Furukawa gets Lucent fiber unit for less, cuts jobs
- 19 November, 2001 08:02
Lucent Technologies and Japanese telecommunication cable maker Furukawa Electric Co. Ltd. have reached an agreement whereby Lucent will sell its optical-fiber unit to Furukawa and U.S. company CommScope Inc. for US$2.3 billion, of which CommScope's share will be $173 million, Furukawa announced Friday.
Furukawa, after the acquisition, will take over all 4,200 employees from the unit and expects to cut jobs there, the company said.
Talks between the two companies and broadband coaxial cable maker CommScope started early this year, and in July, Lucent and Furukawa were ready to settle with a $2.5 billion deal.
CommScope, however, failed to raise its $650 million share, and requested that Furukawa reduce CommScope's stake in the partnership. Furukawa then persuaded Lucent to reduce the originally agreed price in return for Furukawa increasing its share, said Nobuyuki Kishi, a spokesman for Furukawa.
The deal has been signed and is expected to be completed at midnight Saturday Japan time, Kishi said.
The unit will be divided into two operational companies, one focusing on optical fiber and the other on optical cable. A third joint-venture company will be formed to oversee operations. Furukawa will have an 81.6 percent stake and CommScope an 18.4 percent stake in the optical-cable company; the other two will be wholly owned by Furukawa.