Elisa Corporation and Lounet Oy have signed a merger plan according to which Lounet will merge with Elisa through the absorption process referred to in the Finnish Companies Act, chapter 16, section 2, paragraph 1, sub-paragraph 1. Before the merger Elisa Group owned 80.51 per cent of Lounet. The business activities of the companies participating in the merger complement each other as a whole, and combining these activities will generate a stronger and more competitive entity. The merger will also simplify Elisa's current group structure. According to the merger plan, Lounet shareholders will receive a merger consideration consisting of new Elisa shares. 0,07 Elisa new shares will be given in exchange for each Lounet share (corresponding 70 Elisa new shares in exchange for each Lounet share certificate). Furthermore, the Board of Directors of Lounet Oy has proposed that Lounet Oy distributes a dividend, the amount of which is EUR 150 for each Lounet Oy share certificate. Elisa has agreed to vote in favour of the Board's proposal for the distribution of the dividend. The amount of the merger consideration is based on the mutual relationship between the values of Elisa and Lounet. A decision regarding the merger shall be made at Lounet's extraordinary shareholders' meeting to be held in Turku on 5 July 2007. Approval of the merger requires that at least two thirds (2/3) of the shares represented at the shareholders' meeting and of the votes given are in favour of the merger. The merger shall take effect once the execution of the merger is registered in the trade register. The estimated registration date of the merger is 30 September 2007.The merger consideration shall be paid after the merger has been registered. No merger consideration shall be paid for the 16,148,000 Lounet shares owned by Elisa. There are a total of 3,909,000 shares owned by shareholders other than Elisa (corresponds to 3,909 Lounet share certificates). Consequently, a maximum of 273.630 new Elisa shares will be given as merger consideration, which represents approximately 0,17 per cent of the current number of Elisa shares. The merger plan is attached to this release. Elisa is scheduled to publish a merger prospectus on the Lounet merger in week 25. ELISA Vesa Sahivirta Vice President, IR and Financial Communications For more information, please contact: Jari Kinnunen CFO, tel. +358 10 26 9510 Pekka Ekstam Vice President, M&A, tel. +358 50 5205252 Distribution: Helsinki Stock Exchange Principal media APPENDIX: Merger plan MERGER PLAN 1 Companies participating in the merger 1.1 Elisa Corporation, business ID 0116510-6, Helsinki (Hereinafter "Elisa") 1.2 Lounet Oy, business ID 0136135-0, Turku (Hereinafter "Lounet" or "merging company") (Elisa and Lounet are hereinafter referred to as "the Parties" or"Companies participating in the merger") 2 Merger The Boards of Directors of the companies participating in the merger have signed this plan regarding the merging of Lounet into Elisa through absorption, referred to in Chapter 16, section 2, paragraph 1, sub-paragraph 1 of the Finnish Companies Act, under the terms and conditions of this merger plan in such a way that all of Lounet's assets and liabilities will be transferred to Elisa without liquidation proceedings. 3 Information required by the Companies Act 3.1 Companies participating in the merger Companies participating in the merger have been specified above in section 1. 3.2 Reasons for the merger It is the opinion of the Boards of Directors of the companies participating in the merger that the business activities of the companies participating in the merger on the whole complement each other, and that combining these activities will generate a stronger and more competitive entity. It is the opinion of the Boards of Directors of the companies participating in the merger that it is in the interest of both Parties and their shareholders to simplify the existing ownership structure by combining the activities of Elisa and Lounet through a merger, which will be executed in accordance with this merger plan. 3.3 Amendments to Elisa's Articles of Association The merger will not require any amendments to Elisa's Articles of Association. 3.4 Shares to be given as merger consideration As merger consideration, Lounet's shareholders will receive new Elisa shares, with each Lounet share being exchanged for 0.07 ("Conversion rate") new Elisa shares. In cases where one Lounet so-called old telephone share consists of 1,000 Lounet shares, the merger consideration shall be 70 Elisa shares for each old telephone share. Elisa owns a total of 15,905,000 (fifteen million nine hundred and five thousand) Lounet shares. In addition, Elisa exercises the voting rights included in those 243,000 shares that are subject to a common annulment procedure in the District Court of Turku (case number H 07/1158). The ownership of the said shares will be assigned to Elisa after the shares have been annulled and the sale prices have been paid to the shareholders involved in the annulment procedure. Including the shares to be annulled, Elisa owns 16,148,000 (sixteen million one hundred and forty-eight thousand) Lounet shares. Lounet holds 3,909,000 (three million nine hundred and nine thousand) shares owned by parties other than Elisa. No merger consideration shall be given for shares owned by Elisa at the time the execution of the merger is registered. A maximum of 290.640 (two hundred ninety thousand and six hundred forty) new Elisa shares shall be given as merger consideration inconnection with the merger. 