Cisco sells Linksys business to Belkin

Belkin has confirmed it has reached agreement to acquire Cisco's Linksys unit, in a deal that will give it a significant slice of the home and small business networking market.

Following the purchase, which is expected to close in March, Belkin will claim 30 percent of the US retail home and small business market.

"We're very excited about this announcement. Our two organisations share many core beliefs. We have similar beginnings and share a passion for meeting the real needs of our customers through the strengths of an entrepreneurial culture." said Belkin chief executive Chet Pipkin.

"Belkin's ultimate goal is to be the global leader in the connected home and wireless networking space and this acquisition is an important step to realising that vision."

Belkin is a privately held company that sells networking products to the consumer and small business market. The firm currently has over 1,200 employees based in 21 different countries.

The announced purchase will see employees from Linksys join the Belkin team. Linksys headquarters also looks to stay open following the investment.

Cisco bought Linksys in 2003 for $500m. The purchase was intended to put Cisco in the consumer marketplace. However, the company has started to step away from consumer electronics in recent years.

John Chambers, Cisco's chief executive, told investors in 2011 that Cisco would begin scaling back consumer operations to focus on its core businesses.

Since that time Cisco has axed its Flip Camera line of products and merged its Umi home videoconferencing division into a more business-focused department.

According to Cisco's head of corporate business development Hilton Romanski, the deal is a good for both Cisco and Belkin. The partnership will see Belkin grow in its market and see Cisco join a strategic partnership with the networking firm.

"Linksys will enhance Belkin's capabilities to meet the needs of original equipment manufactures (OEMs), as well as provide access to a large user base," wrote Romanski in a blog post.

"Belkin and Cisco intend to pursue a strategic relationship focused on a variety of initiatives including retail distribution, strategic marketing and products for the service provider market."

Cisco has been busy reorganising its businesses in recent months. Along with the Linksys deal, the firm is also bought mobile network management software developer Intucell for $475m earlier this month.