Flextronics Signs Agreement to Sell Software Development and Solutions Business

Board approves stock repurchase program SINGAPORE --, April 17, 2006 -- Flextronics International Ltd. today announced that it has signed a definitive agreement to sell its software development and solutions business to an affiliate of Kohlberg Kravis Roberts & Co. (KKR), in a transaction valued at approximately $900 million.

Upon closing, Flextronics expects to receive in excess of $600 million in cash consideration and will hold a $250 million face value note with a 10.5% paid-in-kind interest coupon which matures in eight years. Flextronics will also retain a 15% equity stake in the business, which will operate as an independent software development and solutions company. The purchase price is subject to customary working capital and certain other post-closing adjustments. Flextronics expects the after tax gain on the sale transaction to be approximately $175 million.

"This transaction is the continuation of our previously announced strategy of focusing our efforts and resources on the reacceleration of significant growth opportunities in our core EMS business, which includes design, vertically-integrated manufacturing services, components and logistics," said Michael McNamara, Chief Executive Officer of Flextronics. "By monetizing non-core assets at substantial gains over carrying values, Flextronics will have generated cash proceeds in excess of $1 billion through the divestitures of our software, network services and semiconductor businesses, assuming this transaction is consummated. In addition, we will have retained ownership interests in both the software and network services businesses, which should provide additional cash and potential future upside when monetized."

Thomas J. Smach, Chief Financial Officer of Flextronics, stated, "We expect this transaction to be slightly accretive to our fiscal 2007 GAAP earnings per diluted share. There are a number of attractive opportunities to deploy the cash proceeds from this transaction in a manner which maximizes earnings and long-term shareholder returns. We expect to invest in working capital to support the rapid increase in growth we expect in our core EMS business. Other attractive opportunities include paying down debt or repurchasing stock, or a combination of both."

McNamara concluded, "We believe this transaction benefits all parties involved, and we expect continued success for the software team moving forward. As an independent software development and solutions company, its customers will benefit from enhanced service capabilities and its employees will be better positioned to capitalize on business opportunities as a result of a singular focus. In addition, with Flextronics retaining an equity stake in the software development and solutions business, both companies will continue to capitalize on the synergies they have to offer one another."

The transaction is expected to close this summer and is subject to regulatory approvals and other customary closing conditions. Merrill Lynch & Co. acted as financial advisor to Flextronics in connection with the transaction and rendered a fairness opinion to the Independent Committee of the Board of Directors of Flextronics. Banc of America Securities LLC also rendered a fairness opinion to the Independent Committee of the Board of Directors of Flextronics. Curtis, Mallet-Prevost, Colt & Mosle LLP acted as legal advisor to Flextronics.

Share Repurchase Authorization

Flextronics also announced today that its Board of Directors has authorized the repurchase of up to $250 million of its outstanding ordinary shares. Stock repurchases, if any, will be made in the open market at such times and in such amounts as management deems appropriate and will be made pursuant to the Share Purchase Mandate approved by the shareholders at the Company's 2005 Annual General Meeting, which remains in effect until the Company's 2006 Annual General Meeting. The stock repurchase program does not obligate the Company to repurchase any specific number of shares and may be suspended or terminated at any time without prior notice. Shares repurchased under the program will be canceled. As of March 31, 2006, Flextronics had approximately 578.0 million ordinary shares outstanding.

About Flextronics

Headquartered in Singapore (Singapore Reg. No. 199002645H), Flextronics is a leading Electronics Manufacturing Services (EMS) provider focused on delivering innovative design and manufacturing services to automotive, industrial, medical, and technology companies. With fiscal year 2005 revenues of USD$15.9 billion, Flextronics helps customers design, build, ship, and service electronics products through a network of facilities in over 30 countries on five continents. This global presence provides customers with complete design, engineering, and manufacturing resources that are vertically integrated with components to optimize their operations by lowering their costs and reducing their time to market. For more information, please visit http://www.flextronics.com.