Corning Incorporated to Acquire Siemens' Worldwide Optical Cable, Hardware and Equipment, and Fiber Businesses
Acquisition price of $1.4 billion includes assumed debt and buyout of joint venture interests
Corning, New York, December 8, 1999 -- Corning Incorporated (NYSE:GLW) announced today that it has signed a definitive agreement to acquire Siemens AG's worldwide
optical cable and hardware businesses, and the remaining 50% of its two co-investments with Siemens ? Siecor Corporation and Siecor GmbH ? for $1.4 billion, including
assumed debt.
Corning expects the transaction to close in early 2000 after customary regulatory approvals. The company plans to fund the transaction with proceeds from both a common
stock offering and debt issuance. Corning expects that the acquisition will cause dilution of less than 5% in 2000 earnings per share, and to be accretive thereafter.
In announcing the agreement, Roger G. Ackerman, Corning?s chairman and chief executive officer, stated, ?One of Corning?s great strengths, exhibited consistently since our
founding, is our ability to look to the future and reinvent ourselves to seize market opportunities. This announcement is a logical extension of that strategy.
?Success in today?s rapidly consolidating telecommunications marketplace is a function of market access and product mix. The addition of Siemens? portfolio of businesses
strengthens us significantly in both of these key areas. Now, Corning is poised to be the leading supplier into what is referred to as the ?optical layer?? where optical fiber and
photonic devices join with optical cable, hardware and equipment to leverage the full potential of today?s state-of-the-art communications networks.?
Commenting on the transaction, John W. Loose, president of Corning Communications stated, ?Synergy is an overused phrase in business these days, but in this case, it truly
defines the benefits of this new business combination. Aligning our existing fiber and cable assets with the acquired Siemens? businesses immediately positions us as a
formidable competitive presence in Europe. It also provides us with the resources to extend our optical-layer solutions to any network, anywhere in the world.?
Loose added, ?Sandy Lyons, Siecor Corporation President and CEO, will lead Corning?s worldwide cable, hardware and equipment businesses, Siecor, the Corning Cables
business acquired from BICC in early 1999, and the Siemens businesses.?
As part of the integration of the acquired operations, Corning will create a new operating unit, Corning Communications Europe, which will be headquartered in London. Cliff
Hund, a senior marketing professional with experience in Corning?s fiber and European cable businesses, will serve as president of Corning Communications Europe and will be
responsible for driving and integrating Corning Communications? European strategy. Gerhard Konig, a Corning general manager with experience running businesses in both
Germany and the United States, will serve as managing director Europe ? Cable/Hardware and Equipment. Konig will be responsible for European operations and operational
integration. Both Hund and Konig will report to Lyons.
Corning also announced that Siecor GmbH will become part of Corning?s worldwide optical-fiber manufacturing operations. As a world-leading manufacturer and supplier of
optical fiber, Corning will continue its commitment to its established customer base by maintaining a multi-channel strategy, including direct fiber sales to other cablers.
The transaction price includes $145 million of contingent performance payments to be paid, if earned, over a four-year period, and approximately $120 million of assumed debt.
What Corning Has Acquired
In addition to the ownership in Siecor Corporation and Siecor GmbH, Corning has acquired Siemens? Communications Cables Division, RXS Kabel Garnituren GmbH (RXS) and
Norddeutsche Seekabelwerke GmbH (NSW) in Germany; RXS Morel in France, Teleco Cavi in Italy; and Siemens Fiber Optical Kablolari (SFOK) in Turkey. Corning is also
acquiring certain related Siemens assets in Argentina, Australia and the U.S.
Established in 1851, Corning Incorporated creates leading-edge technologies for the fastest-growing markets of the world?s economy. Corning manufactures optical fiber, cable
and photonic products for the telecommunications industry; and high-performance displays and components for television and other communications-related industries. The
company also uses advanced materials to manufacture products for scientific, semiconductor and environmental markets. Corning?s revenues in 1998 were $3.5 billion.
Corning Contact:
Paul A. Rogoski
607.974.8832
rogoskipa@corning.com
Siecor Contact:
Robie Cline
828.327.5969
robie_cline@siecor.com
Investor Relations Contact:
Katherine M. Dietz
607.974.8217
dietzkm@corning.com
Forward-Looking and Cautionary Statements
Statements in this press release that are not strictly historical are ?forward-looking? statements as defined in the Private Securities Litigation Reform Act of 1995. The actual results may differ from those
projected in the forward looking statements due to risks and uncertainties that exist in the operations and business environments of Corning Incorporated, described more fully in the companies periodic
reports filed with the Securities and Exchange Commission.
For more information regarding this acquisition, including company fact sheets, logos, images and leader profiles, select this link. |
