Furuakwa Electric Sells US Optical Component Subsidiary

Furukawa Electric announced on Monday the firm agreed with Oplink Communications, a US major optical component maker, to sell its subsidiary in USA to produce optical components, Optical Communication Products (OCP). Furukawa Electric will sell all of 66 million stocks of OCP held by Furukawa Electric to Oplink Communications at US$ 99 million, 85% of which will be paid in cash and 15% by Oplink’s stocks.Oplink Communications produces optical network components and supplies optical network set up services, which has productive bases in Zhuhai and Shanghai, China and takes advantages of high cost competitiveness. OCP, a Furukawa Electric’s subsidiary, produces optical fiber components applied to optical networks.Furukawa Electric expects to gain synergies from business integration between Oplink and OCP by sales of OCP to Oplink, a major supplier of optical components in US market, and acquiring Oplink’s stocks partly. In addition, Furukawa Electric can expect sales expansion of semiconductor laser diodes for optical networks thanks to synergies between Oplink and OCP, while the firm has supplied laser diodes to both Oplink and OCP.Furukawa Electric will post profit of approximately 1 billion yen on a full-year results for fiscal 2006 ended March by the sales of OCP’s stocks.