JDS Uniphase to Acquire SDL for $37 Billion

N E W  Y O R K, July 10 -- Acquisitive JDS Uniphase Corp., trying to meet booming global demand for fiber-optic equipment,said today it was snapping up SDL Inc. for about $36 billion in stock, beating out rivals to forge the largest takeover of a technology equipment maker on record.

The acquisition was originally valued at $41 billion when thecompanies announced it early today, before investors sent sharesof JDS Uniphase down 13 percent.

JDS Uniphase only last month completed the purchase of E-TekDynamics, which also makes fiber-optic network equipment, for $15billion.

JDS Uniphase and SDL each manufacture products needed forhigh-capacity fiber-optic networks, which allow for increasedtelecommunications traffic. Demand for such products is growing ashigh-speed audio and video transmission become more prevalent onthe Internet.

Under the terms of the deal announced today, each share of SDLwill be exchanged for 3.8 shares of JDS Uniphase. At Friday’sclosing prices, that would represent a 49 percent premium for SDLshareholders.

Investors reacted by pushing shares of JDS Uniphase down $15.063to $101.125 in trading on the Nasdaq Stock Market, whileshares of SDL rose $25.375 to $320.688.

An Internet Play

“This combination brings together world-class technical andmanufacturing teams that promise to deliver best-in-classproducts at increased volumes for today’s systems whiledeveloping solutions for tomorrow,” said SDL chief executiveDon Scifres.

“We also expect to enable the migration from today’s hybridintegration and module level products to tomorrow’s trulyintegrated system on a chip,” he added.

SDL makes optical equipment for fiber-optic networks tocarry exploding volumes of Internet traffic. The phenomenalgrowth of this market has already created market stars likeCisco Systems and Nortel Networks Corp.

Said JDS CEO Jozef Straus: “By now we all know that theInternet is taking over the world and what that means about theneed for bandwidth. Optical is clearly the only solution and ourcustomers are building tomorrow’s systems, need higher levels ofintegration and more complex products every day.”