Cisco may pay $2.5bn for Data Storage company

Cisco Systems (Nasdaq:CSCO) has said that it may pay as much as $2.5bn (€2.5bn) for Andiamo Systems Inc, a private network data storage company.

The deal, which is expected to be a stock-for-shares swap, is not expected to be closed until 2004 as Cisco want to 'wait and see' if indeed Andiamo can become a key player in the market.

The network data storage market which is currently worth around $1.2bn (€1.2bn) is set to almost quadruple in the next four years, and Cisco is betting that this acquisition will enable it grab a substantial proportion of this market.

Cisco already owns a stake in Andiamo. Its share price rose 0.07 percent to $15.74 on the back of the news.