Global Times - Cisco buys cable box business unit from China's DVN

Cisco buys cable box business unit from China's DVN

Source: Global Times
[14:58 November 04 2009]
Comments

US computer networking giant Cisco announced it inked a deal Nov 3 with Hong Kong-based DVN Holdings Ltd. for the purchase of its cable box business unit worth $44.5 million, in the hopes of making inroads into the Chinese cable market.

Under the agreement, Cisco will pay $17.5 million in advance and the remaining $27 million by installments during the coming four years based on sales performance, with a commitment on both sides that services for cable-box customers will not be suspended during the purchasing period. The cable box business unit will continue to be under DVN's operation and not go to Cisco's International Cable Business Unit until the acquisition is completed.

The acquisition is expected to close in the first half of next year, pending approval by regulators and DVN shareholders, according to details released Tuesday by Cisco.

Terry Lu, DVN chief executive, said that Cisco and DVN combining resources "will ensure that Chinese consumers continue to receive superior digital services today and are provided with world-class advanced technologies moving forward."

According to Cisco, the Chinese cable market is reportedly the largest in the world with 160 million subscribers and is predicted to grow to as many as 200 million over the next three to five years. Approximately one-third of the China market has converted to digital cable and the Chinese government has mandated full digitization by 2015.

"With this acquisition... Cisco will be well positioned to engage in the largest digital transformation opportunity in the world today," said Ken Klaer, general manager of Cisco's International Cable Business Unit.

DVN Holdings Ltd. is a leading maker of boxes for delivering digital broadcasts and interactive online services to television sets in China, with the cable box business covering designation, purchase, logistics, marketing, sale and service.

Also, Cisco and DVN Holdings Ltd. have made a market alliance, to take advantage of the former's middleware, interactive application, technology integration and application service, and providing better end-to-end offers to their common clients.

"Cisco and DVN have similar cultures that emphasize video innovation and a shared vision to enable multimedia connected homes across China," said Klaer, indicating common ground for the two companies' cooperation.