Finisar to pay less for Infineon fiber unit
Finisar will pay less than originally expected for Infineon Technologies fiber-optic business unit.
The two companies agreed a deal in April this year under which Finisar would acquire the German chip manufacturer s subsidiary for 135 million Finisar shares (see related story).
But after the Infineon unit s disappointing six months of operating results in a still-deflated fiber-optic sector, Finisar will now only part with 110 million shares for the acquisition.
That will give Infineon a 33% equity in Finisar, less than the 38% originally expected, if the deal is approved.
Infineon will also provide financial assistance to cover the costs of "restructuring" the operations of the fiber-optic unit and its integration with Finisar.
Finisar s stock is now trading at only around 60% of its value in April, when the Infineon deal was first announced. The result is that the transaction is now valued at approximately $141 million, compared with $263 million six months ago.
Although the transaction remains subject to approval by Finisar shareholders, the company said that CEO Jerry Rawls and CTO Frank Levinson, who own 16% of Finisar between them, would vote in favour of the deal.
Antitrust clearance has already been received from the relevant US and European authorities.
The transfer will see Finisar acquire manufacturing facilities and fiber-optic development activity, along with 1200 Infineon staff. The combined company will rank fifth in the fiber-optic component vendors, according to a recent market survey by Communications Industry Researchers.
