Date: Feb 06, 2001 Author: MATTHEW FORDAHL Source: Associated Press (
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SAN JOSE, Calif. (AP) _ Fiber-optics company JDS Uniphase Corp. will sell a Swiss subsidiary to Nortel Networks Corp., satisfying Justice Department concerns over its $18 billion acquisition of rival SDL Inc.
The two deals are expected to close next week, pending final approval by shareholders, the companies announced Tuesday.
``We are very excited to be at the end of this process, so we begin to focus on our new combined organization,'' said Jozef Straus, chief executive of JDS Uniphase.
Brampton, Ontario-based Nortel will pay $2.5 billion in stock for the Swiss operation and up to $500 million more if Nortel's purchase falls short of targets at the end of 2003. The Zurich subsidiary manufactures pump laser chips, which are a component of fiber-optic equipment.
Nortel has agreed to expand its dealings with the company, though details of new contracts were not announced. Nortel also will acquire the subsidiary's small office in Poughkeepsie, N.Y.
``Nortel is a major customer of JDS Uniphase and this transaction gave us the opportunity to build even further in this important relationship,'' said Anthony R. Muller, JDS Uniphase's chief financial officer.
With fiber-optic technology, huge amounts of data can be sent over networks at high speed. The development of components has grown more important as voice and data traffic build on the Internet and other networks.
JDS Uniphase, with headquarters in Ottawa and San Jose, designs, develops, makes and distributes products for the fiber-optic communications market.
SDL, also based in San Jose, makes products that power the transmission of data, voice and Internet information over fiber-optic networks.
The acquisition is expected to ease the creation and deployment of high-capacity optical networks, accelerating both advanced products and the basic building blocks, said Donald R. Scifres, SDL's chief executive.
Specifically, it could speed up the development of optical systems embedded on chips. Currently, such systems are made up of individual components.
``It has been highly sought after by the optical technology community for the past 20 years and is much regarded grand vision for photonics technology evolution,'' said analyst Jim Liang of WR Hambrecht & Co.
``With the combined expertise of the two companies, we believe they will be able to significantly accelerate the timeline to achieve the grand vision,'' he said.
When announced in July, the all-stock acquisition was worth about $41 billion, but it has since dropped in value as shares of JDS Uniphase have fallen.
Shares of JDS Uniphase rose $3.19 to $53.19 on the Nasdaq Stock Market in trading Tuesday, well off their high of $153.42, while shares of SDL rose $16.27 to $201.64.
