China’s State Administration for Market Regulation is holding up the takeover by II-VI of rival component maker Finisar. There are already too few companies making high-end components. A good argument can be made to block the deal on competition grounds.
Finisar makes some of the most advanced optical components. Huawei produces many of its own optics and can work around the U.S. blockade. It will continue buying components from the U.S. if permitted and wants to always have that option.
China is such a large part of the global market for electronics that it can effectively block any merger. The institutional investors that own most of Finisar will suffer a loss of several hundred million if the deal doesn’t go through.
II-VI Incorporated Corrects Media Reports Regarding Chinese Competition Review Process
PITTSBURGH, Aug. 01, 2019 (GLOBE NEWSWIRE) — Correcting inaccurate media reporting, II-VI Incorporated (Nasdaq: IIVI) (“II-VI”) announced today that it has not been requested by the State Administration for Market Regulation of the People’s Republic of China (“SAMR”) to re-file the application for clearance that II-VI previously filed with SAMR with respect to II-VI’s pending acquisition of Finisar Corporation (the “Merger”).
SAMR’s review of the Merger is currently in Phase III, which ends on August 17, 2019. II-VI will make a subsequent announcement either when SAMR approves the Merger, or if Phase III expires and II-VI re-files in order to provide additional time for SAMR to review the transaction.
About II-VI Incorporated
II-VI Incorporated, a global leader in engineered materials and optoelectronic components, is a vertically integrated manufacturing company that develops innovative products for diversified applications in the industrial, optical communications, military, life sciences, semiconductor equipment, and consumer markets. Headquartered in Saxonburg, Pennsylvania, II-VI has research and development, manufacturing, sales, service, and distribution facilities worldwide. II-VI produces a wide variety of application-specific photonic and electronic materials and components, and deploys them in various forms, including integrated with advanced software to support our customers. For more information, please visit us at www.ii-vi.com.
About Finisar Corporation
Finisar Corporation is a global technology leader in optical communications, providing components and subsystems to networking equipment manufacturers, data center operators, telecom service providers, consumer electronics, and automotive companies. Founded in 1988, Finisar designs products that meet the increasing demands for network bandwidth, data storage, and 3D sensing subsystems. Finisar is headquartered in Sunnyvale, California, with R&D, manufacturing sites, and sales offices worldwide. Visit our website at www.finisar.com.