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CommScope likes the look of Arris – report

M&A

Reuters reckons US networking vendor CommScope is seriously courting UK cable and set top box company Arris.

The report, which cites those shadowy ‘people familiar with the matter’ that are so often responsible for such leaks, just claims the two companies are in talks for CommScope to acquire Arris. The exponentially-growing public demand for streaming video is apparently one of the big drivers behind the talks.

The market values of the two companies aren’t too far apart, but a big reason for this was CommScope’s share price going down the toilet when it announced its Q1 2018 numbers. Specifically forward guidance that indicating a degree of commoditisation in its core markets seemed to spook investors and it could well be that a good old bit of M&A might be just what they need to cheer them up.

Arris is no stranger to M&A of late, having grabbed Ruckus from Broadcom at the end of last year. There seems to be a bit of an accelerated trend towards consolidation among tier 2 kit vendors, apparently catalysed by fear of commoditisation. Light Reading has further analysis of the pros and cons of the potential move here.

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