JDS Uniphase, SDL Agree to $41B Merger

BERLIN (07/10/2000) - Fiber-optics component makers JDS Uniphase Corp. and SDL Inc. announced plans to merge Monday. The transaction, valued at some US$41 billion, will leave SDL as a wholly-owned subsidiary of JDS Uniphase.

The merger is driven by the growing demand for bandwidth in the Internet age, said Jozef Straus, JDS Uniphase's chief executive officer (CEO). "Optical is clearly the only solution, and our customers are building tomorrow's systems," he said on a conference call announcing the merger.

JDS Uniphase will trade 3.8 shares of its common stock for each common share of SDL, the companies said. JDS Uniphase's stock closed Friday at $116.19, up $2.19. SDL's stock closed at $295.31, up $10.88. Both companies are traded on the Nasdaq exchange.

JDS Uniphase reported sales of $395 million in its most recent quarter; SDL's sales were $72 million for the same period.

Executives assured investors that the merger would go smoothly, despite JDS Uniphase's acquisition of several other companies over the past year.

"I think the two companies have very complementary products and skill sets. ...

We're going to be able to create a number of advanced new products," said Don Scifres, SDL's CEO.

Andrew McCormick, an analyst with research firm Aberdeen Group Inc., said JDS Uniphase hopes to position itself among market leaders like Ciena Corp., Corning Inc., Lucent Technologies Inc. and Nortel Networks Corp. "There's such a shortage of components out there that companies like JDS Uniphase are trying to complement the portfolios they have," he said.

McCormick added that JDS Uniphase's rapid period of acquisitions is aimed not only at increasing its capacity, but at broadening its product line from active components, such as amplifiers and lasers, into passive components like couplers and splitters.

Prices are likely to remain high in the fiber-optics components sector in the near term, said McCormick. "These guys have been caught so flat-footed in meeting the demand that it's going to take them some time to ramp up the supply," he said.

JDS Uniphase, in San Jose, California and Nepean, Ontario, can be reached at +1-408-434-1800 or on the Web at http://www.jdsunph.com/. SDL, also in San Jose, can be reached at +1-408-943-9411 or http://www.sdli.com/.

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