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Alcatel and Finmeccanica Finalise the Creation of New Joint Ventures

PRNewswire-FirstCall – Alcatel (Paris: CGEP.PA and
NYSE: ALA) and Finmeccanica (Milano: SIFI.MI, FNC.IM) announced
the successful creation of two new joint ventures effective as of July
1st 2005: Alcatel Alenia Space and Telespazio Holding.

The creation of these two new companies
represents a great opportunity for their growth. Their common
objectives will be to consolidate leadership in telecommunication
satellite systems and services, to acquire a strong position in the
most important European programs, such as Galileo and GMES, and to
strengthen space defence and security, as well as observation,
exploration and science.

Alcatel Alenia Space, of which Alcatel
holds 67% and Finmeccanica 33%, now combines the activities of Alcatel
Space and Alenia Spazio. It focuses on the design, development, and
manufacturing of space systems, satellites, payloads, orbital
infrastructures and space transportation, instruments and associated
ground systems for civilian and military applications. The operational
headquarters of Alcatel Alenia Space are located in Cannes, France,
with plants in France, Italy, Belgium and Spain. With estimated 2004
sales of 1.8 billion euros and around 7,200 employees, it is the
European leader in satellite systems.

Telespazio Holding, of which Finmeccanica holds 67% and Alcatel 33%,
combines Telespazio with Alcatel Space Services and Operations
activities. It concentrates on operations and services for satellite
solutions, which include control and exploitation of space systems as
well as value-added services for networking, multimedia and earth
observation. Its headquarter is located in Rome, Italy with plants in
Italy, France and Germany. With estimated 2004 sales of 350 millions
euros and around 1,400 people, it is a key player in the space services

Alcatel and Finmeccanica will account for
Alcatel Alenia Space and Telespazio Holding using proportional
consolidation. The creation of the new companies has a cash/debt impact
of EUR109m for the two companies’ shareholders.

Alcatel and Finmeccanica also announced
today the nomination of the senior management responsible for each of
the two European space companies:

Alcatel Alenia Space:

Mr. Giorgio Zappa, Chief Operating Officer Finmeccanica,
will hold the position of Chairman of the supervisory board of Alcatel
Alenia Space.

Mrs. Pascale Sourisse will hold the position of President and CEO of this new company.


Mr. Olivier Houssin, Executive Vice President of Alcatel and
President of its Private Communications Group that includes Alcatel‘s
Space activities, will hold the position of Chairman of the board of
directors of Telespazio Holding.

Mr. Giuseppe Veredice will hold the position of CEO of this new company.
For the purposes of this transaction, Alcatel was advised by BNP Paribas, while Finmeccanica was advised by Lazard.

About Alcatel

Alcatel provides communications solutions
to telecommunication carriers, Internet service providers and
enterprises for delivery of voice, data and video applications to their
customers or employees. Alcatel brings its leading position in fixed
and mobile broadband networks; applications and services, to help its
partners and customers build a user-centric broadband world. With sales
of EURO 12.3 billion and 56,000 employees in 2004, Alcatel operates in
more than 130 countries. For more information, visit Alcatel on the

About Finmeccanica, S.p.A.

is Italy‘s leading high-tech company, operating in the design and
manufacture of helicopters, civil and military aircraft,
aerostructures, satellites systems and space infrastructure, satellite
services, command and control systems, defence electronics and systems,
communications, security and IT. Finmeccanica participates in some of
the largest international programmes in the sector through
well-established alliances with European and American partners.
Finmeccanica also boasts significant manufacturing assets and skills in
the transport and energy sectors. With operations in Italy and abroad, it
employs around 51,000 staff in total. Finmeccanica spends 16% of its
revenues on research and development. For more information, please

(Credits Alcatel & Finmeccanica)