Corning to Buy Oak Industries for $1.8 Billion
Corning Inc. on Sunday announced a $1.8-billion deal to acquire Waltham, Mass.-based Oak Industries in a bid to broaden the company’s presence in the burgeoning optical communications market.
Oak Industries designs and manufactures devices used as timing references in wireless, wireline and fiber-optic applications. The company’s subsidiaries include Lasertron Inc. and Gilbert Engineering Co. Corning, the world’s leading supplier of optical fiber, is a key player in the technology behind Internet communications. The company has more than 15,000 employees worldwide, including about 6,000 at its headquarters. Oak Industries employs about 3,900 people.
No layoffs are expected from the merger, company officials said.
“With the Internet basically doubling every 100 days, there’s demand for more information to be transmitted. This is an opportunity for Corning to really grow with that industry,” Corning spokesman Robert DeMallie said.
The deal will allow customers in the fiber optics industry to “have a single source for components and modules for optical communications, as well as access to a broad array of related products, including optical fiber, cable and hardware,” said Roger G. Ackerman, Corning’s chairman and chief executive.
Under a stock transaction agreement, Corning will exchange .83 share of its stock for each share of Oak. Based on Corning’s closing price Friday of $90.38 on the New York Stock Exchange, the deal values each Oak Industries share at $75, which represents a 51% premium over its closing price Friday of $49.75 on the NYSE.
