Infineon Exits Fiber Optics Business
Online staff -- Electronic News, 4/29/2004
Infineon Technologies AG looks to be getting out of the fiber optics business.
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As consolidation in the market continues, the Munich, Germany-based company today announced it has sold its fiber optics unit to Finisar Corp. for 135 million shares of stock, valued at $263 million.
Following the transaction, Infineon will hold a 38 percent equity interest in Finisar.
The acquisition involves the transfer of Infineon's fiber optic development, manufacturing and certain marketing activities, and approximately 1,200 employees.
Finisar said it expects to realize significant synergies within the first year following closing of the transaction, mainly from complementary technology and customer base.
"About 40 percent of Infineon's business is in markets where we currently don't compete including the automotive industry and emerging fiber-to-the-home opportunity," said Jerry Rawls, Finisar's president and CEO, said in a statement.
[Harry:Yes, but those are all sectors that are not seeing much demand right now. Why else would IFX be dumping it.]</b.
"The combined product offerings of both companies will be unsurpassed in terms of product breadth and technology for datacom applications while providing important new tools for leveraging our penetration of WDM and telecom applications. Furthermore, we have identified significant synergies that should help make this a successful and a profitable combination."
In Infineon's now closed fiscal Q2, the fiber optics unit posted revenues of about $32 million. Combined with Finisar's revenue guidance of $55 million to $60 million in its Q4 ending April 30, the combination would create the largest pure-play optical components company in the world, according to Infineon.
"Leveraging the unique optical capabilities of both companies, this combination
will be an important step in the ongoing consolidation of the fiber optic market,"
said Thomas Seifert, CEO of Infineon's wireline communications business group, in a statement.
The transaction is expected to close by September's end. Assets to be transferred include Infineon Fiber Optics GmbH with its locations in Berlin (development, manufacturing and marketing), Munich (development and manufacturing) and Regensburg (development and marketing). In addition the manufacturing facilities in Trutnov, Czech Republic; development and marketing activities in Longmont and San Jose. Infineon's stake in the ParoLink joint venture with UEC in Taiwan also will be transferred.
At closing, Thomas Seifert, CEO of Infineon's wireline communications business group, is expected to join the Finisar board of directors. Infineon is expected to continue to be a strategic supplier of IC chips to the combined entity. |
