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Cisco gets government go-ahead for Starent acquisition

by Sylvie Barak on 18 December 2009, 13:10

Tags: Cisco (NASDAQ:CSCO)

Quick Link: HEXUS.net/qavfy

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Wired for wireless

Doing its due diligence and jumping through all the regulatory hoops, Cisco has announced its $2.9 billion acquisition of Starent Networks has cleared a U.S. antitrust review and can be finalised within days.

Starent, which makes the equipment that goes into cell tower switching centres, used for transferring data back and forth between smartphones and the Internet, has already been given the go-ahead by its shareholders to accept Cisco's $35 a share buy-out.

Cisco, sometimes referred to as the ‘plumber of the internet' announced that both the DoJ and the FTC had given the ok on the deal, which will allow Cisco to become a major player in the wireless equipment space.

"Due to the 50 fold increase in mobile data traffic seen by the likes of AT&T over the last three years, this acquisition addresses key pain points for the wireless industry," analyst Ronald Gruia told HEXUS.

"Data is going to continue to play an ever increasing role," he said, as heavy users continued to put strain on networks.

"Strarent produces best in class products and is very good at what it specialises in," Gruia went on, explaining why the move was significant for Cisco.