Alcatel to Sell Two Plants

PARIS -- Alcatel (Paris: CGEP.PA and NYSE: ALA), today announced its intention to sell its manufacturing facilities located in Saintes (Charente Maritime) and Coutances (Manche). Approximately 520 employees work at these 2 Alcatel CIT subsidiaries.

The transactions, which should be closed by the end of this year, will be presented today to Alcatel CIT's worker council.

These sales will enable both manufacturing facilities to strengthen their future, by broadening their telecommunications customer base, and by growing their business into other market sectors.

Saintronic (the Saintes facility), which has 300 employees, manufactures integrated electrical cabinets used in telecommunication applications as well as in instrumentation, railway, electronic and radio applications. Advanced negotiations for the sale of this facility are ongoing with GMD, a French leader in the industrial outsourcing for cutting, stamping and general sheet metal work.

The facility in Coutances, with 220 employees, manufactures printed circuit boards used in telecommunication applications as well as in military, avionics and IT markets. Negotiations have started with the current facility management for the purchase of the facility within the scope of a Leveraged Management Buyout.

These transactions are in line with Alcatel's strategy to focus on its core business -the development and deployment of telecommunications systems and services. The move is also in line with the strategy of outsourcing its components manufacturing, which has become a specialized business.

Alcatel SA