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JDSU Sells 980 Nm Pump Laser Business To Nortel To Secure Approval For SDL Merger (Fiber Optics News)

The US Department of Justice gave its long-awaited approval for the merger of JDS Uniphase and SDL on February 6. As expected, JDSU was required to divest its Zurich-based 980 nm pump laser operation, which will be purchased by Nortel. Without this sale, according to the DOJ, the combined company would have controlled more than 80% of the market for this critical component. Nortel will pay $2.5 billion for the business, and up to $500 million in 2004 if it does not meet purchase commitments to JDSU. The Zurich operation was purchased by JDSU in 1995 from IBM for $50 million. Nortel is the world s largest consumer of 980 nm lasers, and could have easily scuppered the merger with a few well-placed objections. Analysts who follow both companies believe that Nortel received a very good deal from JDSU, perhaps in return for their compliance. JDSU said that several companies wanted to buy the plant. However, some analysts have questioned whether any of the other likely candidatesLucent/Agere, Corning, Furukawahad any deep-rooted interest. The Zurich plant supplies around 40% of more than $200 million in 2001 revenues, it will also provide Nortel with access to a renowned group of experts in the technology. This same group were the first to develop a facet passivation process that allowed production of reliable, high power 980 nm lasers, leading to widespread use of these devices in EDFAs. In turn, this enabled the explosive growth of DWDM networks. Following completion of the transaction the Zurich site will become a wholly owned subsidiary of Nortel Networks. JDS Uniphase will retain several other European assets, including their source laser operation in the Netherlands and their laser packaging operations in the United Kingdom. "We are pleased that the agreement with Nortel Networks permits us to complete our merger with SDL," said Jozef Straus, CEO and co-chairman of JDS Uniphase. "We now look forward to quickly completing the transaction and moving ahead with the merger of our businesses in order to exploit
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