Lucent sells Fiber unit to Furukawa

  07/25/2001 6:41:15 AM MDT Albuquerque, Nm
  By Dustin D. Brand; Owner AMO

Struggling Lucent cuts an additional 15,000-20,000 jobs and sells their Fiber unit.
  Lucent posted a massive third-quarter loss, far wider than expected, and said it would cut another 15,000 to 20,000 jobs in a bid to return to a profit in fiscal 2002. On the same day, and after publicly stating they would sell their Fiber Unit, Lucent sells the Fiber unit to Corning to Furukawa.

Furukawa Electric Co., Japan's biggest optical parts maker, and U.S.-based Corning Inc. on Tuesday said they would buy Lucent Technologies Inc.'s fiber-optic cable division for $2.75 billion.

Furukawa said it will pay Lucent $2.525 billion and Corning, the world's largest fiber-optic cable maker, will pay $225 million in cash and also receive Lucent's interests in two Chinese joint ventures. The deal is expected to close by the end of September.

Lucent's Fiber unit may have been costing them greatly, but Fiber stands to gain the most in the next few years, and now Lucent has little to show for it's struggling company. Lucent's Stock has plumeted the last few years and is currently trading at $6.43 way down from it's 52 week high of $51.8750.

"We can be a major player worldwide through this deal, since we can offer various fiber-optic products," Furukawa President Junnosuke Furukawa said at a brief news conference in Tokyo.

The Japanese company said it acquired valuable intellectual property rights as Lucent and Corning dominate the patents on fiber-topic technology.

Furukawa said the North American fiber-optic market is facing a temporary slowdown, but demand for information technology remains, and it expects mid- to long-term growth.

Shares in Furukawa were up nearly 8 percent and closed at 892 yen.

In 1999, Lucent held 14 percent of the global fiber-optic market, while Corning had 30 percent and Furukawa 6 percent, according to the Nihon Keizai Shimbun, a financial newspaper. Furukawa is expected to use proceeds from last year's $1.77 billion sale of its stake in JDS Uniphase Inc. , the world's largest supplier of fiber-optic components, to help pay for the Lucent operations.

"We are considering eventually selling shares in JDS Uniphase," Junnosuke Furukawa said. "We would like to pay for the Lucent deal without putting a strain on our finances."

Furukawa Electric closed at its highest in more than a week, after coming under pressure after hitting a 32-month low of 794 yen on July 9 in line with widespread losses in telecoms shares.