Prysmian signs €5.5 billion Molex deal in data center push
Major Long-Term Agreement and Strategic Investment
Deal Overview
ROME, July 20 (Reuters) - Italian cable maker Prysmian has signed a long-term agreement worth up to €5.5 billion ($6.4 billion) with Molex, an electronics company owned by U.S. group Koch, to supply fibre optic cables for data centers.
Financial Terms
• The deal of up to 10 years includes a €550 million upfront payment, Prysmian said in a statement.
Market Impact
• Prysmian's shares rose more than 2%, with analysts saying the accord provided more certainty on the outlook for profit margins.
Leadership Commentary
• Chief Executive Massimo Battaini described the investment and agreements as a "transformative moment" for Prysmian's Digital Solutions business.
Expansion and Investment Plans
Production Capacity and Investment
• The company will invest €1.25 billion through 2031 to expand optical cable and fibre production, doubling its output capacity in the United States, where it is one of just three local producers in the sector.
Job Creation
• The investment will add 1,000 new jobs globally, of which 600 will be in the United States.
Strategic Positioning
• Prysmian said the investments would support its push to position itself as a "one stop shop" for data centers.
Product Range
• Already a provider of a wide range of cables required for data centers - from power cables to long-distance submarine ones - Prysmian will supply fibre optic cables used inside data centers under the deal.
Broader Industry Context
Partnerships and Market Trends
• The agreement is part of a broader set of accords with hyperscalers and data center infrastructure providers, betting on AI-driven demand.
Revenue Projections
• These deals are expected to deliver as much as €1.1 billion in annual revenue from 2031, for a cumulative additional €10 billion in 2035 versus 2025, Prysmian said.
Reporting Credits
(Reporting by Giulia Segreti and Valentina Za; Editing by Gianluca Semeraro, Subhranshu Sahu and Susan Fenton)
