Corning to Acquire Substantially All of 3M’s Communication Markets Division
Year:2018 ISSUE:1
COLUMN:ECONOMY AND BUSINESS
Click:376    DateTime:Jan.09,2018
Corning to Acquire Substantially All of 3M’s Communication Markets Division

Corning Incorporated announced recently that it has entered into agreements with 3M to purchase substantially all of 3M’s Communication Markets Division in a cash transaction valued at approximately US$900 million. The acquisition is expected to close during 2018, subject to customary closing conditions and regulatory approval.
Corning’s Optical Communications segment will acquire approximately US$400 million in annual sales of high bandwidth and optical fiber products. The effective enterprise value of the transaction is less than 7 times the Communication Markets Division’s estimated forward-annual adjusted EBITDA, including expected run-rate synergies. Corning expects the transaction to add US$0.07~0.09 to 2019 EPS.
“Corning leads in optical passive components and solutions. This transaction expands both our global market reach and our high-bandwidth portfolio. It also provides new co-innovation opportunities and enhances our ability to serve customers globally,” said Clark S. Kinlin, executive vice president, Corning Optical Communications. “We look forward to bringing these two strong organizations together and welcoming a group of outstanding employees.”
The pending acquisition is part of Corning’s multi-year Strategy and Capital Allocation Framework, which is designed to create significant value for shareholders by focusing the company’s portfolio and utilizing its financial strength. A key component of the Framework is the company’s plan to invest approximately US$1 billion to US$3 billion in acquisitions. When complete, this acquisition will augment Corning’s Optical Communications global market access and expand its broad portfolio of high-bandwidth optical connectors, assemblies, hardware, and accessories for Carrier Networks, Enterprise LAN, and Data Center solutions.
The acquisition is subject to consultation or information requirements with relevant works councils, as well as customary closing conditions and regulatory approvals.