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Exploring Mobile Radio Consolidation: Why Companies Merge?

two way radios on a light blue background

The mobile radio industry is a world of constant change and evolution. Like the tides of the ocean, it ebbs and flows, with companies rising to power only to be swallowed by larger entities as they grow too big for their britches.

As consumers, we are often left wondering why these mergers happen and what impact they will have on our daily lives. Let’s dive deep into the reasons behind mobile radio consolidation and explore why companies merge in this ever-changing landscape.

From increased market share to expanded resources, many factors drive businesses toward consolidation. But what does this mean for us as consumers? Is it good or bad news for our freedom to choose?

Why Do Two-Way Radio Companies Merge?

When it comes to two-way radio companies, mergers and acquisitions are not uncommon. But why do these companies choose to merge?

Several strategic benefits come with consolidation in the mobile radio industry.

Staying Ahead Of Their Competitors

One of the biggest reasons for merging is market competition. With so many players in the two-way radio space, consolidating can help a company maintain its edge over competitors.

By combining resources, expertise, and technology, merged companies can create a more robust offering to stay ahead of rivals.

Minimizing Cost

Another key benefit is cost savings. When two companies combine operations, they often find ways to streamline processes and eliminate redundancies.

This can result in significant savings on everything from manufacturing costs to administrative expenses. These savings translate into better margins and increased profits for the newly formed entity.

Acquiring Technologies & Customer Base

Beyond cost savings and competitive advantages, merging also allows for increased capabilities and customer base expansion. Combining resources means access to new technologies or services that one company may not have had before.

Additionally, bringing together different customer bases can lead to cross-selling opportunities as well as provide broader coverage across regions.

Joining forces has proven beneficial time and again for two-way radio companies looking to grow their presence in an increasingly competitive marketplace.

As we’ll see later on, there are plenty of examples of successful mergers within the mobile radio sector – showcasing just how effective this strategy can be when executed thoughtfully and strategically.

What Are Some Examples Of Two-Way Radio Company Mergers?

two king pieces side by side

 

  • In 2008, Motorola Solutions acquired Vertex Standard, expanding its global reach and product portfolio and positioning itself as a leader in the professional two-way radio market.
  • In 2009, Harris Corporation bought Tyco Electronics Wireless Systems, expanding Harris’ product portfolio and global reach.
  • In 2014, Kenwood Corporation merged with EF Johnson Technologies, creating a new powerhouse in the two-way radio industry.
  • Lastly, In 2019, Harris Corporation merged with L3 Technologies to create L3Harris Technologies, becoming the 6th largest defense company in the US.

Motorola-Vertex

A significant merger in the two-way radio industry was between Motorola and Vertex Standard. The merger was aimed at expanding Motorola’s portfolio of communications solutions and enhancing its ability to serve customers worldwide. Additionally, Vertex brought expertise in digital radio technology that could complement Motorola’s existing offerings.

The acquisition involved an exchange of shares, with Motorola owning 80% of Vertex’s stock and Tokogiken (Vertex’s parent company) retaining the remaining 20%. As part of the deal, the Vertex brand was absorbed into Motorola Solutions, but the product line continued under the Vertex Standard name. In 2012, Motorola took full ownership of Vertex.

Motorola bolstered its position as a top player in the professional mobile radio market, providing them with access to new markets and technologies. They were able to integrate Vertex’s products into their suite of communication solutions, offering customers a more comprehensive range of options. Furthermore, this allowed Motorola to expand its reach across Asia-Pacific, where Vertex had a strong presence.

On the other hand, Vertex benefited from being a part of a larger organization with greater resources and global reach. They could leverage Motorola’s R&D capabilities to enhance their products and accelerate innovation. Moreover, they gained access to Motorola’s extensive distribution network, enabling them to expand their customer base beyond their traditional markets.

Harris-Tyco(Formerly M/A-COM)

Harris Corporation, a leading technology company in the defense industry, acquired Tyco Electronics Wireless Systems (TEWS), a business unit of Tyco Electronics Corporation, in 2009 for $675 million. The acquisition was primarily aimed at expanding Harris Corporation’s product portfolio in the defense and public safety sectors, as well as increasing its global reach.

The acquisition of TEWS was a strategic move for Harris Corporation, as it gave them access to a range of wireless communication products, including tactical radio systems, microwave and satellite systems, and public safety networks. These products complement Harris Corporation’s existing offerings in the defense industry, such as secure communication systems, geospatial solutions, and surveillance systems.

The acquisition also allowed Harris Corporation to expand its presence in key international markets, such as the Middle East and Asia, where TEWS had a solid customer base. Harris Corporation leveraged this to establish new partnerships and win significant contracts with foreign governments, bolstering its position as a global leader in the defense industry.

Kenwood-EF Johnson

Another merger took place in 2014 due to a mutual agreement between the two companies that recognized the benefits of joining forces. This strategic move allowed both companies to expand their market reach by combining their resources.

Kenwood is known for its high-quality audio products, while EF-Johnson specializes in providing mission-critical communication solutions for public safety. With this merger, Kenwood now has access to advanced technology that can enhance its product offerings, while EF-Johnson gains access to Kenwood’s expertise in the audio industry.

Moreover, this partnership enables both companies to share their knowledge, skills, and experience to create innovative products that cater to the needs of their customers. By working together, they can develop solutions that are more efficient, reliable, and cost-effective.

Harris-L3 Technologies

Harris Corporation merged with L3 Technologies in 2019 to form L3Harris Technologies. The merger combined their expertise in communication and defense technologies, creating a more diverse product portfolio. The merger aimed to achieve cost savings of $500 million annually through supply chain optimization and shared services.

The merger also led to greater financial resources and investment in research and development, resulting in new innovative products. The merger created a stronger and more competitive company with a market capitalization of approximately $34 billion, making it one of the largest defense companies globally.

Conclusion

grey scale hand shake

As we’ve seen, consolidation in the two-way radio industry is nothing new. From Motorola acquiring Vertex to Harris merging with L3 Technologies, mergers and acquisitions have been happening for years.

But what are the wider implications of these consolidations? And how does it affect us, consumers?

By merging with another company, a business can benefit from economies of scale and reduce duplication of effort. Consolidation also allows for increased capabilities and customer base expansion, leading to cross-selling opportunities and broader coverage across regions. These help them expand their product portfolios, global reach, and expertise.

Consumers, on the other hand, are affected in both positive and negative ways. Consolidation can lead to cost savings and increased efficiency, resulting in lower prices and improved network coverage.

Ironically, decreased competition can also lead to higher prices and reduced innovation, limiting consumer choices and negatively impacting customer service.

Overall though, it’s clear that many businesses see significant benefits from merging with other two-way radio firms. Whether it’s increasing market share or improving operational efficiencies, consolidation offers numerous advantages for those willing to take the risk.

As such, it seems likely that we’ll continue to see more mergers and acquisitions within this sector in the coming years.

If you want to learn more about news and insights about two-way radios, visit our articles from time to time. Sell Radios is one of the leading buyers of two-way used radios. We pay top dollar for your surplus 2-way radios.

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