MILPITAS, Calif.-- C-Cube Microsystems Inc. here has agreed to combine its wholly-owned DiviCom Inc. subsidiary with Harmonic Inc. and to spin off or sell its semiconductor business.
DiviCom is the leading provider of open solutions for digital television. Harmonic, headquartered in Sunnyvale, Calif., makes digital and fiber optic systems that enable cable TV and other network operators to provide interactive services such as high-speed Internet access and video-on-demand.
Under the terms of the agreement, the Harmonic transaction will be structured as a tax-free exchange of stock in which C-Cube shareholders will receive, in exchange for each share of C-Cube stock, 0.5427 share of Harmonic stock. Based upon Harmonic's closing price of $64.875 on Wednesday, the value of the Harmonic combination would be approximately $1.7 billion.
In addition, the C-Cube shareholders will receive spun-off shares of the semiconductor business or net, after-tax proceeds of any sale of the semiconductor business.
"The combination of DiviCom and Harmonic creates a powerful broadband networking company that is the premier provider of open solutions for voice, video and data infrastructure," said Alexandre Balkanski, C-Cube's CEO. "The spin-off launches a semiconductor pure play that is No. 1 and strengthening in digital video."