US-based telecom equipment vendor CommScope said it has agreed to pay $3 billion to buy most of TE Connectivity’s broadband network solutions business to expand its footprint into Europe and Asia.
The transaction includes TE Connectivity’s telecom, enterprise and wireless businesses but exclude but exclude the subsea communications or data communications operation, TE Connectivity said in a statement.
TE's Broadband Network Solutions business unit - one of the market leaders in providing fiber-optic connectivity for wireline and wireless networks - consists of TE's Telecommunications, Enterprise Networks and Wireless businesses.
The unit had revenue of $1.9 billion in the 2014 fiscal year, consisting of $164 million from wireless business, $1.1 billion from the wireline telecom business and $627 million from the enterprise segment.
CommScope said the acquisition will enable the company to expand into the adjacent wireline telecom networks/fiber-to-the-X (FTTx) market and meet the steadily growing demand for broadband services in developed and emerging markets.
It will also help CommScope expand overseas with TE Connectivity’s strong presence in the Europe, Middle East, Africa and Asia Pacific regions.
The deal, which is expected to close by the end of 2015, will add more than 20% to CommScope’s adjusted earnings per share by the end of the first full year after closing, the company said in a statement.
“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,” Eddie Edwards, CommScope president and chief executive officer said in a release.
“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.