Nortel buying JDS optical biz for up to $3 billion

Nortel buying JDS optical biz for up to $3 billion

Telecommunications manufacturer Nortel Networks announced a definitive agreement on Tuesday to buy JDS Uniphase's 980 nanometer pump-laser chip design and manufacturing subsidiary for up to US$3 billion in stock.

JDS Uniphase's subsidiary, based in Zurich, Switzerland with related assets in Poughkeepsie, New York, produces chips which provide the energy source by which light is strengthened as it is transmitted on fiber between cities or buildings. The components are used to produce optical networks.

Nortel said the purchase will help it integrate the technology and associated intellectual property into its optical amplifier modules, used to boost and amplify light in dense wave division multiplexing (DWDM) networks.

Based on Nortel's Monday closing of $38.08, Nortel will issue approximately 65.7 million common shares on closing and up to approximately 13.1 million common shares in deferred consideration, the company said. The deferred consideration will only be paid to the extent that Nortel Networks does not meet its purchase commitments with JDS Uniphase by December 31, 2003.

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