Optical component maker offloads some of its lithium niobate product lines to Chinese provider.

SAN JOSE, Calif. and ZHUHAI, China, Dec. 2, 2019 /PRNewswire/ -- Lumentum Holdings Inc. ("Lumentum"), a leading provider of photonics products for optical networking and lasers for industrial and consumer markets, and Advanced Fiber Resources (Zhuhai) Ltd. ("AFR"),a leading provider of passive optical components, today announced they have entered into an agreement whereby AFR will acquire the assets associated with certain Lithium Niobate based optical component product lines from Lumentum that are developed and manufactured by Lumentum's San Donato, Italy site.

"This transaction is a good outcome for all stakeholders as Lumentum's telecom transmission product strategy is now focused on Indium Phosphide photonic integrated circuit based components and modules and we planned to ramp down Lithium Niobate operations in San Donato," said Beck Mason, Lumentum's Senior Vice President and General Manager, Telecom Transmission.

"With this acquisition, AFR is excited to expand its market opportunities and capabilities to include Lithium Niobate based products for the communications and sensing markets," said X.L. Wang, AFR's Chairman and Chief Executive Officer. "We believe with our strengths in cost-effective high-volume manufacturing we are well positioned to address customer needs for Lithium Niobate products in our addressable markets."

The transaction is subject to certain customary closing conditions for a transaction of this type and is expected to close early in Lumentum's third quarter of fiscal year 2020. The product lines in the proposed transaction are part of the discontinued Telecom and Datacom product lines that Lumentum previously discussed on its first quarter fiscal year 2020 earnings call on October 31, 2019.