17 Jun 2002
Corning has agreed to buy Pirelli's 90% share of an optical components and devices business for approximately USD 3.6 billion. The remaining 10% of the company is owned by Cisco Systems. The optical-components firm, which is based in Milan, Italy, is a leading manufacturer of lithium niobate modulators, pump lasers, certain speciality fibers and fiber gratings that are used in optical networks.
Corning will make an initial payment of approximately USD 3.4 billion, and may make a contingent payment of USD 180 million after achieving certain business milestones. The acquisition, which is subject to customary regulatory approvals, is expected to close by the end of the fourth quarter of 2000.
Roger G Ackerman, Corning's chairman and chief executive officer said: "The acquisition of Pirelli's active-component technologies and products significantly adds to our capabilities in the transmission segment of the optical layer. The combination of Pirelli's business with our leading position in optical fiber and photonic technologies enables us to continue to provide our customers with an enhanced-value proposition for high-speed next-generation systems."
Marco Tronchetti Provera, chairman and chief executive officer of the Pirelli Group stated: "Through this transaction Pirelli will strengthen its long-standing relationship with Corning and will reinvest the proceeds to further enforce its strategic role in its core businesses - telecommunications, energy transmission and tires - capturing opportunities to create additional value."
The addition of lithium niobate technology will broaden Corning's portfolio as the company continues to position itself as a leading supplier of photonic products to optical-layer companies. The capabilities of Pirelli's optical-components business in 980 nm pump lasers for submarine use directly complements and supplements Corning Lasertron's terrestrial 980 nm pump capabilities.
Lithium niobate modulators are ideally suited for use in high-speed, long-haul optical communications networks. The technology has been chosen by the majority of long-haul equipment suppliers because it has the best combination of optical, electronic and reliability performance.