Swedish wireless handset manufacturer Ericsson made an all-cash offer of $1.4 billion to acquire compression vendor Tandberg Television, topping a $1.2 billion cash-and-stock bid announced last month by Suwanee, Ga.-based broadband equipment manufacturer Arris.
The cash offer by Ericsson, which has already acquired 11.7% of the outstanding shares in Tandberg, represents a premium of 18.2 percent to Tandberg's 90-day volume weighted average stock price and a premium of 10.4 percent over Arris’ January 15, 2007 offer. It is likely to scuttle the previously announced deal with Arris, which would have created a significant new competitor to cable technology giants Cisco and Motorola.
Stockholm-based Ericsson says the Tandberg acquisition would allow the company to tackle the lucrative IPTV market and expand Ericsson's customer base to include cable and satellite operators as well as broadcasters.
"IPTV for cable and telecom operators is the biggest networked multimedia opportunity going forward,” said Ericsson president and CEO Carl-Henric Svanberg in a statement. “Ericsson and Tandberg Television is a strong combination with a unique ability to offer complete IPTV solutions. Tandberg's leading TV technology and customer base and our global presence and strong position in IP networks and IMS, will create a leading player in networked media solutions for telecom, cable and satellite operators as well as media companies."