Lucent to Buy Chromatis in Stock Deal Valued at $4.5 Billion

The deal marks Lucent's first big plunge into optical networking.
Publish date:

Updated from 8:20 a.m. EDT

Lucent Technologies


, North America's biggest maker of communications equipment, said Wednesday that it had agreed to acquire privately held optical network technology company

Chromatis Networks

in an all-stock deal valued at around $4.5 billion.

Based in Herndon, Va., Chromatis makes equipment that consolidates data and voice communications traffic from within a large corporation or among many smaller businesses, and then transmits that information using light waves across high-capacity fiber optic networks within cities.

The deal marks Lucent's first big plunge into optical networking. Lucent competitors such as

Nortel Networks



Cisco Systems

(CSCO) - Get Report

have both been aggressive in snatching up optical networking companies.

"With Chromatis, Lucent is one step closer to bringing the speed and power of fiber optics all the way to the customer's desktop," said Richard McGinn, chairman and chief executive of Murray Hill, N.J.-based Lucent, in a statement. "This acquisition will allow us to enhance what is already recognized by the industry as the broadest portfolio of optical networking products."

Under the terms of the deal, which was first

reported in

The New York Times

on Monday, Lucent will acquire Chromatis for 78 million shares. Based on Lucent's closing stock price of $58.19 Tuesday, the deal is valued at approximately $4.5 billion.

Lucent's shares were trading down 3/8, or 0.6%, at 57 3/8 around midday Wednesday. (Lucent finished down 3/8, or 0.7%, at 57 3/8.)