Cisco is moving ahead with the $3.4 billion purchase of Tandberg despite not getting control of the desired 90 percent of shares
Cisco Systems is going ahead with the $3.4 billion (£2.05bn) acquisition of Tandberg, despite not getting the number of shares it was seeking.
Cisco officials announced on 3 December that it will buy the Norwegian company, creating the largest video conferencing vendor in the world.
Cisco initially had sought the backing of Tandberg investors who held at least 90 percent of shares. As of the 3 December deadline, Cisco had collected 89 percent of the Tandberg shares. However, Cisco officials said they will waive the 90 percent requirement.
In October, Cisco announced its intention to buy Tandberg for $3 billion, a bid that Tandberg’s board of directors approved but a number of shareholders holding almost 30 percent of the stock rejected as being too low.
Cisco officials had threatened to walk away from the deal, though analysts predicted the company would eventually go through with it. Cisco offers high-end video conferencing equipment for enterprises, while Tandberg will give it a greater SMB presence.
Last month, Cisco upped its offer to $3.4 billion, and extended the deadline several times in hopes of reaching the desired 90 percent of shares. Company officials promised that they would not increase the offer, and that the 3 December deadline would be the last.
Tandberg’s video conferencing and telepresence will be a key part of what Cisco officials say is a $34 billion collaboration market. The video conferencing space is a competitive one, with such vendors as Hewlett-Packard, Polycom and Logitech—with its $405 million acquisition of LifeSize—as key players.
Cisco—which ended the third quarter with more than $35 billion in cash—has been aggressive in its acquisition strategy, as illustrated by its purchase of Pure Digital Technology and its Flip Video products in May and its $2.9 billion offer in October for wireless infrastructure vendor Starent Networks.