NOTE 17
BUSINESS COMBINATIONS

ACQUISITION OF ECTUS LTD. On 3 October 2005, TANDBERG Telecom AS acquired 100% of the voting shares of Ectus Ltd, an unlisted company in New Zealand, specializing in streaming of video content. In connection with the business combination TANDBERG asa sold 43,171 of its own shares with a fair value of NOK 87.50 to TANDBERG Telecom AS to be paid out to the employee shareholders of ECTUS Ltd. In addition a cash consideration of USDm 6.7 was paid to the shareholders.

The fair value of the identifiable assets and liabilities of Ectus Ltd as at the date of the acquisition were:



From the date of acquisition, Ectus Ltd has contributed USDm (0.5) to the net profit of the Group.

If the combination had taken place at the beginning of the year, the net profit for the Group would have been USDm (0.7).

The employee shareholders in Ectus receiving TANDBERG shares in the transaction have a holding period of 18 months.

Included in the USDm 5.4 of goodwill recognized above are certain intangible assets that cannot be individually separated and reliably measured from the acquired company due to their nature. Assets included in this balance consist of research activities and control over the acquired company.

ACQUISITION OF CERTAIN ASSETS AND RIGHTS FROM TNO, THE NETHERLANDS ORGANIZATION FOR APPLIED SCIENTIFIC RESEARCH On 1 July 2005, TANDBERG Telecom AS acquired assets and certain rights from TNO related to interactive multimedia video applications and development of video services for 3G mobile phones. Total consideration for the assets and certain rights were € m 1.75. Of the total consideration, € m 1.3 was paid in cash at the transaction date, while payments of € m 0.45 are conditional on certain clauses in the Sales and Purchase Agreement.

The fair value of the identifiable assets and certain rights acquired from TNO at the date of the acquisition were:



The conditional payments will be paid within 12 months if certain conditions in the Sales & Purchase agreement are met.