Why CommScope Puts $7.4B for Arris ?

The deal, will bring consolidation from the cable, telecom to wireless product market, will create a technology behemoth that will see its addressable market double to more than $60 billion. With the focused area inclusion of "converged small cell" products for licensed and unlicensed spectrum, wired and wireless communications infrastructure, private network products for enterprise customers and public venues, and will bring a host of line-up of connected/smart home solutions.

Secondly, this merger to scale up a wireline and wireless portfolio with an eye fixed on the 5G era, the companies claim that they'll be able to generate about $1 billion in cash flow from operations and be more than 30% accretive to adjusted earnings per share in the first full year after closing, and produce annual cost synergies of more than $150 million within three years. The combined company will also have 15,000 patents and about $800 million in average annual R&D spending has positioned perfectly positioned to help deliver on the technology promises of today and tomorrow.

The expanded global footprint enables to support customers in more than 150 countries and offers greater opportunities through a solution portfolio that now covers high performance networking and communications, advanced home networking and entertainment, and all forms of wireless technology - across a broad range of global market verticals. The venture is expected to generate new and larger opportunities in high-growth areas such as converged small-cell solutions, complete wired and wireless communications infrastructure, integrated broadband access, end-to-end private networks and connected homes.

CommScope has completed its acquisition of ARRIS - a major milestone in the evolution of these two great companies and an exciting time for our entire industry. In the press statement announced, we are eager to help shape communications connectivity and networks of the future as a stronger combined company and committed to building on our proven innovation and technology leadership.

With a strong goal is to keep things simple and communicate ahead of changes.

* ARRIS and CommScope systems will continue to run independently until further notice.

* There are no changes today to the way you have been operating with us under existing contracts with CommScope or ARRIS parties, and our relationship will remain the same until further notice.

* Purchase orders will continue as-is with no change in name or location.

* Continue to send all invoices to the same groups as you do today.

* Continue to work with your current ARRIS, Ruckus and CommScope contacts and use existing processes until further notice.

CommScope and ARRIS have strong track records of successful integrations and we expect to build on that legacy with the ARRIS-CommScope combination. We are committed to making this transformation as seamless as possible.

CommScope is set to pay $31.75 per share and a total price of about $7.4 billion, including a repayment of debt, for Arris. The Carlyle Group LLC is also on board to invest $1 billion and take a minority stake in the combined company. One big aim of the deal is to combine assets for the 5G era and link CommScope's expertise and products for licensed spectrum with Arris's in the area of WiFi and unlicensed technologies. Both companies have already developed complementary products focused on the emerging, shared 3.5GHz Citizens Broadband Radio Service (CBRS) band.

In a statement, Eddie Edwards, president and CEO of CommScope, said a merger, which will tie together complementary assets for wired and wireless infrastructure, presented the "best path forward" with respect to growth and shareholder returns.

Arris CEO Bruce McClelland called CommScope an "ideal partner," noting that it provides "immediate and substantial cash value to our shareholders."

Lastly, Edwards will remain president and CEO of CommScope, and McClelland and other members of the Arris leadership team will join the combined company. CommScope will stay headquartered in Hickory, N.C., and the company will "maintain a significant presence" in Suwanee, GA(US)- Arris's current corporate headquarters.