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ARRIS offers $1.2 B for Tandberg, sets up for long battle with Cisco, Motorola

Wed, 01/31/2007 - 7:00pm
Staff

Early reaction from industry analysts suggests that the $1.2 billion pairing of ARRIS and Tandberg Television will position the combo to cross swords with the likes of Motorola Inc. and Cisco Systems Corp.

This "gutsy move" by ARRIS will create a "third force" in cable TV and video technology, said ThinkEquity Partners analyst Anton Wahlman, in a research note.

"While ARRIS has been looking for a strategic acquisition for some time, they couldn't have found a better partner that transforms the company into a global leader in providing video, voice, and data equipment," added Oppenheimer & Co. Inc. analyst Alan Bezoza. "We also feel ARRIS will help Tandberg gain access into the elusive U.S. cable encoder market."

Wahlman, meanwhile, pored over the possibility that Tandberg could receive a competing bid, pointing out that Cisco and Motorola are the only two out there with "the muscle and the will" to fight ARRIS' offer.

But even if one of those two stepped up with a bid, he said, cable operators would "likely bark loudly," and such a deal would possibly see government intervention.

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