Avanex Corporation (Nasdaq: AVNX), a global pioneer of cost-effective, high-performance intelligent photonic processing subsystem and module solutions designed to unleash the power of the optical layer in telecommunications networks, Alcatel (PARIS: CGEP.PA) (NYSE: ALA), and Corning Incorporated (NYSE: GLW) jointly announced today the signing of a definitive agreement pursuant to which Avanex will acquire Alcatel's and Corning's optical components businesses in combined transactions valued at approximately $63.5 million based on Avanex's May 9, 2003 closing price of $1.12 per share. The acquisitions by Avanex will combine the complementary optical business capabilities of three of the industry's leading providers of optical components, modules and subsystems for fiber optic transmission networks, and enable Avanex to offer one of the broadest lines of advanced optical technologies and intelligent photonic solutions to enhance the speed and capacity of optical communications systems. After the acquisitions, Avanex will offer products that address optical wavelength generation and modulation, multiplexing and demultiplexing, signal amplification, wavelength routing and dispersion compensation. Avanex estimates that after the acquisitions, it will have over $250 million in cash and 1,600 employees on the closing date. Walter Alessandrini, Chairman, President and Chief Executive Officer of Avanex, noted today that, "Our acquisition of these two complementary businesses is a logical, timely and appropriate step for success in today's market environment. These acquisitions position Avanex as an industry leader with a broad customer base, full suite of industry-leading products, competitive cost structure, strong manufacturing expertise and worldwide R&D capabilities. In addition, there is significant potential for synergies arising from these transactions including immediate opportunities for cost reductions and incremental sales." "Avanex's strategy is to be the leading supplier of optical solutions. Our customers want suppliers who can deliver end-to-end solutions that are cost- effective and of the highest quality. After the acquisitions of Alcatel's optical components division and certain optical component business lines from Corning, Avanex will have the scale and resources to effectively supply our customers with their product needs." As part of this transaction:

Alcatel and Corning will receive as consideration 28% and 17% respectively of Avanex's outstanding common stock of the post-transaction company, which currently translates into approximately 35.2 and 21.4 million shares. Following the transaction, Alcatel and Corning have agreed to certain restrictions on the voting and transfer of their Avanex shares. Avanex will acquire all outstanding equity of Alcatel's optical components division. This business will include key operations located in France and the United Kingdom. Alcatel is expected to contribute over $110 million in cash, to be finalized at closing. Avanex and Alcatel will enter into a supply agreement whereby Avanex will supply solutions for Alcatel's optical networking products over a three-year period. Assets to be purchased from Corning include optical amplifier, dispersion compensation, and micro optics operations located in New York and Corning modulator operations located in Italy. Corning is expected to contribute over $20 million in cash, to be finalized at closing. Alcatel and Corning will assign approximately 1,400 patents to Avanex and additionally license several thousand patents to Avanex as part of the transaction. At closing, Dr. Joseph A. Miller Jr., senior vice president and chief technology officer of Corning, is expected to join the Avanex Board of Directors. Alcatel's optical component division had sales of EURO 7.3 million for its March 2003 quarter. The division's products include lasers, photodetectors, optical amplifiers, transponders and key passive devices such as arrayed waveguide gratings and Fiber Bragg grating filters. Alcatel's optical component division had 950 employees as of March 31, 2003. The business lines to be acquired from Corning had sales of approximately $11 million for the March 2003 quarter. Key products from these business lines include optical amplifiers, dispersion compensation modules, Lithium Niobate and electro-absorptive modulators, and micro optics products. These business lines had 490 employees as of March 31, 2003. The companies anticipate closing the transaction by the end of Avanex's first fiscal quarter, ending September 30, 2003, subject to customary closing conditions, including the approval of the stockholders of Avanex and required regulatory approvals. The Boards of Directors of all three companies have approved the transaction. Citigroup Global Markets Inc. is acting as exclusive financial advisers to Avanex with respect to this transaction.

Avanex Corp. (Nasdaq: AVNX) Alcatel Optronics (Nasdaq: ALAO; Paris: CGO.PA) Corning Inc. (NYSE: GLW)