Has anyone discussed this article on Ericsson's shopping list?
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June 22, 1998
Ericsson to Be 'Opportunistic,' But Price-Wary in Data Buys
By MARK BOSLET
Dow Jones Newswires
PALO ALTO, Calif. -- Telecommunications-equipment
maker L.M. Ericsson Telephone Co. said it intends to be
"opportunistic" in acquiring data-networking technology.
But the Swedish company said its sense of urgency to
enter the market will be tempered by a desire not to
overpay.
"You feel some pressure to
do something quickly," said
Gary Pinkham, who as vice
president of business
development and
data-networking solutions oversees Ericsson's
data-networking business in the U.S.
But in a market where company valuations are very high,
Ericsson wants to be sure any purchase creates
shareholder value, he said.
In that vein, Mr. Pinkham said he hasn't talked about a
possible combination with 3Com Corp. Rumors have been
swirling around Wall Street that Ericsson may be poised
to snatch up the maker of modems, network adapter
cards and data-networking devices.
Mr. Pinkham said he views 3Com's CoreBuilder gigabit
switching technology as potentially interesting to Ericsson,
as well as the company's U.S. Robotics component and
its PalmPilot.
But 3Com's exposure to network adapter cards, where
technology is expected over time to be swept into a
computer's central chips, is less attractive, he said.
Mr. Pinkham said Ericsson is interested in four areas of
data networking. They are access technology, such as
remote-access concentrators and ADSL technology;
transport technology, such as wave division multiplexing;
asynchronous transfer mode, or ATM, edge and core
switches; and Internet protocol technology, such as
software and high-performance routers.
In the wake of Northern Telecom Ltd.'s proposed
acquisition of Bay Networks Inc., there is "a lot of hype
going on in the marketplace," Pinkham said, and the list of
major data-networking companies is getting shorter.
In this environment, Mr. Pinkham continued, he expects
Ascend Communications Inc. will be purchased. Wall
Street expects companies such as Lucent Technologies
Inc. and Tellabs Inc. to be interested.
Ericsson, however, is not going to be pressured into
making a purchase it doesn't think will fit, he said. In an
interview with The Wall Street Journal, an Ericsson
executive said the company is looking at 10 networking
companies in the U.S. and has begun acquisition
discussions with three, each in the
several-hundred-million-dollar range. >>> |
