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Finland/August 16, 2003/--Electronic manufacturing services provider Flextronics International Ltd. has signed an agreement to acquire Microcell Group, a Finland-based original design manufacturer of wireless GSM, GPRS, and EDGE (Enhanced Data Rates for Global Systems for Mobile Communications Evolution) handset products.

The acquisition will strengthen Flextronics' mobile phone ODM capabilities by adding Microcell's competence in the GSM/GPRS/EDGE field. Microcell's operations include product creation centers in Finland and Denmark, administrative offices in Switzerland and USA, and a manufacturing operation through a joint venture in Nanjing, China.

Flextronics will pay Microcell $80 million in cash and assume $120 million of net liabilities. The purchase price is subject to adjustments for contingent consideration, based upon the acquired business achieving specified levels of earnings through December 2005.

"In addition to increasing capabilities for our telecom OEM customers, this acquisition will bolster Flextronics' ODM initiative in the areas of GSM, GPRS and EDGE mobile phone technologies," said Michael E. Marks, chief executive of Flextronics, in a statement. "The two companies have had a close working relationship for the past few years during which Flextronics has been a major supplier to Microcell. This long-standing relationship gave us unique insight into their management team, customer relationships and technical capabilities while we evaluated this potential combination."

The acquisition, expected to close in October, is not expected to have a significant impact on sales and is expected to have a neutral to slightly positive effect on the operating profits of Flextronics from the closing date through its fiscal year ending March 31, 2004. For the subsequent fiscal year it is expected to be additive to operating profits.

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