3.5 Other merger consideration If the number of all Elisa shares, determined on the basis of the Conversion Rate, to be given as merger consideration is not an integer number, the number of Elisa shares to be given as merger consideration shall be the number derived by multiplying the number of all Lounet shares entitling to merger consideration by the Conversion Rate and rounding up the resulting number of Elisa shares to the nearest lower integer number. If the number of Elisa shares, determined on the basis of the Conversion Rate, to be given as merger consideration to any shareholder is not an integer number, the number of Elisa shares to be given as merger consideration shall be the number derived by multiplying the number of Lounet shares owned by the relevant shareholder by the Conversion Rate and rounding up the resulting number of Elisa shares to the nearest lower integer number. The remaining fraction shall be paid in cash through a procedure whereby Elisa shares compiled of the fractions will be sold in the Helsinki Stock Exchange on behalf of the Lounet shareholders entitled to the fractional merger consideration immediately after the execution of the merger has been registered, and the value of the fraction shall be calculated on the basis of the average selling price of the shares sold. This value will be paid to those entitled to it within three (3) weeks of the date on which the execution of the merger was registered under the conditions specified in section 3.6. No other consideration shall be paid in addition to those specified in sections 3.4 and 3.5. 3.6 Division of the merger consideration, time of merger consideration payment, and other terms related to the merger consideration payment, and the grounds thereof The merger consideration specified in sections 3.4 and 3.5 shall be distributed to Lounet shareholders against their shareholding provided that (a) the recipient of the consideration has informed Elisa or a third party named by Elisa of their book-entry account number and, if the consideration to be given to the Lounet shareholder also includes cash, a bank account number, (b) the recipient of the consideration has provided Elisa or a third party named by Elisa with share certificates, if share certificates have been issued for the shares owned by the recipient of the consideration, (c) if no share certificates have been issued for the shares owned by the recipient of the consideration, the recipient was, on the date on which the execution of the merger was registered, registered in Lounet' share register, or can provide Elisa or a third party named by Elisa, with a sufficient, reliable and acceptable account of their title and ownership, and (d) the recipient of the consideration will in other respects comply with the requirements set forth by Elisa in its merger prospectus. The merger consideration shall be recorded in book-entry accounts immediately after the execution of the merger has been registered, and any fractional cash consideration referred to in section 3.5 shall be paid within three (3) weeks of the registration of the execution of the merger. If a Lounet shareholder entitled to merger consideration has not handed over any share certificates issued for Lounet shares to Elisa or a third party named by Elisa, or informed its book-entry account number or bank account number for the payment of merger consideration before the registration of the execution of the merger, the merger consideration shall not be paid until the recipient of the consideration has handed over the share certificates and/or provided the information regarding the book-entry account and bank account. If a Lounet shareholder entitled to merger consideration has not handed over any share certificates issued for the shares they own and/or informed their book-entry account or bank account number to Elisa or a third party named by Elisa for the payment of the merger consideration within ten (10) years of the registration of the execution of the merger, shareholders at Elisa's shareholders' meeting may decide to forfeit the right to merger consideration and any rights based on it. The merger consideration shall be determined on the basis of the mutual relationship between the values of Elisa and Lounet. The parties and their shares have been valued on the basis of generally used valuation principles. For Lounet, the valuation has primarily relied on a financial analysis based on the company's projected cash flows and on a peer company analysis, and for Elisa, based on the volume weighted average price (adjusted by dividend) on Helsinki Stock Exchange between February 8, 2007 and May 16, 2007. On the basis of negotiations and various reports, the Boards of Directors of the merging companies have come to the conclusion that the proposed payment of consideration is correct and justified. 