Telecommunications-network provider ADC is set to snap up rival Andrew Corp. in a stock deal estimated to be worth $2 billion.
Under the merger agreement, Andrew will become a wholly owned ADC subsidiary, and Andrew shareholders will receive 0.57 shares of ADC stock for each share of Andrew stock they own. Upon closing, ADC shareholders will have about 56% of the total company stock, while Andrew shareholders will have 44%.
The merger will consolidate the company’s position in the growing market for next-generation broadband-wireline and wireless-communications systems. The two companies have broad portfolios of network gear and systems products for telco copper, fiber, cable coaxial and wireless networks, and their customer accounts include nearly all major wireline- and wireless-service providers in the world, with 53% of sales coming from North America.
The two companies claim 20,000 employees and produced $3.3 billion in telecommunications-network sales in the past 12 months.
“With this strategic combination, we will be a world leader in communications-network-infrastructure products and services,” ADC CEO Robert E. Switz said.
The merger has been approved by both companies’ boards of directors, and it now awaits approval from federal regulators. After closing, Switz will remain as the merged company’s CEO, while Andrew CEO Ralph Faison will stay on as a consultant to help with the transition.