February 10, 2004 Dallas--Alcatel and Draka (Amsterdam) today announced their intention to combine their global optical fiber and communication cable businesses into a jointly owned company. It is agreed that Draka would own 50.1% of the new company and Alcatel 49.9%. In optical fiber and fiber cables, the combination would be the undisputed number one in China, through the combination of Alcatel's assets with Draka's interest in YOFC, the leading Chinese optical fiber and fiber cable manufacturer. The new company would also be a leader in Europe and a major player in North America.
It is Draka's intention to issue 150 million euros of new equity in parallel with the creation of the new company. This new equity will be fully underwritten by Draka's two largest shareholders, Flint Holding N.V. and Parcom Ventures B.V.
Alcatel should contribute all its optical fiber and fiber cable assets to the new company, which would be accounted for as an equity company.
"With this announcement, we are making another important step in our strategy to focus on communication solutions. As part of this strategy, Alcatel is playing an active role in fostering the necessary consolidation of the fiber and fiber cable industry. This proposed transaction will allow Alcatel to benefit from an improved fiber cable capability in its FTTH activity, thereby further strengthening its leading offering in broadband access. The proposed combination of Alcatel's and Draka's assets will also generate substantial technical and industrial synergies," said Olivier Houssin, executive vice president of Alcatel.
"Draka is delighted to be joining forces with Alcatel, a world leading telecommunications solutions vendor. The proposed combination reinforces Draka's capabilities in the fiber and communication cable industry and as such would represent a major step in the group's strategic development. In this context, it provides a unique opportunity to roll out Draka's long-term growth strategy to become a top five player in the global cable industry and to create value for Draka's shareholders," said Jan Van Kesteren, chairman of the Board of Management of Draka.
The new company would have a comprehensive product portfolio across optical fiber and fiber cable, addressing the full range of telecommunication and data communication applications. The new company's product portfolio would also include a comprehensive copper telecommunication and data communication cable product range.
Alcatel brings fibers and fiber cables, including TeraLight, the advanced long-distance fiber, enhanced singlemode fibers and optical cables. These products use Alcatel's proprietary Advanced Plasma Vapor Deposition process and draw coloring ColorLock process. Draka brings complementary optical fiber activities to the combination, as well as communications-related, copper-based cables. Among the major features, Draka would bring its proprietary Plasma Chemical Vapor Deposition process, as well as a top-notch LAN/premise fiber solution, led by the MaxCap product family and JETnet networking systems.
The proposed combination, which has already received approval from Alcatel's Board of Directors and from Draka's Supervisory Board and Board of Management, is subject to confirmatory due diligence, agreement on final legal documentation, and customary regulatory and other approvals. It is expected to be completed by the end of the second quarter of 2004.