Definitive Merger Agreement w/ Chemring Group PLC

VIENNA, Virginia, January 19, 2010 - The Allied Defense Goup, Inc. (NYSE Amex: ADG) announced that it has signed a definitive merger agreement with Chemring Group PLX (LSE: CHR). Chemring has agreed to acquire The Allied Defense Group in an all-cash transaction valued at $7.25 per share, a premium of 54% over the closing price on January 15, 2010. The close of the transaction, which is subject to regulatory filing periods and shareholder approval, is expected within 90 days.

Major General (Ret) John J. Marcello, President and Chief Executive Officer of The Allies Defense Group said, "We are delighted to have our ammunition manufacturing companies join the Chemring Group. Operating as subsidiaries of a larger ammunition production organization will open far more opportunities than were available to them in a much smaller organization. The financial resources brought by Chemring will also benefit our customers and suppliers."

Added Marcello, "Our decision to streamline our operations and focus on core competencies strengthened our market share in the global ammunition market and made The Allied Defense Group an attractive acquisition for Chemring. This propose transaction is the culmination of our Board's exploration of strategic alternatives designed to maximize shareholder value. We are confident this is the right decision for our shareholders, employees and customers."

Dr. David Price, Chief Executive of Chemring added, "The acquisition of The Allied Defense Group will significantly enhance our business within the global ammunition and ammunition-related service markets. It provides a complementary range of products and manufacturing technologies and increases the strength of our product engineering capabilities. I am confident that the combined business will provide a strong platform for growth and create a world leader in these markets."

The Board of Directors of The Allied Defense Group voted unanimously to adopt and approve the merger agreement and recommend that the shareholders of Allied Defense Group stock vote in favor of the transaction.

About Chemring Group

Chemring Group PLC is a global defense business listed on the London Stock Exchange with a market capitalization of about £1 billion ($1.6 billion). Chemring specializes in the manufacture of energetic material products, providing solutions for highly demanding requirements in the Pyrotechnics, Explosive Ordnance Disposal, Munitions and Countermeasures markets. The Group is build on a hundred-year history of innovation and development and now employs over 3500 people in the UK, US, France, Germany, Italy, Norway, Spain and Australia. For more information, please visit the Company website: www.chemring.co.uk