JDS FITEL Inc. and Uniphase Corporation Agree to US $6.1 Billion Merger
NEPEAN, Ontario & SAN JOSE, California, Jan. 28 /CNW/ - JDS FITEL Inc.
(TSE:JDS) and Uniphase Corporation (NASDAQ: UNPH), announced today the signing of a definitive merger agreement to combine the companies in a merger of equals. The transaction is valued at US $6.1 billion based on January 27, 1999 closing prices.
The merged company, to be named JDS Uniphase Corporation, will be one of the largest and most advanced optical component and module manufacturers in the world with global operations in eight countries serving all major fiberoptic communications markets. By joining forces, JDS FITEL and Uniphase will offer customers increased access to all the key active and passive components and modules used to transmit, route and manage optical signals in fiberoptic networks.
Uniphase, a leading manufacturer of active fiberoptic components and
modules, including lasers, modulators and transmitters, will complement JDS FITEL's wide portfolio of passive fiberoptic products such as wavelength division multiplexers (WDM), optical switches and isolators. By combining the two companies' complementary portfolios, JDS Uniphase will offer a broader range of solutions integrating both active and passive components to meet the increasing demand for products with a higher level of functionality. With similar markets and minimum product overlap, the combined company will focus on its complementary strengths while supporting the continued growth and development of its operations and workforce. In particular, JDS Uniphase will concentrate on its state-of-the-art manufacturing, advanced research and world-leading product development to address key applications in the major fiberoptic communications markets including submarine, long-haul, metropolitan and cable TV markets.
Under the terms of the agreement, JDS FITEL shareholders resident in
Canada will, pursuant to a plan of arrangement, be entitled to receive 0.50855 shares of exchangeable stock of JDS Uniphase Canada, a wholly owned subsidiary of JDS Uniphase, or, at their option, 0.50855 shares of JDS Uniphase, for each JDS FITEL share they hold. The exchangeable shares are the economic and voting equivalent of shares of common stock of JDS Uniphase and will be exchangeable
for such shares on a one-for-one basis at any time. The current shareholders of JDS FITEL and Uniphase will each own approximately 50 percent of the combined company following the merger. The structure of the transaction is expected to provide the opportunity for a tax-free exchange for Canadian holders of JDS FITEL stock.
The merger is conditional upon regulatory approvals, as well as approvals by Uniphase and JDS FITEL shareholders. The transaction will be accounted for as a purchase and the resulting goodwill will be amortized over a period of approximately 5 years.
JDS Uniphase Corporation will be quoted on the Nasdaq National Market and will report its financial results in U.S. dollars. On a pro forma basis, the new company would have reported annual sales of approximately US $420 million based on 12 month trailing sales and would employ more than 3,600 people worldwide. JDS Uniphase will be led by an integrated executive team from both companies. Kevin Kalkhoven from Uniphase will be Co-chairman and Chief Executive Officer. Jozef Straus from JDS FITEL will become Co-chairman,
President and Chief Operating Officer. Both companies will each nominate one half of the board.
Jozef Straus, President & CEO of JDS FITEL, stated, ''I am very excited about the excellent strategic fit this merger provides as well as the potential product opportunities it allows us to create. The transaction reflects our continuing effort to capitalize on the rapidly growing telecommunications industry by providing a broader product range, higher levels of functionality and increased technological differentiation. As fiberoptic networks continue to increase transmission capacity, we will be better positioned to offer customers a more comprehensive product offering with shorter development and deployment cycles.'' Kevin Kalkhoven, Chairman & CEO of Uniphase stated, ''This merger brings together two market leaders at the forefront of the fiberoptics industry to offer a compelling vision for the future of fiberoptic communications. By combining two companies with complementary products and technologies, we can
focus on meeting the needs of our customers through combined R&D and increased product integration in an effort to unleash greater innovation and reduce time-to-market.''
Mr. Junnosuke Furukawa, President of The Furukawa Electric Co., Ltd.
stated: ''The fiberoptic industry is evolving rapidly and we recognize that,by merging together, JDS FITEL and Uniphase will be a stronger enabling force in that evolution. We are very pleased to be part of making this transaction possible, as we will be the largest shareholder in the company. Furukawa looks forward to a long-term relationship with JDS Uniphase.'' Furukawa, JDS FITEL's largest shareholder with 40.5 million shares, or approximately 52% of the outstanding shares, endorses the merger. In order to effect a limited return on its significant ongoing investment, Furukawa intends to sell approximately 3.5 million of its shares of JDS FITEL in the
near term. Furukawa has engaged CIBC Wood Gundy Securities Inc. as a financial advisor regarding the proposed sale.
CIBC Wood Gundy Securities Inc. has provided JDS FITEL's Board of
Directors an opinion that the transaction is fair from a financial point of view to JDS FITEL's common shareholders.
BT Alex. Brown Incorporated has provided Uniphase's Board of Directors an opinion that the consideration to be provided by Uniphase in the transaction is fair from a financial point of view to holders of Uniphase's common stock. Uniphase Corporation is an optoelectronics company that designs, develops, manufactures and markets fiberoptic telecommunications components and modules, and laser subsystems. The company's telecommunication products
include semiconductor lasers, high-speed external modulators, transmitters, fiber Bragg gratings and optical modules for fiberoptic networks in the telecommunications and cable television industries. Uniphase's shares are quoted on Nasdaq National Market under the symbol UNPH. More information on Uniphase is available at ww.uniphase.com.
JDS FITEL is a Canadian high technology company that manufactures and
distributes a broad range of products for the growing fiberoptic
communications market. The Company executes its business strategy through its advanced design capabilities, proprietary manufacturing tools and processes and, in particular, its early participation in advancing market and technology trends. JDS FITEL's common shares are listed on The Toronto Stock Exchange under the symbol JDS. More information on JDS FITEL is available at www.jdsfitel.com. |
