NEW YORK: Pace, the world’s largest maker of TV set-top boxes, has agreed a $2.1bn takeover by Arris, a US networking equipment maker that will change its domicile to the UK in the latest transatlantic tax inversion deal.
The transaction shows that US companies are still willing to buy rivals that allow them to relocate to lower tax jurisdictions, six months after the Obama administration launched a crackdown on so-called inversions.
Following the merger the company, which will be renamed New Arris, will be incorporated in the UK but its operational headquarters will remain in Suwanee, Georgia and the company will be listed on Nasdaq.
Arris will pay Pace shareholders 426.5p in cash and stock, a 28 per cent premium to the closing price.
Shares in Arris jumped 25 per cent to $38.21 in after-hours trading as investors welcomed a deal that will bring down the US group’s tax rate to about 21 per cent compared to 35 per cent in the US.
Bob Stanzione, chairman and chief executive of Arris, said the deal would increase the pace of innovation and growth at the combined company.
“Adding Pace’s talent, products and diverse customer base will provide Arris with a large scale entry into the satellite segment, broaden our portfolio and expand our global presence,” he said.
Pace, based in Saltaire in Yorkshire, is one of the UK’s few global technology groups. The London-listed company already has a strong presence in the US, thanks to partnerships with subscription TV providers such as Comcast, DirecTV and AT&T. But it has also secured a firm foothold worldwide through deals with Brazil’s Oi SA and Sky Italia.
