The two firms will merge early this summer to provide broadcasters around the world with triple-play technology including IPTV, HD, video-on-demand and internet telephony (VoIP).
The as-yet-unnamed company will have more than 1,600 employees and 2,000 clients in more than 100 countries. No offices are to close and widespread job losses are thought unlikely.
Tandberg's roster of clients, including Sky, NBC, Red Bee and Arqiva, will be combined with Arris' client list, which includes Time Warner Cable and Comcast Cable. Recent Tandberg
projects include the interactive TV application for this week's live Golden Globe Awardson NBC.
The merger is likely to benefit both companies. Southampton-based Tandberg already has a more than 25% share of the global video-processing market and its position will significantly expand Arris' US cable business. Equally, Tandberg's UK broadcasting clients will hope to benefit from Arris' expertise in VoIP and other communications technologies.
Tandberg chief executive Eric Cooney said: 'Our customers are increasingly relying on next-generation technology to help create and distribute converged services. There's a clear benefit in sourcing from one trusted partner.'
A Tandberg spokesperson denied that the merger would lead to redundancies. 'The new firm will have a broader scope and increased growth opportunities.'
Cooney is among key senior staffers who will head the company, though no decisions have yet been made about job titles.
The merger is likely to complete at the start of the second quarter, once Arris shareholders give their go-ahead. Arris' board and senior managers unanimously approved the deal at a purchase price of 96 Norwegian Kroner (£7.60) per Tandberg share, almost one-and-a-half times the 90-day average.
Tandberg made an estimated £180m revenue last year, and Arris delivered $657m (£335m) in the first nine months of 2006.