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Infineon sells transceiver business to Finisar

Infineon strikes a new $50 million deal with Finisar, but sheds 350 staff from sites in Berlin, Munich and Longmont.

Infineon Technologies has agreed to sell part of its fiber-optic business to US-based Finisar, just two weeks after trashing the original deal to sell the entire unit.

The revised deal involves Finisar issuing Infineon with 34 million shares, valued at $50 million, in exchange for assets associated with design, development and manufacture of optical transceiver products.

The acquisition, which will be completed by 31 January 2005, gives Infineon a 13 percent share in Finisar.

Infineon added that it would lay off 350 staff associated with the fiber-optic business from sites in Berlin and Munich, Germany, and Longmont in the US.

Finisar will acquire 10 Gb/s transceiver designs for XPAK, X2, XENPAK and XFP form factors. Infineon will retain its components division for parallel optics and fiber-to-the-home applications, and plastic optical fiber products that are used in the automotive industry.

The deal represents the latest twist in the rocky relationship between the two companies. Two weeks ago Infineon withdrew from a $200 million agreement to sell Finisar its entire fiber-optic business unit (see related story), and both companies appeared to be heading for the courts. However, since striking this new pact Infineon and Finisar have called off any legal action.

"The acquisition considerably broadens our customer and product portfolio, particularly our 10 Gb/s product platforms," said Finisar CEO Jerry Rawls. "We stand ready to fully support Infineon's current customer base, and look forward to making this an easy transition for them."

"We are happy to sign this agreement today with Finisar," added Infineon CEO Wolfgang Ziebart, who indicated that more changes will be on the way. "The transition supports the ongoing consolidation of the fiber optic market, and is the first major step towards the restructuring of our fiber optics group in order to return to profitability."

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