Luxembourg-based manufacturer of smart cards, Gemplus International (www.gemplus.com) and its slightly smaller Dutch competitor Axalto Holding (Amsterdam / The Netherlands; www.axalto.com), will merge to form a new company called Gemalto, to be headquartered in the Netherlands. The merger will make Gemalto the world´s leading supplier of smart cards and give it a global market share of 35-40%. The main shareholders of Gemplus (the German Quandt family and the Texas Pacific Group together hold 43.7%) have already approved the transaction. Each Gemplus shareholder will receive two Axalto shares for 25 Gemplus shares. Prior to this, Gemplus will distribute EUR 126m to its shareholders as a special dividend.

Gemalto´s combined sales in 2005 are estimated to be around EUR 1.8 bn, with a total workforce of some 11,000, including 4,500 from Axalto. In 2004, Axalto posted sales of USD 960m (EUR 813m) with 11 production facilities – four in Asia, four in Europe and three in North America. Gemplus alone had sales of EUR 865m in the same period. The new company expects to achieve annual savings of EUR 58m through exploitation of synergies. Chairman of the company will be the former Gemplus president, Alex Mandl. Chief executive will be Axalto´s CEO, Olivier Piou.