Ericsson announced today a bid to acquire Tandberg Television for NOK 106 (USD 17.32) in cash per share for a total price of approximately SEK 9.8 billion (USD 1.6 billion).
Ericsson's CEO Carl-Henric Svanberg said that a merger would solidify the company's IPTV offering and move the company into a world leadership position in IPTV. "Tandberg's leading TV technology and customer base and our global presence and strong position in IP networks and IMS, will create a leading player in networked media solutions for telecom, cable and satellite operators as well as media companies."
The merger would also expand Ericsson's customer base to include cable and satellite operators as well as broadcasters.
The bid also represents a premium of 10.4 percent or NOK 10 per share to the
proposed mixed cash/share offer announced January 15, 2007 by Arris.
A large part of the expected traffic growth in the world's mobile and fixed networks is expected to be generated by TV services. Tandberg is a world-leader in video head-end, encoding and compression technology critical to maximize picture quality while minimizing bandwidth in video applications. This technology is a key part of IPTV solutions. Tandberg is particularly strong in MPEG-4 which is critical for cost effective delivery of High Definition TV. In addition, Tandberg offers on-demand and interactive video solutions.
With the majority of sales in cable/satellite and the growing telecom business, Tandberg has built a premiere customer base with customers in more than 100 countries. The company has over 200 patents granted. The European and North American operations are headquartered in Southampton, UK and Atlanta, US.
Carl-Henric Svanberg went on to say, "IPTV for cable and telecom operators is the biggest networked multimedia opportunity going forward. Ericsson and Tandberg Television is a strong combination with a unique ability to offer complete IPTV solutions."
Upon completion of this transaction, Tandberg Television will become a wholly owned subsidiary of Ericsson. In combination with Ericsson's existing products the combined companies will be uniquely positioned in offering complete IPTV solutions.
The acquisition will be conducted by means of a public voluntary cash offer for all of the 80,529,876 outstanding shares in Tandberg Television, which values all the outstanding shares to NOK 8.5 b.
Ericsson owns 11.7 percent of all shares outstanding in Tandberg Television. Furthermore, holders of approximately 13 percent of the outstanding shares and votes of Tandberg Television have agreed to tender their shares in the bid.