EMC Corporation, a leader in information management and storage, and RSA Security Inc., a leader in protecting and managing identities and digital assets, announced a definitive agreement for EMC to acquire RSA. Under the terms of the agreement, EMC will pay $28.00 per share in cash in exchange for each share of RSA and the assumption of outstanding options, for an aggregate purchase price of slightly less than $2.1 billion, net of RSA's existing cash balance. EMC's acquisition of RSA brings together two market leaders with a shared vision for helping organizations of all sizes securely manage their information throughout its lifecycle. The acquisition adds industry-leading identity and access management solutions and encryption and key management software to EMC's expanding, information-centric security portfolio. The acquisition is expected to be completed late in the third quarter or early in the fourth quarter of 2006, subject to customary closing conditions and regulatory approvals.

RSA provides technologies to secure information no matter where it resides or travels inside or outside of an organization and throughout its lifecycle. With industry-leading authentication, access control, and encryption solutions, RSA helps organizations of all sizes ensure the authenticity and protection of people, information and transactions.

According to recent surveys conducted by industry and financial analyst firms, information security is the number one priority among CIOs. Meanwhile, 75 percent of U.S. companies suffer data loss each year. With high-profile data breaches garnering national coverage and pressure to meet regulatory compliance, the combination of RSA's security offerings and EMC's information management and storage solutions uniquely addresses the market's rapidly growing need for information-centric security.

EMC's information-centric security strategy implements an integrated, four-part solution that secures information throughout its lifecycle. The strategy helps customers assess the security of their information, secure their information infrastructure, directly protect their sensitive information, and manage security information and events to assure effectiveness and ease the burdens of compliance. The integration of RSA's authentication and access management capabilities will build on EMC's foundation of inherently secure products and processes. RSA's encryption and key management technology will be central to EMC's strategy to directly protect the information no matter where it resides within or outside of an organization.

On a GAAP basis, EMC currently expects the acquisition of RSA will be dilutive by $.03 per diluted share in 2007 and will not have a material impact on diluted earnings per share in 2008. On a non-GAAP basis, which excludes the impact of intangible amortization and stock option expense, EMC currently expects the acquisition will not have a material impact on diluted earnings per share in 2007 and will be accretive to earnings by $.03 per diluted share in 2008.

Upon completion of the acquisition, RSA will operate as EMC's Information Security Division, headquartered in Bedford, Mass. Art Coviello will become an executive vice president of EMC and president of the division.

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