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Lucent sets Agere terms
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February 7, 2001: 11:52 a.m. ET
IPO of microelectronics unit could raise $7.4B; sale set for end of March
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NEW YORK (CNNfn) - Agere Inc., the microelectronics unit of Lucent Technologies, could raise as much as $7.4 billion in its proposed initial public offering, making it the biggest IPO so far this year.
Agere set the terms of its issue and plans to sell 370.3 million shares at $15 to $20 each via lead underwriters Morgan Stanley. Agere initially filed with the Securities and Exchange Commission in December.
Allentown, Pa.-based Agere itself is selling 222.6 million shares while underwriter Morgan Stanley will offer 147.6 million shares. Morgan Stanley received the shares in exchange for Lucent's debt obligations, the SEC filing said.
The Agere IPO is still targeted for the end of March, a Lucent spokesman said.
Agere makes optoelectronic components used in communication networks. The unit is the world leader in sales of communications semiconductors. Agere employs 16,500 people and had a loss of $76 million on $4.7 billion revenue in fiscal 2000.
Agere competes with Agilent Technologies Inc. (A: Research, Estimates), Corning Inc. (GLW: Research, Estimates), JDS Uniphase Corp. (JDSU: Research, Estimates) and Nortel Networks Corp. (NT: Research, Estimates). Following the separation, Agere may also compete against Lucent.
Murray Hill, N.J.-based Lucent (LU: Research, Estimates), the world's No. 1 telecommunications equipment maker, plans to sell Agere, which is now a wholly owned subsidiary. Lucent will distribute the shares it owns to stockholders by Sept. 30.
Lucent is selling about 17 percent to 32 percent of Agere in the IPO. If Lucent does distribute its shares, it will own 100 percent of outstanding Class B common stock after the IPO, or about 70 percent of total outstanding common stock and 90 percent of voting power, according to the SEC filing.
Agere plans to trade under the New York Stock Exchange symbol "AGR." 
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