US-based Corning Inc. has signed a definitive agreement to acquire German group Siemens AG“s worldwide optical cable and hardware business, and the remaining of its two co-investments with Siemens, f…
US-based Corning Inc. has signed a definitive agreement to acquire German group Siemens AG“s worldwide optical cable and hardware business, and the remaining of its two co-investments with Siemens, for US$ 1.4 billion, including assumed debt. In a recent press release, Corning said the transaction, which includes co-investments in Siecor Corp. and Siecor GmbH, is expected to close in early 2000 after regulatory approvals. Corning also said the acquisition will probably dilute earnings per share less than 5% in 2000, and will be accretive thereafter. As part of integrating the acquired operations, Corning will create a new operating unit, Corning Communications Europe, headquartered in London. The company said Sandy Lyons will lead Corning“s worldwide cable, hardware and equipment business. Lyons is Siecor Corp.“s president and chief executive. The company named Cliff Hund president of the unit, and Gerhard Konig managing director, Europe – Cable Hardware and Equipment. Hund is a senior marketing professional. Konig is a Corning general manager. A First Call/Thomson Financial survey of ten analysts estimated Corning“s fiscal 2000 earnings at US$ 2.34 a share. Corning reported fiscal 1998 income from continuing operations of US$ 327.5 million, or US$ 1.39 a diluted share, including a charge of 21 cents a share and a gain of 6 cents a share. The company said Siecor GmbH will become part of its worldwide optical-fibre manufacturing operations. The transaction price includes US$ 145 million of contingent performance payments to be paid over four years, if earned, and about US$ 120 million in assumed debt. Corning also acquired Siemens“ Communications Cables unit, RXS Kabel Garnituren GmbH and Norddeutsche Seekabelwerke GmbH in Germany, RXS Morel in France, Teleco Cavi in Italy, and Siemens Fibre Optical Kablolari in Turkey. The company is also acquiring certain related Siemens assets in Argentina, Australia and the US. Corning makes optical fibre, photonic components, high-performance glass and components for TV and other electronic displays for communications and related industries.