JDS-SDL Merger Approved; JDS Sells Laser Plant to Nortel

JDS Uniphase (JDSU Quote - Cramer on JDSU - Stock Picks) has won U.S. Justice Department approval for its $17.6 billion acquisition of rival SDL (SDLI Quote - Cramer on SDLI - Stock Picks), according to published reports.

At the same time, JDS, the biggest maker of fiber-optic components, has sold its laser-making facility in Zurich, Switzerland, to Nortel Networks (NT Quote - Cramer on NT - Stock Picks) for about $3 billion in stock and cash.

The sale of the Zurich plant helped clear the way for the JDS's acquisition of SDL. The proposed merger has been under review since last July due to concerns that the combined company would dominate the market for lasers that amplify signals on optical networks.

JDS's deal with Canada's Nortel, the world's No. 1 fiber-optic equipment supplier, reportedly includes about $2.5 billion in Nortel stock plus as much as $500 million in future payments tied to component-supply agreements.

Shares of JDS recently swelled $1.94, or 3.88%, to $51.94 in pre-open Island trading. Its shares closed unchanged at $50 yesterday after an analyst for Deutsche Banc Alex. Brown slashed 2001 revenue estimates.

SDL made significant gains this morning, recently surging $10, or 5.39%, to $195.38 in Island pre-open. Nortel closed at $35.76 on the New York Stock Exchange Monday.