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Cisco Systems to Acquire Juniper Networks NEW YORK
(Reuters) - The shares of networking equipment giant Cisco System Inc. and
its acquisition target, Juniper Networks Inc., sizzled Monday on reports the
world's biggest maker of networking equipment, Cisco, would buy the No. 2
maker of networking gear, Juniper, for a cash and stock deal.
The market was abuzz on the announcement.
Juniper shares soared 37 percent to $17.29, while Cisco shares plummeted over
14 percent to $14.42. Other networking stocks were very
active as well, as speculators say this could kill the router industry. Avici
Systems Inc., the 3rd largest core router vendor, was one of the networking
vendors taking the hit – it’s stock shed nearly 37 percent off its value,
dropping to $1.20. Riverstone Networks Inc., a maker of routing gear for the
enterprise market, also plunged, down 20 percent to $4.87. Cisco spokesman John Gahn issued
a statement, saying: “The two companies have long competed for router market
stakes, with Cisco specializing in the Enterprise and Metro [market], and
Juniper specializing in the ISP market. Now, our combined strength will allow
us to provide state-of-the-art solutions to all market sectors, while
integrating both companies’ advanced technologies into all of our platforms.” Juniper Spokeswoman Kathy Burr
said the company would issue a statement later in the day. The details of the deal haven’t
yet been disclosed, but rumors have it that the deal will be worth close to 5
Billion dollars in cash and stock, around 20 percent more than Juniper’s
current market value. Other rumors concerning the
trigger of the deal include Juniper’s highly touted Gibson router – their next
generation core router. "Cisco just couldn’t keep up with Juniper,"
said one analyst who wished to remain nameless. "So it resorted to
something that has worked well in the past – buying the competition." Email this story - View most popular | Printer-friendly format
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