Cisco completes £1.6bn WebEx acquisition

Cisco Systems has completed its acquisition of WebEx Communications, entering the online collaboration services business through a $3.2bn (£1.6bn) deal.

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Cisco Systems has completed its acquisition of WebEx Communications, entering the online collaboration services business through a $3.2bn (£1.6bn) deal.

Cisco will maintain WebEx's current business model of selling subscriptions for a web-based service to enterprises that do not want to buy or build a collaboration system of their own, especially small and medium-size organisations. The company is now a wholly owned subsidiary of Cisco, which plans to retain all its employees, said Cisco spokesman John Noh.

The acquisition further extends a networking equipment giant that is increasingly positioning itself as a software and services company. It followed buyouts of two social-networking companies and all the technologies will complement each other, Chief Development Officer Charles Giancarlo said.

The WebEx service lets companies share presentations, applications and other data online, either asynchronously or in real-time sessions. The buyout will help Cisco compete against Microsoft and other vendors in collaboration and communication, and WebEx technology could also enhance Cisco's Unified Communications portfolio, according to Giancarlo.

WebEx also offers a suite of productivity applications under the WebOffice brand, but Cisco does not plan to compete against desktop application suites such as Microsoft's Office or Google's Google Apps, he said.

The deal closed as expected in Cisco's financial fourth quarter. It was the first deal the company has made through a tender offer, in which the would-be acquirer publicly invites shareholders to sell their shares at a certain price at a given time, Cisco's Noh said. More than 90% of WebEx shares were tendered. A tender offer generally can be finished more quickly than other types of deals, such as cash purchases and share swaps, and makes it easier to offer attractive terms to employees in order to keep them on board, he said.

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