Parthus Technologies plc ("Parthus") (LSE: PRH, Nasdaq: PRTH) and DSP
Group, Inc. ("DSPG") (Nasdaq: DSPG) jointly announce that they have agreed
to combine Parthus with the DSP IP licensing business of DSPG ("Ceva
Business") in a merger of equals (the "Merger"). The Merger, which has
been unanimously approved by the boards of directors of both companies,
creates a combined company which the parties believe will have clear
leadership in the market for Digital Signal Processing ("DSP") cores and
platform-level IP - the core technologies for all digital communication
and multimedia devices. The new combined company will be called
ParthusCeva, Inc. ("ParthusCeva").

Under the terms of the Merger, immediately following the transaction,
shareholders of DSPG and Parthus will own approximately 50.1% and 49.9% of
ParthusCeva, respectively. Parthus shareholders will also receive, as part
of a court approved repayment of capital, a cash payment of approximately
US$60 million (approximately EURO 68 million or GBP 42 million).

The boards of Parthus and DSPG expect the Merger to be completed by the
end of Q3 2002, subject to, inter alia, receipt of a favourable private
letter ruling ("Tax Ruling") from the U.S. Internal Revenue Service of the
tax-free spin-off of the Ceva Business by DSPG ("Spin-off"), Parthus
shareholder approval of the transactions contemplated by the Merger, the
Irish High Court approval of a scheme of arrangement in accordance with
Irish companies legislation ("Scheme") and other customary closing
conditions.

Strategic Rationale for the Merger

Parthus is an established leader in platform-level IP solutions
(complete silicon and software IP solutions) targeting key technologies
related to the mobile Internet. The Ceva Business is the leading supplier
of DSP cores to the semiconductor industry and its SmartCores™ technology
is the licensed DSP core of choice in the cellular phone market.

Key strengths of ParthusCeva are expected to include:

Market leadership in both DSP cores and platform-level IP
solutions that build around the DSP core;

Strong positioning in large and fast-growing markets such as
wireless communications, mobile computing, automotive, consumer
entertainment and computer networking;

Compelling product offering which includes IP solutions for
key applications such as Bluetooth, GPS, W-CDMA, VolP and MP3;

Strategically well positioned to exploit the industry shift
toward the licensing of open-standard processor architectures;

Blue-chip semiconductor and OEM customers (including nine out
of the top-10 semiconductor companies) with demonstrated strong customer
retention and significant cross-selling opportunities; and

Proven business model with scalable, high margin revenues and
pro forma combined net cash position in excess of US$80
million.

Eli Ayalon, Chairman and Chief Executive Officer of DSPG who will also
be Chairman of ParthusCeva said, "The merger of our two companies will
create what we believe to be the leading independent provider of DSP-based
IP solutions with strong customer penetration of many of the world's
largest semiconductor companies and OEMs. ParthusCeva will be in the
unique position of being able to offer an integrated IP solution -
including communication, application and multimedia IP built around the
company's DSP core technology. This integrated solution will favourably
position ParthusCeva to exploit the industry trend towards the licensing
of open-standard IP architectures for the digital economy."

Kevin Fielding, President of Parthus who will be Chief Executive
Officer of ParthusCeva said, "This is a compelling combination that brings
together two leading companies with complementary technologies, roadmaps,
customer bases and target markets. DSP technology is fundamental to our
customers as they target their products at high growth markets such as
wireless communications, mobile computing, automotive, consumer
entertainment and computer networking. By combining DSPG's industry
leading DSP cores with Parthus' portfolio of platform-level IP, we believe
ParthusCeva will be uniquely positioned to deliver to our customers
integrated solutions based on our open-standard processor
architecture."

