SEC FORM 3

SEC Form 3

FORM 3

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

OMB APPROVAL

OMB Number:			3235-0104
Estimated average burden
hours per response:			0.5

1. Name and Address of Reporting Person^*

DANFOSS A/S

(Last)

(First)

(Middle)

NORDBORGVEJ 81

(Street)

6430 NORDBORG

(City)

(State)

(Zip)

2. Date of Event Requiring Statement (Month/Day/Year)
07/11/2008

3. Issuer Name and Ticker or Trading Symbol
SAUER DANFOSS INC [ SHS ]

4. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

Director	X	10% Owner
Officer (give title below)		Other (specify below)

5. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Beneficially Owned
1. Title of Security (Instr. 4)	2. Amount of Securities Beneficially Owned (Instr. 4)	3. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	4. Nature of Indirect Beneficial Ownership (Instr. 5)
Common Stock, par value $0.01 per share	8,358,561⁽¹⁾	D
Common Stock, par value $0.01 per share	18,241,962	I	By Danfoss Murmann Holding A/S⁽²⁾

Table II - Derivative Securities Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 4)	2. Date Exercisable and Expiration Date (Month/Day/Year)		3. Title and Amount of Securities Underlying Derivative Security (Instr. 4)		4. Conversion or Exercise Price of Derivative Security	5. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	6. Nature of Indirect Beneficial Ownership (Instr. 5)
1. Title of Derivative Security (Instr. 4)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	4. Conversion or Exercise Price of Derivative Security	5. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	6. Nature of Indirect Beneficial Ownership (Instr. 5)
Call option (right to buy)⁽³⁾	07/11/2008	07/11/2015⁽⁴⁾	Common Stock	10,029,264	$49.45⁽⁵⁾	D
Put option (obligation to buy)⁽⁶⁾	07/11/2008	07/11/2015⁽⁴⁾	Common Stock	10,029,264	$29.67⁽⁷⁾	D

Explanation of Responses:

1. The Reporting Person has become a 10% stockholder of the Issuer as a result of its acquisition from Sauer Holding GmbH, a limited liability company organized under the laws of Germany ("Sauer"), on July 11, 2008, of (i) 8,358,561 shares of the Issuer's Common Stock and (ii) all of Sauer's holdings of issued and outstanding shares of stock of Danfoss Murmann Holding A/S (the "Holding Company"), which holds an additional 18,241962 shares of the Issuer's Common Stock, pursuant to that certain Share Purchase Agreement, dated as of March 10, 2008, by and between the Reporting Person and Sauer.

2. Danfoss Murmann Holding A/S, a corporation organized under the laws of Denmark, is a wholly owned subsidiary of the Reporting Person.

3. Under that certain Stockholders Agreement, dated as of July 11, 2008, by and between the Reporting Person and Sauer (the "Stockholders Agreement"), the Reporting Person has the right to acquire (via exercise of a call option) 10,029,264 shares of the Issuer's Common Stock (the "Sauer Shares") from Sauer in two equal stages of 5,014,632 shares each, during the 21 day periods starting on August 1 and running until August 21 following the delivery of the Issuer's audited financial statements to Sauer for the Issuer's 2009 and 2011 fiscal years, respectively (the "Exercise Windows"). The Reporting Person may accelerate its exercise of the call option at any time to acquire the Sauer Shares subject thereto.

4. The Stockholders Agreement (and, hence, the call option and put options described therein) terminate on the earlier of: (i) the seventh anniversary of the date thereof and (ii) such time as Sauer has sold all of the Sauer Shares and no longer beneficially owns any shares of the Issuer's Common Stock.

5. The exercise price for the call option will be determined based on the operating income of, and adjusted with respect to the net debt level of, the Issuer in the Issuer's 2009 and 2011 fiscal years, respectively, but will be set within the range of $29.67 and $49.45 per share, subject to adjustment as a result of stock splits and other similar transactions involving the Issuer's Common Stock. In the event of an accelerated exercise of the call option by the Reporting Person, the exercise price will be $49.45 per share, subject to adjustment as a result of stock splits and other similar transactions.

6. Under the Stockholders Agreement, the Reporting Person has granted to Sauer the right to sell to the Reporting Person, via Sauer's exercise of a put option, the Sauer Shares, in two equal stages of 5,014,632 shares each during the Exercise Windows. Sauer may accelerate its exercise of the put option upon notice from the Reporting Person that the Reporting Person has approved a merger transaction that would result in the extinguishment or exchange of the Issuer's Common Stock for securities of a successor entity (but not cash consideration).

7. The exercise price for the put option will be determined based on the operating income of, and adjusted with respect to the net debt level of, the Issuer in the Issuer's 2009 and 2011 fiscal years, respectively, but will be set within the range of $29.67 and $49.45 per share, subject to adjustment as a result of stock splits and other similar transactions involving the Issuer's Common Stock. In the event of an accelerated exercise of the put option by Sauer, the Reporting Person will be obligated to purchase the Sauer Shares subject thereto at a price of $29.67 or $39.56 per share (depending on the identity of the third party entity involved in the transaction giving rise to Sauer's acceleration right), subject to adjustment as a result of stock splits and other similar transactions.

Remarks:

Name of Additional Reporting Person: Danfoss Murmann Holding A/S Address of Additional Reporting Person: Nordborgvej 81 6430 Nordborg, Denmark

	Danfoss A/S By: /s/ Jorgen M. Clausen, President & CEO, Danfoss A/S By: /s/ Niels B. Christiansen, Vice CEO, Danfoss Murmann Holding A/S By: /s/ Jorgen M. Clausen, President & CEO, Danfoss Murmann Holding A/S By: /s/ Hans Kirk, Board Member	07/11/2008
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 5 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB Number.