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Thu 1 Mar 2007 12:56 PM

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Ericsson jumps in with Tandberg bid

Telephone equipment maker Ericsson has made a US$1.4 billion offer to buy Norwegian video communications firm Tandberg in an effort to bolster its IPTV offering.

Telephone equipment maker Ericsson has made a US$1.4 billion offer to buy Norwegian video communications firm Tandberg in an effort to bolster its IPTV offering.

Ericsson's cash offer comes around six weeks after an bid of US$1.2 billion from Arris Group, a provider of broadband communication networks, was recommended by both Arris' and Tandberg's boards.

Arris Group and Tandberg had said they hoped to complete the takeover during the second quarter.

Ericsson already owns 11.7% of Tandberg and said investors holding a further 13% had indicated that they were willing to sell their stock.

The firm said the purchase of Tandberg would enable it to strengthen its position in the internet TV market.

Ericsson president and CEO Carl-Henric Svanberg said the combination of Ericsson and Tandberg would give it a "unique opportunity to offer complete IPTV solutions", enabling it to become a leading player in networked media for telecom, cable and satellite operators, as well as media companies.

"IPTV for cable and telecom operators is the biggest networked multimedia opportunity going forward," he said.

Arris has said it is reviewing the new offer, but is unlikely to put up much resistance to Ericsson's bid, according to Michiel Plakman, of asset management firm the Robeco Group.

"Tandberg TV will likely end up with Ericsson because it has more fire power and because Tandberg's existing clients will likely prefer Ericsson," Plakman said to Bloomberg newswire.

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