Digital Equipment has agreed to sell its once high flying networking division to Cabletron Systems for $430 million in cash and stock.
The deal comes after months of speculation over the future of the Network Products business, despite consistent denials from Digital that it would sell. The unit will become a Cabletron company and add some products from the Cabletron line but retain the Digital brand.
"Working with Cabletron, we will continue to provide our customers with the world-class network products they have come to expect from the Digital brand," said Robert Palmer, chairman of Digital.
However, only last month Digital denied it was contemplating any sale and issued a private assurance to its channel that it would retain the networks division to help drive its other businesses.
"Our mission statement is to build network solutions - it would be rather difficult to do this without products. We want to be the number one switch vendor," said the confidential statement.
The networking business has consistently been one of Digital's best performing businesses but has faced increased competition from other network hardware vendors and has lacked a solid product line in 100Mbps Ethernet technology to which many users are upgrading.
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