underwriters selected for such underwriting by the Company
     (provided that PRH shall not be required to enter into any such
     underwriting agreement prior to entering into a lock-up agreement pursuant
     to this paragraph 3.2 or receiving confirmation from the Company that no
     such lock-up agreement will be required from PRH), which underwriter shall
     be an internationally recognized investment bank of good standing and
     reputation with substantial knowledge

                                       6
<PAGE>   7


      of the German and United States markets and a proven track record in lead
      managing international equity issues and in serving as lead underwriter
      of initial public offerings on the exchange(s) on which it is proposed
      the relevant Securities will be listed. If such Underwriters shall so
      request, PRH shall also enter into a lock-up agreement in (i)
      substantially the same form as the form it is entering into in connection
      with the Redistribution Offering, (ii) the form entered into by the
      Company in connection with such underwriting pursuant to this paragraph
      3, or (iii) a form entered into by any other shareholder who may be
      participating in such underwriting pursuant to this paragraph 3,
      whichever form is reasonably deemed by PRH to be most favorable to it, it
      being understood that PHR will not be required to enter into any lock-up
      agreement if either the Company or any other shareholder participating in
      such underwriting shall not enter into a lock-up agreement.  The Company
      shall not require PRH to make any representations or warranties to, or
      other agreements with, the Company or the underwriters other than
      representations, warranties or agreements regarding PRH, the lock-up
      agreement, the Securities and PRH's intended method of distribution and
      any other representation required by law.  Without limitation on the
      foregoing, in relation to any offering which includes a distribution in
      the United States, the underwriting agreement shall contain
      indemnification and contribution provisions substantially similar to the
      provisions of paragraphs 7 and 8 hereof, respectively.

      In advance of proceeding with a public offering of any equity securities
      which would give rise to PRH's incidental registration rights under this
      paragraph 3 and as soon as practicable after providing the notice
      required by paragraph 3.1(i), the Company will first consult with PRH as
      to (i) the Company's reasons for seeking additional equity capital at
      that time and (ii) PRH's interest at that time in selling any of its
      Securities, and shall use its best efforts to cause the underwriter or
      underwriters of a proposed underwritten public offering to permit
      inclusion in that offering of such number of Securities as PRH may
      request, taking into account (i) the Company's own capital needs and (ii)
      PRH's desire to

                                       7
<PAGE>   8


      sell Securities and its rights hereunder.

      Notwithstanding any other provision of this paragraph 3, if the
      underwriter determines that marketing factors require a limitation of the
      number of shares to be underwritten, the underwriter may limit the amount
      of securities (including Securities) to be included in the registration,
      qualification or listing and underwriting by the Company's shareholders,
      or may exclude such securities entirely from such registration,
      qualification on listing and underwriting, provided that if securities
      are being offered for the account of persons other than the Company and
      PRH, any such limitation or exclusion shall be applied against the
      securities being offered by such other persons prior to being applied
      against the Securities.

      The Company further agrees to consult with PRH prior to entering into any
      agreement granting any person registration rights with respect to equity
      securities, taking into account (i) the desirability of the overall
      transaction contemplated and the importance of the registration rights
      agreement to its successful completion and (ii) PRH's interest in not
      reducing its ability to sell the Securities in registrations effected
      pursuant to this Agreement.  The Company agrees that no registration
      rights agreement entered into by it with any person other than PRH will
      contain expense provisions more favorable to such other person than the
      provisions of paragraph 5 hereof.  PRH will consider a request by the
      Company to enter into an amendment to this Agreement so that any
      limitation or exclusion pursuant to the immediately preceding paragraph
      hereof shall be applied on a pro rata basis against the securities which
      may be offered by any other person to whom

                                       8
<PAGE>   9


     the Company may grant registration rights and the Securities, provided that
     the terms of any such proposed amendment will provide that any such
     limitation or exclusion of the Securities shall not represent a greater
     fraction of the number of Securities intended to be offered by PRH than the
     fraction of similar reductions imposed on such other persons over the
     amount of securities they intended to offer.  If, as a result of agreeing
     to any such amendment, PRH is unable to sell the full number of Securities
     it had requested be included in such registration, it shall be entitled to
     one (1) additional demand registration right during the next succeeding
     twelve (12) months following the registration upon the terms of paragraphs
     2 and 4 and the number limitations in paragraphs 4(a) and (c) shall each be
     increased by one (1).  Notwithstanding the foregoing, PRH will agree to
     enter into such an amendment to the extent that the Company intends to
     grant registration rights to a party in the context of a sale of its
     securities to such party if as a result of such sale such party will have a
     shareholding equal to or greater than the aggregate shareholding of PRH and
     PRH's affiliates at the time.

