Ericsson announces a recommended voluntary offer to acquire Norwegian AXXESSIT

Ericsson hereby announces that it will make a voluntary cash offer to acquire 100% of the outstanding shares of AXXESSIT ASA, a Norwegian based advanced technology company that develops, produces and markets integrated access devices and multi-service provisioning platforms for next generation access and metro networks.
Press release
Jun 20, 2005 06:32 (GMT +00:00)
Ericsson will offer NOK 28.50 in cash per AXXESSIT share, corresponding to a premium of 43.9% per share. The value of the offer totals NOK 330 million (USD 51 million). AXXESSIT's products strengthen Ericsson's offering in the Ethernet/Metro segment. The Board of AXXESSIT recommends the offer and the largest shareholders are positive to the offer. The acquisition will improve Ericsson's prospects for sales growth in this segment. However, marginal effects on Ericsson's key ratios for 2005.

Sivert Bergman, Vice President of Ericsson comments; "This acquisition provides us with a very interesting product suite within the Ethernet/Metro segment, which will enable us to improve our offering to telecom operators all over the world. Through the acquisition Ericsson will also get access to high skilled R&D resources with long experience in this future growth segment."

Comment from the chairman of AXXESSIT, Nils Erik Skarsgård; "We know Ericsson to be an excellent company and a first class world player in the telecom equipment industry and are of the opinion that Ericsson represents a strong long-term owner for AXXESSIT. We recommend to the shareholders to accept the offer subject to not receiving a higher competing offer for their shares."

More details on the Offer below.
The Offer is not directed to persons whose participation requires a further prospectus, registration or measures other than those required under Norwegian law. The press release may not be distributed or released in any country in which distribution or the Offer requires measures as stated in the preceding paragraph or is in contravention of the rules in such a country. This announcement is a translation of the Norwegian announcement and in the event of any difference between the two, the Norwegian announcement will prevail.
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The Offer
Ericsson hereby announces that it will make a public tender offer to the shareholders of AXXESSIT ASA ("AXXESSIT") for all of the outstanding shares (the "Offer"). The shares in AXXESSIT are listed on the Oslo Stock Exchange, (OB Match).

NOK 28.50 in cash will be offered for each share. Under the Offer, the total value of all shares outstanding in AXXESSIT amounts to NOK 330 million (USD 51 million[1]). The premium for the AXXESSIT share is 43.5% based on the average last price paid during the last ten trading days prior to the announcement of the Offer and 43.9% compared to the last price paid on June 17, 2005.

The Board of Directors of AXXESSIT unanimously recommends that the shareholders of AXXESSIT accept the Offer to the extent no higher offer is received. For further information, see press release at AXXESSIT's homepage

The largest shareholders in AXXESSIT, including Board members and management, representing 51.8% of the outstanding capital of AXXESSIT have declared that they support the Offer and will tender all their shares in the Offer to the extent no higher offer is received.

There is no commission fee for shareholders.

The Offer will be made by Ericsson Holding International BV, a wholly owned subsidiary of Telefonaktiebolaget LM Ericsson. No legal entity within the Ericsson Group currently owns any shares in AXXESSIT.

Conditions for the Offer
The Offer will be conditional upon the following:

A  that the Offer is accepted to such an extent that Ericsson becomes the owner of more than 90% of the total number of shares;

B  that the Competition Authority or other competition authorities does not prohibit or restrict Ericsson's acquisition of the shares; and

C that after the public announcement of the Offer, no material adverse changes shall have occurred in relation to AXXESSIT's business, operations, organisation or market conditions that materially and negatively effects Ericsson's acquisition of AXXESSIT.

Ericsson reserves the right to waive one or more of the conditions in A through C above.
Value of the Offer

The Offer represents a bid premium on the AXXESSIT shares of 43.5% based on the average last price paid for the AXXESSIT shares during the last ten days of trading prior to the Offer and 43,9% based on the last price paid for the AXXESSIT shares on June 17, 2005.

