Rival Fiber-Optic Companies Merging
Monday, July 10th 2000, 12:00 am
By: News On 6
NEW YORK (AP) â€” JDS Uniphase Corp. is buying rival fiber-optic product company SDL Inc. for about $41 billion in stock, just weeks after it purchased competitor E-Tek Dynamics Inc.
JDS Uniphase and SDL each manufacture products needed for high-capacity fiber-optic networks, which allow for increased telecommunications traffic. Demand for such products is growing as high-speed audio and video transmission become more prevalent on the Internet.
Under the terms of the deal announced Monday, each share of SDL will be exchanged for 3.8 shares of JDS Uniphase. At Friday's closing prices, that would represent a 49 percent premium for SDL shareholders.
The deal requires approval by shareholders of both companies as well as federal regulators. After the deal is completed, SDL will operate as a wholly owned subsidiary of JDS Uniphase.
Shares of JDS Uniphase closed Friday at $116.188, up $2.1875, while shares of SDL rose $10.875 to $295.313. Both companies are traded on the Nasdaq Stock Market.
San Jose, Calif.-based SDL, which has about 1,700 employees, earned $14 million on revenue of $72 million in the three months ended March 31. JDS Uniphase, with offices in San Jose and Nedean, Ontario, has about 17,000 employees. During the first quarter of 2000, it lost $241 million on revenue of $395 million.
JDS Uniphase last month completed the purchase of E-Tek Dynamics, which also makes fiber-optic network equipment, for $15 billion.
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