Commentary

Coherent and Rofin merger approved

Oct. 31, 2016

The EU’s objection of the Coherent/Rofin merger likely stems from one or more of their customers.

Back in March, after we digested the fact that MKS was acquiring Newport, Coherent announced that it was going to acquire Rofin. At the time it seemed like a good pairing and the two companies have much synergy. By August both stockholders and US regulators approved the merger, but there was one more approval required, the European Commission. At first everything looked like it was proceeding smoothly, but then a slight problem and a slight delay. As it turns out, the problem was with lower-power CO₂ lasers that are under 1KW.

The EU’s objection of the Coherent/Rofin merger likely stems from one or more of their customers, who feel that the merger may rob them of bargaining power if the two companies CO₂ products are combined into one. But is this really a valid concern? Certainly three low-power CO₂ laser suppliers (Coherent, Rofin, and Synrad) would now be merged into two. But we can’t forget Chinese competition in this area either, which has kept prices in-check. In any case, Coherent felt that the best solution here would be to sell-off Rofin’s Hull UK CO₂ division and move on, and this was likely a smart move. If for no other reason, removing this segment will make it easier to combine with Rofin and it will mean more employees overall will keep their jobs. Also this part of Rofin certainly isn’t why Coherent wanted to purchase Rofin, so it’s a win-win all around.

Overall while the high-power CO₂ laser market has been declining as more high-power material processing lasers are being replaced with fiber lasers, the low-power CO₂ markets have been robust, with new applications for these lasers continuing to increase.

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About the Author

Allen Nogee | President, Laser Markets Research

Allen Nogee has over 30 years' experience in the electronics and technology industry including almost 20 years in technology market research. He has held design-engineering positions at MCI Communications, GTE, and General Electric, and senior research positions at In-Stat, NPD Group, and Strategies Unlimited.

Nogee has become a well-known and respected analyst in the area of lasers and laser applications, with his research and forecasts appearing in publications such as Laser Focus World, Industrial Laser Solutions, Optics.org, and Laser Institute of America. He has also been invited to speak at conferences such as the Conference on Lasers and Electro-Optics (CLEO), Laser Focus World's Lasers & Photonics Marketplace Seminar, the European Photonics Industry Consortium Executive Laser Meeting, and SPIE Photonics West.

Nogee has a Bachelor's degree in Electrical Engineering Technology from the Rochester Institute of Technology, and a Master's of Business Administration from Arizona State University.