San Jose, (California) Dec 23: Digital Microwave Corp and New Zealand's MAS Technology Ltd have said they have signed a definitive agreement to merge in a deal valued at about $110 million.

Under the agreement, announced on Monday, Digital Microwave will exchange 1.2 common shares for each outstanding share of MAS stock.

Digital Microwave will also exchange stock options using the same ratio, and expects to issue approximately 8.2 million shares to MAS stockholders and option holders.

The merger of the two wireless companies will combine Digital Microwave's and MAS's product lines and distribution channels that is expected to provide a full range of wireless connection products to customers world-wide, the companies said.

MAS shareholders will own about 17 per cent of the combined entity. The $110 million transaction value is based on Digital Microwave's closing price of $13.375 as of December 22.

The companies said that MAS will retain its name and operate as a subsidiary of Digital Microwave, and will continue to be headquartered in Wellington, New Zealand.

MAS's chief executive officer Neville Jordan is expected to remain as the chief executive responsible for MAS operations.

The transaction, which has been approved by the boards of the two companies, is expected to close in about 90 days, subject to regulatory reviews, approval by each company's stockholders, and other customary closing conditions.

The acquisition is intended to qualify as a tax-free reorganisation and will be accounted for as a pooling-of-interests transaction.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.