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Ericsson: There Was Never Talk of a Cisco Takeover

The two companies last week unveiled a partnership to help them in such areas as IoT and SDN, Ericsson says, but no discussion of a Cisco acquisition.

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Cisco Systems and Ericsson may want to be partners in the rapidly shifting networking space, but neither is interested in Cisco buying Ericsson.

A story in a Swedish daily publication, Dagens Industri, that came out days after the announcement indicated that during the year-plus that the two vendors had been in negotiations, Cisco officials also were interested in buying the European networking company.

Executives from both vendors moved to spike the rumors. Cisco spokesman Nigel Glennie told Bloomberg that the focus of the discussions had been around a partnership.

"As our executives have said this week, other types of transactions were never on the table," Glennie told the news site. "We're excited about the strategic partnership we announced on Monday and the potential it offers for both companies."

In a statement released Nov. 16, Ericsson executives backed up that scenario.

"We note that there are rumors in the market regarding an acquisition of Ericsson by Cisco possibly spurred by the recent announcement of a partnership between our two companies," Hans Vestberg, president and CEO, said in the statement. "The talks leading up to the partnership announcement have been ongoing for a year and there have not been any discussions whatsoever on a merger or an acquisition."

The two companies announced the partnership Nov. 9, saying that the alliance could mean as much as $1 billion to each company by 2018. Officials with Cisco and Ericsson say the partnership will help them as they push into a range of emerging market segments, including the Internet of things (IoT), software-defined networking (SDN) and network-functions virtualization (NFV).

It also will help them better compete in a rapidly changing networking market. Nokia is buying Alcatel-Lucent for $16.6 billion in a move that officials said will create a major player in the global networking space that would challenge such top vendors as Ericsson and Cisco. At the same time, Chinese tech vendor Huawei Technologies continues to grow its reach in the European networking market, where both Ericsson and Cisco compete.