Zurich sell-off seals JDS-SDL merger

17 Jun 2002

JDS Uniphase is to sell Zurich-based subsidiary to Nortel as part of reshuffle

JDS Uniphase is to sell its Zurich-based laser subsidiary to Nortel, as part of a major reshuffle involving a buyout by JDS of the company SDL for USD 18 billion.

The companies expect to close the merger once the sale of the subsidiary is complete and the required stockholder approvals, due on 12th February, have been obtained.

JDS, based in San Jose, US, was forced to sell the plant to gain clearance from the US Department of Justice for the SDL merger. The Zurich plant manufactures 980 nm pump diodes for optical amplifiers in fibre-optic networks. Its 2001 revenues are expected to be around USD 200 million.

Nortel agreed to exchange USD 2.5 billion in common stock for the Zurich facility, plus an additional fee of up to USD 500 million if Nortel's purchases from the newly merged company do not meet certain undisclosed amounts.

According to JDS Uniphase, the deal does not affect its diode-packaging plant in Plymouth, UK, where the switch to packaging SDL diodes is expected to be "rapid".

The SDL and JDS Uniphase merger, valued at USD 41 billion when first announced last July, is now worth closer to USD 18 billion. The newly merged company has also agreed new supply contracts with Nortel, which are said to be "over and above" the value and extent of existing deals. Tony Muller, JDS Uniphase chief financial officer, said that "JDSDL" would now have an increased percentage of Nortel's business.