October 31, 2007, Milan, Italy--The Pirelli Group signed with Alcatel-Lucent an agreement to acquire the 12.4% stake held by Alcatel-Lucent in Avanex at a market price of approximately 33.4 million euros (US$48.2 million). With this agreement Pirelli becomes the main industrial investor in Avanex, one of the major worldwide players in optical modules and components for telecommunications.
The Pirelli Group's Broadband Solutions unit and Avanex, which have complementary technology capabilities, will explore collaboration for the development of advanced and cost-effective optical solutions to meet growing consumer demand driven by broadband applications such as IPTV (Internet Protocol Television).
Within the framework of this transaction, Alcatel-Lucent also signed supply agreements with both Pirelli and Avanex for related components.
"The entry of Pirelli into the share capital of our company will allow us to continue having as an industrial investor one of the most technologically advanced players in the global optical market with more than 20 years of experience and a high-level research staff," said Jo Major, chairman, president, and chief executive officer of Avanex.
The agreement will also strengthen the role of Milan, Italy, as a global technological hub for telecommunications infrastructures, due to the presence of Pirelli Labs, one of Alcatel-Lucent's major R&D centers for optical solutions, and of the local research center of Avanex.
"The supply agreement with Alcatel-Lucent and the investment in Avanex strengthen the Group's presence in the core business of second generation photonics after the start-up, in 2001, of the Pirelli Labs advanced research center and the incorporation in early 2005 of Pirelli Broadband Solutions," said Claudio De Conto, general manager, operations, of Pirelli.