The companies said that 0.405344 shares of Avanex stock will be exchanged for each share of Oplink. Aggregate shareholders on either side would own roughly half of the combined company, which would have a market capitalization of roughly $610 million, the companies reported.

The merger, announced at the Optical Fiber Communications Conference, s expected to close in June.

Avanex chief executive officer Paul Engle will become chief executive of the combined company, which will retain the Avanex name and have its headquarters in Fremont. Oplink chief executive officer Fred Fromm will serve on the new Avanex board, along with Engle.

Analysts have been expecting consolidation among photonics vendors due to the difficult communications market. Some have specifically called for an Oplink-Avanex combination "because of the synergies between the two companies," said Ken Brizel, senior vice president of business development at Oplink.

Oplink, a maker of high-end optical components, has begun providing subsystems to the market. Avanex, a subsystems vendor, was buying its components from the outside, putting itself "at the whim of each one of the niche vendors they're buying products from," Brizel said.

Further, Oplink's founders are physicists who created a company heavy in optics talent. Avanex, on the other hand, built up teams of electrical engineers and computer scientists to concentrate on subsystems integration.

By owning a components division, a subsystems provider can "sit across from the customer and work out a design with them," Brizel said. That's important because many optical components can't yet be standardized; 80 percent of Oplink's work is custom, both on the component and subsystems sides, he said.