breaking news buyout of OAK by Corning, SDLI should sky rocket tomorrow
Sunday November 14, 1:45 pm Eastern Time
FOCUS - Corning to buy Oak for
$1.8 bln in stock
(Recasts, adds background and details)
By Laney Salisbury
NEW YORK, Nov 14 (Reuters) - Corning Inc.,
(NYSE:GLW - news) a leading producer of fiber-optic cable,
said on Sunday it will buy Oak Industries Inc., (NYSE:OAK -
news) which makes fiber-optic equipment, for $1.8 billion in stock in the latest move toward
consolidation in the ultra-high speed communications equipment market.
Corning said the boards of both companies have already approved the deal in which Corning
agreed to exchange 0.83 share of its common stock for each share of Waltham, Mass.-based
Oak Industries.
The deal will allow Corning, N.Y.-based Corning to provide both components and modules for
optical communications, as well as access to a broad array of related products including optical
fiber, cable and hardware. Fiber optics are glass cables that can transport voice and data far
faster than copper wire or copper cables can.
Based on Friday's closing prices, the deal represents a 51 percent premium over the $49.75 for
Oak Industries shares, Corning said.
Corning spokesman Paul Rogoski said there will be no job cuts because the company plans to
continue operating all the businesses of Oak Industries.
Of particular attraction to Corning is Oak Industries' Lasertron Inc. unit, which makes lasers that
transmit or amplify the optical signal as it goes over the network.
The products of Oak Industries' Gilbert Engineering Co. subsidiary, a manufacturer of coaxial
connectors for broadband communications networks, will also complement Corning's existing
capabilities in optical connectors, optical cable, hardware and related equipment, Rogoski said.
The deal comes a week after JDS Uniphase Corp., (NasdaqNM:JDSU - news)
(Toronto:JDU.TO - news) itself the product of a June merger, agreed to acquire Optical Coating
Laboratory Inc., (NasdaqNM:OCLI - news) another maker of fiber-optic connector equipment,
in a $2.8 billion deal.
''You need to have a broader range of capability if you're going to compete in the industry
today,'' said Rogoski.
Rogoski added that Corning and Oak Industries have not yet finalized the transition of
management and could not comment on whether there would be any big changes in the leadership
of Corning.
Corning said the transaction, which is expected to close in the first quarter of 2000, will be
accounted for as a pooling of interests. It is expected to be accretive to Corning's earnings per
share beginning in 2000.
More Quotes
and News:
Corning Inc (NYSE:GLW - news)
JDS Uniphase Corp (Toronto:JDU.TO - news;
NasdaqNM:JDSU - news)
Oak Industries Inc (NYSE:OAK - news)
Optical Coating Laboratory Inc (NasdaqNM:OCLI - news)
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