The recent history of networking deals

The $20 billion merger of Lucent and Ascend highlights the latest wave of consolidation in the networking industry.

2 min read
The $20 billion merger of Lucent and Ascend highlights the latest wave of consolidation in the networking industry, largely focused on the collision between older telephone networks and new data-based equipment built for the Internet. Other moves, however, have helped to facilitate the current environment of competition combined with consolidation in the networking industry.

Mergers and Acquisitions
April 1996 Cisco Systems acquires Stratacom in a stock deal worth about $4 billion. Analysts say the purchase allows Cisco to go after high-end users and telecommunications carriers, which was Stratacom's target market.
Dec 1996
Newbridge Networks beefs up its networking offerings by buying UB Networks from Tandem Computers for $96 million. The move, however small, indicated a need for Newbridge to move beyond its high-end niche to become a larger player in the networking industry.
March 1997 Ascend merges with Cascade Communications in a stock swap worth about $3.7 billion. Analysts called the merger a perfect fit, giving Internet service providers a compelling alternative to products from Cisco Systems and others. Ascend specialized in industrial-strength remote-access gear for ISPs, while Cascade focused on wide area network switching technology based on high-speed Frame Relay and Asynchronous Transfer Mode (ATM) pipes for the same market.
Feb 1997 Networking giant 3Com merges with modem maker U.S. Robotics in a stock-swap deal worth about $8.5 billion. The merger allows 3Com to offer customers a one-stop shopping alternative for networking equipment and allows the company to maintain its lead in the middle-tier market that serves small companies and home companies.
June 1998 Canadian telecommunications firm Northern Telecom buys data networking company Bay Networks for $9.1 billion, catapulting the duo to the forefront of the converging marketplace. Combined entity becomes Nortel Networks.
Sept 1998 Telecommunications equipment makers Tellabs and Ciena cancel a proposed $4.7 billion merger, citing recent changes in Ciena's financial outlook and an unlikelihood that shareholders would approve the deal. The deal would have created a powerhouse in optical networking equipment.
Oct 1998 European giant Alcatel becomes the latest telecommunications equipment provider to jump into the data-based networking market by snagging gigabit-speed start-up Packet Engines in a $315 million cash deal. The deal, though relatively small, highlighted a trend among various large communications firms from different geographic regions to dip into the data networking game.