Cisco to buy S-A

Cisco announced a deal to buy Scientific Atlanta for about $7bn.

What is the strategy behind this deal, one of the largest acquisitions ever for Cisco? Video, Video and Video. First Cisco acknowledged it was not enough aggressive in the IPTV market and need to sell a more end-to-end integration solution. Video is the cornerstone of the triple or quadruple play offered by operators, and Scientific-Atlanta is a leading global provider of set-top boxes, end-to-end video distribution networks and video system integration. Secondly, Cisco continues its strategy to enter the home markets (after Linksys, Airespace). Set-top boxes will complement Cisco product portfolio for home networks (voice, WiFi, remote management, security) and end-point CPEs for municipal networks (mesh networks). Thirdly, Cisco gets a better presence in the cable market.
The deal was approved by the boards of both companies, and the final price is expected to be around $5.3bn, if an expected cash balance of about $1.7 bn is extracted from SA' s current liabilities.