JDS Uniphase Corp and SDL Inc. Merger

B. Rajesh Kumar
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B. Rajesh Kumar: Institute of Management Technology

Chapter 40 in Wealth Creation in the World’s Largest Mergers and Acquisitions, 2019, pp 329-333 from Springer

Abstract: Abstract In 1999, the Uniphase Corporation and JDS Fitel Inc. merged in a stock swap deal valued at approximately $3.2 billion. The deal created one of the biggest manufacturer of parts used in phone equipment. Uniphase made lasers and computer chips which helped fiber-optic phone networks to carry more information. JDS Fitel made components used in systems such as filters. The definitive merger agreement between JDS Uniphase and SDL was announced on July 10, 2000. The deal was valued at $41 billion. The acquisition of SDL was the continuation of the aggressive merger strategy pursued by JDS Uniphase. The deal represented a 49% premium for SDL shareholders. The transaction valued SDL’s shares at $441.5125 a share which represented approximately 50% premium for SDL shareholders. The union was aimed to increase the technological expertise and economies of scale and offer customers new innovative module offerings. The increased demand for bandwidth required faster telecommunication network capacity and flexibility. The acquisition of SDL added pump lasers and arrayed wave guides to its product mix. The cumulative return analysis for JDS Uniphase stock was done for 1-year period (1/7/2000 to 1/7/2001) covering 251 days of analysis. The merger event window was −4 to +246-day period. On a cumulative basis during the time window event of analysis for merger, the JDS Uniphase stock declined by approximately 150%.

Keywords: Uniphase Corporation; JDS Uniphase (JDSU); Arrayed Wave Guides; Definitive Merger Agreement; Time Window Effect (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/978-3-030-02363-8_40

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