The world’s leading provider and manufacturer of network solutions, Cisco, has bought over Starent Networks Corp for a premium price of US$2.9b. The sale will thus allow Cisco to tap into the wealth of expertise that Starent has in the field of mobile network infrastructure and also boosted its position in the 4G mobile race. The sale, which valued Starent at US$35 per share – a 21% increase on its closing price on the 12th of October, is the second acquisition Cisco has made in a month. Just two weeks before the Starent take-over, Cisco also completed a US$3b deal to acquire Tanberg a maker of videoconferencing equipment.
According to observers, the decision to take over Starent looks like a signal by Cisco that it is shifting its next generation mobile networks focus from WiMAX to LTE (Long Term Evolution). Some have also said that the deal looks to be a pre-emptive strike that prevents rival Juniper from entering into a partnership with Starent, and thus forming an anti-Cisco trio with Nokia. Cisco’s moves have also boosted belief that other network players will soon go into an M&A spree as they seek to consolidate their position in the face of Cisco’s strengthened one.
