Juniper buys Unisphere to further challenge Cisco

21 May 2002 Networking hardware vendor Juniper Networks has bought rival Unisphere Networks from its German owner Siemens for approximately $740 million (€803.9m) in cash and stock.

Juniper is the main rival to Cisco in the router market and the deal is being interpreted as means of further challenging Cisco, as well as a sign of renewed consolidation in the networking hardware market. Sales have been badly affected by the drop in demand from debt-ridden telecoms operators.

Juniper will pay Siemens $375 million (€407.4m) in cash and Siemens will also receive 36.5 million in Juniper shares, amounting to just under 10% of the company’s outstanding stock. Siemens has also agreed to resell some Juniper products.

Unisphere was only set-up in 1999, but now that Siemens’ ICN telecoms unit is being restructured, management has decided to off-load Unisphere at the same time.

Unisphere had revenues of about $200 million (€217.3m) in 2001 and the company has yet to reach profitability. The unit makes routing and broadband access systems. In 2001 Juniper generated revenues of $887 million (€963.6m), from start-up in the mid-1990s.

The acquisition is expected to dilute Juniper’s earnings in 2002, but the company says that it will be positive in 2003. The deal is subject to regulatory approval, but is expected to close in the third quarter.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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