3.7 Lounet's options and other special rights entitling to shares Lounet has not issued any options referred to in Chapter 16, section 3, paragraph 2, sub-paragraph 7 of the Companies Act, and does not possess any other rights entitling to its' shares. 3.8 Elisa's share issue and increase in share capital To pay the merger consideration, a share issue shall be carried out at the time the execution of the merger is registered on the basis of the share issue authorisation granted at the shareholders' meeting on 19 March 2007 and in accordance with this merger plan. A maximum of 290.640 new Elisa shares will be issued. The shares will be offered as merger consideration to Lounet's shareholders other than Elisa in accordance with this merger plan. There is an important financial reason for waiving the pre-emption rights of existing shareholders as it enables the execution of the merger and, in addition, the merger is expected to benefit Elisa's shareholders. The share subscription price will be determined on the basis of the accounting process related to the merger, which is explained in section 3.9 of the merger plan. In connection with the share issue related to the merger, the consideration of the share issue will be recorded in the invested free equity fund. However, in the event that a need to pay the cash consideration referred to in section 3.5 above arises, Elisa shall increase its share capital in connection with the share issue by a sum that is eleven (11) times higher than the total amount incurred from the shares sold in a manner explained in section 3.5. In this case, this portion of the share subscription price determined in the merger will be recorded as an increase in the company's share capital while the remainder will be recorded in the invested free equity fund. This increase in share capital in connection with the merger may be waived provided the Boards of Directors of the companies participating in the merger agree to do so. The shares offered as merger consideration shall entitle to equal rights with other Elisa shares following the registration of the execution of the merger. 3.9 Lounet's assets, liabilities, shareholders' equity and factors affecting their measurement, the effect of the merger on Elisa's balance sheet, and the accounting methods applied to the merger Lounet's assets primarily consist of the assets used in the telecommunications operations, cash and bank receivables, trade receivables, and investments and real estate company shares. Cash and bank receivables and trade receivables have been measured at nominal value, investments and real estate companies at acquisition cost, and the assets used in telecommunications business at acquisition cost less planned depreciation. Lounet's liabilities primarily comprise trade payables and other business-related liabilities. There are no long-term financial liabilities. In accounting, liabilities have been recorded at nominal value. Lounet's assets and liabilities will be recorded in Elisa's balance sheet in compliance with the accounting continuity principle. Approximately EUR 4,000,000 will be entered under Elisa's shareholders' equity, of which the amount specified above in section 3.8 will be recorded in share capital and the amount not recorded in share capital will be recorded in the invested free equity funds. In Elisa's accounting, the merger generates goodwill, which will be written off in five (5) years. In Elisa's consolidated financial statements, Lounet's assets and liabilities will be measured and allocated to acquired assets in accordance with international accounting standards. The values for the transferring assets and liabilities to be recorded in Elisa's balance sheet will be finally determined on the basis of a final account to be prepared on the date on which the execution of the merger is registered. 3.10 The right of the companies participating in the merger to decide on arrangements other than standard business practices that affect their shareholders' equity or number of shares During the merger procedure, Lounet agrees not to engage in, or decide to engage in any unusual or far-reaching or otherwise non-standard business activities. However, under a decision taken at the Annual General Meeting, Lounet may, before the execution of the merger is registered, pay a dividend of not more than EUR 0,15 per share. Lounet specifically agrees that before the merger takes effect, it shall not (i) change or decide to change its share capital (ii) repurchase or decide to repurchase its own shares (iii) grant or decide to grant options or other special rights (iv) pay or decide to pay any dividend other than that which has been specified in the previous