Atmel: Proposed sale of SMS Business to Inside Contactless

As part of the proposed transaction, Atmel would make a minority equity investment in Inside. In addition, Inside would enter into a multi-year supply agreement to continue sourcing wafers from the fabrication operation in Rousset, France that Atmel recently agreed to sell to LFoundry GmbH. Atmel is presenting Inside's offer to the members of the Works Council in Rousset today. After completion of the information and consultation process with the Rousset Works Council in accordance with French law, Atmel will seek authorisation from its Board of Directors to enter into the purchase agreement with Inside, with the transaction expected to close in the second half of 2010, subject to certain closing conditions. Today's announcement is part of Atmel's pursuit of strategic alternatives for its ASIC business and related manufacturing assets, and follows the agreement to sell Atmel's wafer fabrication operation in Rousset, France, to LFoundry GmbH, which is expected to close during the second quarter of 2010. Financial terms of the proposed Inside transaction and separate minority equity investment in Inside were not disclosed.