GlobespanVirata, Conexant to Merge

NEWPORT BEACH, Calif. and RED BANK, N.J. -- Conexant Systems, Inc. (Nasdaq: CNXT) and GlobespanVirata, Inc. (Nasdaq: GSPN) today announced the signing of a definitive agreement to combine the two companies in a strategic merger. The combined company will possess the world’s most complete and most advanced portfolio of semiconductor solutions targeting the broadband digital home.

“Conexant has been focused exclusively on delivering the technology and products that are driving the digital home, one of the semiconductor industry’s most exciting and highest-growth opportunities,” said Dwight W. Decker, Conexant chairman and chief executive officer. “With the addition of GlobespanVirata’s highly complementary product portfolio, we gain key end-to-end digital subscriber line connectivity with a leading position in central office applications worldwide. We also benefit by adding GlobespanVirata’s leadership position in wireless local area networking, a critical technology for the digital home.

“From a financial perspective, we have the opportunity to capture significant operating efficiencies, and we anticipate that the merger will be accretive within six to nine months from the close of the transaction,” Decker continued. “Together, we will have the scale and scope to make the necessary R&D investments for continued innovation leadership in wired and wireless communications and multimedia applications for the digital home.”

“Combining GlobespanVirata with Conexant allows us to complement our leadership in broadband communications capabilities with leadership in broadband media processing capabilities, including broadcast video encoders and decoders as well as digital set-top box system solutions for cable, satellite, terrestrial data and digital video networks,” said Armando Geday, president and chief executive officer of GlobespanVirata. “I am confident that the new merged company will deliver stronger financial performance and create more value for our shareholders, customers and employees than either company could operating independently.”

“This merger will result in the creation of a new company with the management expertise, talent resources, technology, market positions, and critical mass to succeed in an increasingly competitive industry,” said Matt Rhodes, Conexant’s president.

About the Combined Company
Armando Geday will serve as chief executive officer of the company and Matt Rhodes will be president. Dwight Decker will assume the role of chairman.The board of directors of the combined company will have 12 members, with Conexant designating seven directors, including Decker, and GlobespanVirata designating Geday and four others.Based on the market values of the individual companies on October 31, 2003, the merged company would be valued at approximately $2.8 billion, and it would have an annual revenue run-rate of approximately $1.2 billion. The combined company will retain the Conexant name and its stock will continue to trade on the Nasdaq national market under the ticker symbol “CNXT.” The merged company will employ approximately 2,400 people worldwide and will be headquartered in Red Bank, New Jersey at GlobespanVirata’s current headquarters.About the Transaction
Under the terms of the merger agreement, which has been unanimously approved by the boards of directors of both companies, GlobespanVirata shareholders will receive 1.198 shares of Conexant common stock for each share of GlobespanVirata stock. Based on the fully diluted share counts for the two companies as of market close on Friday, October 31, 2003, current Conexant shareholders will own 62.75 percent and current GlobespanVirata shareholders will own 37.25 percent of the combined company’s shares. The transaction is subject to customary closing conditions, including shareholder and regulatory approvals, and is expected to be completed in the first quarter of calendar 2004.Conexant Systems Inc.GlobespanVirata Inc.