Corning to Buy Pirelli Fiber-Optic Unit

Corning Inc., the world’s top maker of cable used in fiber-optic networks, agreed to buy Pirelli’s fiber-optic components unit for as much as $4 billion in cash, people familiar with the situation said. Announcement of the purchase, which would be Corning’s largest, is scheduled for today, the people said. Talks were reported earlier by the Wall Street Journal Interactive edition. Corning has spent billions of dollars this year to make acquisitions, build new factories and expand production of fiber-optic components that beam data, voice and video signals along hair-thin strands of glass. Demand is soaring as communications companies upgrade networks to handle escalating Internet traffic. The Pirelli transaction is smaller than acquisitions that Corning considered earlier this year. Corning has agreed to pay between $3.7 billion and $3.8 billion when the transaction closes and make another payment of about $250 million once Pirelli equipment being developed passes performance tests, one person said. Corning and Pirelli officials declined to comment. Corning shares rose $3 to close at $325 on the New York Stock Exchange.