Management of ParthusCeva

ParthusCeva will be headquartered in San Jose, California. ParthusCeva
will have over 400 employees, with approximately 330 involved in research
and development. Key executives of ParthusCeva will include:

Eli Ayalon, currently Chairman and Chief Executive Officer of
DSPG, who will serve as Chairman of ParthusCeva;

Brian Long, currently Chief Executive Officer of Parthus, who
will serve as Vice Chairman of ParthusCeva;

Kevin Fielding, currently President of Parthus, who will
become Chief Executive Officer and a board member of ParthusCeva;

Gideon Wertheizer, currently Executive Vice President of DSPG,
who will become Executive Vice President - Business Development and
Chief Technology Officer of ParthusCeva;

Eoin Gilley, currently Chief Operating Officer of Parthus, who
will become Executive Vice President and Chief Operating Officer of
ParthusCeva; and

Elaine Coughlan, currently Chief Financial Officer of Parthus,
who will become the Chief Financial Officer of
ParthusCeva.

The board of ParthusCeva will comprise eight members in total,
including five non-executive directors.

Summary of the Transaction Terms

Subject to obtaining the Tax Ruling, DSPG will distribute 100% of the
equity of Ceva, Inc., its wholly owned IP licensing subsidiary, ("Ceva")
to DSPG Stockholders as part of the Spin-off. Immediately following the
Spin-off, Ceva will issue common stock to the existing shareholders of
Parthus, and, as a result of the Merger, DSPG Stockholders will hold
shares representing approximately 50.1% of the ParthusCeva's Common Stock
immediately following the Merger.

Parthus shareholders will, in exchange for all outstanding Parthus
Ordinary Shares, receive in aggregate ParthusCeva Common Stock
representing approximately 49.9% of the issued ParthusCeva Common Stock
immediately following the Merger. In addition, approximately US$60 million
(approximately EURO 68 million or GBP 42 million) is expected to be
distributed to Parthus shareholders as a court approved capital repayment
("Capital Repayment"). Based on Parthus' issued share capital as at the
date of this announcement the Capital Repayment equates to approximately
US$1.03 (approximately EURO 1.14) per Parthus ADR and approximately
GBP0.07 (approximately EURO 0.12) per Parthus Ordinary Share. In addition,
as part of the consideration, each Parthus shareholder will also be
entitled to receive a pro rata share of an aggregate payment of US$100,000
(approximately EURO 113,580). Holders of Parthus ADRs and Ordinary Shares
will receive the payment in US$ and GBP respectively, unless they elect to
receive the payment in EURO. The exact distribution to Parthus
shareholders will be calculated by reference to Parthus' issued share
capital as at closing.

The Merger, which is pre-conditional on, amongst other matters, receipt
of the Tax Ruling, is to be effected by means of the Scheme whereby new
shares of ParthusCeva Common Stock will be issued to Parthus' shareholders
in consideration for the cancellation of their shares in Parthus.
ParthusCeva will be listed on Nasdaq and have a secondary listing on the
Official List of the UK Listing Authority.

Parthus shareholders holding approximately 32% of Parthus' issued share
capital will be required to irrevocably undertake to give Ceva a proxy to
vote such shares at the shareholder meetings to be convened in connection
with the Scheme.

The board of directors of Parthus, which has been so advised by Goldman
Sachs International, considers the terms of the Merger, the Scheme and
Capital Repayment to be fair and reasonable to the shareholders of
Parthus. In providing its financial advice, Goldman Sachs International
has taken into account the directors of Parthus' commercial assessment of
the merits of the Merger, the Scheme and the Capital Repayment.
Accordingly, the board of directors of Parthus unanimously recommends that
Parthus' shareholders vote in favour of the resolutions to be proposed at
the Parthus shareholder meetings to be convened in connection with the
Merger, the Scheme and the Capital Repayment, as each of the directors of
Parthus intends to do so in respect of his beneficial holdings, which in
aggregate amount to approximately 27% of Parthus' issued share
capital.

This announcement should be read in conjunction with the accompanying
full text
announcement (PDF) .

The directors of Parthus accept responsibility for the information
contained in this announcement relating to the Parthus Group, the
directors of Parthus, their immediate families, related trusts and persons
connected with them. To the best of the knowledge and belief of the
directors of Parthus (who have taken all reasonable care to ensure that
this is the case), the information contained in this announcement for
which they accept responsibility is in accordance with the facts and does
not omit anything likely to affect the import of such information.

