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CommScope acquires TE Connectivity’s broadband business for €2.7 billion

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CommScope has acquired TE Connectivity’s telecom, enterprise and wireless business for $3 billion (€2.7 billion) to drive the company’s expansion into fibre-to-the-x (FTTx) and other adjacent markets.

The all-cash transaction includes approximately 7,000 patents and patent applications from TE Connectivity and as well as the manufacturer’s fibre technology.

CommScope said the purchase would enable the company to address increasing demand for high-capacity broadband networks in developed and emerging markets, as well as strengthen its opportunities with business partners. 

TE Connectivity will also transfer some 10,000 staff and 65 facilities to CommScope, which is expecting a 20 percent gain on earnings per share from the transaction by the end of the first full year.

Further, the company said it expects more than $150 million (€132 million) resulting from annual synergies by the end of the third year, including more than $50 million (€44 million) in the first year alone.

US-based CommScope also claimed the acquisition would boost the company’s presence in EMEA and Asia-Pac and “broaden its position as a leading communications infrastructure provider”.

Eddie Edwards, President and CEP of CommScope, said: “This is an important and transformative acquisition for CommScope, bringing together complementary geographic and customer coverage, products and technologies for the benefit of our stockholders, customers and employees.”

“This transaction has many clear strategic and financial benefits for all of our stakeholders.  It creates enhanced scale with a combined, diversified portfolio that we believe is well-positioned to take advantage of opportunities in the marketplace.”

The transaction is expected to close by the end of 2015.

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