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UPDATE 1-Optics tech firm Lumentum buys Oclaro for $1.7 billion

(Adds details from the release, shares)

March 12 (Reuters) - Laser and optical fibre specialist Lumentum Holdings Inc, seen by analysts as a parts supplier for Apple's Face ID technology, will buy optical components producer Oclaro Inc for about $1.7 billion in cash and stock.

Announcing the deal on Monday, California-based Lumentum said the purchase was aimed at broadening its portfolio of laser offerings and getting an edge in a fast-developing market for 3D sensing technology.

Technology sector analysts say Lumentum is the primary supplier of vertical-cavity surface-emitting lasers (VCSELs) that power the Face ID feature in Apple Inc's premium iPhone X.

However, neither Apple nor Lumentum have publicly said that this is the case.

The offer price of $9.99 per share, consisting of $5.60 in cash and 0.0636 of a share of Lumentum common stock, represents a premium of 27.3 percent to Oclaro's closing price of $7.85 on Friday.

The deal is expected to generate more than $60 million of annual run-rate synergies within 12 to 24 months of the closing of the deal and immediately add to Lumentum's adjusted earnings per share, the companies said in a joint statement.

Lumentum intends to fund the cash consideration with a combination of cash on hand from the combined companies' balance sheets and $550 million in debt financing.

Oclaro, which makes optical components for data center markets said its stockholders are expected to own about 16 percent of the combined company when the deal closes.

Deutsche Bank Securities served as financial adviser to Lumentum and Wilson Sonsini Goodrich & Rosati as legal counsel while Jefferies LLC was the financial adviser to Oclaro and Jones Day the legal counsel.

Oclaro shares were up nearly 25 percent to $9.79 in premarket trading. (Reporting by Sonam Rai and Arjun Panchadar in Bengaluru; editing by Patrick Graham)