DASAN Networks and Zhone Technologies to merge to become global leader in telecom market
DASAN Networks and Zhone Technologies to merge to become global leader in telecom market
DASAN Networks, a global network solution provider in South Korea has decided on a merger and acquisition involving Zhone Technologies (Nasdaq: ZHNE), a US-based telecommunications equipment provider.
DASAN Networks and Zhone Technologies announced that they have agreed to merge subsidiary companies, DASAN Network Solutions, Inc. and DA corp.
By merging the two subsidiary companies, DASAN Networks will be acquiring 58 per cent of Zhone Technologies shares, incorporating Zhone Technologies as one of its major subsidiary companies.
After this merger and acquisition (M&A), DASAN Networks will become the seventh largest provider of broadband access equipment, while jumping to the sixth largest provider of GPON equipment, only trailing major global conglomerates such as Alcatel-Lucent, Huawei and ZTE.
Zhone Technologies, located in California, currently has the top eighth position in global FTTH market. By the time the M&A is complete (approximately June-July 2016), Zhone Technologies will change its company name to DASAN Zhone Solutions and will try to take place as one of the top five network solution providers in the global market.
DASAN Zhone Solutions aims to maximise revenue and market share by merging the strengths of both companies. While DASAN Networks has a strong foothold throughout Asia, Zhone Technologies has a strong foothold in North America, Europe, and the Middle East.
DASAN Zhone Solutions will thus be able to promote products and solutions that previously belonged to two separate companies to expand its product portfolio and customer base.
The current target is to reach 2 per cent market share in the global broadband access, mobile backhaul, and enterprise markets which add up to a $40 billion market.
DASAN Networks is expected to gain momentum for market expansion in North America. Zhone Technologies, having existing clients, along with production and logistics centres in America, will provide a concrete foundation for DASAN Networks to compete with other network equipment providers already existing in North America.
Zhone Technologies’ three customer support centres will also become a major upside in DASAN Zhone Solutions’ expansion plan for North America.
DASAN Zhone Solutions will provide total solution portfolio after integrating the products of both companies. Zhone Technologies’ next-generation multiple service access platform (MSAP), and terabit access concentrator combined with DASAN Networks’ product line-up produces an end-to-end fiber network solution that will meet expectations from various clients and customers.
MinWoo Nam, chief executive officer (CEO) of DASAN Networks, said that this decision was made as a global expansion plan for both DASAN Networks, and Zhone Technologies. Now, by combining forces, DASAN Zhone Solutions had a strong foothold in every continent, and could reach customers all around the globe.
“The M&A between the two companies will become a major turning point, and the North American market will become the main market for DASAN Zhone Solutions ,” he said, adding that “By combining the strengths of both companies, DASAN Zhone Solutions will become one of the top five network solution providers.”
“The merger of Zhone and DASAN will immediately position our company as a leading provider of Broadband Access, Mobile Backhaul, Ethernet Switching and Passive Optical LAN solutions,” said Jim Norrod, CEO of Zhone Technologies. “We will expand our customer base around the world and take advantage of greater economies of scale in manufacturing, support and engineering.”
