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Thursday, February 04, 2010
Chinese Buy 60 Percent of Emcore's Fiber Optics Business
Associated Press
Emcore Corp. of Albuquerque has entered into an agreement for a Chinese investment company to buy a 60 percent interest in Emcore's fiber optics business.
The agreement announced Wednesday will create a joint venture with Tangshan Caofeidian Investment Corp., located in the Hebei Province of China.
The new joint fiber optics business will be renamed Emcore Fiber Optics Ltd., or EFO, and will be registered in Hong Kong.
The Chinese company will pay Emcore about $27.8 million in cash and will provide $27 million to EFO after the deal closes.
A news release says the new venture will focus over the next several years on developing a high-volume, low-cost manufacturing infrastructure and customer support to serve the expanding market in China and elsewhere.
The transaction includes Emcore's telecom, enterprise, cable television, fiber-to-the-premises and video transport product lines. Emcore will retain its satellite communications and specialty photonics fiber optics lines and its satellite and land solar power business.
Emcore, which makes semiconductor-based components, has a solar photovoltaic factory in Albuquerque.
The company said it will address details of the transaction in a conference call about its December quarterly earnings. The date of that call has not been set.
The agreement calls for Emcore's executive chairman and chairman of the board, Reuben F. Richards Jr., to resign as executive chairman of Emcore to become chief executive officer for EFO. Emcore's president and CEO, Hong Q. Hou, also will be a director of EFO.
Tangshan Caofeidian Investment nominated Yi Li as EFO's chairman of the board.
The Chinese investment firm was established in 2006 in the Caofeidian Industry Zone in Tangshan City to provide support to enterprises within that zone and to promote local economic development.
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