Cisco to bolster videoconferencing clout with $3bn Tandberg takeover

Technology giant Cisco has today underlined its commitment to establishing video conferencing as a green alternative to many face-to-face meetings, with the announcement that it is to acquire rival video communications specialist Tandberg.

Under the terms of the deal, which is expected to close during the first half of next year subject to regulatory approval, Cisco will pay approximately $3bn (£1.9bn) in cash for all outstanding Tandberg shares.

The bid represents an 11 per cent premium on yesterday's closing share price and a 25 per cent premium on the average closing price over the last three months. It was recommended unanimously by the Norwegian firms board of directors.

Tandberg specialises in a range of endpoint video technologies and is particularly strong in the so-called telepresence sector, where large high-definition screens installed in dedicated videoconferencing suites create the impression of real face-to-face meetings.

Cisco said that following the completion of the acquisition it plans to integrate Tandberg's technology into its own suite of online collaboration tools and networking technologies.

John Chambers, chairman and chief executive of Cisco, said that the deal would bolster the company's presence in a market that is fast expanding as businesses seek to limit the financial and environmental impact of travelling to meetings.

"Cisco and Tandberg have remarkably similar cultures and a shared vision to change the way the world works through collaboration and video-communications technologies," he said, hailing the online collaboration sector as "a $34bn market that is growing rapidly".