Oct 01, 2009 Cisco to Buy Tandberg to Gain Video Equipment
By: Rochelle Garner
Cisco Systems Inc., the world’s largest maker of networking equipment, agreed to buy Tandberg ASA for 17.2 billion kroner ($2.97 billion), to expand its lineup of video-conferencing products.
Cisco will pay 153.50 kroner a share in cash, Lysaker, Norway-based Tandberg said today in a statement. That’s 11 percent more than Tandberg’s closing price in Oslo trading yesterday. Tandberg is the world’s largest maker of videoconferencing equipment.
The purchase, Cisco’s first acquisition of a public company outside the U.S., accelerates its push in the video- conferencing market, where the company already offers different versions of its TelePresence system. TelePresence -- which typically includes furniture, cameras, and giant screens -- can transmit life-size images of up to six people. Some systems may cost $299,000 or more, depending on the configuration.
“This fits very well with Cisco,” said Michiel Plakman, who helps oversee the equivalent of $150 billion at Rotterdam- based Robeco NV, including Cisco and Tandberg shares. “They will immediately become the most important player in the market and aren’t paying a ridiculous premium, so this is positive.”
With Tandberg, Cisco gains less-expensive systems that appeal to smaller companies, Chief Executive Officer John Chambers said today in an interview. Tandberg, whose products range from room-sized systems to personal products, counts Ericsson AB and Bayer AG as customers. It’s developing systems for integrating video with other communications such as messaging.