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Infineon abandons sale of fiber optics unit to Finisar

Posted: 13 Jan 2005 ?? ?Print Version ?Bookmark and Share

Keywords:finisar? fiber-optic?

Infineon Technologies is blaming long delays in filing documents with the U.S. Securities and Exchange Commission for its decision to abandon the proposed sale of its laser and fiber optics subassembly business to Finisar Corp.

Infineon said delays meant the deal would not be closed until at least the end of March, almost a year after Finisar emerged as the successful bidder for the operation.

Infineon also said it would start "the necessary restructuring of its fiber optics business, while continuing to provide full support to customers".

This restructuring is expected to lead to significant cutbacks and job losses. The German company initially put its fiber optics business unit up for sale early in 2004.

Finisar has also informed Infineon that it is likely to withdraw its recommendation to Finisar's shareholders in favor of the transaction.

Infineon said the significant delay and high uncertainty of closing is "expected to result in deterioration of our fiber optics business and in potential harm to our customers." The company said before taking any further action, it would "assess its legal options to recover the damages incurred by way of an arbitration proceeding in Germany."

The terms of the original agreement were modified last October to take account of the operating results of the unit between April and October of last year and the depressed state of the fiber optics sector.

Following that amendment, Finisar would have issued about 110 million shares of Finisar common stock to Infineon valued at about $206 million as of close of business Monday (Jan. 10).

In the original agreement, Finisar was to offer 135 million shares to Infineon.

Infineon also agreed to provide financial assistance to help restructure the unit's operations and integrate them into Finisar following the closing. Finisar planned to acquire Infineon's fiber optic development, manufacturing and marketing activities along with 1,200 employees.

- John Walko

EE Times

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