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Jan 28 (Reuters) - Telecom equipment maker CommScope Holding Co Inc said it would buy nearly all of Swiss electronics firm TE Connectivity’s network gear business for about $3 billion to expand in Europe and Asia.
The deal comes at a time when operators are increasing their spending on mobile and fixed networks to improve coverage and boost capacity to keep up with rising data traffic from video and smartphones.
TE Connectivity, which split from Tyco International Ltd in 2007, said the unit generated revenue of about $1.9 billion in the year ended Sept. 26. The business makes fiber optic cables and network switches.
The acquisition does not include the unit’s subsea fiber optics operation, which is used by telecom and oil and gas customers.
The deal will help CommScope expand in overseas markets. The company gets about 55 percent of its sales from the United States, according to Thomson Reuters data.
TE Connectivity gets about 80 percent of its sales from non-U.S. markets.
The deal, expected to close by the end of 2015, will add more than 20 percent to CommScope’s adjusted earnings by the end of the first full-year after closing, the company said in a statement.
CommScope said it would finance the deal through cash and up to $3 billion in debt.
Allen & Company LLC, J.P. Morgan Securities LLC, BofA Merrill Lynch and Deutsche Bank are financial advisers to CommScope.
Alston & Bird LLP, Latham & Watkins LLP, Baker & McKenzie and Jones Day are serving as legal advisers to CommScope. (Reporting by Supantha Mukherjee and Kshitiz Goliya in Bengaluru; Editing by Saumyadeb Chakrabarty)