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To: tech101 who wrote (1581)	10/17/2002 10:20:37 PM
From: tech101	Read Replies (1) \| Respond to of 2772

Pirelli CEO sees U.S. deal building on MIT link By Sinead Carew Reuters Thursday October 17, 8:26 pm ET NEW YORK, Oct 17 (Reuters) - Italy's Pirelli SpA (Milan:PIRI.MI - News), which effectively controls Telecom Italia, is eyeing the purchase of a U.S.-based optical network company that would build on its nanotech partnership with Massachusetts Institute of Technology, its chairman said on Thursday. Pirelli Chairman and Chief Executive Marco Tronchetti said the company is keen on taking advantage of the low share price valuations of companies working on technologies including photonics and nanotechnology. Photonics refers to equipment that transmits data over glass fibers at the speed of light, rather than relying on traditional electronics. Nanotechnology involves the design of tiny electrical circuits built at the molecular level. "It's not that we need an acquisition. But it's an opportunity because of the telecommunications market now," Tronchetti said at a luncheon where he was the guest of honor. "It (an acquisition) would follow from the Pirelli and MIT partnership." Pirelli Labs, the research arm of the Pirelli Group, set up a partnership with MIT earlier this year to finance the development of miniaturized optical chips that the company plans to market exclusively. Tronchetti, who is also chairman of Telecom Italia (Milan:TIT.MI - News), said this summer he could be on the hunt for a deal. This fueled speculation he was considering the purchase of the optical business of troubled U.S. communications equipment maker Lucent Technologies Inc. (NYSE:LU - News). "Everything has gotten a lot smaller so I would imagine there isn't anything too large for (Tronchetti) to consider," said Lehman Brothers analyst Steven Levy, who would not suggest a target name since the executive mentions optical technology in the broadest sense. He could look at units of Nortel Networks (Toronto:NT.TO - News), Alcatel's (Paris:CGEP.PA - News) U.S.-centered optical operations or entire companies such as Ciena Corp. (NasdaqNM:CIEN - News) Corvis (NasdaqSC:CORV - News),Sonus Networks (NasdaqNM:SONS - News) or Tellium (NasdaqNM:TELM - News), Levy said. Shares of telecommunications equipment vendors have been hammered by a massive over-supply of network capacity that has caused a two-year slump in spending among network operators. Tronchetti was honored by the Gruppo Esponenti Italiani for his role in expanding Italy's telecommunications industry and enhancing the country's image.