Cisco to Buy Starent for $2.9 Billion

October 13, 2009

Merger Mania continues. This time, it's Cisco's (CSCO) turn. The tech stalwart has agreed to Starent Networks (STAR) for $35 a share or $2.9 billion. To show you how strong Merger Mania is, this is Cisco's second big deal of the month. They already agreed to buy Norway's Tandberg ASA for about $3 billion.

I'm glad to see Merger Mania make a comeback. Earlier I wrote:

Mergers are very healthy sign for investors. It tells us two things. First, that companies are out there willing to spend money if the price is right. Only a few months ago, no one was willing to spend any money no matter what the price. This also tells us that there's plenty of cash out there waiting to pounce.

This is a smart move for Cisco. Although I currently rate it a Hold, I rate Starent a Strong Buy.

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