Cisco wins control of Tandberg

91.1% stake has company looking to rapidly close deal

Cisco late yesterday won control of Norwegian videoconferencing leader Tandberg with ownership of 91.1% of the company's shares. Cisco had to raise its initial $3 billion offer and extend the offer acceptance deadline three times in order to gain control of the company.

Cisco's initial offer, made on Oct. 1, was rejected by more than 90% of Tandberg shareholders.

At the expiration of the third acceptance deadline yesterday, Cisco said it controlled 89% of Tandberg shares. Combined with the 2% stake Cisco acquired in Tandberg in November, this pushed Cisco's holdings above the 90% share ownership needed to secure the deal, according to this report from Reuters.

Cisco struggled to gain that 90+% in the face of stiff resistance from Tandberg shareholders. Less than 10% accepted Cisco's initial bid of $3 billion. Cisco raised its offer to $3.4 billion.

By acquiring Tandberg, Cisco is looking to fill out its desktop and mid-range videoconferencing product portfolio. Its high-end TelePresence offerings can cost hundreds of thousands of dollars and are apparently too costly and elaborate to scale downmarket, as Cisco initially intended.

Cisco views video as the "killer app" that will fill up bandwidth and drive equipment upgrades into the next decade.

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• Cisco
• mergers and acquisitions
• Tandberg
• videoconferencing