Bookham and Avanex Agree to Merger

  New Company Will Be a Leader in Optical Solutions for Metro and Long Haul
                               Telecom Networks

             Annualized Cost Saving Expected to Reach $28 Million

Business Wire

SAN JOSE, Calif. & FREMONT, Calif. -- January 27, 2009

Bookham, Inc. (NASDAQ:BKHM) and Avanex Corporation (NASDAQ:AVNX) today
announced that they had reached a definitive agreement to merge in an
all-stock transaction. Avanex shareholders will receive 5.426 shares of
Bookham common stock for every share of Avanex common stock and will own
approximately 46.75% of the combined company.

It is expected that the combination will be Adjusted EBITDA accretive in the
first full quarter after the close of the transaction and will generate $7
million of quarterly cost savings by the end of the fourth full quarter after
the close. The new company will have a stronger balance sheet, benefiting from
combined cash balances and no outstanding debt. Restructuring costs associated
with the transaction are expected to be less than $7 million.

Key strengths of the new company include:

  * A complete portfolio of terminal and line product technologies critical
    for the metro and long haul markets
  * Best in class telecom chips based on Indium Phosphide, Lithium Niobate and
    Gallium Arsenide
  * Well positioned for 40Gbs and reconfigurable networks
  * Ability to leverage new opportunities quickly within expanded customer
    base
  * Resources to enable leading R&D investment in key product lines
  * Ability to leverage both in-house and outsourced manufacturing capacity to
    maximize flexibility and gross margin opportunities
  * $7 million of quarterly synergies by the end of the fourth full quarter
    after close, which is $28 million annualized
  * Company to be led by Alain Couder as CEO and talented executives from both
    companies

“The combination of Bookham and Avanex creates synergies that we expect will
significantly improve financial performance faster than either of the two
companies could accomplish on a stand-alone basis,” said Alain Couder,
president and CEO of Bookham. “There is minimal product overlap between our
businesses allowing us to quickly expand sales opportunities and improve
service to our customers. In addition, both companies have strong technology
platforms and the best engineering teams that we expect will allow us to drive
innovation and expansion for both existing and new growth areas.”

“The significant financial and technological advantages to combining the two
companies will benefit our customers, employees, and shareholders, as well as
the industry as a whole,” said Giovanni Barbarossa, President and CEO of
Avanex. “We expect that the combination of Avanex’s next generation subsystem
design and integration capabilities, enhanced with additional internal content
from Bookham will deliver end-to-end product offerings to our customers at
competitive prices.”

The combined company will be led by Alain Couder who will serve as President
and CEO. The company is expected to have two telecom divisions and one
non-telecom division. The board of directors will be composed of Alain Couder
and three additional directors from the Bookham board, and Giovanni Barbarossa
and two additional directors from the Avanex board.

Transaction Details

Under the terms of the agreement signed on January 27, 2009, which has been
approved by both boards of directors, Avanex shareholders will receive, at a
fixed exchange ratio, 5.426 shares of Bookham common stock for every share of
Avanex common stock. Upon the close of the transaction, Avanex shareholders
will own approximately 46.75 percent of the combined company. Based on the
closing price of Bookham on January 26, 2009 the total consideration to Avanex
shareholders would be equivalent to $35.4 million or $2.17 per share.

The merger is subject to customary closing conditions including shareholder
approval by both companies. Both companies will continue to operate their
businesses independently until the close of the merger. The merger is expected
to be completed within three to six months.

Citigroup Global Markets Inc. is acting as Bookham’s financial advisor. Banc
of America Securities, LLC is acting as Avanex’s financial advisor.

Bookham and Avanex will each be filing the full text of the merger agreement
with the Securities and Exchange Commission (the "SEC") on Form 8-K within
four business days of the date of this release. Investors and security holders
of each company are advised to review those filings for the full terms of the
proposed combination, as well as any future filings made by the companies,
including the Form S-4 Registration Statement (and related Joint Proxy
Statement/Prospectus) (see below under “Additional Information and Where to
Find It”).

