(Reuters) -Fiber-optic cable maker Amphenol said on Monday it will buy CommScope's connectivity and cable solutions business for $10.5 billion, broadening its broadband portfolio and network infrastructure.
Shares of CommScope surged 42% in premarket trading, while Amphenol rose about 2%.
The all-cash transaction is aimed at diversifying Amphenol's industrial interconnect products, particularly in the building infrastructure connectivity market.
It is the largest acquisition for Connecticut-based Amphenol
and will boost its market share and capitalize on surging broadband and 5G demand, while positioning the company at the forefront of the rapidly evolving connectivity landscape.
For CommScope, the sale is a significant step in its strategy to streamline operations and shore up its balance sheet.
The unit that CommScope is selling designs, manufactures, and supports cabling and connectivity products for various network types, including broadband, enterprise and wireless networks.
Earlier this year, Amphenol had bought CommScope's Andrew business. The latest deal also follows last year's $2.1 billion purchase of CommScope’s outdoor wireless network and distributed antenna systems businesses.
The U.S. network infrastructure provider reported a debt load of $9.4 billion as of December and has been pursuing asset sales as part of a comprehensive debt reduction plan.
Following the completion of the divestiture, CommScope will retain its access network solutions business and part of its networking and security services.
The U.S.- listed company is navigating the legacy of aggressive acquisitions and the economic turbulence brought about by the global pandemic, which temporarily slowed its expansion plans.
CommScope's decision to sell its CCS division is a calculated effort to bolster its balance sheet, reinforcing its commitment to financial prudence and strategic agility in the competitive network infrastructure sector.
The deal is expected to close in the first half of 2026 and will add to Amphenol's diluted earnings per share in first full year after closing.
The Wall Street Journal first reported that they are nearing a deal.
(Reporting by Kritika Lamba in Bengaluru)
