Germany's Siemens AG on Monday said it agreed to buy two US data-networking companies and invest in a third firm as part of its US$1 billion push to expand into the fast-growing data-equipment business.
The move will help Siemens, one of the biggest telecommunications companies, better compete against rivals such as Alcatel and Lucent Technologies, which already have moved aggressively into the data-networking market, analysts said.
Siemens (SMAWY) will spend about $300 million to acquire Castle Networks, about $240 million to buy Argon Networks, and about $30 million for a stake in Accelerated Networks, said Anthony Maher, a member of the managing board of Siemens information and communication networks group.
These investments are part of an initial $1 billion earmarked by Siemens for the data-networking market. It expects to make further acquisitions, but declined to identify the specific product areas it will pursue.
"This is the beginning. If something is of value, we will move quickly and precisely to pursue that," Maher said at a press conference in New York.
Siemens' priority will be to meld its acquisitions of Castle and Argon into its new Unisphere Solutions unit, which would comprise all its data, speech, and Internet operations. Unisphere will be based in Burlington, Massachusets, and will include about 500 employees throughout the United States, Canada, and Munich, Germany. The company will offer products that allow telecommunications and Internet companies to send voice and data traffic on one network, instead of separate networks.
The new unit will initially focus on local phone companies and Internet service providers. Unisphere initially will have about $200 million in annual revenues and is expected to grow faster than the total market, which is seeing growth of about 15 percent, Maher said in an interview.
Martin Clague, who previously oversaw IBM's global networked computing business, will be president and chief executive of Unisphere.