paragraph (v) initiate or decide to initiate a demerger, a merger other than that referred to in this merger plan, or any other corporate arrangement. During the merger procedure, Elisa shall be entitled to take or decide to take all measures representing standard business practices regardless of whether or not the said measures affect Elisa's shareholders' equity or the number of shares. It is specifically pointed out the Elisa shall be entitled to repurchase its own shares under the authorisation granted at Elisa's Annual General Meeting of 19 March 2007. The share purchase price shall then be based on the market price at the Helsinki Stock Exchange, and in the Parties' opinion it will not alter the financial grounds on which the merger consideration was determined. Elisa will continue to have the right to cancel its own shares in its possession. Even though the cancellation will reduce the number of Elisa shares, the Parties' opinion is that it will not alter the financial grounds on which the merger consideration was determined. Elisa shall continue to have the right to make decisions regarding share issues under a decision of Elisa's Annual General Meeting, or of the Board of Directors, if the share price to be paid in the share issue is the same as the market price of Elisa shares at the Helsinki Stock Exchange. In the Parties' opinion it will not alter the financial grounds on which the merger consideration was determined. Elisa shall continue to have the right to change its equity structure if such change has no effect on the total amount of shareholders' equity. Making decisions referred to in Chapter 16, section 3, paragraph 2, sub-paragraph 10 of the Companies Act for both Parties requires prior consent from the Boards of Directors of both Parties. 3.11 Capital loans The companies participating in the merger have no capital loans referred to in Chapter 16, section 3, paragraph 2, sub-paragraph 11 of the Companies Act. 3.12 Ownership structure Lounet owns 49,976 Elisa shares. As explained above in section 3.4, Elisa owns 16,148,000 (sixteen million one hundred and forty-eight thousand) Lounet shares. This represents an 80.51% holding of Lounet. Lounet does not own its shares. 3.13 Business mortgages Elisa has registered business mortgages consisting of seven (7) mortgaged collateral notes amounting to a total of EUR 185,000 (FIM 1,100,000). The business mortgages do not represent collateral for Elisa's obligations. Elisa has signed a merger plan with First Orange Contact Oy, which states that the expected merger date is 31 August 2007. First Orange Contact Oy has registered business mortgages consisting of three (3) mortgaged collateral notes amounting to a total of EUR 25,228 (FIM 150,000). The business mortgages do not represent collateral for the company's obligations. There are no registered business mortgages on Lounet's assets, nor are there any mortgage applications pending. 3.14 The benefits and rights granted in connection with the merger Members of Lounet's Supervisory Board, Board members of the companies participating in the merger, managing directors, or auditors shall not be offered any special benefits or rights in connection with the merger, nor will any such benefits be offered to the authorised public accountants issuing a statement of the merger, apart from a reasonable invoiced fee. 3.15 Proposal for a planned registration of the execution of merger The merger will take effect once the notification of the execution of merger has been registered. The planned registration date is 30 September 2007. 3.16 Other merger terms and conditions Lounet's Board of Directors has decided to call a shareholders' meeting on 5 July 2007 and has decided to propose to the meeting that the company pay a dividend of EUR 0.15 per share (corresponding of EUR 150 per so called old telephone share) . Elisa undertakes to vote in favour of the Board's proposal at the said shareholders' meeting. A precondition for the merger is that no permanent unfavourable changes occur in the current financial operating conditions of the merging companies other than changes attributable to business cycles before the shareholders' meeting or Board meeting in which the approval of the merger plan shall be decided. The companies participating in the merger undertake to act in line with the objectives and purpose of this merger plan and to take it duly into consideration in all their decision-making, unless otherwise agreed in this merger plan. The Boards of Directors of the merging companies are hereby authorised to make joint decisions regarding any technical modifications in the merger plan or its appendices possibly required by the authorities or otherwise deemed appropriate. 4 Date and signatures This merger plan has been written in two (2) identical copies, one (1) for Elisa and one (1) for Lounet. Helsinki, 24 May 2007 ELISA CORPORATION Pekka Ketonen Mika Ihamuotila Lasse Kurkilahti Matti Manner Risto Siilasmaa Ossi Virolainen LOUNET OY Tapio Laakso Matias Castren Pasi Mäenpää Jouko Virta