(Oslo, 29th May, 2006) The Board of Directors of Eltek ASA ("Eltek") and Nera ASA ("Nera") have agreed to seek to finalize a merger between Eltek and Nera. The merger proposal was initiated by Eltek and will be based on an exchange ratio giving the shareholders in Nera one new share in Eltek in exchange for 5.75 shares in Nera. Given the exchange ratio Eltek and Nera shareholders will hold approximately 60% and 40% of the combined company, respectively.

Eltek and Nera see the opportunity to create a uniquely positioned Norwegian telecom equipment company with global coverage, first tier customer base, leading engineering capabilities and low cost manufacturing through the Merger. By joining forces, the new company will enhance its position as an attractive player in the telecom equipment business world-wide. The combined company will have leading positions in transmission, telecom power supply and mobile satellite communication. The combined company will benefit from clearly the strongest telecom R&D and engineering pool in Norway, and access to resources on a global scale. The new CEO of the company will be the current CEO of Eltek, Morten Angelil.

It is believed that the telecom power supply business in Eltek and Nera's transmission business can directly benefit from each other's sales channels and marketing activities. In all global regions the merging companies' market positions are complementary and can be used to increase sales in both product areas. Higher combined revenue towards each customer should entrench the combined company's strategic position.

The Parties believe in synergies between the companies in the areas of sales growth, sourcing, manufacturing and administration. The merged company will keep the strong brand names established by the two merging companies in the different product segments.

Jointly, the two companies had revenue of more than 4.7 bn NOK in 2005, with approximately 45% in EMEA, 30% in Asia Pacific and 25% in Americas. The combined growth from 2004 to 2005 is more than 18%. Given the prevailing share price of Eltek, the market capitalisation of the combined company will be approximately NOK 4,860 million.

The Board of Directors of the companies will on the above basis negotiate a merger plan and prepare all other required documentation in connection with the merger. It is anticipated that completion of the merger will be conditional upon customary conditions, including approval by the general meeting of the companies, regulatory approvals and the satisfactory completion of a due diligence of the two companies. It is expected that the merger plan will be entered into by the end of June, and that the general meetings will be held in the beginning of August.

Bjørn Olafsson, CEO of Nera, states: `The initiative is interesting. There is basically no overlap in the two companies' product offerings and large potential opportunities in the customer base within Transmission and Telecom power supply. We believe that a joint company can be a sustainable player in the global telecom equipment markets.'

Morten Angelil, CEO of Eltek, believes strongly in the opportunities for the joint company: 'Nera has a strong product portfolio and impressive engineering capabilities. The joint company will have an outstanding market presence and a combined product portfolio which I believe will create opportunities for growth and profitability.'

Contact persons:

Morten Angelil, Eltek ASA, CEO, +47 32 20 32 36 Jørgen Larsen, Eltek ASA, CFO, +47 32 20 33 41

Bjørn Olafsson, Nera ASA, CEO, +47 55 22 57 30 Helge Skaar, Nera ASA, Information and public affairs, +47 55 22 58 20