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Oracle takes over Acme Packet in £1b deal

Oracle has said it will take over communications hardware company Acme Packet in a $1.7 billion (£1 billion) deal, as it expands from software into network equipment.

Acme makes hardware that is used in the transmission of voice and video data over the Internet, making it a competitor for firms like Cisco and Juniper Networks. Though Oracle has a miniscule presence in the communications infrastructure market, the Redwood Shores, California-based company bought Sun Microsystems in 2010 in a deal worth $7.4 billion (£4.7 billion).

"We have been expecting Oracle to make a bigger push into the networking market," said Topeka Capital Markets analyst Brian White.

"Convergence across the IT world appears to be inevitable," he added.

Acme has faced a drop in orders over the past year, leading it to report a fourth-quarter deficit of $2 million (£1.3 million). Its shares saw a 22 per cent boost after the announcement of the acquisition, while Oracle’s shares declined by 2.3 per cent.

The two firms said the deal will "accelerate the migration to all-IP networks by enabling secure and reliable communications from any device, across any network."