4.   FORM S-3

     The Company shall use its best efforts to qualify for registration of its
     securities for offer and sale in the United States on Form S-3 (or F-3) or
     any successor form(s) as soon as possible. After the Company has qualified
     for the use of Form S-3 (or F-3), PRH shall have the right to request
     registrations on Form S-3 (or F-3) (such requests shall be in writing and
     shall state the number of Securities to be disposed of and the intended
     method of disposition of those Securities by PRH, including whether the
     registered offering will be underwritten), subject only to the following:

     (a)  The Company shall not be required to effect a registration pursuant to
          this

                                       9
<PAGE>   10


           paragraph 4 or under paragraph 2 during any calendar year to the
           extent that PRH has disposed of Securities on two (2) or more
           occasions pursuant to any registration referred to in this
           paragraph 4 or in paragraphs 2 and 3 during that same calendar
           year.

      (b)  The Company shall not be required to effect a registration
           pursuant to this paragraph 4 or pursuant to paragraph 2 unless PRH
           proposes to dispose of Securities having an aggregate proposed
           offering price (before deduction of underwriting discounts and
           expenses of sale) of at least $75 million.

      (c)  The Company shall not be required to effect in the aggregate
           more than ten (10) registrations pursuant to this paragraph,
           provided that such number shall increase by one (1) if the Company
           effects a capital increase subsequent to the date hereof other than
           capital increases required solely in connection with Company stock
           option and other employee benefit plans.

      The underwriter of any underwritten offering shall be selected in the
      same manner as is set forth in paragraph  2.2.  Subject to the foregoing,
      the Company will as soon as practicable effect the registration of all
      shares of Securities on Form S-3 (or F-3) to the extent requested by PRH
      for purposes of disposition and all such registrations, qualifications or
      compliance (including without limitation, the execution of an undertaking
      to file post-effective amendments, appropriate qualification under
      applicable Blue Sky or other state securities laws and appropriate
      compliance with applicable requirements or regulations) as may be so
      requested and as would permit or facilitate the sale and distribution of
      all or such portion of such Securities as are specified in such request.

      At all times that the Company qualifies for registration of its
      securities on Form S-3 (F-3), any demand by PRH for registration pursuant
      to this Agreement shall be pursuant to this paragraph 4, if available,
      rather than pursuant to paragraph 2, provided that the Company shall
      include in the prospectus forming part of any registration statement on

                                       10
<PAGE>   11


     Form S-3 (F-3) effected pursuant to any such demand a level and detail of
     disclosure reasonably deemed appropriate by the Underwriters for any
     offering of Securities by PRH, but not more disclosure than would be
     required under Form S-1 (F-1).

5.   EXPENSES OF OFFERING

     All Offering Expenses incurred in connection with any registration,
     qualification or listing pursuant to paragraphs 2, 3 and 4 shall be borne
     by the Company; provided, however, that PRH shall bear the Selling Expenses
     and Excluded Expenses with respect to all Securities that are sold by PRH
     in a registration, qualification or listing pursuant to this Agreement.

6.   OFFERING PROCEDURES

     Whenever required under this Agreement to effect the registration,
     qualification or listing of any Securities, the Company shall:

     (a)  Within the time periods set out in paragraph 2, prepare and file with
          or submit to the applicable securities regulatory authority a
          registration statement, listing particulars or offering document with
          respect to such Securities and cause such registration statement to
          become effective or such offering document to be approved, and keep
          such registration statement effective for up to one hundred and eighty
          (180) days or until all Securities covered thereby have been sold, if
          earlier, or keep such listing particulars or other offering document
          current in accordance with applicable regulations;

     (b)  As expeditiously as possible prepare and file with the applicable
          securities regulatory authority such amendments and supplements to
          such registration statement, listing particulars or offering document
          as may be necessary to comply with the provisions of the applicable
          securities laws and regulations with respect to the disposition of all
          securities covered by such registration statement, listing

                                       11
<PAGE>   12


           particulars or offering document;

      (c)  Furnish to PRH such numbers of copies of a prospectus,
           listing particulars or offering document, in conformity with the
           requirements of the applicable securities laws and regulations, and
           such other documents as it may reasonably request in order to
           facilitate the disposition of Securities owned by it;

