Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (24601)	12/20/1999 9:28:00 AM
From: d. alexander	Read Replies (2) \| Respond to of 69326

Something from todays WSJ Cisco to Buy Pirelli Unit For $2.15 Billion in Stock By SCOTT THURM and DEBORAH BALL Staff Reporters of THE WALL STREET JOURNAL Cisco Systems Inc. will acquire the fiber-optic telecommunications equipment business of Italy's Pirelli SpA for $2.15 billion in stock. Pirelli on Monday confirmed the sale, adding that Cisco also will invest approximately $100 million for a 10% stake in Pirelli's optical-components and submarine-cable businesses. Cisco, San Jose, Calif., is interested in Pirelli's equipment to transport computer traffic or telephone calls over fiber-optic lines. Pirelli, based in Milan, is the fourth-largest maker of equipment that breaks up a single beam of light into as many as 128 "colors," greatly multiplying the amount of information that can be carried over a single piece of fiber-optic cable. The acquisition will be Cisco's 47th, its third since August in fiber optics, and its largest ever in Europe. Cisco is expected to keep the approximately 700 Pirelli employees who work at a research center in Milan, and offices in France, Germany and Lexington, S.C. Cisco, the world's biggest maker of computer-networking equipment, wants Pirelli's equipment to round out its offerings for the operators of telecommunications networks. Cisco began moving aggressively into the fiber-optic equipment business with the recent purchases of start-ups Cerent Corp. and Monterey Networks Inc. for a total of $7.7 billion. Company Profile: Cisco Systems Inside a telecommunications network, Pirelli's gear can connect Cerent's equipment with Monterey's equipment, said Dana Cooperson, director of optical networking for market researcher RHK Inc., South San Francisco, Calif. Pirelli's fiber-optic equipment is part of its Cables & Systems Sector, which posted revenue of 1.9 billion euros ($1.93 billion) for the first six months of this year, or about 60% of the company's total revenue of 3.2 billion euros. The remainder came from its better-known tire business. In North America, MCI WorldCom Inc. and Global Crossing Ltd. use Pirelli's fiber-optic gear in their networks. Cisco Executive Vice President Don Listwin told analysts on Dec. 1 that Cisco is interested in acquiring additional fiber-optic companies but has been deterred by their stratospheric values. For example, Sycamore Networks Inc. has a market value of $19 billion following its October initial public offering. Last week, Cisco rival Nortel Networks Corp. said it would acquire Qtera Corp., a start-up maker of fiber-optic gear that won't ship its first products until the middle of next year, for $3.25 billion. "It's difficult to move when the pieces of the chessboard keep changing in value," Mr. Listwin said at the analysts' meeting, adding that Cisco "won't be lured into something that doesn't make sense." Cisco last week was reported to be in talks to acquire Corvis Corp., another fiber-optic start-up. However, people close to both companies said there weren't any such discussions. In fact, Corvis just closed a new round of private funding amounting to $215 million.