WSJ News Exclusive | Lumentum in Advanced Talks to Buy Laser Maker Coherent

Lumentum Holdings Inc. is in advanced talks to buy laser maker Coherent Inc., according to people familiar with the matter, in a deal that would combine two companies whose products are used in everything from laser eye surgery to semiconductor manufacturing.

A cash-and-stock deal could come together as soon as this week, assuming the talks don’t fall apart, the people said. Exact terms couldn’t be learned but Coherent had a market value of $3.7 billion as of Friday’s close, while Lumentum’s was $8 billion.

Santa Clara, Calif.-based Coherent makes lasers and related products used in medical and scientific equipment, industrial applications and semiconductor manufacturing. It was founded in 1966.

Milpitas, Calif.-based Lumentum primarily makes optical components used in cloud networking, data transmission and submarine communications. It also has a lasers segment with offerings used in sheet metal and circuit board manufacturing. It became a stand-alone company in 2015 when it was spun off from JDS Uniphase Corp.

Lumentum’s shares have risen about 40% over the past year, while Coherent’s fell about 10% over the same period, compared with the S&P 500’s 17% rise.