Why Are Adtran Shares Trading Lower Today?

Adtran Inc ADTN and ADVA Optical Networking SE ADVOF have agreed to consolidate to create a global, scaled provider of end-to-end fiber networking solutions for the communications service provider, enterprise, and government customers.
The combined business will offer a comprehensive portfolio for homes, businesses, and 5G infrastructure with scalable, secure, and assured fiber connectivity, paired with cloud-managed Wi-Fi connectivity and SaaS applications.
The combination offers $52 million in pre-tax annual cost synergies realized within two years post-closing.
Adtran and ADVA will combine under a new holding company Adtran Holdings, Inc, in the all-stock transaction with a global headquarters in Huntsville, AL, and a European headquarters in Munich, Germany.
Each ADVA share will represent 0.8244 shares in the new holding company. Each Adtran share will signify a share in the new company.
The purchase price of €14.98 per ADVA share represents a premium of 22% based on Adtran's 3-month VWAP as of August 27. Adtran will have a 54% stake in the company, and ADVA will own the remaining 46% share.
Adtran's Chairman and CEO, Tom Stanton, will serve in the same capacity. ADVA's CEO, Brian Protiva, will become the VC. Adtran's CFO, Mike Foliano, will remain in his current role.
ADVA's CTO, Christoph Glingener, will serve in the same capacity. The company will be dual-listed on the NASDAQ and Frankfurt Stock Exchange.
Price Action: ADTN shares traded lower by 15.3% at $20.80 on the last check Monday.

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