FI [LOGO]
FLEXTRONICS
INTERNATIONAL
PRESS RELEASE
FOR IMMEDIATE RELEASE
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Flextronics International: The Dii Group:
Cheryl Scritchfield Sharon Sweet
Corporate Marketing Investor Relations
(408) 576-7901 (303) 652-2221
cheryl.scritchfield@flextronics.com sharon_sweet@diigroup.com
Laurette Slawson
Treasurer/Investor Relations
(408) 576-7233
laurette.slawson@flextronics.com
FLEXTRONICS INTERNATIONAL AND THE DII GROUP
SIGN MERGER AGREEMENT
FLEXTRONICS ANNOUNCES PLANNED STOCK SPLIT
SAN JOSE, CA. AND NIWOT, CO. - November 22, 1999 - Flextronics
International Ltd. (NASDAQ: FLEX) and The Dii Group, Inc. (NASDAQ: DIIG)
today jointly announced the signing of a definitive merger agreement for a
tax-free, stock-for-stock merger. Flextronics and The Dii Group are both
leading providers of electronics manufacturing and design services, each
operating through a global operations network in the Americas, Asia/Pacific
and Europe. The combination enables Flextronics to expand its printed
circuit board operations and design services, while providing additional
geographic locations and customer relationships. For The Dii Group this
merger enables its stockholders to participate in the expanded growth that
top tier electronics manufacturing service providers are experiencing.
Based on Flextronics' closing price of $81.25 on November 19, 1999, the
transaction is valued at approximately $65.41 per share of Dii common
stock, or more than $2.4 billion in the aggregate. As a result, this
transaction is the largest combination in the electronics manufacturing
services industry. In addition, on November 20, 1999, the Board of
Directors of Flextronics approved a two-for-one stock split, which will be
completed prior to the closing of the merger.
Under the agreement, Dii shareholders will receive 0.805 Flextronics
ordinary shares for each share of The Dii Group (1.61 Flextronics ordinary
shares after giving effect to Flextronics' planned two-for-one stock
split), resulting in current Dii shareholders owning approximately 34% of
the combined company. The merger is intended to be accounted for as a
pooling of interests, and is subject to approval by shareholders of both
companies, regulatory approvals and other customary conditions. Executives
and directors of both companies have agreed to vote their shares in favor
of the proposed transaction. The companies anticipate that the transaction
will be completed in early April 2000.
The combined company will operate under the Flextronics International name.
The companies on a combined basis, had sales for the last twelve months of
over $3.8 billion.
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2090 Fortune Drive - San Jose, CA. 95131 - Phone: 408.576-7000
- Fax: 408.576.7454
The combined company is the fourth largest provider of electronics
manufacturing services, with strengths in telecommunications, consumer
electronics, PCB fabrication, and design services. The Dii Group will bring
to the combined company manufacturing services from 22 strategic locations
in China, Southeast Asia, North and South America and Europe. As a result
of the transaction, Flextronics will add over 12,000 employees and over 2.9
million square feet of manufacturing and design facilities. Flextronics
will gain a manufacturing presence in Ireland, Germany and the Czech
Republic, and will expand its PCB assembly capacity in China, Malaysia,
Mexico, Austria, and the United States. Dii's facilities also include
significant advanced PCB manufacturing capabilities in California,
Minnesota, Texas, Germany, China and Brazil. In addition, Flextronics will
gain design and semiconductor centers in California, Arizona, India and
Israel.
Michael E. Marks, Chairman and Chief Executive Officer of Flextronics
stated, "The trend in outsourcing has been growing at an astounding rate.
As a global, world-class EMS provider, you must have the speed and
flexibility to offer a comprehensive set of custom design and manufacturing
services. Our strategic merger with the Dii Group will expand and
strengthen our ability to provide an extensive global network of facilities
and capabilities to meet our OEM customers growing needs. Dii's strong
management team and business philosophy truly complements our core business
strategies and will significantly contribute to the expansion of our
position in the industry."
Ronald R. Budacz, Chairman and Chief Executive Officer of The Dii Group
stated "We have made great strides in achieving our business initiatives.
The Dii Group has a history of operational excellence, strong organic
growth and a cautious yet aggressive acquisition strategy. This merger is a
good strategic fit for both organizations since it allows us to offer our
customers a more comprehensive network of services and capabilities. It
also brings together an impressive management team that is capable of
driving growth and manufacturing excellence."
SalomonSmithBarney and Broadview International LLC acted as financial
advisors and provided fairness opinions to The Dii Group. Fenwick & West
LLP is counsel to Flextronics International Ltd. and Curtis,
Mallet-Prevost, Colt & Mosle LLP is counsel to The Dii Group.
About Flextronics
Flextronics (NASDAQ: FLEX) is a global full-service supplier of a full
spectrum of value-added Electronic Manufacturing Services. Its global
original equipment manufacturer (OEM) customers include leaders in
fast-growth communications, computers, medical and consumer markets where
innovation, time-to-market, product miniaturization and cost reduction are
paramount. For more information, please visit the Flextronics Web site at
www.flextronics.com.
About The Dii Group
The Dii Group (NASDAQ: DIIG) is a leading value-added electronics design
and manufacturing service provider, which operates through a global network
of companies in South America, North America, Europe and Asia. The Dii
Group serves the electronics industry through its four core competencies:
semiconductors; printed circuit boards; circuit board and finished product
assembly and distribution; and process control technologies. Its Web site
can be reached by accessing "www.diigroup.com" to view recent press
releases, company information, and financial data relating to The Dii
Group.
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2090 Fortune Drive - San Jose, CA. 95131 - Phone: 408.576-7000
- Fax: 408.576.7454
This press release contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These forward-looking statements involve a
number of significant risks and uncertainties that may cause results to
vary from expectations. In particular, while the companies have executed a
definitive merger agreement, there is no assurance that the transaction
will receive shareholder and regulatory approval and be completed.
Additional risks include unexpected costs in connection with the
combination, including diversion of management time; risks relating to
integrating Flextronics and The Dii Group; risks involved in retaining and
motivating key personnel; and difficulties in obtaining any of the expected
benefits of the combination. Other risks and uncertainties relating to the
ongoing operations of the Flextronics are described in Flextronics' most
recent annual report on Form 10-K for the fiscal year ended March 31, 1999
and quarterly report on Form 10-Q for the quarter ended September 25, 1999
filed with the Securities and Exchange Commission (SEC); and risks and
uncertainties relating to the ongoing operations of The Dii Group are
described in The Dii Group's most recent annual report on Form 10-K for the
fiscal year ended January 3, 1999 and quarterly report on Form 10-Q for the
quarter ended October 3, 1999 filed with the SEC.
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2090 Fortune Drive - San Jose, CA. 95131 - Phone: 408.576-7000
- Fax: 408.576.7454