Coherent and Rofin merger approved

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

Allen Nogee 720

Blog by Allen Nogee, Laser Analyst

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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