Corning to Acquire Alliance Fiber Optic Products

8 April 2016—Corning Inc., the New York–based maker of glass, ceramics, and specialty optical materials, and Alliance Fiber Optic Products, a designer and manufacturer of a variety of high-performance fiber optic components, yesterday announced an agreement to merge the two companies.
 
Under the agreement, approved by both company boards, Corning will acquire all outstanding common shares of Alliance, in a cash tender offer valued at US$18.50 per share. That’s 20 percent above Thursday’s closing price for Alliance stock and a 32 percent premium to the stock’s average price over the past month, and represents a total deal value of some US$305 million.
 
The Sunnyvale, Calif.–based Alliance, which also has operations in Taiwan and China, manufactures a variety of fiber optic connectivity and passive optical components, including interconnect systems, couplers and splitters, wavelength-division multiplexing components, mirco-optics, and other items. The company has a particular focus on the cloud and data center market, and Corning’s existing optical communications arm already uses some Alliance products.
 
According to its press release on the deal, Corning hopes that the merger will strengthen its position in “the high-growth cloud data center market segment,” a strategic objective of the company, as well as boost its presence in Asian markets.
 
Corning, which had full-year 2015 revenues of US$9.1 billion, will wrap the acquired Alliance operations into its existing Optical Communications business segment, which booked sales of US$736 million in the 2015 fourth quarter. The company expects to be able to extract “product and cost synergies” from the deal. The acquisition is expected to close during the 2016 second quarter, and Corning expects that it will start to contribute to bottom-line per-share results during the first year.