Oberthur Card Systems Merge with Francois-Charles Oberthur Fiduciaire

Their businesses are complementary both in terms of geographic location and activity. By combining them, OCS will be able to: Boost growth in its Identity businesses,Expand in the mobile phone Scratch Card market,Exploit significant growth potential in Value Protection The Identity segment is a significant part of the group’s future growth. Oberthur Card Systems is a leading world provider of smart card solutions, and FCOF supplies over 50 countries with secure identity documents (traditional passports, visas, identity cards, etc.) and electronic passports. The new group would provide a complete and unique range of high value-added services and products for the identity sector: secure printing on plastic and paper, smart card technologies, inlays, document personalization using the CPS proprietary software which already has a proven track record in the banking sector. In addition, with the combined sales and marketing teams from both companies the new entity would instantly be active in over 50 countries.  The Scratch Card business would be integrated into the Mobile product line and benefit from Oberthur Card System’s business with mobile operators in 80 countries worldwide. This way, the group would bolster its product portfolio as well as its position in the mobile sector by offering a larger array of products, ranging from SIM cards to recharge cards. Given that the group sold 330 million cards in 2006 and that the world Total Accessible Market represents 15 billion units, there is still huge potential for growth in this business. There is also significant room for growth in Cash Protection, the secure cash-in-transit equipment and ATM protection business, which is currently very successful in France and Belgium. It would benefit from OCS’ substantial presence in the banking sector, serving 5000 financial institutions in 65 countries. Figures and Description The transaction would take the form of a business contribution. The assets transferred to OCS will comprise FCOF’s Fiduciary Printing (banknotes, Identity documents), the Scratch Card businesses (an OSC1 activity), the Cash Protection businesses (activities of Axytrans, which is 91% owned by FCOF and Mr Jean-Pierre Savare). The new group would report pro-forma 2006 revenue of €645M, including 80% contributed by the Card business (€350.5M of pro-forma sales for H1 2007), and improved margins with a pro-forma 2006 EBITDA of €67.5M, or 10.5% of sales (proforma EBITDA of €50.7M for H1 2007 or 14.5% of sales) After the merger, the new group should have a debt to equity ratio based on pro-forma figures at June 30th, 2007, of 0.43 and a debt to EBITDA2 ratio of 1.1. Employee representatives have been informed and shall be consulted on the project. This project will be submitted for approval by OCS shareholders at an Extraordinary General Meeting on December 27th, 2007. An earlier Extraordinary General Meeting will be held on December 5th, 2007, with the purpose of reducing the nominal value of OCS shares to enable the contributions to be made at book value, which is the method recommended for this type of transaction. To pay for the assets contributed to the new entity, 31M to 38M new OCS shares, representing between 28 and 33% of the capital, will be issued, subject to verification of the spin-off by the auditors. The OCS Management Board (members representing FCO and the Savare family abstained) has nominated Mr Dominique Ledouble (Cabinet CDL) as an independent auditor to express a fairness opinion on the share exchange ratio. Based on this, after the transaction, FCOF would hold between 69% and 71% of capital, while the volume of the float would remain unchanged. With a stable main shareholder and stronger financial fundamentals, the company would be in a bet