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Cisco to sell Linksys business to Belkin

Networking business will change hands again
Fri Jan 25 2013, 10:43
A Cisco logo on a building

ELECTRONICS HARDWARE MAKER Belkin is set to acquire the Linksys business from Cisco.

Cisco will sell off its home networking division for an undisclosed amount. The deal is expected to be completed by March of this year. Following the purchase Belkin will own 30 per cent of the US retail home and small business market.

"We're very excited about this announcement. Our two organizations share many core beliefs. We have similar beginnings and share a passion for meeting the real needs of our customers through the strengths of an entrepreneurial culture." said Belkin CEO Chet Pipkin.

"Belkin's ultimate goal is to be the global leader in the connected home and wireless networking space and this acquisition is an important step to realizing that vision."

Belkin is a privately held company that sells networking products to the consumer and small business market. The firm presently has over 1,200 employees based in 21 different countries.

The purchase will see employees from Linksys join the Belkin team. Linksys headquarters will stay open following the investment.

Cisco bought Linksys in 2003 for $500m. The purchase was intended to put Cisco into the consumer networking market. However, the company has started to step away from consumer electronics in recent years.

Cisco CEO John Chambers told investors in 2011 that Cisco would begin downgrading operations to focus on its core businesses.

Since that time Cisco has axed its Flip Camera line of products and merged its Umi home videoconferencing division into a more business-focused department.

According to Cisco's head of corporate business development Hilton Romanski, the deal is a win-win for both Cisco and Belkin. The partnership will see Belkin grow in its market and see Cisco join a strategic partnership with the networking firm.

"Linksys will enhance Belkin's capabilities to meet the needs of original equipment manufactures (OEMs), as well as provide access to a large user base," wrote Romanski in a blog post.

"Belkin and Cisco intend to pursue a strategic relationship focused on a variety of initiatives including retail distribution, strategic marketing and products for the service provider market."

Cisco has been busy reorganizing its businesses in recent months. Along with the Linksys deal, the firm has also bought mobile network management software developer Intucell. Cisco made the purchase for $475m earlier this month. µ

 

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