CENDANT COMPLETES ACQUISITION OF GALILEO INTERNATIONAL FOR APPROXIMATELY $1.8 BILLION IN STOCK AND CASH

Final Consideration is 1.328 Shares of Cendant Common Stock and $4.08 in Cash for Each Share of Galileo International

Mark E. Miller Appointed President & CEO of Cendant’s New Galileo Unit

Transaction Expected to be Accretive Beginning in 4Q 2001; Significantly More Accretive as Air Travel Approaches Prior Levels


Cendant Corporation (NYSE: CD) today announced that it has completed its previously announced acquisition of Galileo International, Inc. (NYSE: GLC) for approximately $1.8 billion in common stock and cash. Cendant also assumed approximately $550 million of Galileo net debt, which it will retire. When the Company announced its intention to acquire Galileo in June 2001, the transaction value was estimated to be approximately $2.9 billion in stock and cash, excluding debt. Based upon today’s closing price of Cendant common stock on the NYSE, the transaction is valued at $20.91 per Galileo share. The value of the transaction declined because of the reduction in market value of Cendant common stock.

Galileo shareholders will receive 1.328 shares of Cendant common stock and approximately $4.08 in cash for each share of Galileo. The stock portion of the consideration is expected to be tax-free to Galileo shareholders.

Additionally, Mark E. Miller, formerly president and COO of Cendant’s Travel Division, has been appointed president & CEO of Galileo, and Samuel L. Katz, chairman and CEO of Cendant’s Travel Distribution Division, has taken on the additional role of chairman of Galileo.

The Company expects the transaction to be accretive to its earnings per share beginning in the fourth quarter of 2001, and significantly more accretive as air travel approaches levels experienced prior to the events of September 11, 2001.

As previously announced, the Galileo and Cheap Tickets transactions will be less accretive than originally expected, however, the Company will take management action which will enable its newly formed Travel Distribution Division to make a positive contribution on both a cash and earnings per share basis, immediately. Latest estimates by the airline industry indicate an expected reduction in air travel of approximately 20 percent in 2002. Assuming Galileo experiences a similar reduction in air travel bookings, the Travel Distribution Division will add $0.07 to $0.09 per share to Cendant’s 2002 earnings compared with earlier projections of $0.11 to $0.16.

Cendant’s Travel Distribution Division has three principal components: reservations transactions systems provider WizCom, which handles reservations for more than 115 hotel and car rental chains in over 40 countries; Cendant’s travel agency business; and now Galileo. It is also anticipated that the off-line operations of Cheap Tickets, Inc. will be added to Cendant’s Travel Distribution Division when that acquisition closes, which is expected to be on October 5, 2001.

Quantitude, Galileo’s telecommunications network services provider, has been combined with Cendant’s telecommunications group, and THOR, also a Galileo subsidiary, offering discounted hotel rate programs to more than 15,000 travel agencies, is being integrated with Cendant’s travel agency business. The Company also announced that Travel Portal, Inc. (TPI), an affiliate of Cendant is acquiring the licensing rights to Galileo’s TRIP.com on-line travel service.

Cendant’s Chief Strategic Officer and Chairman & CEO of the Travel Distribution Division, Samuel L. Katz stated: “The near term impact of the events of September 11 on Galileo’s earnings does not make its acquisition any less strategic, and we remain excited by the prospects that the addition of Galileo creates for Cendant. Our underlying objective is to provide value-added services to businesses and consumers around the world, primarily within the travel and residential real estate sectors. Clearly, Galileo’s business will make a great contribution to this objective, enabling us to provide large corporations, small businesses, travel agencies and individual consumers with the broadest possible range of travel services.

“The anticipated combination of Galileo, Cheap Tickets, Cendant’s travel agencies and our inventory of hotel rooms, timeshare intervals and rental cars as well as that of third parties will drive consumption of business and leisure travel, bringing added value to all travel industry participants. Galileo’s fee-for-services business model, customer relationships and consumer base are highly complementary to Cendant’s, and its major presence in air travel bookings, substantial international reach and significant online resources will facilitate our ability to capitalize on future growth opportunities within the travel industry.”

Mark E. Miller, president & CEO of Galileo, said, “Galileo’s great team of professionals is a powerful new addition to Cendant. We are excited to work with them to offer an even more comprehensive and cost-effective suite of travel services. I am excited about the opportunities that the combination of these two companies provides for distribution customers, supplier partners and travelers worldwide. Given the extensive planning by Cendant and Galileo to date, we expect a seamless integration of operations.”

Effective immediately, Cendant will begin to transition Galileo’s corporate functions to Cendant’s facilities in Parsippany, NJ. About 200 positions will be eliminated over the next 18 months as merger synergies are realized primarily from combining corporate functions. Galileo’s Rosemont, IL, Denver, CO, and internationally based facilities, however, will remain key operating centers of Cendant’s Travel Distribution Division.