Cisco Going Mobile, Acquiring Nokia?

Keruo writes "Sunday Business paper is reporting on its latest issue that Cisco Systems is considering of acquiring some large player in the mobile telephone field. According to a Reuters article the paper also suggests that the company is most likely Nokia. Neither of the companies have yet commented on the rumour." From the article: "Cisco's mainstay networking market was fast changing with the convergence of fixed-line and wireless networks, and Cisco needed a merger to acquire the technology to create intelligent wireless applications, which Finnish-based Nokia could provide."

Comments

Back to the old Cisco

[Anonymous Coward]

This would be their first really big acquisition in a long time, perhaps a bit too big for them?

Re:Back to the old Cisco

[Mictian]

It would certainly be a rather uncharacteristic or bold move by Cisco as far as their track record of corporate acquisitions go. I touched on this very briefly in my own rejected submission (which imho was slightly more informative than the one posted, however it was probably submitted later, so I'm not complaining).

I'll just post it here too, since it includes a few more links for those interested:

According to today's Sunday Business newspaper, Cisco Systems Inc. is thinking of buying the finnish mobile handset giant Nokia in the aftermath of CEO Jorma Ollila's retirement announcement. In the past Cisco has concentrated more on buying smaller, niche tech companies. But this time its chief is believed to be interested in merging with a wireless infrastructure company, and Nokia would fit this bill. The paper says the merger would help Cisco create "intelligent wireless applications". Convergence is the buzz word of the day and this move would certainly combine the fixed-line and wireless networking capabilities of the companies. Cisco is currently valued at about $123 billion (25.5 times earnings) and Nokia at $71 billion (18.8 times earnings). Neither company has yet commented on the rumour.

What is the big deal?

[Zxsw85]

This article has no real content as the source of the information is unrevealed and both companies refused to comment. The real story is that large corporations have departments that work on plausible mergers/acquisitions day and night on future moves. They create possible mergers day and night, and will continue to do so after this. Without actual information, this article is fluff at best. The intresting part is the effects of this merger upon the technological fields.

Story is from a rumor mill

[Zarhan]

This seems to be a story that started out from a single source. All the articles in Google news seem to quote each other and none of them seem to know where the original reference is (probably some analyst has started it as a way to boost his holdings). Now Reuters has picked it up. Excpect some nice trading on Monday when first Helsinki stock exchange and NASDAQ later open up. Then everyone forgets about this two days later.

I wouldn't count on it.

[dnaumov]

I couldn't find any data on what these companies are WORTH to see how easily Cisco could acquire Nokia, but Nokia revenues for 2004 were at 29.3 billion euro whilst Cisco revenues were at 22 billion euro. I am not exactly sure Cisco could swallow Nokia and not choke on it big time.

Re:I wouldn't count on it.

[LilWolf]

Cisco is valued at 123 billion dollars(99,8 in euros). Nokia is valued at 71 billion dollars(57 in euros).

Re:I wouldn't count on it.

[haggar]

Mod parent down: Nokia has total cash US$ 13.79B.
That's nearly 14 billion bucks of cash. That's 10 times more than what the parent reports.

Please check the facts for yourself instead of believing an anonymous poster.

Re:I wouldn't count on it.

[Lawrence_Bird]

in fact its short term investments, usually bills or the like.
One could argue Crisco could use that 14B to pay for a large
part of the deal, but there is no way Nokia goes with out a
premium of at least 20%, or $14B.  Hence you are left with
a $120 odd billion market cap company with at most $18B in
tangible assets trying to pay for $70B.  Its unlikly (to me)
that Nokia or its shareholders would be receptive to a merger
of equals approach and hence this would be treated as a
hostile acquisition.  Bad news for Cisco shareholders when
Nokia ownders dump $70B of stock on the market.  Can't see
Cisco financing that much in debt or new equity either.

Given this, its probably announced tomorrow :)

Jeez!

[Jukashi]

And all because Mike Wynn has a nokia phone - I think this attempt at silencing him has gotten a little out of hand.

Other way around?

[Cyclops]

Actually, I'd believe more the other way around...

When I See It

[MBCook]

It's official, I'll believe it. It's an interesting rumor, but it seems a little far out there. I suppose that Cisco would be one of the companies that would be big enough to purchase Nokia.

Other than just becomming a conglomerate, I don't see much point. Wireless like Nokia does and network like Cisco does are just too different at this point. So unless they were going to use it for a big push at becomming the dominate VOIP provider (hardware wise), I can't really see it. This could endup as another AOL/TimeWarner in some ways.

That said, it doesn't make that much difference to me. If they can get Sprint (my cell provider) to carry Nokia/Cisco phones (un-crippled) then I'll be happy. Otherwise it won't mean that much to me personally.

