FREMONT, Calif., CORNING, N.Y., and PARIS, May 12 -- Avanex will acquire Alcatel's and Corning's optical components businesses in combined transactions valued at approximately $63.5 million, based on Avanex's May 9, 2003 closing price of $1.12 per share, the companies announced today. The acquisitions will enable Avanex to offer products that address optical wavelength generation and modulation, multiplexing and demultiplexing, signal amplification, wavelength routing and dispersion compensation. Alcatel and Corning will assign approximately 1,400 patents to Avanex and license several thousand patents to Avanex as part of the transaction. Avanex estimates it will have over $250 million in cash and 1,600 employees on Sept. 30, the expected closing date. The boards of all three companies have approved the transaction. Alcatel and Corning will receive as consideration 28 percent and 17 percent, respectively, of Avanex's outstanding common stock of the post-transaction company -- about 35.2 and 21.4 million shares. Avanex will acquire all outstanding equity of Alcatel's optical components division, including key operations in France and the UK. Alcatel is expected to contribute over $110 million in cash, to be finalized at closing. Avanex and Alcatel will enter into a supply agreement in which Avanex will supply solutions for Alcatel's optical networking products over a three-year period. Assets to be purchased from Corning include optical amplifier, dispersion compensation and micro-optics operations located in New York and Corning modulator operations in Italy. Corning is expected to contribute over $20 million in cash, to be finalized at closing. Joseph A. Miller Jr., senior vice president and chief technology officer of Corning, is expected to join the Avanex board of directors. Alcatel's optical component division had sales of 7.3 million euros for its March 2003 quarter. The division's products include lasers, photodetectors, optical amplifiers, transponders and key passive devices, such as arrayed waveguide gratings and Fiber Bragg grating filters. Alcatel's optical component division had 950 employees as of March 31. The business lines to be acquired from Corning had sales of approximately $11 million for the March 2003 quarter. Key products from these business lines include optical amplifiers, dispersion compensation modules, lithium niobate and electro-absorptive modulators and micro optics products. These business lines had 490 employees as of March 31. For more information, visit: www.avanex.com