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Cisco Purchase of Tandberg Approved

March 30, 2010

The U.S. Justice Department and the European Commission (EC) approved the sale of Norwegian videoconferencing equipment manufacturer Tandberg ASA to Cisco Systems, Inc. on Monday, after the California-based consumer electronics firm agreed to a series of EC-proposed concessions.

The deal, initially agreed to in October 2009, will call for Cisco to purchase Tandberg, the largest videoconferencing equipment maker in the world, for a reported $3.4 billion. The Associated Press (AP) reports that the two firms expect to finalize the deal within the next couple of weeks.

In exchange for approval from the EC, Cisco agreed to facilitate greater interoperability between its video conferencing products and those of its top competitors. Furthermore, it vowed to appoint an independent moderator to ensure that these commitments are honored. The Justice Department waved a hearing into the sale following the company’s agreement with the EC, and told the AFP that the deal “is not likely to be anticompetitive due to the evolving nature of the videoconferencing market.”

Tandberg is the latest in a long series of companies to be purchased by Cisco. The company has recently purchased Hong Kong-based DVN Holdings Ltd. For $44.5 million dollars, as well as network security company ScanSafe for $183 million and wireless equipment maker Starent Networks for $2.9 billion.

The Justice Department and EC approval also came on the same day when Cisco announced a multiyear deal with Bank of America to provide 200 TelePresence video conferencing systems units at the financial institution’s locations worldwide by year’s end.

William Blair & Co. analyst Jason Ader told Reuters that the deal was expected to be “in the range of $50 million”¦ which would be the largest TelePresence deal by far.”

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