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PCB | December 19, 2006

Eltek-Nera merger approved

The Boards of Eltek ASA and Nera ASA have now approved the merger plan.

The Board of Nera believes the merger will improve the company's market position, turnover and financial results. The two companies have so far identified and quantified annual cost synergies of approximately NOK 120 million by 2007, in addition to other cost savings in both companies. The companies have also identified significant opportunities for increased sales as a result of the merger. Through the merger, Eltek and Nera see an opportunity to create a uniquely positioned, Norwegian and global telecom equipment and solutions supplier, with first-tier customers, leading engineering capabilities and low production costs. By leveraging on a larger resource pool, the new company will strengthen already leading positions within telecom power, transmission networks and mobile satellite communication. The exchange ratio is one Eltek share per 5.75 Nera-shares. Consideration will be 90 percent in Eltek-shares and 10 percent in cash, implying that one Nera-share equals 0.1565 Eltek-share plus NOK 1.3914 in cash. The cash element is based on the volume-weighted average Eltek share price 12 June - 23 June 2006. Settlement will take place immediately upon final completion of the transaction late October 2006. As a result of the transaction, the number of shares outstanding in Eltek will increase by 14.5 - 17.5 million. The number of shares in Eltek after the merger will be between 47-50 million, excluding outstanding share options in Eltek. Eltek's shareholding of 16.3 million Nera-shares (13.2%) and Nera's holding of 1.1 million own shares (0.9%) will not be compensated. Eltek is free to further increase its shareholding in Nera. The current CEO in Eltek, Mr Morten Angelil, will become CEO in the merged company. Eltek's CFO, Mr Jørgen Larsen, will retain this position also in the merged company. The new company will initially comprise the four business areas Eltek Energy, Nera Networks, Nera SatCom and Nera Telecommunications Ltd (50.1% owned, listed in Singapore). Knut Aven will become EVP Eltek Energy and Lars Jervan EVP Nera Networks, whereas Stig-Are Mogstad and Samuel Ang retain their positions as EVP Nera SatCom and CEO Nera Telecommunications Ltd., respectively. After the completion of the merger, the company will continue its efforts to identify and evaluate further structural changes within the four business areas. Divestments will also be considered if this may contribute to value creation for the shareholders. The Board of Directors in the new company will consist of Chairman Erik Thorsen (current Chairman of the Board of Eltek), Deputy Chairman Svein Ove Strømmen (current Chairman of the Board of Nera), Arve Johansen, William H. Crown, Susanne E. Munch Thore and Susan G. Swenson, in addition to employee representatives. Johansen and Crown are currently Board members in Eltek, whereas Munch Thore is Board member in Nera. Eltek and Nera will early July issue an Information Memorandum in connection with the transaction, and the two companies plan to host extraordinary general meetings on 10 August, 2006. The Corporate Assembly in Nera will issue a statement early July to the annual meeting regarding the merger. The transaction is estimated to be finalised late October, 2006.
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October 11 2019 3:09 pm V14.5.0-1