JDS FITEL and Uniphase Agree to US $6.1 Billion Merger

Uniphase Corp. and JDS FITEL Inc. are merging in a transaction valued at $6.1 billion based on January 27, 1999 closing stock prices. The combined company will be called JDS Uniphase.

By combining the two companies' complementary product portfolios, JDS Uniphase hopes to sell products that integrate both active and passive components. The combined company will offer a more comprehensive product offering with shorter development and deployment cycles, executives say.

Uniphase manufactures active fiber optic components and modules, including lasers, modulators, and transmitters. JDS FITEL makes passive fiber optic products such as wavelength division multiplexers (WDM), optical switches, and isolators. Kevin Kalkhoven from Uniphase will be co-chairman and CEO of JDS Uniphase. Jozef Straus from JDS FITEL will become co-chairman, president, and COO. Both companies will each nominate one-half of the board.

The current shareholders of JDS FITEL and Uniphase will each own approximately 50% of the combined company following the merger. The Furukawa Electric Co. Ltd. owns 40.5 million shares of JDS FITEL, or approximately 52% of the outstanding shares. It will be JDS Uniphase's largest shareholder. In order to effect a limited return on its ongoing investment, Furukawa intends to sell approximately 3.5 million shares of JDS FITEL in the near term.

For each JDS FITEL share they hold, JDS FITEL shareholders resident in Canada will be entitled to receive 0.50855 shares of JDS Uniphase or 0.50855 shares of JDS Uniphase Canada, a wholly owned subsidiary of JDS Uniphase. The exchangeable shares are the economic and voting equivalent of shares of common stock of JDS Uniphase and will be exchangeable for such shares on a one-for-one basis at any time.

JDS Uniphase Corp. will be quoted on Nasdaq National Market and will report its financial results in US dollars. On a pro forma basis, the new company would have reported annual sales of approximately US $420 million based on 12 month trailing sales and would employ more than 3,600 people worldwide.

Both JDS and Uniphase stock prices were up more than 8% during the day after the merger announcement (Jan. 28).