Cisco, the world’s largest manufacturer of network equipment, has announced on Friday that the company now has over 90 percent stake in Tandberg, a Norwegian based company, indicating that it had secured the $3.4 billion acquisition deal.
However, Cisco has reported that the US Department of Justice (DOJ) has made a ‘second request’ for information pertaining to outstanding regulatory issues.
The company said that it will fully co-operate with the DoJ to complete the review process of the deal. Cisco expects to close the transaction process in the first half of 2010.
Interestingly, this take over will make Cisco a leader in the emerging video-conferencing market. After this deal, market leader Polycom will remain as the sole major independent provider of video-conferencing service.
Cisco manufactures high-end video conferencing rooms which project life-size image of the caller although such systems cost around $300,000.
The Tandberg deal will allow Cisco to enter the low-cost end of the market and will propel it as a competitor to HP and Microsoft in the online collaboration market which is worth around $34 billion.
Cisco had purchased a 89 percent stake in Tandberg via public tender offer. It purchased another 2 percent in the stocks, making it compulsory for Cisco to purchase the remaining 9 percent under the Norwegian law.
Cisco is using its massive cash reserves to make strategic acquisitions as the price of stocks is lower than what it would have been during a normal economic cycle. Cisco, together with the likes of Microsoft, IBM, Dell, HP, Google and Oracle are very well placed to wither the current economic woes and prepare for the next boom.