Fibre Optic Broadband Supplier ADTRAN Merges with ADVA to Boost Reach

American firm ADTRAN, which is known for supplying a variety of full fibre broadband kit and services to UK ISPs and network builders from Openreach (BT) to CommunityFibre and more, has announced a new deal to merge with a similar European telecommunications vendor called ADVA in order to boost their global reach.

Under the deal (an all-stock transaction), ADTRAN shareholders will own approximately 54% and ADVA shareholders will hold approximately 46% of the combined company, assuming a tender of 100% of ADVA shares. The combined company will also benefit from an expanded product offering (i.e. combining ADTRAN’s fibre access, extension and subscriber connectivity solutions with ADVA’s metro wavelength division multiplexing, data centre interconnect, business Ethernet and network synchronization solutions).

Both ADTRAN and ADVA will combine under a new holding company, which will be renamed ADTRAN Holdings, Inc. The combined business is expected to enjoy total revenue of $1.2bn.

ADTRAN Chairman and CEO, Thomas Stanton, said:

“We are in the early stages of an unprecedented investment cycle in fiber connectivity, especially in the U.S. and Europe, fueled by the demand for last-mile fiber 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 capitalize 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.”

The new holding company will commence the public takeover offer after approval of the offer document by the German Federal Financial Supervisory Authority (Bundesanstalt fuer Finanzdienstleistungsaufsicht / BaFin), which ADTRAN anticipates occurring in November 2021. The offer will be subject to certain closing conditions, including a minimum acceptance threshold of 70% of the outstanding shares in ADVA, majority approval by ADTRAN shareholders, regulatory approvals, and other customary closing conditions.