SanDisk Completes Acquisition of msystems.

MILPITAS, Calif. -- SanDisk[R] Corporation (NASDAQ:SNDK) today announced the completion of its acquisition of msystems[TM] Ltd. in an all stock transaction valued at approximately $1.5 billion.

"Today marks the exciting beginning of the new SanDisk as we commence operations with msystems as an integrated team under one company," said Eli Harari, SanDisk Chairman and CEO. "With our great energy and passion and complementary strengths, we expect this industry leading innovative team to transform our markets through leadership products in the coming decade."

"Joining SanDisk is a great opportunity for our shareholders, employees and partners. It strengthens the foundation for the continued growth of the business we have built together over the past 18 years. We are proud of creating true value and I have no doubt that the joint organization will continue creating innovation, value and success," said Dov Moran, President and CEO of msystems. "We are pleased that the acquisition of msystems is now complete and I would like to thank our shareholders, employees and partners for their faith and unwavering support throughout this process."

Details of the Transaction

On July 30, 2006, SanDisk and msystems entered into definitive agreements for SanDisk to acquire msystems in an all stock transaction. In the transaction, each msystems ordinary share will be converted into 0.76368 of a share of SanDisk common stock, and options or other rights in msystems shares will be converted using the same ratio. The convertible note issued by M-Systems Finance Inc. will become convertible into SanDisk common stock, after giving effect to the exchange ratio in the Merger.

Effective with the closing of the transaction, trading in msystems common stock on the NASDAQ stock market will cease. Computershare Investor Services, L.L.C., the exchange agent for the SanDisk/msystems acquisition, will promptly send a transmittal letter to current msystems shareholders with instructions on how to exchange their share certificates for SanDisk common stock certifications and for cash in lieu of fractional shares. msystems shareholders who hold their shares in street name will not receive a letter of transmittal and such shareholder accounts should automatically be credited with their new SanDisk shares.

About SanDisk

SanDisk, the world's largest supplier of flash memory data storage card products, designs, manufactures and markets industry-standard, solid-state data, digital imaging and audio storage products using its patented, high density flash memory and controller technology. SanDisk is based in Milpitas, CA.

About msystems

msystems has been transforming raw flash into smarter storage solutions since 1989. From embedded flash drives deployed in millions of mobile handsets to U3 USB smart drives designed for leading global brands, msystems creates, develops, manufactures and markets smart personal storage solutions for a myriad of applications targeting high growth markets.

Forward-Looking Statements

This news release contains certain forward-looking statements, including statements regarding the combined company's future business performance and role in enabling the evolution of the flash market, and the processes for msystems shareholders to exchange their msystems' ordinary shares that are based on our current expectations and involve numerous risks and uncertainties Risks that may cause these forward-looking statements to be inaccurate include among others: slower than expected growth in market demand for our products or a slower adoption rate for these products in current and new markets that we are targeting, any interruption of or delay in supply from any of the semiconductor manufacturing or subcontracting facilities, including test and assembly facilities that supply products to us, slower than expected expansion of our global sales channels, fluctuations in operating results, unexpected yield variances related to our conversion to 70-nanometer NAND flash technology or the ramp-up of the 300mm flash fabrication facility, our inability to make additional planned smaller geometry conversions in a timely manner, future average selling price erosion that may be more severe than our expectations due to decreased demand or possible excess industry capacity of flash memory from ourselves as well as from existing suppliers or from new competitors, less than expected growth in the average megabyte capacity per card, price increases from non-captive flash memory sources and third-party subcontractors, higher than expected operating expenses, higher than anticipated capital equipment expenditures, adverse global economic and geo-political conditions, including adverse currency exchange rates and acts of terror and war, the timely development, internal qualification and customer acceptance of new products that are based on 70-nanometer NAND technology, fluctuations in license and royalty revenues, business interruption due to earthquakes, hurricanes, pandemics, power outages or other natural disasters, particularly in areas in the Pacific Rim and Japan where we manufacture and assemble products, potential impact of high energy prices and other global events outside of our control which could adversely impact consumer confidence and hence reduce demand for our products, risks related to our acquisition of msystems, including that we may not realize the expected benefits of the acquisition due to integration challenges, the loss of customers, suppliers, distributors or other third parties or other issues, that we may incur substantial costs or other damages associated with pending or future litigation related to the merger or costs or damages related to msystems' prior stock option grant practices and that we may incur charges or other accounting changes as a result of the merger, and the other risks detailed from time-to-time under the caption "Risk Factors" and elsewhere in our Securities and Exchange Commission filings and reports, including, but not limited to, our Form 10-K for the fiscal year ended January 1, 2006 and our quarterly reports on Form 10-Q. Future results may differ materially from those previously reported. We do not intend to update the information contained in this release.

SanDisk[R] is a registered trademark of SanDisk Corporation registered in the United States and other countries. msystems is a trademark of msystems Ltd.