European Commission Approves Merger of Axalto-Gemplus

European Commission Approves Merger of Axalto-Gemplus

May 22, 2006

    AMSTERDAM, Netherlands and LUXEMBOURG, May 22
/Xinhua-PRNewswire/ -- Axalto Holding N.V. (Euronext:
NL0000400653 - AXL) and Gemplus International S.A.
(Euronext: LU0121706294 - GEM and Nasdaq: GEMP) announce
today that the European Commission has cleared the proposed
Axalto and Gemplus combination under the EU merger
regulation, with specific undertakings. This step
constitutes satisfaction of an important condition
precedent to the proposed combination of the companies
anticipated to occur upon the parties' satisfying the
remaining conditions under their contractual agreements.

    Axalto and Gemplus have committed to maintain their
current business practices of patent licensing and making
available to card competitors the interoperability
information for Over The Air (OTA) SIM card
administration.

    Olivier Piou, Chief Executive Officer of Axalto,
comments: "We are extremely pleased to see that the
very comprehensive investigation conducted by the European
authorities has led the Commission to approve the merger,
and to conclude that the Axalto-Gemplus transaction would
not harm the competitive environment. We are all really
eager to start operating as the new company, Gemalto, as
soon as the remaining conditions and practical matters per
the contract have been satisfied." 

    Alex Mandl, Chief Executive Officer of Gemplus, adds:
"The conditions to this clearance are consistent with
longstanding industry practices and will benefit the
continuing growth of our industry. We look forward to the
bright future of Gemalto as a new leader in digital
security."

    The shareholders and Boards of Directors of both
companies have already approved the transaction. The US
antitrust authorities have not raised objections to the
transaction.

    The European Commission clearance constitutes
satisfaction of the final antitrust condition for the
contribution of Texas Pacific Group and the Quandt family
entities shareholdings in Gemplus to Axalto. As previously
announced, this contribution in kind will be followed by a
voluntary offer by Axalto to all remaining Gemplus
shareholders at the same exchange ratio, subject to
regulatory approvals. 

    Important information

    Investors and security holders are strongly advised to
read, when they become available, the prospectus/offer to
exchange and related exchange offer materials regarding the
business combination transaction referenced in this press
release, as well as any amendments and supplements to those
documents because they will contain important information.
When available, the prospectus/offer to exchange and the
other documents may also be obtained from Axalto Investor
Relations.  If required, the prospectus/offer to exchange
will be filed with the Securities and Exchange Commission
by Axalto. To the extent the prospectus/offer to exchange
is filed with the Securities and Exchange Commission
("SEC"), security holders may obtain a free copy
of the prospectus/offer to exchange (when available) and
other related documents filed by Axalto at the Commission's
website at http://www.sec.gov .   Investors and security
holders who are US persons or who are located in the United
States should also read any solicitation/recommendation
statement of Gemplus on Schedule 14D-9 when and if filed by
Gemplus with the SEC because it will contain important
information. The solicitation/recommendation statement and
other public filings made from time to time by Gemplus with
the SEC are available without charge from the SEC's website
at http://www.sec.gov .  This document, if issued, will
also be available for inspection and copying at the public
reference room maintained by the SEC at 100 F Street, N.E.,
Washington, D.C. 20549, United States. For further
information about the public reference room, call the SEC
at [phone].  In France, holders of Gemplus
securities are requested, with respect to the offer, to
refer, when filed by Axalto, to the prospectus (note
d'information) that will be available on the website of the
AMF ( http://www.amf-france.org ).  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 or an offer to sell or exchange or the
solicitation of an offer to buy or exchange any securities
of Gemplus, nor shall there be any sale or exchange of
securities in any jurisdiction in which such offer,
solicitation, sale or exchange would be unlawful prior to
the registration or qualification form the laws of such
jurisdiction.  Accordingly, persons who come into
possession of this document should inform themselves of and
observe these restrictions.  The solicitation of offers to
buy any Gemplus ordinary shares (including Gemplus shares
represented by Gemplus American Depositary Shares) in the
United States will only be made pursuant to a
prospectus/offer to exchange and related offer materials
that Axalto expects to send to holders of Gemplus
securities, in accordance with or pursuant to an exemption
from the U.S. securities laws.   Unless otherwise
determined by Axalto, it is not intended that any offer
will be made, directly or indirectly, in or into Australia,
Canada or Japan and in such circumstances it will not be
capable of acceptance in or from Australia, Canada or
Japan. Accordingly, copies of this announcement are not
being, and must not be, mailed or otherwise distributed or
sent in or into Australia, Canada or Japan. Custodians,
nominees and trustees should observe these restrictions and
should not send or distribute this announcement in or into
Australia, Canada or Japan.  

    For more information, please contact:

    Axalto:

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

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

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

    Gemplus:

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

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

SOURCE  Gemplus International S.A.