Combining Cinterion’s wireless modules expertise with Gemalto’s “over the air” platforms will accelerate the deployment of “Smart Machines”

Amsterdam, June 29, 2010–Gemalto (Euronext NL 0000400653 GTO), the world leader in
digital security, announces today the acquisition of Cinterion Wireless Modules GmbH (CWM).
Cinterion is the leading provider of industrial Machine-to-Machine (M2M) wireless communication modules, with 2009 M2M revenues of €145 million, EBIT of €4 million and approximately 20% market share. Cinterion, which uses a fabless business model, employs 335 staff with major centers in Munich and Berlin, Germany. The business was started by Siemens in 1995 and spun out to a financial sponsor consortium in 2008.

Building on the investments made in the last twenty years by mobile network operators worldwide that provide wireless data coverage in almost every part of the world, wireless M2M applications are increasingly revolutionizing businesses by enabling simple and cost-effective connectivity for a variety of applications. These include among others: remote monitoring of utility meters or patients at home, tracking of high value items or stolen vehicles and optimized real time management of fleets, smart energy grids for more efficient energy consumption and air pollution detection systems for urban reduction programs in CO2 emissions.

Combining Cinterion’s M2M module technology with Gemalto expertise in deploying software and services for mobile network operators will provide simple to deploy M2M solutions with proven security and demonstrated remote “over-the-air” management of devices for industrial companies, for administrations and for mobile network operators which are increasingly seeking to offer M2M communication services. Technology research specialist Gartner projects year-on-year volume growth rates of 25% from 2009 to 2013, making M2M one of the fastest growing segments in the mobile data business.

Gemalto will pay €163 million in cash for the CWM business, approximately one time annual sales. The closing of the transaction is expected within the next six weeks. The acquisition will be immediately accretive to Gemalto’s 2010 earnings per share and should contribute around €20 million to Gemalto’s profit from operations target of €300 million in 2013. Cinterion’s business results will be reported as part of a new segment that will regroup Gemalto’s activity in this domain, called M2M, to reflect its value and strong growth potential.

“We are taking the leadership position in a fast growing market, the market of Smart Machines that paves the way to the ‘internet of things’” commented Olivier Piou, Chief Executive Officer of Gemalto. “Together with Cinterion we can address the strong interest of our largest customers, the mobile network operators in M2M and team up with them to offer the M2M market the right combination of advanced software, premium devices and remote management services that has historically been successful in our SIM card business. Cinterion is a high-quality company, with an impressive track record of market leadership, excellent management and strong values: we look forward to accelerating their development in Gemalto”.

“We are very pleased to join Gemalto” added Norbert Muhrer, Chief Executive Officer of Cinterion. “Gemalto has the financial strength and management vision to deliver on the potential of the M2M market and will provide the ideal growth platform for us. We will continue to run our M2M module business and serve our customers as in the past, while leveraging Gemalto’s strong relationship with mobile operators and excellent capabilities in remote device management to facilitate M2M roll out. This combination represents a unique offering in the market.”

Live Conference call

Gemalto will host a conference call today in English today at 11:00 am Paris time (10:00 am London time and 5:00 am New York time).

Investors and financial analysts wishing to participate to this conference call may dial:

+44 (0)20 7784 1036 or +1 718 354 1152 or +33 (0)1 70 99 42 84

The presentation slide show will be available for download on our Investor Relations web site (http://www.gemalto.com/investors) at 10:30 am Paris time (9:30 am London time, 4:30 am New York time).

Replays of the conference call will be available from approximately 3 hours after the conclusion of the presentation and until July 22, 2010 by dialling

+44 (0)20 7111 1244 or +1 718 354 1112 or +33 (0)1 71 23 02 48
access code : 3755214#

About Gemalto

Gemalto (Euronext NL 0000400653 GTO) is the world leader in digital security with 2009 annual revenues of €1.65 billion, and over 10 thousand employees operating out of 75 offices, research and service centers in 41 countries.

Gemalto is at the heart of our evolving digital society. The freedom to communicate, travel, shop, bank, entertain, and work–anytime, anywhere–has become an integral part of what people want and expect, in ways that are convenient, enjoyable and secure.

Gemalto delivers on the growing demands of billions of people worldwide for mobile connectivity, identity and data protection, credit card safety, health and transportation services, e-government and national security. We do this by supplying to governments, wireless operators, banks and enterprises a wide range of secure personal devices, such as subscriber identification modules (SIM) in mobile phones, smart banking cards, electronic passports, and USB tokens for online identity protection. To complete the solution we also provide software, systems and services to help our customers achieve their goals.

As the use of Gemalto’s software and secure devices increases with the number of people interacting in the digital and wireless world, the company is poised to thrive over the coming years.

For more information please visit http://www.gemalto.com.

Contacts

Investors Relations
Vincent Biraud
M.: +33 (0) 6 08 48 33 23
vincent.biraud@gemalto.com

Corporate Communication
Isabelle Marand
M.: +33(0) 6 14 89 18 17
isabelle.marand@gemalto.com

This communication does not constitute an offer to purchase or exchange or the solicitation of an offer to sell or exchange any securities of Gemalto.

This communication contains certain statements that are neither reported financial results nor other historical information and other statements concerning Gemalto. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, events, products and services and future performance. Forward-looking statements are generally identified by the words “expects”, “anticipates”, “believes”, “intends”, “estimates” and similar expressions. These and other information and statements contained in this communication constitute forward-looking statements for purposes of applicable securities laws. Although management of the company believes that the expectations reflected in the forward-looking statements are reasonable, investors and security holders are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of the company, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements, and the company cannot guarantee future results, levels of activity, performance or achievements. Factors that could cause actual results to differ materially from those estimated by the forward-looking statements contained in this communication include, but are not limited to: the ability of the company’s to integrate according to expectations; the ability of the company to achieve the expected synergies from the combination; trends in wireless communication and mobile commerce markets; the company’s ability to develop new ! technolo gy and the effects of competing technologies developed and expected intense competition generally in the companies’ main markets; profitability of expansion strategy; challenges to or loss of intellectual property rights; ability to establish and maintain strategic relationships in its major businesses; ability to develop and take advantage of new software and services; the effect of the combination and any future acquisitions and investments on the company’s share prices; and changes in global, political, economic, business, competitive, market and regulatory forces. Moreover, neither the company nor any other person assumes responsibility for the accuracy and completeness of such forward-looking statements. The forward-looking statements contained in this communication speak only as of the date of this communication and the company are under no duty, and do not undertake, to update any of the forward-looking statements after this date to conform such statements to actual results, to reflect the occurrence of anticipated results or otherwise except as otherwise required by applicable law or regulations.