CommScope Inc. plans to acquire rival communications equipment maker Andrew Corp. for about $2.6 billion to cut costs, the companies said on Wednesday, after failing to reach a deal a year earlier.

The offer represents a significant premium to the original $1.7 billion offer that Andrew rejected last August.

The latest $15-a-share offer also represents a 16 percent premium over Andrew's closing share price on Tuesday. At least 90 percent of it will be paid in cash, the companies said in a statement.

The move comes amid a wave of mergers in the telecommunications industry, among service providers and their equipment vendors.

The companies said the deal, expected to close by the end of 2007, would help them to cut manufacturing costs and diversify their customer base. Analysts had said a combination of the two companies would help trim procurement costs for copper and plastic, since both make coaxial cables.

Based on the two companies' business results for fiscal year 2006, a combined company would have sales of around $3.8 billion, they said.

The companies also said they expect to generate substantial savings of around $90 million to $100 million in the second year after the deal is completed.

Around $50 million to $60 million of such savings are expected in the first full year, they said.

Andrew is set to become a wholly owned subsidiary of CommScope, with Frank Drendel due to remain chairman and CEO of CommScope, they said.

CommScope last year dropped its unsolicited bid after Andrew rejected it as inadequate. Around the same time, Andrew had also terminated a merger agreement with ADC Telecommunications Inc.

In a separate statement on Wednesday, CommScope raised its second-quarter revenue and operating margin outlook.

Canada