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
Mergers and Acquisitions
|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.
|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
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.
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.
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.
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.
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.