      (d)  Register and qualify the securities covered by such
           registration statement, listing particulars or offering document
           under the securities laws of such jurisdictions as shall be
           reasonably requested by PRH, provided that the Company shall not be
           required in connection therewith or as a condition thereto to
           qualify to do business, to pay taxes in any jurisdiction in which it
           would not otherwise be subject to taxation, or to file a general
           consent of service of process in any jurisdictions unless the
           Company is already subject to service in such jurisdiction;

      (e)  In the event of any underwritten public offering, enter into
           and perform its obligations under an underwriting agreement, in
           usual and customary form and consistent with international market
           practice, with the underwriter or underwriters selected for such
           offering in accordance with the terms hereof.  PRH shall also enter
           into and perform its obligations under such an agreement;

      (f)  Qualify the Securities being publicly offered for listing on
           the New York Stock Exchange, the Frankfurt Stock Exchange and/or on
           any other exchange or quotation system on which the Company's
           securities are then listed or quoted;

      (g)  For a reasonable period prior to the filing of any such
           Registration Statement and throughout the registration and sale
           process, subject to the execution by PRH and the Underwriters and
           their respective legal counsel of an appropriate confidentiality
           agreement in favor of the Company, assist  PRH, its advisors,
           Underwriters and counsel to the extent such persons reasonably deem
           necessary to avoid potential liability to such persons under the
           U.S. securities laws or any

                                       12
<PAGE>   13


          other applicable securities laws or regulations in the context of an
          offering, qualification or listing of the Securities;

     (h)  Cause its officers, directors, employees, counsel and accountants to
          respond to any inquiries, as shall be reasonably necessary, in the
          judgment of the underwriters and their advisors, to conduct a
          reasonable due diligence of the business of the Company;

     (i)  Cause its senior management to be available for and participate in
          international road shows and other marketing activities and otherwise
          provide reasonable assistance to the underwriters as shall be
          reasonably necessary in the judgment of the underwriters;

     (j)  Otherwise use its best efforts to comply with all applicable rules and
          regulations of the applicable securities regulatory authority(ies);

     (k)  Deliver promptly to counsel to PRH and each underwriter, if any,
          participating in the offering of the Securities, copies of all
          correspondence between the applicable securities regulatory
          authority(ies) and the Company, its counsel or auditors;

     (l)  In the case of a registration of Securities in the United States,
          obtain the withdrawal of any order suspending the effectiveness of the
          registration statement; and

     (m)  Provide a CUSIP number or other recognized securities identification
          number for all Securities in a timely manner.

7.   INDEMNIFICATION

     In the case of any offering which includes a public offering registered in
     the United States, and without limitation on the terms of paragraphs 2.2 or
     3.2 hereof:


                                       13
<PAGE>   14

      (a)  the Company will indemnify PRH, each of its officers, directors and
           partners, and each person controlling PRH, within the meaning of
           Section 15 of the Securities Act, with respect to which such
           registration, qualification or listing has been effected pursuant
           to this Agreement, and each underwriter (as defined in the
           Securities Act), if any, and each person who controls any
           underwriter, against all claims, losses, expenses, damages and
           liabilities (or actions in respect thereto), including any of the
           foregoing incurred in settlement of any litigation or proceeding,
           commenced or threatened arising out of or based on any untrue
           statement (or alleged untrue statement) of a material fact
           contained in any prospectus, listing particulars, offering circular
           or other document (including any related registration statement,
           notification or the like) incident to any such registration,
           qualification or listing, or based on any omission (or alleged
           omission) to state therein a material fact required to be stated
           therein or necessary to make the statements therein not misleading,
           or any violation by the Company of any rule or regulation
           promulgated under the Securities Act or any state securities law
           applicable to the Company and relating to action or inaction
           required of the Company in connection with any such registration,
           qualification or listing, and will reimburse PRH, each of its
           officers, directors and partners, and each person controlling PRH,
           within the meaning of Section 15 of the Securities Act, each such
           underwriter and each person who controls any such underwriter, for
           any reasonable legal and any other expenses incurred in connection
           with investigating, defending or settling any such claim, loss,
           damage, liability or action, provided that the Company will not be
           liable in any such case to the extent that any such claim,

