Has this been posted yet:? interesting , hope FNTN is a choice"
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Monday March 8 11:55 AM ET
Siemens To Invest $1 Billion In U.S. Internet, Data Firms
By Melanie Cheary
FRANKFURT, Germany (Reuters) - Germany's Siemens AG announced Monday it will invest $1 billion in vital acquisitions in the U.S. data networking and Internet technology area, putting to rest recent speculation about how it planned to enter the sector in the United States.
Siemens said it planned to take over two U.S. data transmission firms, buy a strategic stake in a third and establish a new U.S. division, called Unisphere Solutions Inc., comprising its data, speech and Internet solutions.
The industrial and telecommunications giant said at a news conference in New York it would buy U.S. data networking firms Argon Networks and Castle Networks, and take a strategic stake in Accelerated Networks.
Analysts say Siemen's entry into this U.S. market is crucial if it wants to beat out rivals -- such as Alcatel SA, Ericsson and Lucent Technologies -- who have made a number of recent U.S. acquisitions.
But Siemens shares got little thrill from the news which simply met expectations, traders said. The stock seesawed in heavy volume ahead of the announcement and weakened after, falling about 4 percent before recovering.
Traders said investors were disappointed the group was not buying a unit of major Internet protocol technology firm 3Com which it was rumored to be doing. ''Siemens is always a company that disappoints on news,'' one trader said.
Siemens shares were down 1.55 euros ($1.69) at 58.10 euros ($63.27) in late trading in Frankfurt.
''Siemens shares hiked up last week on the possibility of a big thing and now the news has come as expected,'' another trader said, adding the $1 billion price tag was seen as too high.
Nevertheless, Siemens said it and 3Com were examining possibilities for expanding their current cooperation agreement and that 3Com viewed Siemens' expansion into the data networking sector positively.
Siemens said its new U.S.-based company Unisphere Solutions Inc. -- which would group data, speech and Internet operations, and be headed by former International Business Machines Corp. (NYSE:IBM - news) Senior Executive Martin Clague as president and chief executive -- was likely to make further acquisitions and partnerships. It will be based in Burlington, Mass.
Other telecommunications equipment suppliers have been obliged to expand their product lines amid the Internet boom.
Alcatel last week announced it had bought Assured Access Technology for $350 million and also planned to acquire Xylan Corp. (Nasdaq:XYLN - news) for $2 billion.
Lucent Technologies Inc. (NYSE:LU - news) bought Ascend Communications Inc. (Nasdaq:ASND - news) in January, and Northern Telecom Co. bought Bay Networks last year.
Earlier Stories
Siemens Eyeing 3com Unit - Report (March 5)
Siemens To Buy U.S. Networks Units, Not 3Com - FT (March 5)
Siemens Stock Rises Amid U.S. Data Network Hopes (March 4)
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