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12/4/2009
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Cisco Snags Shares To Acquire Tandberg

Now the U.S. Justice Department will step up its review of Cisco's pending acquisition of the Norwegian videoconferencing firm.

Cisco missed its latest deadline Thursday for acquiring videoconferencing firm Tandberg, but squeaked across the finish line Friday morning after it revealed it has bought enough shares on its own to seal the $3.4 billion acquisition.

Cisco now is confronted with a new hurdle: The U.S. Justice Department is stepping up its review of the acquisition.

At first the acquisition appeared stalled when just 89% of the required 90% stockholder shares had been tendered at the close of the working day Thursday, potentially leaving the deal hanging. Cisco had already repeatedly extended its offer to meet the requirements of Norwegian law for acquisitions.

But Friday morning, Cisco said it had nailed down enough shares to acquire the Norwegian videoconferencing firm.

"The shares tendered, combined with shares owned, currently represent approximately 102 million shares, or approximately 91.1% of the shares and voting rights in TANDBERG," Cisco's Friday release stated.

The final acquisition figure represented a more than 50% gain in Tandberg stock from the date when rumors started circulating that the company was an acquisition target.

Since October 1st, when the acquisition was first announced, Tandberg's directors and management supported the acquisition. Some stockholders and investment bankers, however, moved to squeeze more money out of Cisco, which has more than $30 billion in cash.

Tandberg's chief executive Fredrik Halvorsen has been picked to lead Cisco's new telepresence technology group, reporting to Marthin De Beer, senior VP of Cisco's emerging technologies group. The integration plan calls for Tandberg's technology to be integrated into Cisco's existing collaboration architecture.

The acquisition is just another 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."

As for the Justice Department's examination of the merger, Cisco said it has received a second request from federal regulators for information on the acquisition. The company added that it will "continue to work cooperatively" with the DOJ during the review.

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