                                       14
<PAGE>   15


           loss, damage or liability arises out of or is based on any untrue
           statement or omission based upon written information furnished to
           the Company in an instrument duly executed by PRH or any
           underwriter specifically for use therein; and provided further that
           the agreement of the Company to indemnify any underwriter and any
           person who controls such underwriter contained herein with respect
           to any such preliminary prospectus, listing particulars, offering
           circular or other document shall not inure to the benefit of any
           underwriter from whom the person asserting any such claim, loss,
           damage, liability or action purchased the stock which is the
           subject thereof, if at or prior to the written confirmation of the
           sale of such stock, a copy of the prospectus, listing particulars,
           offering circular or other document (including as amended or
           supplemented), excluding the documents incorporated therein by
           reference, was not sent or delivered to such person, and the untrue
           statement or omission of a material fact contained in such
           preliminary prospectus, listing particulars, offering circular or
           other document was corrected in the prospectus, listing
           particulars, offering circular or other document (including as
           amended or supplemented);

      (b)  PRH will, if Securities held by or issuable to PRH are
           included in the securities as to which such registration,
           qualification or listing is being effected, indemnify the Company,
           each of its directors and officers, each underwriter as defined in
           the Securities Act, if any, of the Company's securities and each
           person who controls the Company within the meaning of the Securities
           Act, against all claims, losses, expenses, damages and liabilities
           (or actions in respect thereto), including any of the foregoing
           incurred in settlement of any litigation or proceedings, commenced
           or threatened arising out of or based on any untrue statement (or
           alleged untrue statement) of a material fact contained in any
           prospectus, listing particulars offering circular or other document,
           (including any related registration statement, notification or the
           like) incident to any such registration, qualification or listing,
           or any omission (or alleged omission) to state therein a material
           fact required to be stated therein or necessary to make the
           statements therein not misleading, and will reimburse the Company,
           each of its officers and directors and each person who controls the
           Company within the meaning of the Securities Act and such
           underwriters for any reasonable legal or any other expenses incurred
           in connection with investigating, defending or settling any such
           claim, loss, damage, liability or action, in each case to the
           extent, but only to the extent, that such untrue statement (or
           alleged untrue statement) or omission (or alleged omission) is made
           in such prospectus, listing particulars offering circular or other
           document, registration statement, notification or the like in
           reliance upon and in conformity with written

                                       15
<PAGE>   16


           information furnished to the Company by an instrument duly executed
           by PRH specifically for use therein; and provided further that the
           agreement of PRH to indemnify any underwriter and any person who
           controls such underwriter contained herein with respect to any such
           preliminary prospectus, listing particulars, offering circular or
           other document shall not inure to the benefit of any underwriter from
           whom the person asserting any such claim, loss, damage, liability or
           action purchased the stock which is the subject thereof, if at or
           prior to the written confirmation of the sale of such stock, a copy
           of the prospectus, listing particulars, offering circular or other
           document (including as amended or supplemented), excluding the
           documents incorporated therein by reference, was not sent or
           delivered to such person, and the untrue statement or omission of a
           material fact contained in such preliminary prospectus, listing
           particulars, offering circular or other document was corrected in the
           prospectus, listing particulars, offering circular or other document
           (including as amended or supplemented).  Notwithstanding the
           foregoing, the total amount for which PRH shall be liable under this
           paragraph 7(b) shall not in any event exceed the aggregate proceeds
           received by PRH from the sale of Securities held by PRH in such
           registration; and

      (c)  each party entitled to indemnification under this paragraph 7 (the
           "Indemnified Party") shall give notice to the party required to
           provide indemnification (the "Indemnifying Party") promptly after
           such Indemnified Party has actual knowledge of any claim as to which
           indemnity may be sought, and shall permit the Indemnifying Party to
           assume the defense of any such claim or any litigation resulting
           therefrom, provided that counsel for the Indemnifying Party, who
           shall conduct the defense of such claim or litigation, shall be
           approved by the Indemnified Party (whose approval shall not be
           unreasonably withheld), and the Indemnified Party may participate in
           such defense at such party's expense, and provided further that the
           failure of any Indemnified Party to give notice as provided herein
           shall not relieve the Indemnifying Party of its obligations
           hereunder, unless such failure resulted in actual detriment to the
           Indemnifying Party.  No Indemnifying Party, in the defense of any
           such claim or litigation,

                                       16
<PAGE>   17


          shall, except with the consent of each Indemnified Party, consent to
          entry of any judgment or enter into any settlement which does not
          include as an unconditional term thereof the giving by the claimant or
          plaintiff to such Indemnified Party of a release from all liability in
          respect to such claim or litigation.

