II-VI, a global optical module·compound semiconductor company, acquired a laser solution company, Coherent. Following a fierce takeover battle with II-VI’s competitor, Lumentum(LITE.O), they even drew approval from the Chinese regulatory authorities. II-VIwill maximize synergy between optical module·semiconductor materials and laser solutions through the acquisition of Coherent.
II-VI announced that they had recently received approval for a Coherent merger and acquisitions (M&A) from ChineseState Administration for Market Regulation(SAMR) and completed the acquisition process. The acquisition price is said to be around 7.1 billion USD. It has been a year and four months since Two Six announced its plan to acquire Coherent.
Coherent was established in 1966 and specializing in industrial and research laser solutions. They provide 'end-to-end' solutions from laser sources to measuring, machining, parts and applications. Because of their broad portfolio of laser solutions, the company has been gaining a lot of attention from the optical technology industry several times.
Lumentum was the first company who challenged theacquisition of Coherent. It is the second largest company in the global optical module market after II-VI. In January last year, Lumentum agreed to acquire Coherent for 5.7 billion USD. After that, MKS Instruments joined in to acquire Coherent for 6 billion USD. II-VI announced the third intention to acquire Coherent with an offer of 6.4 billion USD. As the amount of the acquisition gradually increased, a contract was signed in March last year by II-VI to purchase Coherent for7.1 billion USD.
The two companies' M&A faced regulatory approval conflict right after the acquisition. As the Chinese regulator, SAMR, started investigating the laser industry within the country, it has become an obstacle to M&A in the industry. It is interpreted as the result of both II-VI and Coherent having an influence on China's new growth engine industry. It is known that the M&A process was delayed by one or two quarters due to an investigation by the Chinese authorities. Chinese authorities approved the acquisition on the 28th of last month.
With the acquisition of Coherent, II-VIwill expand their market to laser solutions as well as optical modules and compound semiconductors. The two companies are expecting to maximize business synergies as their product portfolios are complementary to each other.
By Staff Reporter Dong-jun Kwon (djkwon@etnews.com)