WASHINGTON (AP) — The Justice Department said Thursday it has approved cable and wire manufacturer CommScope Inc.'s $2.6 billion purchase of fellow communications equipment maker Andrew Corp., with conditions.
The department said that CommScope and Andrew agreed to sell Andrew's 30 percent stake in a separate company, Andes Industries Inc., as part of a settlement that allows the deal to proceed.
CommScope and a subsidiary of Andes, PCT International Corp., are two of only four companies that make the coaxial cable used by cable television companies, the department said.
Andrew's stake in Andes would have given CommScope ''the ability and incentive'' to coordinate its activities with PCT, or undermine PCT's ability to compete, leading to higher prices and reduced innovation, the department said.
As originally structured, the transaction would also have allowed CommScope to appoint members to Andes' board of directors, the department said, in violation of antitrust law, which forbids companies from participating on the boards of directors of its competitors.
Andrew sold its own coaxial cable business to Andes in March. Westchester, Ill.-based Andrew makes antennas, base stations and network products.
CommScope executives said when announcing their purchase of Andrew in June that it would enable the company to add wireless networking products to its portfolio.
Hickory, N.C.-based CommScope said in a statement Thursday that the value of the Andes stake and related assets that will be sold was less than $20 million as of Sept. 30. The company expects to close the deal by the end of the year.
Shares of CommScope rose 3 cents in after-hours trading to $47.54, after increasing $1.01, or 2.2 percent, to close at $47.51 Thursday. Andrew shares rose 11 cents to close at $14.85.