Intel to buy Shiva

Intel today surprised observers by agreeing to purchase Shiva, the 12-year-old US-based firm that specialises in remote access and virtual private networking (VPN) products. Although the direction is no shock, Intel had been frequently linked with another remote access firm, 3Com, in recent weeks. The move will ensure that Intel becomes a key contender in the category against the likes of 3Com and Cisco.

Under terms of the cash-for-stock deal worth about $185 million, Shiva will become an Intel subsidiary under the Network Products Division umbrella. Shiva's crown jewels are its VPN technology that lets multiple LANs be linked by the Internet, with huge cost-saving implications for enterprises.

"Networking plays a strategic role in Intel's vision of a billion connected computers," said Mark Christensen, vice president and general manager of the Network Products Division, in a prepared statement.

Shiva chairman and CEO James Zucco said the merger will simplify deployment for customers by offering a single point of contact for data networking. A teleconference is planned for 6pm today, UK time.

A year ago this month, Intel completed the acquisition of Dayna Communications, a supplier of networking equipment for the small business market. The firm has long had other interests in the remote access sector as a manufacturer of network interface cards, switches, hubs, systems management software and modems, and through initiatives such as the Wired for Management specification.