Cisco Completes $3.3B Tandberg Acquisition

By Michelle Maisto  |  Posted 2010-04-20 Email Print this article Print

Video conferencing and networking giant Cisco Systems, now $3.3 billion lighter in the pocket, has completed its acquisition of Tandberg, which it hopes will raise revenue figures to $1 billion. Ideally, the Tandberg deal will also provide new leverage against competitors such as Hewlett-Packard and Logitech.

Cisco Systems has completed its acquisition of Tandberg, a fellow leader in video communications.
With the close of the transaction on April 18, the full line of Tandberg products has become part of Cisco's TelePresence portfolio. The technology, which involves using large screens to make users feel like they're in a face-to-face meeting, has been deployed by major enterprises such as PepsiCo and Bank of America to help reduce travel expenses and improve collaboration within and between companies.
Under the terms of the offer, Cisco will have purchased all outstanding shares of Tandberg for 170 Norwegian kroner per share, for a total purchase price of 19 billion kroner, or $3.3 billion.
"Today we are celebrating a very important step for our customers in the journeys to put people at the center of collaboration and change the way we work," Marthin De Beer, a Cisco senior vice president, said in a statement.

"We strongly believe that telepresence-the next generation of video conferencing-along with Cisco's entire rich collaboration portfolio powers this new way of working where everyone, everywhere, can be more productive through the pervasive use of video and face-to-face collaboration," De Beer continued.
With the transition, former Tandberg CEO Fredrik Halvorsen will become the senior vice president and leader of the new TelePresence Technology Group within De Beer's organization.
On March 29, Cisco and Tandberg were given approval to proceed with the deal by regulators in the United States and Europe. Tandberg has headquarters in both the United States and Norway.

The U.S. Department of Justice and the European Commission each had concerns about how the deal would affect competition within the market. Ultimately, Cisco promised European regulators that it would divest itself of the TIP (TelePresence Interoperability Protocol) standard, which EC Vice President for Competition Joaqu??ín Almunia found "suitable to safeguard competition in the market for video communications where the merged entity will have a strong presence."
Previous to the acquisition, Cisco had approximately 600 global customers. With the acquisition of Tandberg, it hopes to extend its presence to new markets, including small and midsized businesses, and to better compete against competitors such as Hewlett-Packard-which on April 19 announced its plan to acquire 3Com-and Logitech.
With Tandberg in the mix, Cisco executives have estimated that company revenue could reach $1 billion dollars, in a worldwide market set to increase from $3 billion to $10 billion in five to seven years.

Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University, and in her spare time obsesses about food. Her first book, The Gastronomy of Marriage, if forthcoming from Random House in September 2009.

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