Tuesday, December 19, 2006

Ericsson to Acquire Redback for $2.1 Billion

Ericsson agreed to acquire Redback Networks for $2.1 billion, or $25 dollars per Redback share. The acquisition is expected to occur by means of a tender offer for all of the outstanding shares of Redback common stock. The companies expect the deal to be completed in early 2007.

Redback Networks supplies multi-service routing platforms for delivering broadband access, including next generation services such as VoIP, IPTV and On-Demand Video. Its customers include many top service providers worldwide.

Ericsson said the acquisition will play a key role in its strategy to help telecommunications carriers lower costs and upgrade their networks for broadband, telephone, video and mobility services. Ericsson and Redback believe there is market opportunity to upgrade more than two billion wired and wireless users worldwide over the next ten years to all IP-based broadband infrastructures -- an opportunity ten times larger than the 250 million broadband users today.

"We believe the combined strengths of both companies in mobility and IP routing will create significant value for customers and shareholders," said Carl-Henric Svanberg of Ericsson. "Redback now will have the global reach and financial resources to accelerate its own routing technology innovation and grow market share faster than our traditional routing competitors."http://www.ericsson.comhttp://www.redback.com

  • Earlier this year, Ericsson completed its acquisition of Marconi. The deal, which was valued at US$2 billion when it was announced in October 2005, included Marconi's optical networking business, Marconi's broadband and fixed radio access network business, Marconi's softswitch business, and Marconi's data networking equipment and services businesses.