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Lumentum And Coherent To Merge

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$5.7 billion transaction brings together two complementary portfolios and teams to accelerate photonic innovation

Lumentum has announced it will acquire Coherent in a cash and stock transaction valued at $5.7 billion. Under the terms of the agreement, which has been unanimously approved by the boards of directors of both companies, Coherent stockholders will receive $100.00 per share in cash and 1.1851 shares of Lumentum common stock for each Coherent share they own. At closing, Coherent stockholders are expected to own approximately 27 percent percent of the combined company.

The combination unites Coherent's photonics and lasers businesses, including in the microelectronics, precision manufacturing, instrumentation, and aerospace & defence markets, with Lumentum's telecom, datacom, and 3D sensing photonics businesses, creates a diversified photonics technology company with significantly increased scale and market reach.

The combination accelerates Lumentum's penetration of the more than $10 billion market for lasers and photonics outside of the communications and 3D sensing applications. The powerful R&D engine of the combined company will be primed to accelerate innovation in existing and future markets that need the unique capabilities that photonics bring.

The combined company will be better positioned to serve the needs of a global customer base increasingly dependent on photonics to enable important end-market transitions including the shift to digital and virtual approaches to work and life, the transition to 5G in wireless networking, advanced bioinstrumentation, advanced microelectronics, and new materials for next generation consumer electronic devices, flat panel and OLED displays, communications equipment, electric and autonomous vehicles, and energy storage.

"Today's announcement is an important advancement of Lumentum's strategy," said Alan Lowe, Lumentum President and CEO. "In our five years as a standalone public company, we have focused on developing the most innovative products and technology in our industry and partnering with market leading customers to help them compete and win in their markets. As we look ahead, we are thrilled to join forces with Coherent to create one of the world's largest and most diverse photonics technology companies with leading positions in the growing market for photonics. Coherent brings one of the most recognizable and respected brands in the photonics industry and a very talented and innovative team. By increasing our scale, expanding our portfolio, and bolstering our R&D capabilities at a time when global markets are increasingly relying on photonics products and technologies, we are confident in our combined ability to pursue exciting new growth opportunities.

"Together, we expect to increase the pace of innovation, and to be at the forefront of the long-term market trends that are dependent on the capabilities of photonics. The combined company will also have a strong financial profile with a diversified revenue mix and significant synergy opportunities that will deliver enhanced value to our stockholders. We look forward to welcoming Coherent's talented employees to the team and are confident in our ability to execute a smooth integration focused on supporting both companies' employees and customers. As I often say, the future is truly bright at Lumentum - and with the addition of Coherent, it is even brighter," concluded Lowe.

"We are excited about the combination of Lumentum and Coherent, two iconic brands in their respective photonics markets. We anticipate the combined complementary product portfolio, breadth of customer application knowledge, and R&D capabilities, all based on photonics, will accelerate innovation and adoption of photonics across the many markets that we serve," said Andy Mattes, Coherent president and CEO.

"We are excited to bring Coherent's strength in OLED display manufacturing, semiconductor wafer inspection and life science instrumentation to Lumentum's portfolio, to name but a few of the key applications we serve, and believe Lumentum's expertise and scale in world class photonics components and systems will accelerate Coherent's vertical integration and addressable market expansion in several high growth areas, such as directed energy in defense and precision battery welding in automotive. We look forward to contributing to a customer-centric, innovative culture with a track record of operational excellence. We are also pleased to deliver immediate."



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