8.   CONTRIBUTION

     In the case of any offering which includes a public offering registered in
     the United States, and without limitation on the terms of paragraphs 2.2 or
     3.2 hereof, if the indemnification provided for in paragraph 7 is held by a
     court of competent jurisdiction to be unavailable to an Indemnified Party
     with respect to any loss, liability, claim, damage or expense referred to
     therein, the Indemnifying Party, in lieu of indemnifying such Indemnified
     Party thereunder, shall contribute to the amount paid or payable by such
     Indemnified Party as a result of such loss, liability, claim, damage or
     expense in such proportion as is appropriate to reflect the relative fault
     of the Indemnifying Party on the one hand and of the Indemnified Party on
     the other in connection with the statements or omissions which resulted in
     such loss, liability, claim, damage or expense as well as any other
     relevant equitable considerations.  The relative fault of the Indemnifying
     Party and of the Indemnified Party shall be determined by reference to,
     among other things, whether the untrue or alleged untrue statement of a
     material fact or the omission or alleged omission to state a material fact
     relates to information supplied by the Indemnifying Party or by the
     Indemnified Party and the parties' relative intent, knowledge, access to
     information and opportunity to correct or prevent such statement or
     omission.

9.   INFORMATION BY PRH

     PRH shall promptly furnish to the Company such information regarding PRH
     and the distribution proposed by PRH as the Company may reasonably request
     in writing and as shall be required in connection with any registration,
     qualification or listing referred to herein.


                                       17
<PAGE>   18

10.  RULE 144 REPORTING

     With a view to making available to PRH the benefits of certain rules and
     regulations of the Commission which may permit the sale of the Securities
     to the public without registration, the Company agrees at all times after
     it becomes subject to the reporting requirements of the Commission under
     the United States Securities Exchange Act of 1934, as amended (the
     "Exchange Act"), to:

     (a)  make and keep public information available as those terms are
          understood and defined in Rule 144 under the Securities Act;

     (b)  use its best efforts to file with the Commission in a timely manner
          all reports and other documents required of the Company under the
          Securities Act and the Exchange Act;

     (c)  so long as PRH owns any Securities, to furnish to PRH forthwith upon
          request a written statement by the Company as to its compliance with
          the reporting requirements of said Rule 144 and of the Exchange Act, a
          copy of the most recent annual or quarterly report of the Company, and
          such other reports and documents so filed by the Company as PRH may
          reasonably request in complying with any rule or regulation or the
          Commission allowing PRH to sell any such securities without
          registration; and

     (d)  to take whatever actions are necessary in order for it to qualify to
          use Form S-2 (or F-2) or S-3 (or F-3), or any form subsequently
          adopted by the Commission to take the place of Form S-2 (or F-2) or
          S-3 (or F-3) which does not require substantially more disclosure than
          the form which it replaces.

                                       18
<PAGE>   19

11.  TRANSFER OF OFFERING RIGHTS

     PRH's rights to cause the Company to register, qualify or list its
     securities and keep information available, granted to it by the Company
     under paragraphs 2, 3, 4 and 10, may be assigned to a transferee or
     assignee who, in a transaction not including a public offering, (i)
     receives Securities representing not less than five percent (5%) of the
     class of ordinary shares of which the Securities form a part, or (ii) is a
     wholly owned subsidiary or parent of, or any corporation or entity which is
     (within the meaning of the Securities Act) controlling, controlled by or
     under common control with PRH.  Any transfer or assignment permitted by the
     foregoing sentence shall be effective as long as (i) the Company is given
     written notice by PRH at the time of or within a reasonable time after said
     transfer, stating the name and address of said transferee or assignee and
     identifying the securities with respect to which such offering rights are
     being assigned and (ii) such transferee agrees to be bound by the terms and
     conditions of this Agreement, treating for such purposes references herein
     to PRH as being references to such transferee, the Company hereby
     acknowledging that upon any such permitted transfer any such transferee
     shall have the rights of PRH hereunder.  In the event that PRH transfers
     less than all of its Securities, the number of demand rights pursuant to
     paragraphs 2 and 4 hereof will be unchanged, and it will be the obligation
     of PRH and its transferee or transferees to apportion such demand rights
     among themselves, provided that to the extent PRH and one or more of its
     transferees shall jointly exercise a demand right pursuant to paragraphs 2
     or 4 hereof in respect of all or a portion of their respective Securities,
     that demand shall be deemed to be a single demand for purposes hereof.

