Lumentum Holdings Inc. is in advanced talks to buy laser manufacturer Coherent Inc., according to people familiar with the matter, in an agreement that would combine two companies whose products are used from laser eye surgery to semiconductor manufacturing.
People said a deal with cash and stocks could come together as early as this week, assuming the talks don’t fall apart. Exact terms could not be learned, but Coherent had a market value of $ 3.7 billion at the close on Friday, while that of Lumentum was $ 8 billion.
Coherent, headquartered in Santa Clara, California, manufactures lasers and related products for use in medical and scientific equipment, industrial applications and semiconductor manufacturing. It was founded in 1966.
Lumentum, based in Milpitas, California, primarily manufactures optical components used in cloud networks, data transmission and underwater communications. It also has a segment of lasers with offers used in the manufacture of sheets and circuit boards. It became an independent company in 2015 when it was derived from JDS Uniphase Corp.
Shares of Lumentum have risen about 40% over the past year, while those of Coherent fell about 10% in the same period, compared to the S&P 500’s 17% increase.