Cisco's $5 Billion NDS Deal Gets Euro OK


The European Commission cleared Cisco Systems' proposed $5 billion bid for U.K.-based NDS Group, concluding that the transaction "would not raise competition concerns," marking the final regulatory approval for the transaction.

The deal, announced in March 2012, is expected to close in the second half of 2012. The NDS acquisition would be Cisco's biggest acquisition in the sector since its $6.9 billion takeover of Scientific Atlanta in 2006.

"Cisco worked cooperatively with investigators at the European Commission, the Antitrust Division of the U.S. Department of Justice, and competition enforcement agencies in Brazil, Israel, Serbia, Turkey and the Ukraine, all of which reviewed Cisco's acquisition of NDS," Cisco spokeswoman Robyn Jenkins-Blum said. "Cisco European Commission approval was the last required regulatory approval, and the parties look forward to closing their transaction in the near future."

The European Commission, in announcing approval of the deal Tuesday, said its investigation "confirmed that the merged entity would continue to face competition from a number of strong competitors and that customers, namely pay-TV providers, would continue to have alternative suppliers in all markets concerned," including set-top boxes, conditional access and electronic program guides.

The commission said Cisco and NDS have "only limited overlaps" in hardware and software products at the worldwide level, and even less in the European Economic Area (EEA).

NDS would bulk up Cisco's software offerings for cable, satellite and telco TV operators and would give Cisco one of the most widely deployed conditional-access systems for encrypting and authenticating TV programming.

NDS will "significantly increase the speed with which we can help our service providers and a broader set of media players deploy and monetize next-generation video experiences," Cisco chairman and CEO John Chambers said on the company's earnings call in May.

In the U.S., NDS customers include DirecTV, Cox Communications and Cablevision Systems. London-based NDS boasts a strong client roster outside the U.S., including in emerging markets like China and India.