Corning Incorporated will buy 3M’s Communication Markets Division for $900 million as part of its strategy to strengthen its leadership in telecom market.
This business — including optical fiber and copper passive connectivity solutions for the telecom industry including 3M’s xDSL, FTTx, structured cabling solutions and telecommunications system integration services — has annual global sales of approximately $400 million.
Approximately 500 3M employees are expected to join Corning upon completion of the transaction that is expected to be completed in 2018.
Corning earlier said Optical Communications sales rose 15 percent in the third quarter to $917 million with net income of $102 million. The increase was driven by strong demand for both enterprise and carrier products.
Corning CEO Wendell P Weeks earlier said that Corning’s Strategy and Capital Allocation Framework defines the company’s leadership priorities through 2019.
Corning has continued to make significant progress on its goals to return more than $12.5 billion to shareholders, and to invest approximately $10 billion in growth and sustained leadership.
“We combine our three core technologies and four manufacturing and engineering platforms to deliver unique optical solutions. As a result, we are growing at more than twice the rate of the telecommunications industry, with global leaders turning to us in support of their visions,” said Weeks.
Corning recently said it has achieved the milestone of 1 billion fiber kilometers sold during the third quarter of 2017. “As optical solutions penetrate further into the network, we are investing because we know that the opportunities ahead of us are even greater than those behind us,” Weeks said.
3M expects to realize a gain of approximately $0.40 per share from this transaction, net of actions related to the divestiture.
“After completing a thorough strategic review, we believe that this business will be well positioned with Corning,” said Ashish Khandpur, executive vice president, Electronics & Energy Business Group.