But what would we call them? Nisco? Cikia? Nokisco? Just don't see a good name. Not like Squeenix (Square-Enix, or at least as I like to call 'em because it sounds better).

Re:When I See It

[mcc]

But what would we call them? Nisco? Cikia? Nokisco? Just don't see a good name.

They should both do a three-way merger with Abbot Laboratories, then we could call the whole thing Nabisco

Re:When I See It

[haggar]

How wrong you are. Nokia produces tons of networking hardware, wireless equipment, and of course, mobile switching stations, BSCs, all sorts of 3G equipment, mobile network servers for all sorts of services, VOIP, multimedia, network management, etc. etc. etc. - the protfolio of Nokia Networks is so large and varied, I would never be able to do it justice. In fact, one line of products are the IP routers and firewalls that are considered by many to be best-of-breed. A lot of these solutions/products incorporate some Cisco device.

And of course, Nokia Networks is in tight symbiosys with Nokia Mobile Phones.

So, Cisco as a partner would make a lot of sense. But it would have to be a merger of equals, because Nokia is a very large company, with 70+ billion$ market cap and 13+ billion$ in the bank.

one big company acquiring another?

[Anonymous Coward]

We cannot see how this wouldn't work. Think of the synergies and the long-term return on shareholder equity.

It's a cinch that this deal will produce unflappable results.

Sincerely,

AOL and Time-Warner

Nokia denies the rumor

[Anonymous Coward]

Nokia's chief of corporate communications Arja Suominen denies the news as unsupported speculation according the Finnish Broadcasting Company YLE.

Nokia might need this

[badzilla]

Nokia has this image as "king of the wireless" but in fact this has been slipping in the last couple of years as their primary product (handset) has been under threat of commoditisation by many other vendors primarily Far-Eastern.

To their credit Nokia saw this coming a long time ago and have strenuously tried to diversify into (a) server-side systems for mobile e.g. specialised mobile groupware and (b) network infrastructure with a security highlight such as dedicated (BSD) firewall boxes and VPN systems.

So maybe they do have something attractive for Cisco and might even view it as a merger.

Trivia: Nokia invented the first non-black Wellington Boot.

Cisco and linksys.

[Blapto]

When cisco acquired linksys, build quality went down the pan. My pre-cicso equipment is solid stuff, built to last. The WRT54G I've got now feels flimsy and from what I've heard from other users is pretty prone to damage.
I'd rather this doesn't happen, as at the moment Nokia is an excellent company that doesn't need messing around with.

Re:Cisco and linksys.

[moosesocks]

WRT54G was a linksys product before the acquisition. there have been various revisions since then, but they've been mostly due to revisions of the chipsets used to power the router.

from what I hear, quality has gone UP across the various revisions, with specific regard to stability (probably related to the chipset), and power supplies.

Re:Cisco and linksys.

[pete6677]

Cisco has been careful to make Linksys products shitty enough so as to not cannibalize sales of the more profitable Cisco name brand. Those sales would suffer if Linksys were high quality enough to be enterprise grade equipment, since it pretty much includes all the features most people need.

Re:Numbers don't add up.

[Sivaram_Velauthapill]

They'll just offer Cisco stock or something. You are right in saying that it is next to impossible for them to raise $70 billion in cash.

AOL

[nchip]

LOL AOL,

sincerly,

HP and Compaq
Compaq and DEC

IOS on Nokia

[flipper65]

Well I guess the interface may change a bit, for example adding a name to my address book: Phone# configure terminal Enter configuration commands, one per line. End with CNTL/Z. Phone(config)# alias exec callbob dial phone.device.213.555.1212 Phone(config)# end Phone# callbob? *callbob="dial phone.device.213.555.1212"

Cisco doesn't have any Cisco shares

[G4from128k]

They'll just offer Cisco stock or something.

Cisco's float is virtually 100%, they don't have any treasury stock they can issue. That is, Cisco doesn't own any Cisco shares to play with. Unless they dilute the current shareholder's stock -- by creating new shares in the joint company to be given to Nokia shareholders -- Cisco doesn't have that many options other than an LBO.

Cisco 7920 looks like a Nokia product already

[zerofoo]

I'm willing to bet that the 7920 wireless phones we use in our office are made by Nokia:

Check them out here.

Maybe Cisco wants to push their wireless VOIP to the next level. It makes sense. Imagine every Nokia product being 802.11 VOIP capable right out of the box.

-ted

A match made in heaven...

[B747SP]

Cisco, a company that used to make great hardware that has now completely lost the plot insofar as hardware goes.

Nokia, a company that used to make great hardware that has now completely lost the plot insofar as hardware goes.

A merger seems like the natural thing to do at this point.