Cisco Said to Seek Partnerships With U.K., German Governments

Cisco Systems Inc. is in talks to forge partnerships with the governments of the U.K. and Germany that will test new networking products, train engineers and invest in local startups, people with knowledge of the matter said.

A deal will probably be similar to an alliance that Cisco signed in February with France, said the people, who asked not to be identified because the agreements haven’t yet been completed.

Cisco will provide more than $500 million in the U.K., on top of a similar amount that Cisco committed in 2011, while the company will invest $100 million to $500 million in Germany, one of the people said. The agreement with France was for $100 million.

The network-equipment maker has often sought large, multifaceted partnerships with governments that are seeking to make better use of the Internet and build up their domestic technology industries. Through such alliances, San Jose, California-based Cisco is able to get its products in front of key government buyers and also obtain early access to promising new technologies.

Hilton Romanski, Cisco’s chief technology officer, declined to comment on the talks with the U.K. and Germany.

“We believe we should have visibility into the best innovation there is, wherever it is, and these investment activities help us do that,” Romanski said in an interview.

Messages to the U.K. and German embassies in the U.S. weren’t immediately returned.

Cisco is renewing the partnership with the administration of British Prime Minister David Cameron because the company has exceeded the $500 million goal of the previous one, the person said.

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The partnership with France, announced by outgoing Chief Executive Officer John Chambers and Prime Minister Manuel Valls, included a commitment by Cisco to train 200,000 network engineers, and to do a “smart-city” pilot project to offer Internet-based services in an as-yet unnamed French city. Cisco also said it would help France strengthen its cybersecurity defenses, help build high-speed networks to support its domestic tech sector and invest in French startups.

Cisco also unveiled a $10 billion multiyear partnership with China on June 18, aimed at creating jobs, funding research and development, spurring innovation and making equity investments.

By forming partnerships overseas, Cisco is also able to find a way to use its cash held overseas. Only $2.6 billion of Cisco’s $54.4 billion in cash and cash equivalents was held in the U.S. in the company’s latest quarter. Any money brought back to the U.S. would incur taxes.

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