Cisco snaps up Tandberg in £2.2bn swoop

Cisco became the biggest maker of videoconferencing equipment yesterday as its $3.3bn (£2.2bn) acquisition of Tandberg, announced last October, closed. It is already the world’s biggest network equipment maker.

The IT networking giant confirmed it has completed a voluntary offer for Tandberg, giving it control of 91 per cent of the company. It began a compulsory acquisition of the remaining shares after trading closed yesterday.

Norway’s Tandberg is in the process of delisting from the Oslo stock exchange.

Cisco believes the deal will dilute earnings in 2010 but strengthen profits in 2011.

Cisco is desperate to build on its videoconferencing portfolio as the sector continues to thrive. The firm said that videoconferencing is getting a boost in demand from the disruption to business travel across Europe caused by the volcano in Iceland.

Fredrik Halvorsen, former Tandberg head and new head of TelePresence at Cisco said: “The only evidence is anecdotal, but you will not get a demo room in any of the Cisco facilities. We have seen a huge spike in usage.”

Cisco has long coveted Tandberg and had an offer rejected last year.