Press Release

Milan, September 27, 2000 - Pirelli and Corning, the two long lasting partners in the optical technology, announced today to have reached an agreement for the sale to Corning of the share capital of Optical Technologies - the American company manufacturing optical components based in Delaware - for USD 3.9 billion plus other assets for USD 100 million. The company shareholding is held 90% by Pirelli SpA and 10% by Cisco Systems, while the other assets are fully owned by Pirelli Cables and Systems.

As already announced last March, the Pirelli strategic aim was to proceed with an IPO in order to allow the new company to benefit from the opportunities offered by the US market in terms of finance, customers and technologies: an aim which is now fully achieved through this transaction.

According to the agreement, which has been approved by the Boards of Directors of the two companies, at the closing of the transaction, which is expected in 2-3 months being subject to customary Antitrust Authorities approval, Corning will correspond to Pirelli an initial payment for the above mentioned transaction of approx. USD 3.43 billion, and a contingent payment of up to USD 180 million based upon the achievement of certain business milestones. The net income for Pirelli will be of about USD 3.05 billion taking into account: the stock options granted to the management (equal to 12,5% of the capital); special benefits granted for the positive conclusion of the deal; and the costs related to the deal itself. The tax charge of the overall transaction, including the transfer of assets already realised in view of the IPO, can be estimated in the range of ITL 1 thousand billion.

Thanks to this agreement, Pirelli will reinforce its leading technologies in optical fibres, optical cables and submarine optical systems, in energy transmission and in tires, and will capture any further opportunity to create additional value.

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For a full brief on the subject, Pirelli SpA will hold a press conference today (Wednesday 27 Sept.) at 14.00 p.m. in Milan, via G. Negri 10.

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Established in 1851, Corning Incorporated (www.corning.com) creates leading-edge technologies for the fastest-growing markets of the world's economy. Corning manufactures optical fiber, cables and photonic products for the telecommunications industry; and high-performance displays and components for television and other communications-related industries. The company also uses advanced materials to manufacture products for scientific, semiconductor and environmental markets. Corning's revenues in 1999 were $ 4.7 billion.