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Gores Group Eyes Polycom Acquisition

(Reuters) – U.S. private equity firm The Gores Group is mulling a merger between its unit Siemens Enterprise Communications and videoconferencing company Polycom Inc (PLCM.O), the Financial Times said, citing people familiar with the situation.

The newspaper said Polycom’s talks with Apax, which fell through earlier this week, had prompted Gores to send the company’s Chief Executive Officer Robert Hagerty a letter asking for a meeting to discuss a potential merger with Siemens Enterprise.

On March 23, sources told Reuters that private equity firm Apax Partners [APAX.UL] had not made an offer to buy Polycom.

Industry experts told the paper that a merger between Polycom and Siemens Enterprise has the potential to cut costs and reduce the salesforce.

The Gores Group and Europe’s biggest engineering conglomerate Siemens (SIEGn.DE) had signed a joint venture deal in 2008, which gave the private equity firm a 51 percent stake in Siemens Enterprise Communications.

Polycom, which planned to counter market erosion resulting from rising consolidation in the videoconferencing space by signing partnership deals, had recently inked a partnership deal with Siemens Enterprise Communications.

Polycom and The Gores Group could not be immediately reached for comment by Reuters outside regular U.S. business hours. (Reporting by Anuradha Ramanathan in Bangalore; Editing by Muralikumar Anantharaman)