Ericsson has made an aggressive move in acquiring Redback Networks for $2.1 billion. The deal serves to edify the increasingly important role IPTV plays in the telco industry. Ericsson characterized the price tag as a 60 percent premium above the 90-day average for Redback stock. The acquisition will also put Ericsson within shooting range of Cisco and Juniper.
The deal follows Ericsson's acquisition of some of Marconi's assets last year, which set off a wave of mergers and acquisitions in the networking sector. The Marconi deal opened up deals for Ericsson throughout Europe, and the Redback deal will pave the way for IPTV deals in the U.S. Ericsson has had a slow but sure entrance into IPTV during the past year, as it looks to an IMS architecture as the key to the service. Well, this acquisition could put the company on the fast track by as early as mid next year.
For more on Ericsson's acquisition of Redback:
- see this WSJ article (sub. req.)