CommScope Inc. will pay about $2.6 billion to cut costs, as the companies said on Wednesday.
Last August CommScope Inc. offered $1.7 billion, which was rejected by Andrew Inc.
The companies’ representatives said in a statement that the latest $15-a-share offer also represents a 16 percent premium over Andrew's closing share price on Tuesday. At least 90 percent of it will be paid in cash.
The companies said the deal will be finished by the end of 2007, would help them to reduce manufacturing costs and enlarge their customer base.
Analysts had said that a combination of the two companies would help trim procurement costs for copper and plastic, since both make coaxial cables. Based on the two companies' business results for year 2006, a merged company would have sales of around $3.8 billion.
The companies said that they will have savings of around $90 million to $100 million in the second year after the deal is finished. First year savings will comprise about $50 million to $60 million.
``We couldn't see how strong it was,'' CommScope Chief Executive Officer Frank Drendel said He added that the company hadn't studied Andrew Inc. thoroughly until last year's bid.
Frank Drendel will remain chairman and CEO of CommScope and Andrew Inc. will become a subsidiary of CommScope.
CommScope’s History:
Based in Hickory, North Carolina since being founded in 1976, CommScope spun off from General Instrument in 1997 and became a publicly traded company on the New York Stock Exchange under the ticker symbol CTV. In January 2004, we acquired Avaya's Connectivity Solutions business and essentially doubled our size by adding approximately 1,900 people to our employee base, the business’ divisional headquarters/SYSTIMAX Labs in Richardson, Texas, and three manufacturing facilities located in Omaha, Nebraska, Bray, Ireland and Brisbane, Australia. In May 2005, CommScope opened a plant in Suzhou, PR China, to manufacture broadband cables. The company has more than 4,500 employees worldwide.
CommScope, Inc. (NYSE: CTV) is a world leader in the design and manufacture of cable and connectivity solutions for communication networks' “last mile," which is the distribution access and final link to the customer. Through its SYSTIMAX® Solutions and Uniprise® brands,
CommScope is the global leader in structured cabling systems for business enterprise applications. It is also the world's largest manufacturer of coaxial cable for Hybrid Fiber Coaxial (HFC) applications. Backed by strong research and development, CommScope combines technical expertise and proprietary technology with global manufacturing capability to provide customers with high-performance wired and wireless cabling solutions.
Andrew Corporation's History
Andrew Corporation is a global designer, manufacturer, and supplier of communications equipment, services, and systems. Andrew products and expertise are found in communications systems throughout the world, including wireless and distributed communications, land mobile radio, cellular and personal communications, broadcast, radar, and navigation.
Over six decades, Andrew Corporation broadened and expanded its product and service offerings to virtually all aspects of voice, video and data communications system. The company has been at the forefront of many technological developments during that time, a role it continues to fill today in expanding technologies like wireless communications systems.
The "Flash" trademark of Andrew Corporation can be seen in every corner of the world-on broadcast towers and microwave antennas, HELIAX® and RADIAX® cables, communications and computer networking equipment. The mark of Andrew, it is the benchmark of quality wherever it appears. It is a symbol of commitment to customer satisfaction from the 11,000-plus employees of Andrew Corporation. – Alla Harutyunyan for HULIQ.COM
