Cisco Says 'No Way' to Nokia Rumor

So, about that merger rumor... what does John Chambers really think?

August 10, 2005

2 Min Read
Cisco Says 'No Way' to Nokia Rumor

While he didn't mention Nokia Corp. (NYSE: NOK)by name, {dirlink 2|19} (Nasdaq: CSCO) CEO John Chambers used every clue at his disposal yesterday to douse the rumors of his firm acquiring the Finnish company.

Rumors of a possible Nokia acquisition sprang up over the weekend, and Cisco broke its usual "no comment" mode to ridicule the theory, which many analysts didn't like anyway (see Silly Season Kicks Off). And yesterday, Chambers delivered a gentlemanly Southern rant on the subject at the end of Cisco's earnings call (see Cisco Sparkles, Investors Pout).

"It is extremely unlikely for us to ever do a large acquisition. My view is, most all of them fail," Chambers said.

Chambers described Cisco's ideal acquisition target as being just about the opposite of publicly traded, 55,500-employee Nokia. "We prefer small acquisitions, private. Ideal target: 100 to 200 people," Chambers noted. He added that Cisco likes an acquiree to be in the early stages of revenues; Nokia fits that bill like Tatum O'Neal fits her old Bad News Bears uniform.

Not convinced? There's more: "We like geographic proximity, similar culture, and we like an environment that is already in a location where we have a very large presence." So... not Finland?

"While we do not want to get in the habit of commenting on rumors, I was surprised the credibility the market gave to some of the recent rumors," he said.

What could be happening, he added, is a strategic partnership, something similar to what Cisco has going with EMC Corp. (NYSE: EMC) or IBM Corp. (NYSE: IBM) -- not that such a deal with Nokia is necessarily brewing.

Of course, Chambers is too savvy to ever say "never" in front of press and analysts. Taken literally, his comments leave open the possibility of a Nokia acquisition. So, the rumor mill may yet spin on.

— Craig Matsumoto, Senior Editor, Light Reading

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