2006 Review: Broadband, Video Drive Telecom Deals

It was a whopper of a year for technology mergers and acquisitions – close to $600 billion, according to Dealogic. (via WSJ) For the fourth consecutive year, the telecom sector led the M&A activity, thanks to ongoing consolidation in the wake of turn-of-the-century meltdown. In 2006 it was AT&T-BellSouth merger (just approved by FCC); a year earlier it was Telefonica buying O2.

2006 was a hectic year for telecom and broadband mergers and acquisitions. Here is a list of some of the notable deals. The deal patterns indicate that Ericsson, Cisco, Motorola, Lucent-Alcatel are now the dominant equipment providers. They are increasingly shifting their business focus and trying to capture opportunities offered by the expansion of broadband and video networks.

(Huawei is missing from this list. The Chinese hardware vendor did partner with Nortel and bought DSLAM maker, Harbour networks for an undisclosed amounts of money.)

  • AT&T-BellSouth.
  • Lucent-Alcatel.
  • Cisco Systems-Scientific Atlanta, (also Arroyo.)
  • Ericsson-Marconi, Ericsson-RedBack Networks, $2.1 bilion.
  • Motorola bought Broadbus, Netopia, Kreatel, and TutSystems. They also bought Symbol Technologies and Good Technology.
  • The chip sector saw some hectic action as well.

    • Freescale Semiconductor went private in a $17.6 billion buyout led by Blackstone Group and other private equity investors.
    • Phillips Electronic’s chip division went private in a $10 billion-plus deal led by a KKR/Silver Lake consortium.
    • LSI Logic bought Agere Systems for $4 billion.
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