Broadcast technology and services provider ARRIS has been slowed in its transaction with former rival Pace.
The news of the prospective acquisition first broke in April 2015 and ARRIS has already gained the required clearances from regulators in Germany, Portugal and South Africa to buy the UK-based firm. But now it has received requests for additional information from the Antitrust Division of the US Department of Justice as well as regulators in Brazil and Colombia. The Antitrust Division's current focus appears to be on certain optical transmission products of ARRIS and Pace.
Even though ARRIS says that all parties are continuing to work to respond to these additional requests, and believes it will be able to obtain the necessary clearances, it concedes that no assurance can be provided that all required approvals will be obtained.
Indeed it adds that as a result of such actions, the closing of the transaction will not occur until late December or the first quarter of 2016. Furthermore, it cautioned that the governmental agencies may impose requirements, conditions or limitations on ARRIS' business after the completion of the transaction which may include a divestiture. Such requirements could further delay the completion of the transaction or reduce the anticipated benefits of the combination.
"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," commented ** ARRIS www.arris.com ** 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 accretion ranges for the first 12 months following the combination, previously estimated and disclosed by ARRIS, continue to remain possible."