JDS Uniphase to Buy E-Tek for $15 Billion in Stock

JDS Uniphase Corp., the world’s No. 1 maker of fiber-optic equipment parts, agreed to buy rival E-Tek Dynamics Inc. for $15 billion in stock to alleviate shortages in capacity and make new products faster.

JDS Uniphase would exchange 1.1 shares of its stock for each share of E-Tek. That values E-Tek stock at $211.40 a share, 56% more than its closing price Friday. Both companies are based in San Jose.

The acquisition would give JDS Uniphase some of the capacity it needs to meet demand from Alcatel, Nortel Networks Corp. and other customers. E-Tek’s main products are found in the gear that phone companies are using to boost the capacity of fiber-optic networks to handle growing Internet use.

E-Tek, which first sold shares to the public in December 1998, had sales of $172.7 million in the year ended June 30. JDS Uniphase was formed in July by the merger of Uniphase Corp. and JDS Fitel Inc.

E-Tek would be JDS Uniphase’s fourth acquisition deal in as many months. Chief Executive Kevin Kalkhoven is seeking to add capacity in a market that analysts expect will have about $22 billion in sales by 2003, up from $4 billion last year.

JDS Uniphase expects to complete the acquisition in June.

In Nasdaq trading Friday, JDS shares rose $4.50 to $192.19 and E-Tek was up $6.19 at $135.88.