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To: Black-Scholes who wrote (45986)	10/11/1999 1:27:00 PM
From: DiViT	Read Replies (1) \| Respond to of 50808

Cisco to spend $10 billion on acquisitions sjmercury.com BY MERISSA MARR GENEVA (Reuters) - Cisco Systems, the world's largest maker of computer networking equipment, said Monday it would step up the pace of acquisitions with plans for more than 20 purchases in the next year for up to $10 billion in cash and stock. After buying 40 companies in six years, Cisco President John Chambers said he was still far from sated and planned to pick up a number of companies in Europe in areas ranging from data, voice and video integration to software applications. ''I hope to acquire between 20 and 25 companies a year. Our research and development has grown from seven to 13.5 percent of sales,'' Chambers told a news conference at the Telecom 99 trade fair in Geneva. Chambers has a simple strategy -- what his engineers can't create he buys. This year alone he has scooped up 10 companies including its largest acquisition yet, Cerent Corp for $6.86 billion. ''We'll be moving more aggressively in data, voice and video integration, support structures and software applications and in more and more start ups in Europe in particular but also Asia,'' Chambers told Reuters. California-based Cisco hopes to ride an Internet boom in Europe in the next three to five years. While it secured $2.0 billion of European online sales from a total $5.6 billion last year, it expects to take a $4 billion slice of the market in 1999 from a total $19 billion. Among possible partners, Chambers said he was in ongoing talks with mobile phone makers Nokia and Ericsson -- with whom the company already works -- about deeper cooperation. ''For it to be worthwhile we have to have five to 10 opportunities to work together with revenue potential both ways,'' Chambers said. Analysts say Ericsson and Nokia have more to gain from a more profound partnership with Cisco than Cisco does. With between $7-10 billion to spend, the company said wireless broadband in Europe was another area it was keeping its eye on and hopes to announce some development there by the end of this fiscal year. Cisco -- founded in 1984 by a group of computer experts from Stanford University -- favors tax-free equity swaps to pay for most of its acquisitions. Chambers said that would continue so long as the U.S. government did not follow through with its threat to ban such operations. Since its first acquisition in 1993, the Internet networking leader has been taking on larger and larger competitors as it moves out of its traditional router market and into fresh markets such as voice, data and video convergence networks. To secure its prey, Chambers' strategy has been to offer such a handsome price for companies that its target agrees not to shop itself around for a higher price. ''We are always the number one or two product in each category,'' Chambers said.