The combined company will be headquartered in Alabama and is expected to have revenue of $1.2bn
Adtran signs €789m merger deal with Germany-based Adva. (Credit: Kramer96/Wikipedia.org)
US-based Adtran has agreed to merge with German telecommunications company Adva in a deal valued at €789m to create an end-to-end fibre networking solutions major.
Listed on the NASDAQ, Adtran is engaged in providing fibre access, fibre extension, and subscriber connectivity solutions.
On the other hand, Adva is focused on offering metro wavelength division multiplexing, business ethernet, data centre interconnect, and network synchronisation solutions. The company is listed on Frankfurt Stock Exchange (FSE).
The combined company, which will operate as Adtran, will be dual-listed on the NASDAQ and FSE. It is expected to have revenue of $1.2bn.
Its global headquarters will be in Huntsville, Alabama, while European headquarters will be in Munich, Germany.
The combined entity is expected to cater to homes, businesses, and 5G infrastructure with fibre connectivity that is scalable, secure, and assured, and paired with cloud-managed Wi-Fi connectivity and SaaS applications.
Adtran chairman and CEO Thomas Stanton said: “We are in the early stages of an unprecedented investment cycle in fibre connectivity, especially in the U.S. and Europe, fuelled by the demand for last-mile fibre access and middle-mile transport to provide high-speed connectivity to homes, businesses and future 5G infrastructure.
“By joining forces, our combined firm’s portfolio will better position us to capitalise on this highly compelling global opportunity. We expect the transaction will create significant long-term value for both companies’ stakeholders by increasing our scale and improving our ability to serve as a trusted supplier for customers worldwide.”
As per the terms of the deal, each of Adva’s shares will be exchanged for 0.8244 shares of the new holding company, post-merger. The deal values Adva at €14.98 per share.
In the combined company, Adtran’s shareholders will own nearly 54%, while Adva’s shareholders will own the remaining 46% stake.
Adva CEO Brian Protiva said: “The business combination is an outstanding opportunity to leverage the complementary nature of our customers and product portfolios and the compatibility of our companies’ businesses and culture.
“We are excited to join forces and create a world-class team with exceptional technology expertise and customer focus.
“Our shared vision and passion for innovative networking solutions will benefit our customers through an enhanced value proposition, including a fully integrated end-to-end architecture for enterprise, access and metro core markets.”
The merger deal has been unanimously approved by the boards of the two companies. It also has the backing of Egora, which holds a stake of 13.7% in Adva.
The closing of the deal is expected to occur during Q2 or Q3 2022. This will be subject to shareholders’ approvals for both the firms, regulatory approvals, and other customary closing conditions.