Ericsson Offers to Acquire Tandberg Television
March 2, 2007
Ericsson has made an unsolicited offer to acquire Tandberg Television for $1.4 billion in cash. The Swedish cell phone company currently owns 11.7 percent of Tandberg, based in Oslo.
Ericsson's proposal tops a recent $1.2 billion offer made in January by Arris Group Inc., a telecom infrastructure provider out of Suwanee, Ga.
Ericsson said the acquisition would be a major step toward a world leadership position in IPTV. It would also expand Ericsson's customer base to include cable and satellite operators, as well as broadcasters.
Carl-Henric Svanberg, president and CEO of Ericsson, said, "IPTV for cable and telecom operators is the biggest networked multimedia opportunity going forward."
Ericsson said a large part of the expected traffic growth in the world's mobile and fixed networks is expected to be generated by TV services. Tandberg is a leader in video head-end, encoding and compression technology, including MPEG-4.
Tandberg Television said in a statement that the board of directors would review the deal being offered upon receipt. Until then, the company would make no further comment on the announcement by Ericsson.
Tandberg Television employs 870 people, including more than 370 video and software engineers, according to Ericsson. Tandberg's revenues in 2006 were $350 million with a growth of 21 percent. Tandberg Television has been listed on the Oslo Stock Exchange, Norway, since 1997. The European and North American operations are headquartered in Southampton, England and Atlanta.
Upon completion of this transaction, Tandberg Television would become a wholly owned subsidiary of Ericsson. The acquisition will be conducted by means of a public voluntary cash offer for all of the 80,529,876 outstanding shares in Tandberg Television.
Completion of the cash offer is subject to conditions and is expected before the end of Q2 2007.