Creation of Gemalto and Launch of the Public Exchange Offer for Gemplus Shares

Creation of Gemalto and Launch of the Public Exchange Offer for Gemplus Shares

June 05, 2006

Gemalto Becomes Operational With This New Step in the Combination ofAxalto and Gemplus
- Not for distribution in Australia, Canada and Japan -

    AMSTERDAM, Netherlands and LUXEMBOURG, June 5
/Xinhua-PRNewswire/ -- Axalto (Euronext NL0000400653 AXL)
and Gemplus International S.A. (Euronext: LU0121706294 -
GEM and Nasdaq: GEMP) announce that the contribution in
kind to Axalto of the interests in Gemplus of TPG and the
Quandt family entities, 25.2% and 18.3% respectively, in
aggregate 43.4% of Gemplus share capital, has been
completed today on the basis of an exchange ratio of 2
Axalto shares for every 25 Gemplus shares. Prior to the
contribution in kind, Gemplus had initiated the
distribution of EUR 0.26 per share to all its shareholders
of record as at today's market close.

    Further to these actions, Axalto changed its name to
Gemalto. This transaction represents the creation of a new
world leader in digital security, with 2005 pro forma
revenues of approximately EUR1.7 billion (US$ 2.2 billion),
operations in 120 countries, large operational centers in
the Paris and Marseille areas, and 11,000 employees
including 1,500 R&D engineers.

    Gemalto will launch a voluntary public exchange offer
for the remaining Gemplus shares at the same exchange ratio
of 2 Gemalto shares for every 25 Gemplus shares. An offering
circular for the offer has been filed with the French stock
market authority, the "Autorite des Marches
Financiers" in Paris. The Board of Directors of
Gemplus has recommended that Gemplus shareholders tender
their shares to the public exchange offer.

    After further review, Axalto and Gemplus have
reconfirmed their initial estimate of the synergies arising
from this transaction, expected to amount to EUR85 million
(US$100 million) per year on a fully-phased basis. This
represents almost 70% of Gemalto's pro forma 2005 operating
income.

    Axalto and Gemplus have worked together since the
merger announcement in December 2005 to develop a detailed,
structured program to allow a rapid and efficient
integration process. In particular, the companies are ready
to operate immediately under a single brand, have defined a
joint customer-facing sales team and elaborated a
go-to-market strategy aiming to minimize possible sales
attrition. Consistent with this program, purchasing is
ready to be pooled as from day one, with significant
positive effects expected in the first quarters following
the completion of the contribution in kind. The first two
levels of management of Gemalto have already been announced
and become effective immediately, concerning over 150
executives from Axalto and Gemplus, and the next level of
management will be announced in the coming days. A full
review of the Gemalto cross-functional business and
supporting processes is expected to be completed before the
end of the third quarter of 2006.

    Olivier Piou, CEO of Gemalto commented: "This is a
very special day for us. Gemalto represents a true merger of
equals, a meeting of minds and people dedicated to building
a world-class leader in digital security. Our unique
combination creates a compelling platform to capture future
industry growth, one that will benefit our clients, our
employees and our shareholders. Each and every one of us is
now fully focused on delivering on Gemalto's vision and
ambition."

    Alex Mandl, Gemalto's Executive Chairman said: "A
major priority of the Board and management of Gemalto will
be to achieve the successful and rapid integration of the
two companies that preserves the key strengths of the
culture, management and business practices of each and
allows the efficient realization of the expected
synergies."

    A conference call will take place today at 3:30 PM
Paris time (2:30 PM GMT and 9:30 AM New York time) in
English only. Dial-in:
    
    France :    [phone]
    UK :        [phone]
    US :        [phone]

    A replay will be available at the following numbers,
its access code is
1524342# :

    
    France :    [phone]
    UK :        [phone]
    US :       [phone]

    Important Information

    This communication does not constitute an offer to
purchase or exchange or the solicitation of an offer to
sell or exchange any securities of Axalto Holding N.V.
("Axalto") or an offer to sell or exchange or the
solicitation of an offer to buy or exchange any securities
of Gemplus International S.A. ("Gemplus").

    The exchange offer described above will not be made,
directly or indirectly, in or into Australia, Canada or
Japan or in or into any other jurisdiction in which such
offer, solicitation, sale or exchange would be unlawful
prior to the registration or qualification under the laws
of such jurisdiction. Accordingly, persons who come into
possession of this communication should inform themselves
of and observe these restrictions.
    Holders of Gemplus securities in France are requested
to refer, if and when filed by Axalto, to the prospectus
(note d'information) that would be available on the website
of the AMF ( http://www.amf-france.org ).

    Notice to US investors

    Any solicitation of offers to buy any Gemplus shares in
the United States in the exchange offer will only be made
pursuant to a prospectus/offer to exchange and related
offer materials that Axalto expects to make available to
holders of Gemplus securities. Investors and security
holders are strongly advised to read, when they become
available, the prospectus/offer to exchange and related
exchange offer materials, as well as any amendments and
supplements to those documents because they will contain
important information.

    The Axalto securities referred to herein that will be
issued in connection with the exchange offer have not been,
and are not intended to be, registered under the U.S.
Securities Act of 1933 (the "Securities Act") and
may not be offered or sold, directly or indirectly, into the
United States except pursuant to an applicable exemption.
The Axalto securities are intended to be made available
within the United States in connection with the exchange
offer pursuant to an exemption from the registration
requirements of the Securities Act.

    The exchange offer will relate to the securities of a
non-U.S. company and will be subject to disclosure
requirements of a foreign country that are different from
those of the United States. Financial statements included
in the prospectus/offer to exchange will be prepared in
accordance with foreign accounting standards that may not
be comparable to the financial statements of United States
companies.

    It may be difficult for you to enforce your rights and
any claim you may have arising under U.S. federal
securities laws, since Axalto and Gemplus have their
corporate headquarters outside of the United States, and
some or all of their officers and directors may be
residents of foreign countries. You may not be able to sue
a foreign company or its officers or directors in a foreign
court for violations of the U.S. securities laws. It may be
difficult to compel a foreign company and its affiliates to
subject themselves to a U.S. court's judgment.

    For more information, please contact:

     Corporate Media Relations, 
     Emmanuelle SABY
     Mobile: [phone]
     Email:  [e-mail]

     Senior Vice-President, 
     Corporate Communications Remi CALVET
     Mobile: [phone]
     Email:  [e-mail]

     Investor Relations, 
     Stephane BISSEUIL
     Tel:    [phone]
     Mobile: [phone]
     Email:  [e-mail]

     TBWA \ CORPORATE, 
     Emlyn KORENGOLD 
     Tel:    [phone]
     Mobile: [phone]
     Email:  [e-mail]

     Edelman Paris, 
     Frederic BOULLARD
     Tel:    [phone]
     [e-mail] 

SOURCE  Gemalto