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Adtran and Adva poised to be global fibre player after shareholders say ‘yes’

Openreach fibre laying 750px.jpg

A complex merger deal involving the western world’s fibre-making industry has taken its next stage, but Adtran and Adva will have to wait an expected six months before they are a single entity.

A new company, Adtran Holdings, now owns 100% of US-based Adtran but only 65.43% in Munich-based Adva, and is now planning its way to become a global fibre player.

The companies’ markets are complementary after shareholders in both entities agreed on the US$1.2 billion deal. Once the merger is complete, the combination will have an annual R&D budget of $240 million, competing only with Nokia among non-Chinese vendors of fibre.

“We will be a new global player,” said a spokesman for one of the companies. The merged company will have interests in the “middle mile” of fibre as well as business access, 5G backhaul and software-based subscriber management.

But the two previously separate companies did not overlap in their product ranges. “That’s whole deal rationale,” said the official.

Because 35% of Adva’s shareholders did not accept their part of the offer, the German company will remain listed on the Frankfurt, while Adtran Holdings will adopt pre-deal Adtran’s Nasdaq listing and will have a separate Frankfurt listing.

The company count sDeutsche Telekom, Telefónica and TIM as customers. “And there are cross-selling opportunities in the US for the middle mile.”

It will also benefit from the US government’s broadband stimulus measures. “We have a phenomenal runway for the next three years.”

Adtran and Adva have a combined total of 3,500 staff, with little overlap – especially in a market with a shortage of fibre.

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