Head vs. wall

13 October 2009 By Robert Cyran Follow @rob_cyran

The US networking giant s $2.9bn purchase of Starent Networks is the second of this size in October alone. And more deals are in the works. There s one problem this strategy hasn t paid off for shareholders over the past decade.

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Cisco has agreed to buy USbased Starent Networks for $2.9bn in cash. The purchase price of $35 per share is a 21% premium to the October 12 close. Starent makes software and equipment that handles multimedia data traffic for wireless devices.

On October 1, Cisco agreed to buy Tandberg, a Norwaybased maker of video communications technology, for approximately $3bn.

As of July 25, Cisco had $35bn in cash on its balance sheet, of which $29bn was overseas.

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