The $3 billion (about £1.9 billion, AU$3.5 billion) acquisition of TE Network network assets by CommScope was finalised earlier this week shortly after reports of a potential deal emerged.
The transaction broadens CommScope portfolio, allowing it to accelerate its strategy to drive profitable growth by entering into "attractive adjacent markets".
TechRadar Pro probed Eddie Edwards, president and CEO of CommScope to find out more about the deal and how it was done.
TechRadar Pro: Why did CommScope buy TE Connectivity?
Eddie Edwards: We believe TE Connectivity's Telecom, Enterprise and Wireless businesses are the best fit for CommScope as we continue to expand our offerings and develop innovative ways to help network operators deal with the constantly growing demand for bandwidth.
TRP: What made it an acquisition target in the first place?
EE: The businesses we are acquiring are well positioned in their markets through the work of a highly-skilled, diverse workforce and a strong pipeline of product innovations, exemplified by a portfolio of about 7,000 patents and patent applications. In addition, the TE Connectivity businesses are highly complementary to CommScope's existing businesses, and should enable us to enter attractive adjacent markets in broadening our position as a leading communications infrastructure provider.
TRP: How long has it been a target?
EE: CommScope regularly talks with industry players as it explores potential relationships that can lead to faster profitable growth and additional ways to meet the needs of customers in the long-term. Discussions with TE Connectivity were among those over the past couple of years.
TRP: Will CommScope consume the TE Connectivity brand?
EE: Decisions on scores of key matters, including branding, won't be made until well into the future. The companies will begin integration planning immediately, while the transaction is expected to close late in 2015.
TRP: What's CommScope view on the opportunities/areas of growth in 2015?
EE: We believe that growth opportunities are being driven by four global trends that are creating demand for communications infrastructure—mobile broadband data consumption, social media usage, cloud services and Big Data.
TRP: How will access to wireless connectivity affect consumers and businesses in 2015?
EE: Access to mobile data through wireless services and devices such as smartphones, tablets and over-the-top video has created continued high demand for network capacity, and that bandwidth growth shows no signs of letting up in 2015. Consumers and businesses are adopting bandwidth-hungry devices and services at a rapid pace, and that growth in video usage and large data applications is being felt in networks around the world.
TRP: With this acquisition expected to expand the global competitive position of CommScope, will there be further moves planned for it to strengthen its market positions even further or move into any other markets in 2015?
EE: As data usage increases, there will be greater demand for a strong, underlying physical network that we believe CommScope will be uniquely capable of providing. The proposed acquisition of the TE Connectivity businesses will strengthen our capabilities and our ability to serve customers in a variety of innovative ways. CommScope has a strong track record of disciplined strategic acquisitions and we will continue to look at opportunities to improve the company's standing for the long-term.
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