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Xerox And Flextronics Close On Manufacturing Asset Sales

Xerox Plants in Mexico, Canada, and Malaysia Transfer to Flextronics in $118 Million Sale (December 21, 2001)
Xerox Corporation (NYSE: XRX) and Flextronics (NASDAQ: FLEX) today announced the completion of the first in a series of asset sales to transfer Xerox's office product manufacturing operations to Flextronics.

The companies completed the sale of Xerox's plants in Toronto; Aguascalientes, Mexico; and Penang, Malaysia to Flextronics for $118 million plus the assumption of certain liabilities. The approximately 2,545 current Xerox employees in these operations transfer to Flextronics.


In September, Xerox and Flextronics announced a manufacturing agreement that includes payment to Xerox of about $220 million for the sale of inventory, property and equipment as well as a five-year contract for Flextronics to manufacture certain Xerox office equipment and components. In addition to the sale of Xerox's operations in Toronto, Aguascalientes and Penang, the company is selling to Flextronics its office manufacturing operations in Resende, Brazil and Venray, The Netherlands.

The asset sales announced today mark the beginning of a one-year transition period for Flextronics to assume manufacturing of Xerox-designed office products and related components. Flextronics will also begin the manufacturing of some Xerox electronic parts and subsystems during the first half of 2002. Xerox will continue to strengthen its manufacturing competencies in high-end production printing and publishing equipment, toner and imaging supplies through its remaining global manufacturing plants.

Xerox had previously received portions of the $118 million from this first set of asset sales and expects to receive today the remaining payment. Additional cash proceeds from the agreement will be received in phases as the companies finalize the other sales, subject to the completion of certain regulatory and other requirements.

About Xerox

Headquartered in Stamford, Conn., Xerox Corporation is a global enterprise with 83,300 employees serving customers in 130 countries. Xerox makes the digital world work better with an array of innovative document solutions, services and systems -- including color and black-and-white digital printers, multifunction devices and copiers -- designed for offices and production-printing environments. For further information, www.xerox.com.

About Flextronics

Headquartered in Singapore, Flextronics is a world-class Electronics Manufacturing Services (EMS) provider focused on delivering operational services to branded technology companies. With fiscal year 2001 revenues of USD$12 billion and approximately 70,000 employees, Flextronics is a major global operating company with design, engineering, manufacturing and logistics operations in 28 countries and four continents. This global presence allows for manufacturing excellence through a network of facilities situated in key markets and geographies that in turn provide its customers with the resources, technology and capacity to optimize their operations. Flextronics' ability to provide end-to-end operational services that include innovative product design, manufacturing, IT expertise and logistics has established the company as the top-tier EMS provider. For further information, please visit www.flextronics.com.

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