Ceramic Industry

Corning Enters Optic Deal

May 11, 2000
Corning Inc. has agreed to acquire optical filter maker NetOptix Corp. for roughly $2 billion in stock, significantly enhancing its ability to produce components that transmit multiple signals over a single communications line.

Corning has also formed a new equity venture with Korea’s Samsung Electronics to mass produce micro-optic products that expand the capacity of the Internet. The newly acquired NetOptix will supply thin film filters to that operation.

Company officials hope to close the NetOptix transaction during the second quarter of this year. Corning expects the merger to be “mildly” dilutive to the company’s 2000 earnings, and accretive next year and thereafter.

Roger Ackerman, Corning’s chairman and CEO, said he pursued the deal because the market for dense division multiplexing components (DWDM)—the devices that actually enable multiple wavelengths to be transmitted over a single fiber optic line—is expected to double this year alone. NetOptix’ filters are a critical component to those devices.

Corning, which says it developed the first fiber-optic cable more than 20 years ago, aims to capitalize on that growth through its new Samsung venture, called Samsung Corning Micro-Optics, which intends to automate the production of DWDM devices that are currently assembled manually.