How Was the Spinoff of Agere Systems Completed?


Quick Answer

Lucent Technologies spun off Agere Systems by distributing 945 million ownership stakes to Lucent shareholders from 2001 to 2002. Lucent made the initial public offering of 600 million shares, representing 58 percent of its ownership in Agere Systems, in 2001 and then repeatedly pushed back the remaining offerings due to financial difficulties. Lucent completed the spin-off by distributing the remaining shares on June 1, 2002.

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Full Answer

Eligible Lucent shareholders received class A and class B shares in the final offering at the rate of 92.77 shares of class A common stock and 3.77 shares of class B common stock per share of Lucent common stock. Lucent issued cash disbursements in exchange for partial shares. Ownership of class B shares bestowed voting rights on the shareholder, and Lucent made the distribution tax-free by keeping the amount of voting shares below 20 percent of the offering.

Agere Systems traded near $6 during the initial distribution. Stock in Agere Systems traded around $4 per share when Lucent announced the final distribution and fell to around $3 following the disbursement. Shares traded on the New York Stock Exchange as AGR.a for class A stock and AGR.b for class B stock.

Agere Systems manufactured telecommunications hardware and components. LSI Corporation acquired the company in 2007.

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