Cisco Sells Linksys Home Router Unit to Belkin

Cisco Systems Inc. (CSCO), the world’s biggest maker of computer-networking equipment, has sold its Linksys home-router unit to Belkin International Inc., shedding another consumer business as it focuses on sales to businesses.

“Linksys has long been an important member of the Cisco family and we are confident that we have found the best buyer in Belkin,” Hilton Romanski, vice president of business development for Cisco, wrote in a blog post.

The deal is expected to close in March and will give Belkin about 30 percent of the U.S. market for home and small business networking, Belkin said in a statement on its website. The purchase price wasn’t disclosed by either party. The two companies will pursue a “strategic relationship” focused on initiatives including retail distribution, and products for the service provider market, Belkin also said.

Bloomberg News reported in December that Cisco had hired Barclays Plc to find a buyer for Linksys, citing people familiar with the situation. The unit was likely to fetch much less than the $500 million Cisco paid for it in 2003, because it is in a mature consumer business with low margins, said the people. Linksys was a primary component of a Cisco division where sales have fallen 35 percent over the past two years.

Chief Executive Officer John Chambers has eliminated 7,800 jobs over the past two years and closed businesses such as the Flip video-camera unit, exiting consumer businesses to focus on higher-margin sales to businesses.

Cisco said yesterday it agreed to buy Intucell Ltd., based in Ra’anana, Israel, for about $475 million, gaining technology that helps wireless carriers manage their networks. In November, the company said it would pay $1.2 billion for closely held Meraki Inc., adding technology that helps businesses manage Wi- Fi networks remotely.

Belkin, which is closely held, is based in Playa Vista, California, and has operations and sales in more than 100 countries, according to its statement.

To contact the reporter on this story: Jordan Robertson in San Francisco at jrobertson40@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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