Juniper Networks Inc. will buy the Unisphere Networks Inc. unit of Siemens for about $740 million in cash and stock in a move to expand the telecom manufacturer's line of equipment that directs traffic on the Web. Juniper is the No. 2 maker of equipment that directs Internet traffic, behind the granddaddy of telecom equipment providers, Cisco Systems Inc.
The deal, which Juniper said will dilute earnings this year, will help the Sunnyvale, Calif.-based company compete with Cisco, one analyst said. It will combine Juniper's strength in network cores, or "long-haul" long-distance lines and systems, with Unisphere's focus on the "edge" of networks, where telecom service providers connect to customers.
The combined market share of the companies based on first-quarter revenue would have been 18%, second to Cisco's 59%.
Investors were cautious. Juniper shares fell 31 cents to $9.54 on Nasdaq.