Cisco’s acquisition allowed by EU

Cisco’s acquisition gets go ahead from EU

Cisco Systems has secured EU backing in their bid to purchase Norwegian video conferencing firm Tandberg.

Such a merger would ensure Cisco’s place as the leading provider in video conferencing products, with Reuters reporting that the American network specialist has already taken control of over 90 per cent of Tandberg, for a figure around the $3.34 billion mark.

Video conference equipment manufacturer Tandberg currently has just less than half of the market share in the mid-tier arena, whilst Cisco specialises in top of the range teleprescence equipment. Thus it is expected that both companies will fit together well, to provide video conferencing products for companies that offer video conferencing services or facilities, as well as government’s or other stakeholders.

MarketWatch reports that shares of both Cisco and Tandberg were pushed up as news of EU regulatory approval spread amongst industry commentators.

The European Commission as the executive wing of the EU, is in charge of coming up with legislation, championing the treaties and carrying out the general administrative functions of the Union. The Commission states that it has approved the acquisition for now, but it has worries about competition issues and is awaiting protocol from Cisco, to ensure that all parties can function in the marketplace effectively.

Nevertheless despite reservations, MarketWatch cites the Commission as saying that the merger ”would not significantly impede effective competition in the European Economic Area or any substantial part of it.”

The merger reflects the growing importance of video conferencing for all business and government functions. It is hoped that the acquisition will provide more effective solutions to video conference technology.