JDS Uniphase in China deal
By Scott Morrison in Toronto
Published: May 8 2000 17:32GMT | Last Updated: May 9 2000 02:11GMT
JDS Uniphase, the world's largest fibre optic components maker, has expanded its global
reach and manufacturing capacity by acquiring a small but rapidly growing Chinese optical
components manufacturer.
Terms of the company's first investment in China were not disclosed, but the company said
its acquisition of Fujian Casix Laser, which closed recently, would be accounted for as a
purchase. JDS Uniphase said Fujian Casix Laser was a profitable operation that was
previously owned by FEH, a private holding company controlled by the Fujian provincial
government.
Fujian Casix Laser supplies crystals, fibre optic components and optics for
telecommunications networks. JDS Uniphase also said the Chinese company's advanced
materials science expertise would be a key to developing a new generation of components
for optical networks.
Optical networking has become one of the hottest market plays as investors bet on
companies vying to develop technology to build the next generation of fibre optic networks.
Industry giants such as Lucent Technologies and Nortel Networks are also very active in
developing similar components.
Duncan Stewart, an analyst at Tera Capital, said JDS generally discloses financial terms of
its acquisitions and it would appear Chinese authorities had insisted on not revealing details
of this transaction. He also noted that the Chinese government generally insists on
technology transfers in these types of situations, although the low output lasers involved
are not considered to have military value.
Jozef Straus, JDS Uniphase's co-chairman and president, said the acquisition was an
important move in the company's global manufacturing strategy. Anthony Muller, the firm's
chief financial officer, said the Chinese company would provide high volume, low cost
production and it would serve as a platform for the global market. The company plans to
make additional investments to increase Fujian Casix Laser's manufacturing capacity.
The transaction was the latest in a series of recent acquisitions by JDS Uniphase, formed
through a combination of Canada's JDS Fitel and Uniphase of the US.
JDS Uniphase has made several smaller purchases and is currently in the process of
acquiring US rival E-Tek, in a deal valued at more than US$15bn. E-Tek is developing
manufacturing facilities in Asia, but the Casix acquisition would give JDS Uniphase its first
presence in the Chinese market.
Shares in JDS Uniphase, which have risen about 600 per cent in the past year, closed
Monday's trading session down 5.8 per cent or $5-7/16 to US $88-3/8. |
