Cisco Systems plans to acquire wireless vendor Linksys
Group in a stock deal valued at $500m (£319m).
Linksys and Cisco both make products for the growing wireless Lan
(WLan) market, but Linksys is particularly strong among home users
of WLan access points and routers. Cisco sells similar products to
corporations.
The deal was struck so Cisco could enter the home and small
business market for WLan products.
The companies have reached an agreement under which Cisco will
issue about $500m in common stock to purchase Linksys and cover its
employee stock options.
The deal is expected to close in the fourth quarter of Cisco's
2003 financial year, pending regulatory approval, that ends in
July.
Cisco has made numerous acquisitions in the 1990s as the company's
stock price soared, but had scaled back those efforts over the last
two years.
The company has bought Signalworks, a maker of IP (internet
protocol) telephony software and purchased security software
company Okena in January.