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Acquisition to support Corning's plan for growth in cloud
data center market
CORNING, N.Y., AND SUNNYVALE,
CALIF.; APRIL 7, 2016 - Corning Incorporated (NYSE: GLW) and
Alliance Fiber Optic Products, Inc. (Nasdaq: AFOP) announced today
that they have entered into a definitive merger agreement under
which Corning will acquire Alliance Fiber Optic Products, Inc.
Under terms of the agreement, Corning will make an
all-cash tender offer to acquire all of the outstanding common
shares of Alliance Fiber Optic Products, Inc. (AFOP) for $18.50 per
share, representing a transaction value of approximately $305
million.
AFOP designs and manufactures high-performance
passive optical components. These products are used by cloud
data-center operators and leading datacom and telecom OEMs
(original equipment manufacturers). These components are used in
several of Corning's existing connectivity solutions. AFOP, founded
in 1995 and headquartered in Sunnyvale, California, has
manufacturing and product development capabilities in the U.S.,
Taiwan and China.
Upon closing of the acquisition, Corning will
integrate AFOP into its Optical Communications business segment.
Corning expects the acquisition to expand its market access to
cloud data-center operators and OEMs, broaden its presence in Asia,
and provide product and cost synergies. Corning expects the
acquisition to be accretive to its earnings per share during the
first year.
"Combining AFOP's components expertise with
Corning's broad portfolio of connectivity solutions further
strengthens our position in the high-growth, cloud data-center
market segment," said Clark S. Kinlin, executive vice president,
Corning Optical Communications. "And, it adds additional products
that Corning can offer our broad customer base while providing an
opportunity for manufacturing synergies."
Peter C. Chang, AFOP founder and CEO, commented,
"We are excited to join forces with Corning. We believe Corning's
scale provides an excellent platform for our products to access a
broader customer base and drive a higher level of growth than we
would be able to achieve as a standalone company. Our board
believes that this transaction is in the best interests of our
stockholders and provides our stockholders with substantial cash
value for their investment. In addition, we believe becoming part
of a larger company with Corning's strong track record benefits
both our employees and customers."
The offer price represents a 32% premium to the
one month average closing price prior to the announcement and a 20%
premium to the closing price on April 7, 2016. The tender offer is
expected to commence within the next 10 business days and will be
followed by a merger, in which all the shares of AFOP common stock
that have not been tendered into the tender offer (other than
shares for which appraisal rights have been properly exercised)
will be converted into the right to receive $18.50 in cash per
share.
The boards of directors of both companies have
approved the transaction, which is expected to be completed in the
second quarter 2016. The completion of the tender offer is subject
to the satisfaction of customary closing conditions, including that
a majority of the outstanding shares of common stock of AFOP
(calculated on a fully diluted basis) are tendered into the tender
offer and regulatory review.
Forward-Looking and Cautionary
Statements
This press release contains certain "forward-looking statements"
within the meaning of U.S. federal securities laws, including with
respect to the parties' plans for closing the transaction, the
commencement and completion of Corning's proposed tender offer for
AFOP common shares, Corning's plans with respect to integration of
AFOP following the transaction, the resulting impact upon Corning's
business, statements concerning the benefits of the transaction
including to stockholders and customers, including the impact of
the acquisition on Corning's future financial and operating
results, plans and expectations and anticipated future events and
expectations that are not historical facts. We caution you
that these statements are not guarantees of future performance and
are subject to numerous risks and uncertainties including the
receipt of necessary approvals, and other risk factors that each of
Corning and AFOP identify in their most recent annual reports on
Form 10-K. Actual results may differ materially from current
expectations because of risks associated with uncertainties as to
the timing of the tender offer and the subsequent merger,
uncertainties as to how many of AFOP's stockholders will tender
their shares of common stock in the tender offer, the risk that
competing offers or acquisition proposals will be made, the
possibility that various conditions to the consummation of the
offer or the merger may not be satisfied or waived, including that
a governmental entity may prohibit, delay or refuse to grant
approval for the consummation of the offer or the merger, the
effects of disruption from the transactions on AFOP's or Corning's
businesses and the fact that the announcement and pendency of the
transactions may make it more difficult to establish or maintain
relationships with customers or employees. Any of these
factors could cause actual results to differ materially from the
expectations we express or imply in this press release. These
forward-looking statements speak only as of the day that they are
made, and neither Corning nor AFOP undertake any obligation to
update them in light of new information or future events.
Notice to Investors
This announcement is neither an offer to purchase nor a
solicitation of an offer to sell securities. The tender offer for
the outstanding shares of AFOP common stock described in this press
release has not commenced. At the time the offer is commenced an
indirect, wholly owned subsidiary of Corning will file a tender
offer statement on Schedule TO with the Securities and Exchange
Commission and AFOP will file a solicitation/recommendation
statement on Schedule 14D-9 with respect to the offer.
The tender offer statement (including an
offer to purchase, a related letter of transmittal and other offer
documents) and the solicitation/recommendation statement will
contain important information that should be read carefully before
any decision is made with respect to the tender offer.
Once filed, those materials will be made available to AFOP security
holders at no expense to them from the information agent named in
the tender offer materials. In addition, all of those materials
(and all other offer documents filed with the SEC) will be
available at no charge on the SEC's website: www.sec.gov.
About Corning
Incorporated
Corning (www.corning.com) is one of the world's leading innovators
in materials science. For more than 160 years, Corning has applied
its unparalleled expertise in specialty glass, ceramics, and
optical physics to develop products that have created new
industries and transformed people's lives. Corning succeeds through
sustained investment in R&D, a unique combination of material
and process innovation, and close collaboration with customers to
solve tough technology challenges. Corning's businesses and markets
are constantly evolving. Today, Corning's products enable diverse
industries such as consumer electronics, telecommunications,
transportation, and life sciences. They include damage-resistant
cover glass for smartphones and tablets; precision glass for
advanced displays; optical fiber, wireless technologies, and
connectivity solutions for high-speed communications networks;
trusted products that accelerate drug discovery and manufacturing;
and emissions-control products for cars, trucks, and off-road
vehicles.
About Alliance Fiber Optic
Products Inc.
Founded in 1995, Alliance Fiber Optic Products Inc. designs,
manufactures and markets a broad range of high performance fiber
optic components and integrated modules. AFOP's products are used
by leading and emerging communications equipment manufacturers to
deliver optical networking systems to the long-haul, enterprise,
metropolitan and last mile access segments of the communications
network. AFOP offers a broad product line of passive optical
components including interconnect systems, couplers and splitters,
thin film CWDM and DWDM components and modules, optical
attenuators, and micro-optics devices. AFOP is headquartered in
Sunnyvale, California, with manufacturing and product development
capabilities in the United States, Taiwan and China. AFOP's website
is located at http://www.afop.com.
Corning Media Relations
Contacts:
Joseph
Dunning
(607)
974-5006
dunningjm@corning.com
Isolde Karro
(828) 901-6406
karroI@corning.com
Corning Investor Relations
Contact:
Ann H.S. Nicholson
(607) 974-6716
nicholsoas@corning.com
Alliance Fiber Optic Products
Inc. Contact:
Keting Lin
Investor Relations Associate
408-736-6900 ext.188
klin@afop.com
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This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Corning Incorporated via Globenewswire
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