Corning Inc. will essentially be out of the photonic components manufacturing business with the news that it is selling a large share of its photonics technologies group to Avanex Corp. of Hudson, Mass. Assets involved in the transaction include optical amplifier, dispersion compensation and micro-optics operations in Corning, N.Y., as well as modulator operations in Milan, Italy. In addition, Corning has plans to close its Lasertron facility in Bedford, Mass., by As part of the deal, the company will contribute more than $20 million in cash and thus capture a 17 percent stake in Avanex common stock posttransaction. It expects this to translate to a second-quarter pretax charge of approximately $50 million to $70 million, depending on the stock valuation at the transaction's closing.According to James B. Flaws, vice chairman and chief financial officer, "The dramatic reduction in photonic technologies demand resulted in Corning undertaking significant restructuring actions over the past several years. While we have been able to reduce our losses, we continue to experience negative cash flow. This transaction is an important step in ensuring that Corning both achieves its goal of returning to profitability later this year and strengthens its financial position."In related news, Avanex also has signed an agreement with Alcatel to acquire all outstanding equity in its optical components division, including chip fabrication operations in Nozay, France, and a gratings manufacturing facility in Livingston, UK. According to an Avanex spokesman, Alcatel will contribute approximately $110 million in cash to the transaction and will receive as consideration 28 percent of common stock in the posttransaction company. Avanex also has signed an agreement to supply necessary components for its optical networking products over a three-year period.Dollars alone are perhaps not the only valuation tool of these transactions, which are expected to close by the end of Avanex's first fiscal quarter in September. Both Alcatel and Corning also are assigning about 1400 patents to the firm, as well as licensing several thousand other patents to it, the true value of which is the long-term potential of the technology involved.