Axtel, S.A.B. de C.V. (AXTEL) announced the signing of a Memorandum of Understanding with Alfa S.A.B. de C.V. (ALFA) and Alestra S. de R.L. de C.V. (ALESTRA), ALFA's wholly-owned telecom subsidiary, to merge AXTEL and ALESTRA. Under the agreed terms, AXTEL will survive as an operating and publicly-traded holding company and is expected to issue new shares to be held by ALFA representing approximately 51% of the combined entity ownership. Per this agreement the Board of Directors of AXTEL will be integrated by Directors nominated by ALFA and AXTEL's shareholders, Messrs.

Alvaro Fernández Garza and Tomas Milmo Santos will be Co-Chairmen of the Board and strategic decisions will be approved by mutual consent between these two groups. Mr. Milmo will also co-lead, together with a Director elected by ALFA, an Executive Committee that will oversee these strategic decisions and, among others, approve the Post-Merger Integration (PMI) plan and the initial organizational structure of the combined entity. At closing, Messrs.

Rolando Zubirán Shetler and Felipe Canales Tijerina will be appointed as Chief Executive Officer and Chief Financial Officer, respectively, of the combined entity.