Corning acquires 3M’s communications markets division for $900M

merger and acquisition
After meeting customary closing conditions and regulatory approvals, the acquisition is expected to close in 2018.

Corning is purchasing 3M’s Communications Markets Division assets for about $900 million, a deal that will enhance the fiber maker’s global reach and high-bandwidth product portfolio.

After meeting customary closing conditions and regulatory approvals, the acquisition is expected to close in 2018.

Under the terms of the agreement, Corning’s Optical Communications segment will acquire nearly $400 million in annual sales of high-bandwidth and optical fiber products. In certain countries, the business also includes telecommunications system integration services.

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Corning said the effective enterprise value of the transaction is less than seven times the Communication Markets Division’s estimated forward-annual adjusted EBITDA, including expected run-rate synergies. Corning expects the transaction to add 7 to 9 cents to 2019 earnings per share.

“This transaction expands both our global market reach and our high-bandwidth portfolio,” said Clark S. Kinlin, EVP of Corning Optical Communications, in a release. “It also provides new co-innovation opportunities and enhances our ability to serve customers globally.”

The pending acquisition is part of Corning’s multiyear Strategy and Capital Allocation Framework, which calls to invest between $1 billion to $3 billion in acquisitions. Upon completion, this acquisition will augment Corning’s Optical Communications global market access and expand its broad portfolio of high-bandwidth optical connectors, assemblies, hardware, and accessories for Carrier Networks, Enterprise LAN, and Data Center solutions.

3M’s Communication Markets Division is headquartered in Austin, Texas, and has a dedicated manufacturing facility in Pontchâteau, France, and operations in Hannover, Germany. The acquisition is subject to consultation or information requirements with relevant works councils, as well as customary closing conditions and regulatory approvals.

Acquiring 3M’s communications assets will also bring Corning closer to achieving its broader revenue goals. The vendor has set a course to accelerate optical sales to $5 billion by 2020.