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Why Cisco wants Norwegian videoconferencing company Tandberg so badly?

By Amarendra Bhushan for CEOWORLD Magazine Updated:November 16, 2009


Cisco Systems Inc. ((NSDQ: CSCO) on Monday raised its cash offer for Norwegian videoconferencing company Tandberg ASA (TAA.OS) to about 3.4 billion U.S. dollars.

Cisco announced on October 1 that it was pursuing a $3 billion cash takeover of Tandberg, a major global supplier of video conferencing equipment with dual headquarters in Oslo, Norway, and New York City.

Cisco announced that it is now offering to purchase all the outstanding shares of Tandberg for 170 Norwegian Kroner per share, which is said to be the networking giant’s “final price” for the transaction.

According to Cisco, the acceptance period is also extended to Dec. 1 this year.

Highlights / Key Facts:

Cisco’s collaboration vision is to enable a sustainable, new level of enterprise productivity, agility and innovation by transforming the way people interact, share knowledge and deliver productive outcomes within and across organizations.

TelePresence and high-quality video have redefined how users communicate through easy-to-use, immersive, high-quality video experiences and are becoming a larger segment of the broader collaboration market.

TANDBERG’s leading video endpoints and network infrastructure solution will be integrated into Cisco’s world-class collaboration architecture.

This will enable intercompany and multi-vendor interoperability and ease of use across the full product portfolio — from desktop to immersive, multi-screen TelePresence. This interoperability will benefit Cisco’s customers, but also competitors and partners by accelerating customer interest in video collaboration globally.

Cisco continues to invest in the European market as a center of innovation across all market segments, and will continue to drive global growth by positioning TANDBERG’s Norway operations as a European center of video excellence alongside our Service Provider video team in Diegem, Belgium.

TANDBERG’s 1,500 employees globally, with innovation centers in Norway and the United Kingdom, will be extremely important as Cisco’s team continues to drive video innovation and growth.

Cisco will “withdraw the offer and evaluate alternative ways to expand our activities in the video communications market” if it doesn’t achieve the desired level of acceptances representing 90 percent shares, the company said in a statement.

On Oct. 1, Cisco initially offered to buy Tandberg for 153.5 Norwegian Kroner per share or about 3 billion dollars in total. The deal was backed by Tandberg’s board but has received opposition from some minority shareholders who said the offer price is too low.

Video Cisco to Acquire Tandberg:

John Chambers, Cisco Chairman and CEO, and Fredrik Halvorsen, Tandberg CEO, discuss how the combination of Cisco and Tandberg will disrupt the collaboration market.

CiscoSystems

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