Ericsson to buy Redback

$3 billion purchase negotiated

Ericsson has agreed to acquire Redback Networks for US$2.1 billion (NZ$3.01 billion).

Redback makes routers for delivering voice, video, data and mobility services at the outer edge of carrier networks. It will become a wholly owned subsidiary of Ericsson but will retain its management team.

Carriers that once delivered simple DSL internet access are now delving into VoIP, video and other services. As a greater variety of carrier services is delivered via IP networks, the devices closest to end-users who consume those services have a more complex job to do.

Founded in 1996, Redback has beaten some bigger rivals by focusing on multi-service router technology. After the acquisition, which is expected to close early this year, it will accelerate its product development and gain global reach and financial resources, Redback says.