Novell announces agreement to acquire SuSE Linux

Novell today announced it has entered into an agreement to acquire SuSE Linux, one of the world`s leading enterprise Linux companies, expanding Novell`s ability to provide enterprise-class services and support on the Linux platform.

With the open source expertise of SuSE Linux and Novell`s world-class networking and identity solutions and support, training and consulting services, Novell will be able to deliver Linux and all its components - from the server to the desktop - and give organisations a secure, reliable and mature Linux foundation. Novell will pay $210 million in cash to complete the acquisition. The transaction is subject to regulatory approval and the winding up of shareholder agreements. Novell expects the transaction to close by the end of its first fiscal quarter (January 2004).

This latest move follows Novell`s August purchase of Ximian, a leader in Linux server and desktop solutions, and further demonstrates Novell`s ongoing commitment to provide customers with a full range of Linux solutions. Both the Ximian and SuSE Linux acquisitions affirm Novell`s commitment to promoting the open source model and developer community.

Novell today also announced that IBM intends to make a $50 million investment in Novell convertible preferred stock. In addition, Novell and IBM are negotiating extensions to the current commercial agreements between IBM and SuSE Linux for the continued support of SuSE Linux on IBM`s eServer products and middleware products to provide for product and marketing support arrangements related to SuSE Linux. Both of these agreements will be effective when the acquisition of SuSE Linux by Novell is completed.

"Responding to customer demands for open, standards-based computing, Novell has been dedicated to a cross-platform vision for four years now, and Linux is an increasingly important part of that strategy," said Jack Messman, chairman and CEO of Novell.

"The acquisition of SuSE Linux will complete Novell`s ability to offer enterprise-class Linux solutions to our customers from the desktop to the server. No other enterprise Linux vendor has the operating system experience and the worldwide technical support capabilities that Novell will be able to deliver. Novell is bringing our significant resources to bear to help customers adopt Linux with more confidence, giving them the freedom of choice Linux provides without the anxiety over whether an open source solution can truly be relied on for mission-critical functions."

"Novell understands the power of open, standards-based computing, and has been moving in that direction for some time," said Richard Seibt, CEO of SuSE Linux. "Novell`s global reach, marketing expertise and reputation for security, reliability and global enterprise-level support are exactly what we`ve been seeking to take SuSE Linux to the next level. We`ve also been impressed by the incredible loyalty and competence of Novell customers and business partners, and we`re looking forward to joining forces to help customers gain the benefits of Linux and to help Novell continue to expand its role in the open source community."