Cisco-Tandberg Deal Likely Not in Peril

(Updated to include results of Cisco's tender so far for Tandberg shares).

NEW YORK (TheStreet) -- As Oracle (ORCL Quote) and Sun (JAVA Quote) get a good grilling, the big bad European Union is not likely to spoil Cisco's (CSCO Quote) deal for Norway's Tandberg.

Europe's antitrust regulators have held up the pending $7.4 billion Oracle merger with Sun, with a formal objection to the plans for the two database software products set to combine.

But the commission isn't likely to find any obvious competitive conflicts should Cisco and Tandberg's video merger reach review, says Peter Crowther, antitrust attorney with Dewey & LeBoeuf in London.

"There's no direct competitive constraint between the two," says Crowther. "It's basically a bolt-on to Cisco's existing capabilities. It brings the video system in house rather than doing it on an outsource basis."

"It's difficult to see how the commission would object to it," Crowther says.

Cisco Chasing Google

Cisco agreed last month to use $3 billion of the $29.1 billion in cash it has stashed overseas to add Tandberg to its video-conferencing operation.

Meanwhile, in a press release issued Tuesday, Cisco said it holds rights to acquire 10,493,298 shares in Tandberg, representing 9.37% of Tandberg's shares and voting rights. Cisco's takeover bid is contingent on the company acquiring 90% of Tandberg's shares. A group of Tandberg holders is seeking a higher bid.

Cisco said it would evaluate whether or not to withdraw its offer after the tender closes on Nov. 18.

Cisco already owns WebEx, a premier Internet video meeting service. The move would dwarf smaller players in the sector such as Radvision (RVSN Quote) and No. 2 Polycom (PLCM Quote), but it wouldn't be the first market in which Cisco took a dominant position.

Don't expect the EU to play the role of giant killer here, though. The regulators have flagged very few deals in tech.

The most notable rejection was GE's (GE Quote) failed bid for Honeywell (HON Quote) in 2001. And prior to the GE move, the EU objected to Boeing's (BA Quote) acquisition of rival McDonnell Douglass in 1997, but a year later the European regulators approved of the deal.