Arris has said its planned takeover of set-top box rival Pace could now be delayed until late December or early next year, as regulatory clearances are sought.
In a statement, Arris said that it continues to believe that it will be able to obtain the necessary clearances for the deal to go through, although for this to happen conditions or limitations could be imposed, “which may include a divestiture”.
Arris said that such requirements could “further delay the completion of the transaction or reduce the anticipated benefits of the combination” and that it now believes that the closing of the deal will not occur until late December or the first quarter of 2016.
Arris and Pace have received the required clearances from regulators in Germany, Portugal and South Africa but have received requests for additional information from the Antitrust Division of the US Department of Justice and regulators in Brazil and Colombia.
“While we are disappointed in the potential delay in the timing for completion, we believe that even if conditions are imposed, the transaction remains in the best interests of the shareholders,” said Arris chairman and CEO, Bob Stanzione.
“Based on our current understanding of the Antitrust Division’s areas of continued focus and given the opportunities for the combined business and the potential synergies, we believe that the non-GAAP EPS (earnings per share) accretion ranges for the first 12 months following the combination, previously estimated and disclosed by Arris, continue to remain possible.”
Arris agreed to buy Pace for US$2.1 billion (€1.95 billion) in April having started mutual discussions with its rival a month earlier.
At the time of the agreement, Arris said it expected the deal to close in the second half of 2015. It also said that Pace will give it a combined workforce of 8,500 employees globally, will “significantly enhance” Arrris’ international presence and provide “large scale entry into the satellite segment” – as well as a broader product portfolio in equipment, software and services.
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