Avanex, Oplink in $303 Million Merger

The consolidation in the telecommunications sector has hit a new gear with fiber
optics networking firms Avanex Corp. and Oplink Corp. announcing a $303
million all-stock merger.

Under terms of the deal, Oplink shareholders would receive 0.405344 of a
share of Avanex common stock in exchange for each share of Oplink common
stock. After the merger, which is scheduled to close by June 30,2002,
shareholders of the Avanex and Oplink would each own 50 percent of the
combined entity.

Avanex, the Fremont, Calif.-based firm that provides optical communications
components called photonic processors, said the transaction is aimed at
providing “immediate opportunities for cost reductions while also providing
potential for incremental sales.”

Oplink, which maintains headquarters in San Jose, Calif. and facilities in
China, sells products that enable service providers and optical system
manufacturers to provide bandwidth to support the increase of data traffic
on the Internet. The company’s products are targeted to telecommunications
equipment providers worldwide.

Avanex president and CEO Paul Engle would assume the head honcho role in the
combined firm, which maintains the Avanex name. Chairman of Oplink’s board
of directors Joe Liu would serve as co-chairman of the combined company.

Fred Fromm, president and CEO of Oplink, will act as an advisor to the
company through the transition period and serve on the board of directors,
which would comprise of nine members: four current Avanex directors,
including Avanex’s CEO; four current Oplink directors, including Oplink’s
Chairman and current CEO; and a ninth independent to be elected by the board
of the new company.

The two sides expect the merger would generate net cost savings of
approximately $15 million in the first full year following completion of the
transaction.

UBS Warburg LLC served as financial advisor to Avanex while Credit Suisse
First Boston Corporation represented Oplink.

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