Taking a page out of Cisco Systems' book, Juniper Networks went the acquisition route, announcing it had completed its purchase of Siemens AG's Unisphere Networks division on Monday in the US at the close of the market. Juniper believes the deal will bolster its portfolio of edge routers and increase its overall market share in the switch and router markets.
The transaction is valued at an estimated $US585 million, which includes $375 million in cash and 36.5 million shares of Juniper Networks' stock. In the deal, Siemens gains an estimated 10 per cent stake in the company.
Further aspects of the deal include a reseller agreement between the two companies, in which Siemens will resell Juniper's entire line of products. Juniper says this arrangement will allow them to reach Siemens' customer base that spans 190 countries.
The gems of the acquisition are Unisphere Networks' ERX and MRX edge routers. The MRX combines IP routing, ATM switching, and MPLS services on a single platform, while the ERX had been deployed in China Netcom and AT&T's networks.
Unisphere has approximately 600 employees and the unit was created by Siemens in 1999 through its acquisitions and integration of Argon Networks and Castle Networks together with several units of Siemens Information and Communication Networks.
Juniper Networks will report its actual second-quarter financial results on July 11, 2002, after the close of the market. The company expects the transaction to be dilutive in the second half of the year and accretive in early 2003. Further details of the deal will be provided at that time, said a Juniper spokesperson.