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Cisco Completes $3.3 Billion Tandberg Buy

Tandberg's videoconferencing product line will be folded into the networking company's TelePresence portfolio.

Cisco says it has finalized the acquisition of videoconferencing firm Tandberg, a major piece of Cisco's strategy of moving beyond routers and switches to supplying the infrastructure for Internet-delivered video communications.

On Monday Cisco said Tandberg's product line would be folded into the networking company's TelePresence portfolio. Specifically, Tandberg technology would be integrated with Cisco's collaboration architecture in order to offer multi-vendor interoperability from desktop through multi-screen telepresence solutions.

Fredrik Halvorsen, former chief executive of Tandberg, will become a senior VP within Cisco and head the company's new Telepresence Technology Group. The organization will focus on endpoints, infrastructure, and cloud services, Cisco said. Halvorsen will report to Marthin De Beer, senior VP of Cisco's emerging technologies group.

In acquiring Tandberg, Cisco encountered some hurdles. Despite having the support of Tandberg directors and management, some stockholders and investment bankers tried to squeeze more money out of Cisco.

After announcing plans for the purchase in October, the deal appeared stalled when Cisco two months later failed at first to get shareholders to tender the required 90% of Tandberg shares. Cisco several days later managed to gain control of more than 91% of the company's shares to close the deal.

On Monday, Cisco said the final purchase price was $3.3 billion.

The acquisition is a major building block in Cisco CEO John Chambers' vision of expanding well beyond its traditional strengths in routers and switches to data centers, servers and particularly to video. "Video," Chambers has said in what is becoming a self-fulfilling prophecy, "is the next wave of Internet disruption."

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