Conference Call

The management teams of both companies will host a conference call today,
January 27, 2009, at 5:00 p.m. ET/2:00 p.m. PT. To access the conference call,
please dial (480) 248-5081, and reference “Bookham and Avanex merger.” A live
webcast and accompanying presentation of the conference call will be available
in the Investors section of Bookham’s website at www.bookham.com and in the
Investors section on Avanex’s website at www.avanex.com. A joint slide
presentation to be used in the conference call will be filed by each company
with the SEC and posted to the investor relations page of each company's
website prior to the conference call. An audio replay of the conference call
will be available until February 3, 2009. To access the replay, please dial
1-303-590-3030, and use the access code 3965637.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Such statements include,
but are not limited to, statements about the timetable for completing the
transaction, the benefits of the business combination transaction involving
Bookham and Avanex, including potential synergies and cost savings and the
timing thereof, future financial and operating results including Adjusted
EBITDA in the first quarter following the transaction, quarterly synergies,
the combined company’s plans, cash balances together, objectives, expectations
and intentions with respect to future operations, products and services; and
other statements identified by words such as “potential,” “expected,” “plan,”
“estimate,” “intend,” “will,” or words of similar meaning. Such
forward-looking statements are based upon the current beliefs and expectations
of Bookham’s and Avanex’s management and are inherently subject to significant
business, economic and competitive uncertainties and contingencies, many of
which are difficult to predict and generally beyond the control of Bookham and
Avanex. Actual results may differ materially from the results anticipated in
these forward-looking statements. Factors that could cause or contribute to
such differences include, but are not limited to, general business and
economic conditions; the performance of financial markets; risks relating to
the consummation of the contemplated merger, including the risk that required
stockholder approval might not be obtained in a timely manner or at all or
that other closing conditions are not satisfied; the failure to realize
synergies and cost-savings from the transaction or delay in realization
thereof; the businesses or employees of Bookham and Avanex not be combined and
integrated successfully, or such combination may take longer, be more
difficult, time-consuming or costly to accomplish than expected; and operating
costs and business disruption following the merger, including adverse effects
on employee retention and on our business relationships with third parties.
Additional factors that can cause the results to materially differ than those
described in the forward-looking statements can be found in the most recent
Form 10-Q, most recent Form 10-K and other periodic reports filed by Bookham
and Avanex, with the Securities and Exchange Commission. Neither Bookham nor
Avanex assumes any obligation or intends to update any forward-looking
statements, whether as a result of new information, future events or
otherwise.

Additional Information and Where to Find It

This communication is being made in respect of the proposed business
combination involving Bookham and Avanex. In connection with the proposed
transaction, Bookham and Avanex plan to file documents with the SEC, including
the filing by Bookham of a Registration Statement on Form S-4 containing a
Joint Proxy Statement/Prospectus and each of Bookham and Avanex plan to file
with the SEC other documents regarding the proposed transaction. Investors and
security holders of Bookham and Avanex are urged to carefully read the Joint
Proxy Statement/Prospectus (when available) and other documents filed with the
SEC by Bookham and Avanex because they will contain important information
about the proposed transaction. Investors and security holders may obtain free
copies of these documents (when they are available) and other documents filed
with the SEC at the SEC’s web site at www.sec.gov and by contacting Bookham
Investor Relations at (408) 404-5400 or Avanex Investor Relations at (510)
897-4188. Investors and security holders may obtain free copies of the
documents filed with the SEC on Bookham’s website at www.bookham.com or
Avanex’s website at www.avanex.com or the SEC’s website at www.sec.gov.
Bookham, Avanex and their respective directors and executive officers may be
deemed participants in the solicitation of proxies with respect to the
proposed transaction. Information regarding the interests of these directors
and executive officers in the proposed transaction will be included in the
Joint Proxy Statement/Prospectus described above. Additional information
regarding the directors and executive officers of Bookham is also included in
Bookham’s proxy statement for its 2008 Annual Meeting of Stockholders, which
was filed with the SEC on September 18, 2008, and additional information
regarding the directors and executive officers of Avanex is also included in
Avanex’s proxy statement for its 2008 Annual Meeting of Stockholders, which
was filed with the SEC on October 14, 2008, respectively.

About Bookham

Bookham, Inc. is a leading provider of high performance optical products,
spanning from components to advanced subsystems. The company designs and
manufactures a broad range of solutions tailored for the telecommunications
optical infrastructure and other selected markets, including industrial, life
sciences, semiconductor, and scientific. The Company utilizes proprietary core
technologies and a vertically integrated manufacturing organization to provide
its customers with cost-effective and innovative devices, as well as flexible,
scalable product delivery. Bookham is a global company, headquartered in San
Jose, Calif., with leading edge chip fabrication facilities in the UK and
Switzerland, and manufacturing sites in the USA and China. To learn more about
Bookham, visit our web site at: www.bookham.com.

Bookham and all other Bookham, Inc. product names and slogans are trademarks
or registered trademarks of Bookham, Inc. in the USA or other countries.

About Avanex

Avanex Corporation is a leading global provider of Intelligent Photonic 
Solutions(TM) to meet the needs of fiber optic communications networks for
greater capacity, longer distance transmissions, improved connectivity, higher
speeds and lower costs. These solutions enable or enhance optical wavelength
multiplexing, dispersion compensation, switching and routing, transmission,
amplification, and include network-managed subsystems. Avanex Corporation was
incorporated in 1997 and is headquartered in Fremont, California. Avanex
Corporation also maintains facilities in Horseheads, New York; Shanghai,
China; Villebon Sur Yvette, France; San Donato, Italy; and Bangkok, Thailand.
To learn more about Avanex Corporation, visit our web site at: www.avanex.com.

Contact:

Bookham Contacts:
Summit IR Group Inc.
Jim Fanucchi, 408-404-5400
ir@bookham.com
or
Jerry Turin, 408-383-1400
Chief Financial Officer
ir@bookham.com
or
Avanex Contact:
Mark Weinswig, 510-897-4188
Interim Chief Financial Officer
ir@avanex.com

Last Updated: January 27, 2009 16:42 EST