Tellabs said it will put up $1.9 billion in cash and stock to acquire Advanced Fibre Communications Inc. (AFC), a deal that will immediately place Tellabs squarely in the middle of the burgeoning fiber-to-the-premises (FTTP) sector.

On the financial front, AFC shareholders will receive 1.55 shares of Tellabs common stock and $7 in cash for each AFC share. AFC chief John Schofield will join Tellabs as COO and a director when the deal closes sometime in the second half of 2004. The combined company will employ about 4,100 people.

“Marrying the leader in access with the leader in transport positions us to grow with our customers in the industry’s sweet spot of broadband services,” said Tellabs CEO Krish Prabhu, in a release.

Among recent wins, Verizon selected AFC as one of its primary vendors for the RBOC’s initiative to deploy FTTP to about 1 million homes passed by the end of 2004.