Siemens to Buy Argon for $240 Million, People Say
Munich, Feb. 27 (Bloomberg) -- Siemens AG, a German maker of
products ranging from locomotives to telecommunications networks,
agreed to buy closely held Argon Networks Inc. for about $240 million
to expand its data-networking business in the U.S., people familiar
with the transaction said.
The agreement may be unveiled within the next few two weeks, the people
said. A spokeswoman for Littleton, Massachusetts-based Argon declined
to comment. Eberhard Posner, a spokesman for Munich-based Siemens
also declined to comment on the agreement, which was reported in the
Feb. 18 edition of the Boston Globe.
Siemens is developing more products to carry voice and data on computer
networks and the Internet, helped by an alliance with No. 2 networking
company 3Com Corp. Argon makes a computer switch that lets phone
companies transmit data faster. ''Siemens and the other Europeans need
a beachhead in the U.S. (networking) market,'' said Craig Johnson, an
analyst with the market research firm Pita Group in Portland, Oregon.
Argon is developing a so-called gigabit switch router, which
sends data traffic over phone networks faster than existing gear
made by No. 1 networking company Cisco Systems Inc. and others.
Alliance
Siemens and 3Com in December broadened their alliance with a $100
million venture to develop phones that can send voice and data
calls over corporate computer networks and the Internet. That
venture will begin delivering its first product in the first
quarter, the companies have said.
Argon's software is being tested in several networks and its gear is
expected to be ready for sale in the third quarter of this year,
spokeswoman Maureen Liberty said Friday.
The company, founded in March 1997, raised $34 million in two rounds of
venture financing, according to documents on its Internet site.
In December, Paris-based Alcatel SA bought closely held Packet Engines
Inc. for $315 million in cash. Some of Packet Engine's products will
compete with those expected from Argon.
Siemens now buys ''a significant amount'' of equipment from Newbridge
Networks Corp., based in Kanata, Ontario, said Patrick Houghton, an
analyst with Sutro & Co. who rates Newbridge ''strong buy.''
Some of that equipment will compete with Argon's product. ''That
(Siemens buying Argon) is going to spook some people about Newbridge,''
Houghton said.
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