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John Chambers, Cisco Systems Inc.'s chief executive, says the heady days of brisk mergers-and-acquisitions activity are over for the networking titan.
During Cisco's annual meeting in Santa Clara, Calif., on Tuesday, Dec. 3, Chambers said partnerships will outstrip M&A in importance over the next decade, according to a UBS Warburg report issued after the meeting. Cisco did not return phone calls by press time.
Analysts, however, were slightly skeptical. Wojtek Uzdelewicz, an analyst with Bear, Stearns & Co., believes Cisco will not abandon its policy of jumping into new markets by acquiring startups.
He said M&A is a practical way to replace research and development costs with one-time acquisition charges, which Wall Street tends to ignore when analyzing performance. "In these instances, M&A artificially helps margins," Uzdelewicz said.
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