EMCORE sale of fiber optics business hits roadblock
JUNE 28, 2010 By Stephen Hardy -- EMCORE Corp. has announced that the proposed sale of 60% of its fiber-optics business to Tangshan Caofeidian Investment Corp. (TCIC) of China has snagged due to regulatory issues.
JUNE 28, 2010 By Stephen Hardy -- EMCORE Corp. (NASDAQ: EMKR) has announced that the proposed sale of 60% of its fiber-optics business to Tangshan Caofeidian Investment Corp. (TCIC) of China has snagged due to regulatory issues.
The two companies made a joint voluntary filing with the Committee on Foreign Investment in the United States (CFIUS) in connection with the proposed transaction, in which TCIC would pay $27.75 million in cash, subject to certain adjustments, for the stake in EMCORE’s fiber-optics business. The stake would exclude EMCORE’s satellite communications and specialty photonics fiber-optics businesses. (For more, see "EMCORE Corp. forms joint venture with Chinese investment company to focus on high-volume fiber manufacturing.")
However, on June 24, 2010, EMCORE and TCIC withdrew their joint filing with the CFIUS, EMCORE has revealed. The withdrawal came in the wake of indications from CFIUS that it has regulatory concerns about the transaction as it is currently proposed.
However, the two companies “remain willing to explore alternative means of cooperation that would address regulatory concerns and meet the parties' objectives,” EMCORE stated in a press release. EMCORE and TCIC say the proposed transaction is currently on hold until those means can be found.
"While addressing any regulatory requirements, EMCORE remains committed to seeking other means of cooperation that would meet the objectives of EMCORE and TCIC,” said EMCORE President and CEO Dr. Hong Q. Hou. “We will continue to explore a broad strategy with TCIC, or with alternative partners, to meet the company's objectives of: 1) creating a low-cost manufacturing base for its fiber-optics business, 2) separating EMCORE's photovoltaics and fiber-optics businesses to become pure plays in each of the business segments, and 3) providing EMCORE with improved liquidity to launch its concentrator photovoltaics (CPV) business."