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Technology Stocks : Celestica
CLS 10.96-2.6%Nov 28 4:00 PM EST

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To: Marc who wrote (406)5/6/2001 11:21:34 PM
From: xtahce  Read Replies (1) of 456
Celestica in Takeover Discussions to Boost Global Operations
By George Stein

Toronto, May 4 (Bloomberg) -- Celestica Inc., the third- biggest contract manufacturer of electronics, said in a filing that it's in takeover talks with several companies to boost operations worldwide and strike relationships with new customers. (I couldn't find a recent filing that made any direct statements about Celestica being in takeover talks. Closest thing would be the April 30th filing of a Short Form Base Shelf Prospectus. If anyone else finds it... sure would be nice to read what the author, George Stein, is reading...TIA)

The filing with the U.S. Securities and Exchange Commission didn't identify the companies involved in the discussions. Celestica couldn't immediately be reached to comment.

Celestica has made 13 purchases of companies, plants and divisions since 1998 (actually, since the beginning of 1997 through to the end of March 31, 2001, CLS has completed 24 acquisitions), the largest a $500 million circuit-board plant from International Business Machines Corp., according to Bloomberg data. The company issued the announcement as analysts said many electronics manufacturers are looking to shed assets.

``Lots of original equipment manufacturers need to reduce their costs, and the electronic manufacturing service providers can help them,'' said Jerry Labowitz, a Merrill Lynch & Co. analyst with a ``buy'' recommendation on Celestica.

Celestica is ``engaged in ongoing discussions with respect to several possible acquisitions of widely varying sizes,'' the company said in the filing.(Ummm, they normally say this in all their filings, part and parcel of a strategy in being the EMS "partner of choice" to leading OEMs..."The Company continues to seek strategic acquisitions and opportunities to establish greenfield operations")

The talks range from small single plants and larger groups of plants to full corporate acquisitions, Celestica said.

``Celestica has identified several possible acquisitions that would enhance its global operations, increase its penetration in the computer and communication industries and establish strategic relationships with new customers,'' the filing said.

Job Cuts

Celestica, which has a market value of $11 billion, on April 18 said it plans to cut as many as 3,100 jobs, or 10 percent of its workforce, to pare expenses in the face of slowing demand.

The Toronto-based company is one of the few contract manufacturers to have met profit and sales expectations this year as it continues to win contracts from customers, which include Sun Microsystems Inc. and IBM.

The company's shares have more than doubled since the beginning of the second quarter. Celestica fell 30 cents to $54 today.

Rival Solectron Corp., the biggest contract manufacturer, said last month it would miss profit forecasts and announced job cuts. Solectron shares are up 46 percent, or about half as much as Celestica, in the same period. Flextronics International Ltd., the No. 2 contract electronics manufacturer, last week said it cut 7,000 jobs and reduced its production capacity by 15 percent. Its shares have risen 87 percent since the period ended.

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