CONTACT INFORMATION

Patrick Verderico -- Chief Financial Officer
Creative Labs, Inc

CREATIVE TECHNOLOGY LTD

(Incorporated in the Republic of Singapore)

ANNOUNCEMENT

The Board of Directors of Creative Technology Ltd (the "Company") is pleased to announce that the Company has on October 25, 1995 in the United States, signed an Agreement and Plan of Reorganization to acquire the whole of the issued share capital of Reveal Computer Products, Inc. ("Reveal"), a corporation incorporated in the State of California, USA (the "Acquisition"). The Acquisition will be in the form of a merger of Reveal into a wholly-owned subsidiary of the Company, in accordance with the laws of the State of California.

Reveal, a privately held company based in Woodland Hills, California, USA, markets a broad range of personal computer peripheral equipment, including sound cards, multi-media upgrade kits, graphic accelerators, high-end video editing boards, telephony products and mass storage devices. The Company plans to continue to sell such products under the Reveal brandname as a lower cost line, sold primarily through Reveal's traditional channel, which has been direct sales to mass merchants.

The consideration for the Acquisition is up to US$65 million (S$92 million) to be satisfied by the issue to the holders of Reveal's preferred and common stock of new ordinary shares of S$0.25 each in the capital of the Company, credited as fully paid ("New Shares") plus an additional consideration of a total of 2,000,000 warrants, each giving the holder thereof the right to convert into one share of S$0.25, in the capital of the Company ("Warrants"). The consideration was arrived at on a willing buyer willing seller basis.

The price attributable to the New Shares will be pegged to the average of the last reported closing price of the Company's ordinary shares as quoted on the Nasdaq National Market for the five trading days immediately preceding the closing date for the Acquisition, subject to the maximum of US$16.28 and the minimum of US$6.98 (the "Average Closing Price"). The Warrants will be exercisable within five years at four different exercise prices the lowest of which is 25% above the Average Closing Price.

By way of illustration, if based on the average of the last reported closing price of the Company's ordinary shares quoted on the Nasdaq National Market for the five trading days immediately preceding the closing date for the Acquisition is US$13 and if the final stock consideration is US$65 million, 5 million New Shares will be issued at US$13 per share. On the same basis 2,000,000 Warrants will be issued at exercise prices ranging from US$16.25 to US$31.25.

The completion of the Acquisition is subject to various conditions, including, among others, approval of the shareholders of the Company in general meeting, the approval of the Stock Exchange of Singapore Limited for the listing and quotation of the New Shares and Warrants and the receipt of all U.S. and Singapore regulatory approvals.

The exact financial effects of the Acquisition, including the effects of earnings per share and net tangible assets, cannot be determined until the final consideration and asset values have been ascertained.

This Acquisition allows the Company to expand product offerings to the personal computer market through additional technologies, multiple brands, and increased efficiencies.

None of the Directors or substantial shareholders of the Company has any interest, direct or indirect, in the Acquisition.

BY ORDER OF THE BOARD

Yeo Choon Tat
Company Secretary
26 October 1995
Singapore