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December 5, 2009

AsiaInfo to merge with Linkage

Linkage shareholders to receive US$60m in cash and approximately 26.8m AsiaInfo shares upon closing of the transaction

By CBR Staff Writer

AsiaInfo Holdings, a provider of telecommunication software and Linkage Technologies International Holdings, a provider of software offerings and IT services for telecommunications industry in China, have signed a definitive agreement to merge, forming AsiaInfo-Linkage. The transaction will leverage both AsiaInfo’s and Linkage’s market positions and complementary customer bases to provide a full-service offering to telecom operators.

According to AsiaInfo, Linkage shareholders will receive $60m in cash and approximately 26.8m AsiaInfo shares upon closing of the transaction as per terms of the agreement. The combined company is expected to have a market value of over US$1.8 billion.

Post-transaction, Linkage’s legacy shareholders will own approximately 35.8% of AsiaInfo-Linkage with AsiaInfo’s legacy shareholders owning approximately 64.2%. The transaction is expected to be accretive to non-GAAP earnings per share in 2010.

Upon completion of the transaction, AsiaInfo-Linkage will have over 8,000 employees, of which approximately 7,000 are engineers dedicated to project delivery and research and development. The combined company will also have 34 patents and an additional 27 patents pending approval in China and the US.

Steve Zhang, president and chief executive officer at AsiaInfo, said: The combined company’s expanded service offering, extensive base of highly skilled engineers, world class R&D capabilities and complementary customer bases will enable us to better service and anticipate our customers’ needs. In addition to growing our business domestically, the merged company will explore new revenue drivers by looking abroad.

The transaction is expected to close by the end of the first quarter or early in the second quarter of 2010.

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