Cisco to Buy Chinese STB Biz

SAN JOSE, Calif., SHANGHAI, and HONG KONG -- Cisco® (NASDAQ: CSCO) today announced a definitive agreement to acquire the set-top box business of DVN (Holdings) Limited, (SEHK: 0500). Listed in Hong Kong with major operations in China, DVN is a market and technology leader in digital cable solutions in China and shares Cisco's vision of a high-performance, scalable and services-rich cable interactive platform extending into every home.

Under the terms of the agreement, Cisco will pay up to $44.5 million for the set-top box business of DVN. Of this amount, approximately $17.5 million will be paid up front, with an additional maximum amount of $27 million to be paid over four years based on the achievement of specific sales milestones. The acquisition is expected to close in the first half of calendar year 2010 subject to standard closing conditions, DVN shareholder approval and regulatory approvals.

In addition to the acquisition, Cisco has entered into a go-to-market alliance with the remainder of the DVN organization -- which will continue to be led by current DVN CEO Terry Lui -- in order to utilize the company's middleware and advanced applications as well as integration and support services. The alliance will provide joint customers with unparalleled end-to-end capabilities through the evolution from basic digital broadcast to advanced interactive services.

"Cisco and DVN have similar cultures that emphasize video innovation and a shared vision to enable multi-media connected homes across China," said Ken Klaer, vice president and general manager, International Cable Business Unit at Cisco. "With this acquisition, we will offer customers the powerful combination of DVN's products with the Cisco® IP Next-Generation Network (IP NGN) platform, and Cisco will be well positioned to engage in the largest digital transformation opportunity in the world today."

Cisco Systems Inc. (Nasdaq: CSCO)