Posted: 02/2000

Cisco To Enter DWDM Market with Acquisition

Cisco Systems Inc. (www.cisco.com) has agreed to
acquire the optical systems business of Pirelli S.P.A., Milan, Italy. The purchase of
Pirelli Optical Systems is Cisco’s first multibillion dollar acquisition in Europe and the
equipment vendor’s first entry into the dense wave-division multiplexing (DWDM) market.
The acquisition will enable Cisco to offer an end-to-end optical networking solution for
service providers.

In connection with the acquisition, Cisco announced a strategic alliance with Pirelli.
It will invest in Pirelli’s optical components and submarine optical transmission system
businesses. Under the agreement’s terms, Cisco is acquiring Pirelli Optical Systems for an
aggregate consideration of up to $2.15 billion, of which a portion is contingent on
revenue targets and other performance milestones.

Each company’s board of directors has approved the acquisition, which is awaiting
antitrust approval.