This is a switch: SLR,LU to unwind a previous deal. Guess business at LU is pretty bad [understatement of this millenium!].
Solectron, Lucent to unwind optical network deal
Monday October 21, 4:31 pm ET
(Adds details throughout, stock prices, re-writes lead)
MILPITAS, Calif., Oct 21 (Reuters) - Contract manufacturer Solectron Corp. (NYSE:SLR - News) on Monday said it has reached an agreement with Lucent Technologies (NYSE:LU - News) to unwind an outsourcing and asset purchase deal completed last May.
Milpitas, California-based Solectron said the two sides hope to reach a final deal involving Lucent's optical networking operations in North Andover, Massachusetts, by the end of November, which is the end of Solectron's fiscal first quarter.
Solectron said under the new arrangement, Lucent will repurchase equipment and unused inventory that Solectron acquired in May. Solectron will continue to produce products for and support Lucent through next March.
Solectron also said it expects to vacate space leased from Lucent at its facility in North Andover at the end of the transition.
Financial terms of the unwinding were not disclosed.
Under the original three-year deal, Solectron bought certain equipment and inventory at Lucent's manufacturing operation in North Andover for about $100 million. The agreement, with a potential value of about $2 billion, was first announced in late March.
The deal was seen as part of Lucent's strategy to ship more of its manufacturing to outside companies in an effort to cut costs.
About 540 Lucent employees were hired by A-Plus Manufacturing, the Solectron company that will produce the optical line systems for Lucent, but nearly a third of those were temporary, transitional jobs.
Solectron said Monday the two sides were still working details related to timing and work-force requirements.
Shares in Solectron closed up 6 cents at $1.86, while Lucent shares ended 5 cents higher at 73 cents, both on the New York Stock Exchange, ahead of the news. |
