Cisco to Buy Linksys for $500 Million

Cisco Systems announced on Thursday intentions to purchase Linksys in a common stock deal valued at $500 million. The move represents Cisco's first foray into the home and small office networking market. Linksys, which currently sells more than 70 consumer network products, will become a division of Cisco helmed by Charlie Giancarlo.

"Fueled by consumer broadband adoption, the home networking space has experienced mass market acceptance. Linksys has captured a strong position in this growing market by developing an extensive, easy-to-use product line for the home and small office," said John Chambers, president and CEO of Cisco Systems, in a statement.

"The future possibilities for Linksys as a part Cisco are limitless," Linksys CEO Victor Tsao said. "Cisco's leadership in networking technologies combined with Linksys' focus on making networking easier will bring added value to our customers for many years to come."

The deal is expected to close in the fourth quarter of 2003.