News Article
Infineon scraps fibre optics sale to Finisar
German chip maker Infineon has cancelled the sale of its fibre optics business to US company Finisar Corp citing "circumstances beyond the company's control".
German chip maker Infineon has cancelled the sale of its fibre optics business to US company Finisar Corp citing "circumstances beyond the companys control".
Infineon had originally agreed to sell the fibre optics division to Finisar in April last year in return for a 38% stake in the US company.
But that deal was modified in October. Under the new terms, Infineon would only receive a 33% stake in Finisar. This was to take account of the operating performance of fibre optics division in the interim.
Finisar would have issued 110 million shares of Finisar common stock to Infineon valued at around US$206 million.
Now, however, the deal has collapsed. Infineon said that it had taken the decision to scrap the sale as a result of "delays related to the filing of the proxy statement with the US Securities and Exchange Commission".
This meant that closing of the deal was unlikely to take place before the end of March 2005.
Finisars enthusiasm for the deal also appears to have cooled. The company has informed Infineon that its board is likely to withdraw its recommendation to Finisars shareholders in favour of the transaction.
"The significant delay and high uncertainty of closing are expected to result in deterioration of our fibre optics business and in potential harm to our customers," said an Infineon spokesman.
"Infineons management board has therefore decided today to terminate the agreement with Finisar and will assess its legal options to recover the damages incurred by way of an arbitration proceeding in Germany."
Infineon has now announced that it will restructure the fibre optics division "while continuing to provide full support to its customers and the Infineon Fibre Optics business".
Infineon had originally agreed to sell the fibre optics division to Finisar in April last year in return for a 38% stake in the US company.
But that deal was modified in October. Under the new terms, Infineon would only receive a 33% stake in Finisar. This was to take account of the operating performance of fibre optics division in the interim.
Finisar would have issued 110 million shares of Finisar common stock to Infineon valued at around US$206 million.
Now, however, the deal has collapsed. Infineon said that it had taken the decision to scrap the sale as a result of "delays related to the filing of the proxy statement with the US Securities and Exchange Commission".
This meant that closing of the deal was unlikely to take place before the end of March 2005.
Finisars enthusiasm for the deal also appears to have cooled. The company has informed Infineon that its board is likely to withdraw its recommendation to Finisars shareholders in favour of the transaction.
"The significant delay and high uncertainty of closing are expected to result in deterioration of our fibre optics business and in potential harm to our customers," said an Infineon spokesman.
"Infineons management board has therefore decided today to terminate the agreement with Finisar and will assess its legal options to recover the damages incurred by way of an arbitration proceeding in Germany."
Infineon has now announced that it will restructure the fibre optics division "while continuing to provide full support to its customers and the Infineon Fibre Optics business".
