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Lumentum Holdings Inc. has announced the signing of an areement with China-based leading provider of passive optical components, Advanced Fiber Resources (Zhuhai) Ltd. (AFR), to sell Lumentum's assets related to certain Lithium Niobate based optical component product lines, manufactured by its San Donato, Italy site, to the chinese company.
According to Beck Mason, Lumentum's Senior Vice President and General Manager, Telecom Transmission, the 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 the company is planning to ramp down Lithium Niobate operations in San Donato. With this acquisition, AFR will expand its market opportunities and capabilities to include Lithium Niobate based products for the communications and sensing 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.
