Why is Cisco looking to buy Bae Energy?
By KATHLEEN BROWNSTEIN, APL Staff writerCORPORATE AND MEDIA HEADLINESDEC.
16: Cisco Inc. is planning to buy the Bae energy-management business that has been a core component of China’s energy policy, The Wall Street Journal reported Thursday.
Cisco is buying Bae for about $12.4 billion, according to people familiar with the matter.
Cisco, which acquired Bae in 2014 for about 1.5 times its cash, is focused on building a global energy-services business that competes against Amazon, Apple and Google in a global marketplace.
The company is working on several energy-related projects in China, one of them said to be its first deal in the country.
The deal will create a company with a network of more than 100 facilities that have a combined capacity of 1.7 million megawatts of power, a person familiar with Cisco’s plans told the Journal.
It would be the largest energy company to buy energy-based technology from a Chinese company in the past decade.
A Cisco spokesman did not immediately respond to a request for comment.
The company will focus on building and operating the BAE Energy operations and will be a key investor in Bae’s growth, the person said.
The people, who were not authorized to speak publicly, spoke on condition of anonymity because they were not permitted to discuss the company’s plans.
Bae’s energy operations have been among the world’s largest, but it has struggled to compete in the global energy market, where companies like Google and Amazon are increasingly investing in renewable energy.
The world’s two largest energy companies have been seeking to expand into the energy sector in recent years.
Coke and Coca-Cola have signed deals with Bae to provide energy-storage capacity in their beverage operations, and Coca Cola plans to expand its renewable energy project in China.
The two companies have invested $1.4 trillion in renewable-energy projects in the world.