Arris says DOJ has signed off on Pace purchase sans stipulations

No. 1 pay-TV cable CPE maker Arris said its merger with No. 2 UK rival Pace has cleared the Department of Justice, with nary a condition.

This is welcome news to the Suwanee, Ga.-based Arris, which in an update to the regulatory process for the $2.1 billion deal, warned its investors in October that the DOJ could impose "conditions or limitations on Arris' business" as a condition for approval. 

In June, Arris said it had received a request from the DOJ for additional information about the deal. Arris was concerned at the time that the agency might require it to divest its optical transmission business in order to gain approval.

Arris said earlier that it had received sign-offs from regulators in Colombia, Germany, Portugal and South Africa. The deal still hasn't been approved in Brazil. 

Merging the world's two largest set-top makers offers insulation from a volatile U.S. pay-TV market, as well as the unpredictable revenue streams of the disparate CPE product cycles, analysts said.

"With a broader portfolio of equipment, software, and services, we'll be able to invest even more aggressively in new innovative solutions for customers worldwide," said Arris Chairman and CEO Bob Stanzione, touting the deal to shareholders during Arris' third-quarter earnings call on Oct. 28.

"The North American market is going to be challenging this year, as capex budgets are reduced or are at best flat," said Jeff Heynen, former principal analyst for broadband access and pay-TV for research company Infonetics, in April when the deal was announced. "Arris needed to add in more international exposure as well as exposure beyond the cable space to help reduce the risk of reduced spending among its core North American customer base on the STB side of the business."

For more:
- read this Arris press release

Related articles:
Arris says security threat posed by reported cable modem backdoor is 'low'
Arris sees 13.1% decline in Q3 revenue amid sluggish CPE sales with AT&T and Verizon
Arris' Pace acquisition delayed due to DOJ concerns

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