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Summary:

Not that you can take it to the bank, but the word from Sweden is that Juniper is going to be taken over by Ericsson. It is hard to imagine why Juniper, despite its recent problems, will be willing to sell out? Juniper has a market […]

Not that you can take it to the bank, but the word from Sweden is that Juniper is going to be taken over by Ericsson. It is hard to imagine why Juniper, despite its recent problems, will be willing to sell out? Juniper has a market capitalization of around $11.4 billion, while Ericsson commands about $55 billion in market valuation. You can read the AFX news report (via Forbes) on this whole rumor – right here. Any thoughts?

Update: Picking through my sources, I have been manage to piece together that all this just might be talk. Given the current issues with Juniper, their management turnover, Juniper is risky buy. In addition, the cost of a deal would be highly dilutive for Ericsson. The impact on Ericsson stock could be huge. Wall Streets believe Ericsson however might be going IP shopping. So why the rumors? Apparently, Juniper is getting a big win in China, but under the cover of Ericsson. In case you missed it – Juniper won a $120 million contract from Microsoft (over two years.) On good news front, Juniper has dropped its lawsuit against messageboard posters.

Update #2: Juniper doesn’t fit the bill in terms of production profile, market capitalization or valuation, says Dresdner Kleinwort Wasserstein.

  1. i’d be very surprised given ericsson is just starting to thrive again after some very tough years. if it did materialize, it may just set off the long-awaited consolidation among the large telecom equipment makers.

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  2. On the surface, it looks like a very good move. Cisco has an end-to-end solution now that makes them very strong.

    An Ericsson and Juniper merger would do much the same.

    Excellent move iMO.

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  3. Leaves Nortel as a smaller player.

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  4. I’d say that Ericsson are in the IP fishing, but Juniper is a big fish to land. Still, if you’re going to buy, buy big. My first instinct was that it seemed like a good move for Ericsson, but you’re right about the dilutive effect, though there have been many deals that are more dilutive than this would be.

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  5. I’d say that Ericsson are in the IP fishing, but Juniper is a big fish to land. Still, if you’re going to buy, buy big. My first instinct was that it seemed like a good move for Ericsson, but you’re right about the dilutive effect, though there have been many deals that are more dilutive than this would be.

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  6. no chance…

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  7. Given all the consolidation in the telecom service provider segment, this was bound to happen and seems like a smart strategy to take on Cisco and low cost Chinese competitors.

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  8. Given the trend in the Telecom industry (convergence of wired/wireless/IP) I’d say it is a smart move by Ericsson to buy a company like Juniper. Ericsson has been reluctant to go into the “computer” side of the communications business before, but that is not the case anymore.

    I can’t really say anything about the rumor itself other than it makes sense. I have not heard anything about this except from what’s in the media (I work for Ericsson by the way, but nowhere near where such discussions are going on, so…and even if I HAD heard anything, I wouldn’t be able to comment anyway ;-)

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  9. An excellent match. They both have blue boxes.

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  10. It would start the big consolidation crunch, exactly the reverse of the 1999 bubble burst.

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