Under the agreement, shares of Cisco common stock with a combined value of $445 million will be exchanged for all outstanding shares and options of California-based companies Fibex Systems and Sentient Networks.
Cisco wants to buy Fibex, which makes products and devices that combine "traditional" voice services with data services, to help service providers that are combining local telephone service and data service in a single device, the company said in a statement. Fibex's ability to merge the services into one product will cut the costs of circuit switch technology.
Sentient Networks will help service providers move their data, voice, and video services onto an integrated cell and packet switching infrastructure, the company said.
Both acquisitions, the company said, will become part of its service provider business lineup. Fibex's employees will join Cisco's digital subscriber line business and Sentient's employees will be under Cisco's multiservice switching business.
Cisco said the acquisitions are expected to be complete in the fourth quarter of this year.