12.  WAIVERS AND AMENDMENTS

     With the written consent of either party to this Agreement, the obligations
     of the other party may be waived (either generally or in a particular
     instance, either retroactively or prospectively, and either for a specified
     period of time or indefinitely), and the terms of this Agreement may be
     amended in a writing signed by both parties.

13.  REMEDIES

                                       19
<PAGE>   20


     Each of the Company and PRH agrees to indemnify the other party and to hold
     the other party harmless from and against any and all losses, costs and
     expenses (including, without limitation, legal and other expenses) arising
     out of or relating to any breach of any term of this Agreement by the other
     party.

14.  GOVERNING LAW; JURISDICTION

     This Agreement shall be governed in all respects by the laws of the State
     of New York as such laws are applied to agreements between New York
     residents entered into and to be performed entirely within New York.

     The parties submit to the non-exclusive jurisdiction of the Courts of the
     State of New York or of United States courts sitting in the State of New
     York in respect of any dispute arising out of the subject matter of this
     Agreement.

15.  SUCCESSORS AND ASSIGNS

     Except as otherwise expressly provided herein, the provisions hereof shall
     inure to the benefit of, and be binding upon, the successors, assigns,
     heirs, executors and administrators of the parties hereto.

16.  ENTIRE AGREEMENT

     This Agreement and the other documents delivered pursuant hereto constitute
     the full and entire understanding and agreement between the parties with
     regard to the subjects hereof and thereof, and this Agreement shall
     supersede and cancel all prior agreements between the parties hereto with
     regard to the subject matter hereof.

17.  NOTICES, ETC.

     All notices and other communications required or permitted hereunder shall
     be in writing

                                       20
<PAGE>   21


     and shall be mailed by either first class mail, postage prepaid, certified
     or registered mail, return receipt requested, or overnight courier service
     addressed (a) if to PRH, at such address as PRH shall have furnished to the
     Company in writing, and (b) if to the Company, at such address as the
     Company shall have furnished to PRH in writing.

18.  SEVERABILITY

     If any provision of this Agreement, or the application thereof, shall for
     any reason and to any extent be invalid or unenforceable, the remainder of
     this Agreement and application of such provision to persons or
     circumstances shall be interpreted so as best to reasonably effect the
     intent of the parties hereto.  The parties further agree to replace such
     void or unenforceable provision of this Agreement with a valid and
     enforceable provision which will achieve, to the extent possible, the
     economic, business and other purposes of the void or unenforceable
     provision.

19.  TITLES AND SUBTITLES

     The titles of the paragraphs and subparagraphs of this Agreement are for
     convenience of reference only and are not to be considered in construing
     this Agreement.

20.  COUNTERPARTS

     This Agreement may be executed in any number of counterparts, each of which
     shall be an original, but all of which together shall constitute one
     instrument.

21.  TERMINATION

     Except as provided herein, this Agreement will terminate on the date three
     months after the shareholding of PRH (together with its "affiliates") in
     the Company is reduced to below ten percent (10%), provided that the
     Company provides PRH with an opinion of independent United States
     securities counsel reasonably satisfactory to PRH that PRH

                                       21
<PAGE>   22


      (together with its "affiliates") is not then an "affiliate" of the
      Company, as such term is defined under the Securities Act.
      Notwithstanding the foregoing, for so long as the shareholding of PRH in
      the Company equals or exceeds five percent (5%), the Company shall
      provide to PRH the assistance in effecting sales of the Securities which
      is described in paragraph 6(i) subject to the same limitations set out in
      paragraph 4, treating any offering in respect of which such assistance is
      provided as being a registration within the terms of such paragraph 4.

                                       22
<PAGE>   23



     IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement on the date first above written.



                              CELANESE AG



                              By:
                                 ---------------------------------------


                              Title:
                                    ------------------------------------



                              PETROCHEMICAL RESOURCES HOLDINGS B.V.




                              By:
                                 ---------------------------------------


                              Title:
                                    ------------------------------------


                                       23

<PAGE>   1
                                                                 Exhibit 23.1




                              Accountants' Consent


The Management Board
Celanese AG:


We consent to the use of our report in the registration statement on Form F-1
of Celanese AG included herein and to the reference to our firm under the
heading "Experts" in the prospectus.



                                        /s/ KPMG Deutsche Treuhand-
                                        Gesellschaft Aktiengesellschaft
                                        Wirtschaftsprufungsgesesellschaft

Frankfurt am Main, Germany
October 22, 1999



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