July 24, 2015
Technicolor plans to acquire Cisco’s television set-top business for about $450 million in cash and $150 million in Technicolor shares. Chuck Robbins, who replaces John Chambers as CEO of Cisco next week, said the sale represents the first in a series of planned changes. “We will continue to make decisions to prioritize our portfolio and our investments to accelerate our business,” he wrote, noting that internal efforts associated with cloud services and the Internet of Things would be more widely distributed across Cisco’s engineering, sales and services units.
“These changes will allow us to scale these businesses as we see increased customer engagements globally,” Robbins wrote on the Cisco blog.
“The deal with the French company closes Cisco’s 10-year involvement in a business that sprung from one of its most costly acquisitions,” reports The Wall Street Journal. “The Silicon Valley giant in 2005 announced a $6.9 billion deal to buy Scientific-Atlanta Inc., which sold products used in homes as well as equipment for cable providers’ central offices.”
“Cisco, while shedding the business that sells products like set-top boxes and cable modems, said it planned to continue selling products to carriers and would collaborate with Technicolor to develop video and broadband technologies,” adds WSJ.
The sale of Cisco’s SP Video customer premise equipment (CPE) business to Technicolor is expected to close by the end of this year or early 2016.
Robbins described the sale as “a win for us, a win for Technicolor, and a win for our customers, partners and employees.”