The directors of DSPG and the directors of Ceva accept responsibility
for the information contained in this announcement other than that
relating to the Parthus Group, the directors of Parthus, their immediate
families, related trusts and persons connected with them. To the best of
the knowledge and belief of the directors of DSPG and Ceva (who have taken
all reasonable care to ensure that such is the case), the information
contained in this announcement for which they accept responsibility is in
accordance with the facts and does not omit anything likely to affect the
import of such information.

Goldman Sachs International is acting for Parthus and no one else in
connection with the Merger, the Scheme and the Capital Repayment and will
not be responsible to any other person for providing the protections
offered to clients of Goldman Sachs International, or for providing advice
in relation to the Merger, the Scheme and the Capital Repayment.

Morgan Stanley is acting for DSPG and Ceva and no one else in
connection with the Merger and the Scheme and will not be responsible to
anyone other than DSPG and Ceva for providing the protections offered to
clients of Morgan Stanley, nor for providing advice in relation to the
Merger and the Scheme.

This announcement does not constitute an offer to sell or issue, or a
solicitation of any offer to purchase or subscribe for any shares in DSPG,
Ceva or Parthus nor shall it form the basis of, or be relied upon in
connection with, any contract for such purchase or subscription. No
representation or warranty, express or implied, is made or given by DSPG,
Ceva or Parthus as to the accuracy or completeness of the information or
the opinions contained in this announcement and no liability is accepted
for any such information or opinions.

The issue of ParthusCeva Common Stock under the Merger and/or the
posting of the Scheme documents to persons not resident in Ireland, the
USA or the UK may be affected by the laws of the relevant jurisdictions.
Persons who are not residents in Ireland, the USA or the UK should inform
themselves about and observe any particular requirements.

Statements in this document regarding the proposed transaction between
DSPG, Ceva and Parthus, the expected timetable for completing the
transaction, future financial and operating results, benefits and
synergies of the transaction, future opportunities for ParthusCeva and any
other statements about DSPG, Parthus or ParthusCeva's managements' future
expectations, beliefs, goals, plans or prospects constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Any statements that are not statements of
historical fact (including statements containing the words "believes,"
"plans," "anticipates," "expects," "estimates" and similar expressions)
should also be considered to be forward-looking statements. There are a
number of important factors that could cause actual results or events to
differ materially from those indicated by such forward-looking statements,
including: the ability of the parties to consummate the transaction, the
ability of the parties to successfully integrate Parthus' and Ceva's
operations and employees; the ability to realise anticipated synergies and
cost savings; and the other factors described in Parthus' Annual Report on
Form 20-F for the year ended December 31, 2000 and in current reports
filed by Parthus on Form 6-K and DSPG's Annual Report on Form 10-K for the
year ended December 31, 2001. Parthus and DSPG disclaim any intention or
obligation to update any forward-looking statements as a result of
developments occurring after the date of this document.

Copies of this announcement are not being sent and must not be mailed
or otherwise distributed or sent in or into or from Australia, Canada or
Japan, including to Parthus Shareholders or participants in the Parthus
Share Option Plans with registered addresses in Australia, Canada or Japan
or to or by nominees, trustees or custodians holding Parthus Ordinary
Shares or Parthus ADRs for such persons. Persons receiving this
announcement (including, without limitation, custodians, nominees and
trustees) should not distribute or send it in, into or from Australia,
Canada or Japan or use Australian, Canadian or Japanese mails or any such
means, instrumentality or facility for any purpose, directly or
indirectly, in connection with this announcement.

GBP amounts have been translated at the convenience exchange rate of
GBP1.00 = US$1.4350. EURO amounts have been translated at the convenient
exchange rate of GBP1.00 = EURO 1.6299 and US$1.00 = EURO 1.1358.

A copy of the Combination Agreement will be available for display at
the offices of LK Shields, Solicitors, 39/40 Upper Mount Street, Dublin 2
during business hours (Saturdays, Sundays and public holidays excepted)
from 11.00am on the date of this announcement until termination of the
Combination Agreement or, if later, completion of the Merger.

A full PDF copy of this press release is available
here.