JDS takes over U.S. firm for $41B
Believed to be biggest high-tech deal ever
Eliminates one of few barriers between fibre-optics
giant and market domination
Bert Hill
The Ottawa Citizen
JDS Uniphase Corp. has pulled off its biggest takeover ever with a deal for SDL
Inc. of San Jose, California. It will pay $41 billion U.S. in stock to buy one of the
few remaining fibre-optic component manufacturers capable of challenging
JDS's position as the world's biggest in the field.
The price tag is more than twice the $18 billion JDS paid to buy E-Tek
Dynamics, also of San Jose, in a deal that closed last month. It is theÊbiggest
deal ever involving a Canadian technology firm, and officials with the companies
said it may be the biggest technology deal ever.
JDS will exchange 3.8 shares of its stock for each SDL share.
The deal will strengthen JDS's ability to produce sophisticated components to
meet the huge demand created by the growth of the Internet on
telecommunications systems around the world.
However, the deal is likely to be closely scrutinized by U.S. anti-trust regulators,
who imposed conditions on their approval of the E-Tek deal.
There has been speculation among U.S. analysts for months that SDL would be
bought by Corning Inc., another major component company, in a bid to create an
effective challenger to JDS.
JDS chief executive officer Jozef Straus said he is thrilled and excited about the
deal, which closed late last night. "This agreement will help us accelerate the
development of the next generation of fibre-optic components that our customers
need," he said in an interview shortly after the deal closed.
He said the company will co-operate with U.S. anti-trust investigators.
"This is not a question about the size of the company, but about the speed in
which we can meet the expectations of the market," he added.
Donald Scifres, chief executive officer of SDL, said his company's strength in
the active components that drive telecommunications traffic will complement
JDS's strengths in the passive components that manage traffic.
SDL, which makes amplifier components at aÊplant near Victoria, B.C., has
manufacturing operations in the California, the Eastern U.S. and England. It
employs 1,700 and had sales of $72 million U.S. in the quarter ending Mar. 31.
JDS has more than 17,000 employees and had sales of $395 million U.S. in the
same period.
JDS was already one of SDL's top three customers, with more than 10 per cent
of SDL's sales.
JDS was advised in the deal by CIBC World Markets. |
