If Siemens doesn’t buy 3Com, which datacoms kit builder will it acquire instead? Siemens’ chief executive Heinrich von Pierer’s denial, on Monday, that the German electronics manufacturer planned to acquire 3Com, has only heightened expectations that the company will move on another datacoms player soon – possibly Newbridge Networks.
Von Pierer, speaking at the announcement of Siemens’ flotation of its Infineon semiconductor business, said Siemens will continue to cooperate with its California datacoms partner but, although acquisitions in the sector are still on the cards, 3Com is not said to be among them. Instead, some observers feel, the company is now more likely to make a move on Newbridge Networks.
The troubled Canadian switch maker, whose ATM products are rebadged by Siemens, has seen its share price slide this year as order fulfillment problems have seen it miss analyst expectations for two consecutive quarters, with every prospect that the fourth quality will be little better. With Ascend’s acquisition by Lucent Technologies likely to be confirmed soon, and GEC’s acquisition of Fore Systems to follow shortly after, Newbridge is the last major carrier-class ATM switch maker left in play. Given the acquisitiveness of the German company’s rivals in the telco equipment space, if Siemens waits much longer it runs the risk of seeing its chief ATM supplier falling into competitive hands.
In March Siemens said it planned to invest $1bn in the datacoms market and to set up a Unisphere Solutions Inc in Burlington, Massachusetts, to provide the an integration focus for further datacoms acquisitions and co-operative ventures. At the same time, Siemens unveiled the acquisitions of Castle Networks, a Westford, Massachusetts VoIP gateway maker; Argon, which makes high-end routers in Littleton, Massachusetts; and Accelerated Networks, Moorpark, California, which makes enterprise class multimedia application servers. Siemens did not disclose what it paid for these companies, but the total is thought to be around $600m.
That leaves little over to chase Newbridge which, present problems not withstanding, would command a multi-billion dollar price tag in the current bull market for datacoms players. However, with ATM switches set to provide the core for the next generation public network, at what price can Siemens afford not to play and still present a serious infrastructure offering to its telco customers?
