JDS UNIPHASE CORP. ACQUIRES SDL INC. FOR $41B.

Optical networks that transmit information using pulses of light modulated by lasers are infinitely more efficient than copper wires. Therein lies the tale of why SDL, Inc. has agreed to be acquired by JDS Uniphase for $41 billion. The optical networking technology that is at the heart of the bandwidth necessary to the operation of the Internet, is of incalculable value to the industry. Both JDS Uniphase and SDL, Inc. manufacture equipment that increases the speed and carrying capacity of fiber-optic cables, the micro-thin strands of glass that are the primary arteries for telephone and Internet traffic.

In the modern architecture of global telecommunications, both voice and data are first converted into pulses of light before transmitted over fiber-optic cables at the speed of light. Both SDL and JDS manufacturer chips that govern lasers used to boost the speed of these light pulses, and between them, control as much as 80% of the market. While the acquisition may face Dept. of Justice scrutiny, JDS had successfully obtained clearance of its last major acquisition, E-Tek Dynamics, Inc., by working with the Dept. of Justice, and expects to be successful with this most recent acquisition.

SDL, within the optical technology industry specializes in pump lasers and in components that are used make laser systems. It has extensive research facilities that JDS Uniphase will integrate into its own R&D in order to enhance its own fiber optic network plans.