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3M is exiting the telecom networks market and selling substantially all of its Communication Markets division to Corning for USD 900 million, according Telecompaper. The business includes optical fibre and copper passive connectivity products, including 3M’s xDSL, FTTx, and structured cabling products and, in certain countries, telecommunications system integration services. The business has annual global sales of around USD 400 million.
 
The sale is the result of a strategic review at 3M and remains subject to regulatory approvals. Around 500 employees will join Corning as a result of the acquisition, which is expected to close in 2018. 
 
Corning said the deal will strengthen its position in passive components and high-bandwidth products, as well as strengthen its ability to provide services to telecom customers globally and innovate on new products. The effective enterprise value of the transaction is less than 7 times the Communication Markets division’s estimated forward annual adjusted EBITDA, including expected synergies. Corning expects the transaction to add USD 0.07-0.09 to per share to its earnings in 2019.
 
The takeover fits with Corning's capital allocation and strategy plan, which allocated USD 1-3 billion to acquisitions in the period 2016-19 to strengthen its core activities.