Network equipment maker Juniper Networks has acquired NetScreen Technologies in an all-stock deal worth approximately $4bn (£2.1bn).
The acquisition will add NetScreen's network security products, including firewalls and VPN (virtual private network) technology, to Juniper's portfolio of high-end networking products.
NetScreen's technology will help Juniper better serve its customers by addressing network security concerns, said Juniper chief executive officer Scott Kriens.
The deal is expected to close in the second quarter of 2004 and must be approved by the shareholders of both companies.
The deal presents new opportunities for the combined company to reach large customers who are the focus of both NetScreen and Juniper. Netscreen's traditional strength in large enterprises will mesh well with Juniper's historical focus on internet service providers, incumbent local exchange carriers and the defence industry, Kriens said.
The growth of networked devices, from portable digital assistants to home entertainment systems is blurring the line between public and private networks.
The future will be less about focusing on specific markets than about ensuring the quality and security of data sent from source to destination, he said.
After completion of the acquisition, NetScreen's 900 employees will join Juniper's staff of 1,600 in a new security products group under the leadership of NetScreen president and chief executive officer Robert Thomas.
The initial focus of that group will be on meeting the demands of NetScreen's existing customers.
Juniper and NetScreen will combine their technologies into suites of products that combine core IP (Internet Protocol) routing with security and policy management features, extending the reach of security products from the network perimeter to the "heart of the network".
In recent months, NetScreen has been taking steps to increase the breadth of its security offerings. The company bought Secure Sockets Layer VPN maker Neoteris in November for $265m in stock and cash, adding that popular remote access technology to its portfolio.
Kriens called that acquisition a "spectacular move" and said that as part of Juniper, NetScreen will continue expanding its security offerings and focusing on solving complex network security problems.
Paul Roberts writes for IDG News Service