Finisar to buy Infineon's fiber optics biz

SAN FRANCISCO: German chip maker Infineon Technologies AG agreed to sell its fiber optics business unit to Finisar Corp. in a $263 million stock deal.

The companies said in a statement the deal would create "the largest pure-play optical components company in the world." Infineon will hold a 38 percent stake in Finisar following the deal's completion, expected in the third quarter.

The deal involves the transfer of about 1,200 employees to Sunnyvale, California-based Finisar. Infineon said its fiber optics business had $32 million in revenue in its March-ending second quarter. Finisar has forecast revenue of $55 million to $60 million in the three-month period ended April 30.

Infineon in 2003 looked at a variety of alternatives for the fiber optics business, and eventually decided to unload the unit in part because customers were demanding a bigger product portfolio, said Mark Tyndall, vice president of business development at Infineon North America.

"What our customers were also looking for was a much broader range of components, so we were very much pulled by the market in making the decision," Tyndall said.

Fiber optics allows high-speed transmission of data and voice. Infineon's optical business serves two markets -- automotive and household -- into which Finisar does not currently sell.

"About 40 percent of Infineon's business is in markets where we don't currently compete," said Finisar President and Chief Executive Jerry Rawls in a statement.

©Reuters