Siemens to buy data network companies

Siemens AG is reportedly set to make a major series of acquisitions to boost its presence in the data networking market, according to an article in Thursday's New York Times.

The German communications giant is in preliminary discussions with 3Com to acquire a unit of the US vendor that sells networking equipment to telephone companies, for a price of around $US1.2 billion, the NY Times report said.

Siemens reportedly plans to announce next Monday that it has also agreed to acquire two privately-held data networking companies -- Massachusetts-based Castle Networks for about $300 million in cash and Argon Networks, also of Massachusetts, for about $240 million in cash. The German company will also announce an agreement to acquire a $30 million stake in privately-held Accelerated Networks Inc, of California, the report added.

Siemens would not comment on the reports. But Urban Bastert, a spokesperson with Siemens in Munich, did confirm that the German company will hold a press conference in New York on Monday where the vendor will give details as to its next steps in the data networking market.

Should the purchases go ahead, the acquisitions would be folded into a new Siemens venture to be based in Boston, according to the NY Times report. Siemens also plans to tap Martin Clague, presently general manager for global network computing solutions at IBM, to become chief executive of the new venture, the report added.

Such moves do not come as a total surprise. Although Siemens has traditionally relied on its own developers to create new products, the company's top executives last month signalled that a change in attitude was likely in the near future. At a press gathering in Berlin in February, Siemens executives announced that the company was scouting for both acquisitions and partnerships in the IT market.

Should the company indeed embark on the rumoured acquisitions, such moves would also be significant steps in helping Siemens combine its traditional products for voice networks with data products, enabling the vendor to offer customers integrated voice and data networks.

Other telephone equipment vendors have done the same recently. On Tuesday, French telecommunications equipment manufacturer Alcatel said it would acquire networking vendor Xylan Corp for $US2 billion. And in January, Lucent Technologies announced it would acquire data network vendor Ascend Communications.

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