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Technology Stocks : Cascade Communications (CSCC)

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To: Steve Lee who wrote (2174)	2/14/1997 7:16:00 PM
From: Dan Markel	of 3743

TORONTO, Feb 14 (Reuter) - Newbridge Networks Corp and remote access networking company Ascend Communications appear to be close to inking a wide-ranging technology partnership, a source familiar with the situation said on Friday. Rumors about such a union have been circulating for several weeks and many Canadian and U.S. analysts have said Newbridge and Ascend are ideally suited for a partnership. "We are getting increasing indications that Ascend and Newbridge are about to announce an alliance similar Newbridge's current alliance with Siemens," the source said. The source said such an alliance would probably include original equipment manufacturer (OEM) agreements, under which a company licenses another to market its products under a private-label brand, and mutual access to technology. A spokesman for Kanata, Ontario-based networking equipment manufacturer Newbridge it is against company policy to comment on rumor and speculation. Officials at Los Angeles-based Ascend were not immediately available for comment. "We have been publicly saying that we think Newbridge is going to pursue a partnership with a remote access company and that Ascend is a very likely candidate given the complementary nature of a potential partnership between those two companies," UBS Securities analyst Nikos Theodosopoulos said. "We wouldn't be surprised but we don't have a 100 percent conviction that it's definitely going to be with Ascend -- there's always a chance it could be with someone else. But it would seem to make sense," he added. Widespread speculation about a tie-up started to swirl around the market last month. Analysts said through such an alliance, Newbridge would get a toehold in the remote access market in which it is not now a player and Ascend would be able to tap into Newbridge's flagship asynchronous transfer mode technolgy. In addition, Ascend is a leader in in providing networking equipment that connects the central offices of Internet service providers to their customers while Newbridge would bring its relationship with Siemens AG (FSE:SIEG) to the union. The source said a pact with a telecommunications equipment vendor is regarded as something of a "holy grail" to most networking players. "The three-way troika would basically pose a very serious competitive threat to other players in the sector, especially the smaller ones which don't have a telecommunications equipment (vendor) alliance," said Dillon Read analyst Robert MacLellan. "It would be something of a coup for both companies."

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