At the price of NOK 28.50 per share outstanding (in total 11,561,000 shares) the total value of the Offer amounts to NOK 330 million.

Ericsson is funding the Offer with cash resources within the Ericsson group.
Preliminary timetable

The offer document is expected to be made public on or about July 1, 2005 and the acceptance period is expected to commence on July 4 and end on July 22, 2005. Assuming that Ericsson declares the Offer unconditional on July 25, payment is expected to be distributed beginning on or about August 2. Ericsson retains the right to extend the acceptance period and to delay in such case the settlement of payment.

Handelsbanken Capital Markets is acting as financial advisor and BAHR as legal advisors to Ericsson in connection with the Offer.



AXXESSIT develops, produces and markets Integrated Access Devices and Multi-Service Provisioning Platforms for next generation access and metro networks. Combined with AXXESSIT's powerful NGOSSs (New Generation Operations Support Systems), the equipment is ideally suited for establishing traditional and new services, based on PDH, SDH, NG-SDH and Ethernet - for greenfield applications or as a complement to existing networks. With more than 25 years of experience in telecommunications, AXXESSIT provides customers with high quality and cost-effective broadband solutions. AXXESSIT is listed on Oslo Stock Exchange and has offices in Oslo, Halden, Bergen, Frankfurt, London, Warsaw, Madrid, Brussels and Moscow. AXXESSIT is ISO 9001 certified for its research and development processes and manufacturing facilities. AXXESSIT has 175 employees. AXXESSIT recorded sales of NOK 150 million (USD 24 million) and a profit before tax of NOK -59 million (USD 9 million) in 2004. The sales in Q1 2005 grew 18% to NOK 40.9 million and the profit before tax was NOK -16 million.

Safe Harbor Statement of Ericsson under the Private Securities Litigation Reform Act of 1995;

All statements made or incorporated by reference in this release, other than statements or characterizations of historical facts, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by us. Forward-looking statements can often be identified by words such as "anticipates", "expects", "intends", "plans", "predicts", "believes", "seeks", "estimates", "may", "will", "should", "would", "potential", "continue", and variations or negatives of these words, and include, among others, statements regarding: (i) strategies, outlook and growth prospects; (ii) positioning to deliver future plans and to realize potential for future growth; (iii) liquidity and capital resources and expenditure, and our credit ratings; (iv) growth in demand for our products and services; (v) our joint venture activities; (vi) economic outlook and industry trends; (vii) developments of our markets; (viii) the impact of regulatory initiatives; (ix) research and development expenditures; (x) the strength of our competitors; (xi) future cost savings; and (xii) plans to launch new products and services.

In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These forward-looking statements speak only as of the date hereof and are based upon the information available to us at this time. Such information is subject to change, and we will not necessarily inform you of such changes. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors. Important factors that may cause such a difference for Ericsson include, but are not limited to: (i) material adverse changes in the markets in which we operate or in global economic conditions; (ii) increased product and price competition; (iii) further reductions in capital expenditure by network operators; (iv) the cost of technological innovation and increased expenditure to improve quality of service; (v) significant changes in market share for our principal products and services; (vi) foreign exchange rate fluctuations; and (vii) the successful implementation of our business and operational initiatives.

"The offer is not being and will not be made, directly, or indirectly, in or into, or by use of the mails of, or by any means or instrumentality (including, without limitation, telephone, facsimile, telex, internet or other forms of electronic communication) of interstate or foreign commerce of, or any facility of a national securities exchange of, the United States, Canada, Australia and Japan. The offer will not be capable of acceptance by any such use, means, instrumentality or facility or from within the United States, Canada, Australia and Japan. Accordingly, copies of this announcement, the offer document when available and any related documents are not being, and must not be, mailed, transmitted or otherwise forwarded, distributed, or sent, in whole or in part in, into or from the United States, Canada, Australia and Japan. Doing so may render invalid any related purported acceptance of the offer."

[1] Based on an exchange rate of 6.46 NOK/USD