The Allied Defense Group, Inc. (AMEX:ADG) today announced that it has entered into a definitive agreement to sell its Marshall, Texas, subsidiary, Titan Dynamics Systems, Inc, to Chemring Group PLC in a transaction valued at $4.75 million. Chemring is a specialist manufacturer of decoy countermeasures and energetic materials for the global defense, security and safety markets. The sale is expected to close by the end of February following receipt of regulatory approvals.

Major General (Ret) John J. Marcello, President and Chief Executive Officer of The Allied Defense Group said, "We are very pleased to announce the Company has agreed to sell another non-strategic asset. Divesting Titan will reduce our capital requirements and allow us to allocate and focus our capital on our core businesses. We believe the change in Titan's ownership will be beneficial to both parties.

"In the last six months, we have been pleased to announce the execution of several important accomplishments, including the receipt of major contracts, the disposition of non-strategic assets, the penetration of new markets, the formation of new business alliances, and the resolution of the liquidity challenges we faced in 2007. This transaction represents another step towards the execution of our ongoing business plan, which includes eliminating non- strategic operations and delivering enhanced, long-term value to our shareholders," concluded Major General Marcello.

About The Allied Defense Group, Inc.

The Allied Defense Group, Inc. is a diversified international defense and security firm which: develops and produces conventional medium caliber ammunition marketed to defense departments worldwide; designs, produces and markets sophisticated microwave security systems; and manufactures battlefield effects simulators and other training devices for the military. For more Information, please visit the Company web site: www.allieddefensegroup.com.