3Com to buy Chipcom for $775 million; stock deal is part of trend toward consolidation in hot network market

Article Abstract:

3Com Corp announced that it will acquire rival Chipcom Corp for $775 million in stock in a sweetheart deal that will give 3Com access to Chipcom's technology, sales force, distribution channel and customers. The acquisition is part of an overall trend in the computer network equipment industry, which has witnessed spectacular growth in recent years. The deal stipulates that 3Com will swap 0.53 of its common stock for each Chipcom share, which is equal to about $39.55 per share. The acquisition price per share is 33% higher than Chipcom's closing share price on Wed Jul 26, 1995. Analysts characterize the 3Com move as a sweetheart deal because the offering price is far below Chipcom's high price of $60.50 in Oct, 1994. Chipcom's share price increased to $37.50 on Jul 27, 1995, an increase of 25%. To acquire Chipcom, 3Com must pay a $50 to $60 million charge. Analysts applaud the deal because it will give 3Com access to Chipcom's sales force, which specializes in large corporate accounts.

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Four makers of telecom equipment join to invest in project to speed up Internet

Article Abstract:

Juniper Networks, a new Silicon Valley manufacturer that aims to improve Internet communications speed, is receiving $40 million in investments from four telecom equipment manufacturing giants. Telecom AB LM Ericsson, Northern Telecom, a Siemens venture, 3Com and Worldcom's UUNET Technologies are four of the world industry's largest five competitors. Lucent Technologies also is investing in the project, according to industry insiders. Jupiter seeks to combine advanced chip technology and a switch router to process information at dramatically higher rates. Major public networks are presently reaching maximum speeds of around 622Mbps, but Juniper and other companies want to elevate speeds to at least 2.4Gbps. The proposed technology, with would have minimum throughput rates of 60 billion bits, would relieve Internet traffic. Juniper will receive competition Cisco's similar $330,000 Gigabit Switch Router, scheduled for release in mid-1998.

Computer network equipment industry, Network hardware industry, Product development, Internet, Telecommunications services industry, Telecommunications industry, Equipment and supplies, Company investment, Investments, Lucent Technologies Inc., LU, NT, Telefonaktiebolaget LM Ericsson, Juniper Networks Inc., Cooperative agreement for product development, Alliances and partnerships, Northern Telecom Ltd., UUNet Technologies Inc.

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3Com agrees to purchase Chipcom for $700 million

Article Abstract:

3Com Corp is planning to acquire Chipcom Corp for about $700 million in stock, a transaction that would result in the second largest manufacturer of computer network equipment. 3Com will be able to sell a greater variety of products to corporations that want to purchase equipment from a limited number of suppliers. The acquisition will be 3Com's tenth such transaction in the last several years and comes as Chipcom is experiencing a slowdown in its fast growth rate. Analysts say that 3Com is one of the fastest growing companies and is good at integrating newly acquired companies. In 1987, 3Com was a company with $156 million in sales that sold only PC adapter cards. It has since grown into a company with $1.3 billion in revenues with an expansive product line.

Local Area Network Equip, Local area networks

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