Corning to Acquire Siemens Optical Cabling Business, Interest in Siecor

In a move to focus on its information and communications technology business, Siemens AG has agreed to sell its optical cabling businesses to Corning Inc., Advanced Materials (Corning, NY) for $1.4 billion, including assumed debt. The transaction price includes $145 million of contingent performance payments to be paid, if earned, over a four-year period, and approximately $120 million of assumed debt.

As part of the agreement, Corning will purchase full ownership of Siecor Corp. and Siecor GmbH. The purchase also includes Siemens' Communications Cables Division, RXS Kabel Garnituren GmbH (RXS) and Norddeutsche Seekabelwerke GmbH (NSW) in Germany; RXS Morel in France, Teleco Cavi in Italy; and Siemens Fiber Optical Kablolari (SFOK) in Turkey. Corning is also acquiring certain related Siemens assets in Argentina, Australia and the U.S.

As part of the integration of the acquired operations, Corning will create a new operating unit, Corning Communications Europe, which will be headquartered in London. Cliff Hund, a senior marketing professional with experience in Corning's fiber and European cable businesses, will serve as president of Corning Communications Europe and will be responsible for driving and integrating Corning Communications' European strategy. Gerhard Konig, a Corning general manager with experience running businesses in both Germany and the United States, will serve as managing director Europe - Cable/Hardware and Equipment. Konig will be responsible for European operations and operational integration. Both Hund and Konig will report to Lyons.

Siecor Corp. president and CEO Sandy Lyons will lead Corning's worldwide cable, hardware and equipment businesses, Siecor, the Corning Cables business acquired from BICC in early 1999, and the Siemens businesses. Siecor GmbH will become part of Corning's worldwide optical-fiber manufacturing operations. Corning will maintain a multi-channel strategy, including direct fiber sales to other cablers.

Corning expects the transaction to close in early 2000 after customary regulatory approvals. The company plans to fund the transaction with proceeds from both a common stock offering and debt issuance. Corning expects that the acquisition will cause dilution of less than 5% in 2000 earnings per share, and to be accretive thereafter.

"Aligning our existing fiber and cable assets with the acquired Siemens' businesses immediately positions us as a formidable competitive presence in Europe," said Corning Communications president John Loose.