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In an effort to accelerate its presence in the videoconferencing market, Cisco Systems Inc., the world’s largest maker of computer networking gear, announced today it will buy TANDBERG, a Norway-based company, for about $3 billion.

 

With the purchase, Cisco (News - Alert) plans to integrate TANDBERG’s video endpoints and network infrastructure solution into its collaboration architecture, allowing intercompany and multi-vendor interoperability across its product portfolio. Cisco officials said the acquisition would help strengthen the company’s position in the $34 million collaboration market and expand its presence as a player in the videoconferencing sector.

 

The proposed deal, which has been endorsed by TANDBERG board of directors, is expected to close in the first half of 2010. The purchase, which reportedly is Cisco’s first acquisition of a public company outside the United States, is expected to give Cisco a boost in the video conferencing sector, which TANDBERG and Polycom have largely dominated.

 

"Cisco and TANDBERG have remarkably similar cultures and a shared vision to change the way the world works through collaboration and video communications technologies,” John Chambers (News - Alert), Cisco's chairman and CEO, said in a statement.  “This acquisition showcases Cisco's financial strength and ability to quickly capture key market transitions for growth."

 

When the deal is complete, TANDBERG CEO Fredrik Halvorsen will lead the new so-called “TelePresence Technology Group” and report to Marthin De Beer (News - Alert), senior vice president of Cisco's Emerging Technologies Group.

 

"Cisco and TANDBERG share a vision of changing the way people communicate and collaborate,” Halvorsen said in a statement. “The combination of world-class technologies, Cisco's global scale, and exceptional people from both organizations will enable us to accelerate innovation and market adoption."

 

TANDBERG, which operates joint headquarters in Oslo, Norway, and New York, offers telepresence, high-definition videoconferencing and mobile video products and services. The company designs, develops and markets systems and software for video, voice and data communication. The firm has 1,500 employees worldwide.

 

Cisco, which mainly sells routers and switches to corporate firms, has diversified its operations in recent years with acquisitions to enter new markets. Over the last 25 years, the company has bought 130 businesses, including cable set-top boxes and home wireless routers. In 2007, Cisco bought 11 firms, while it completed five acquisitions in 2008, company officials said.

 

Company officials said they will continue to invest in the European market and will position TANDBERG's Norway operations as a European “center of video excellence” with the firm’s service provider video team in Diegem, Belgium.

 

 

Edited by Michael Dinan