Lucent sells fiber unit for $2.75 B
Mere hours after Lucent representatives said the company still was negotiating with multiple vendors over the possible sale of its Optical Fiber Solutions unit, the company has announced it will split the unit between Japan's Furukawa Electric Co. and Corning Inc. for $2.75 billion.
Under the deal, Furukawa will pay $2.525 billion for the majority of the unit — possibly including $250 million in CommScope securities. For its part, Corning will cough up $225 million in cash for Lucent's interests in Lucent Technologies Shanghai Fiber Optic Co. Ltd. and Lucent Technologies Beijing Fiber Optic Cable Co. Ltd.
Further, Furukawa and CommScope will form two joint ventures, one for the fiber cable portion of OFS and one for the transmission fiber portion, CommScope says, adding that it will invest about $650 million for its part in the debt-and-equity funded ventures. It will own 51 percent of the fiber cable venture and 49 percent of the transmission fiber company, CommScope says.
The sales to Furukawa and Corning are subject to regulatory and Chinese government approval, respectively. Lucent says it expects to close its deal with Furukawa at the end of the third calendar quarter.
The company's price of the unit has dwindled over the months since it first went on the market; in late April, Alcatel had expressed an interest in the unit, reportedly for about $5 billion. Observers then had speculated that was the best Lucent would get for the business. Alcatel and Lucent later moved into merger talks, which fell through in May. Other companies that had expressed interest include Pirelli and JDS Uniphase.
Now, "We're pleased to have received the best value for this business under difficult market conditions, " says Lucent Executive VP for Corporate Strategy and Business Development Bill O'Shea, in a statement.
Norcross, Ga.-based OFS employs more than 6,000 people, and has wholly owned and joint-venture facilities in Georgia, Massachusetts, North Carolina, New Jersey, Connecticut, Denmark, China, Japan, Russia, Germany and Brazil, Lucent says.