Logitech ends talks to buy Plantronics for $2.2 bn

Logitech, a Swiss manufacturer of keyboards and webcams, has dropped its talks to buy Plantronics, a U.S. maker of Bluetooth earpieces and gaming headsets, for $2.2 billion, Reuters reported.
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The development had reflected the strategy of Logitech and Plantronics to cut manufacturing costs following the introduction of tariffs on imports from China into the United States.

The deal would have been by far Logitech’s largest acquisition and would have illustrated the company’s push to diversify its business.

Plantronics purchased U.S. video-conferencing equipment maker Polycom for $2 billion in July.

Plantronics in a statement said it had discussed the opportunity with Logitech. But it decided to stop negotiations.

Logitech’s and Plantonics’ businesses have been under pressure as a result of new offerings being developed, not just from network gear makers such as Cisco Systems, but also from major technology companies such as Microsoft and Google owner Alphabet.

Logitech has been countering declining sales of personal computers by focusing on consumer accessories that are benefiting from the growth of cloud computing, such as gaming, music, smart home connectivity and video conferencing.

Last year, Logitech, which was founded in 1981, acquired ASTRO Gaming for $85 million in cash to expand in the video game sector.

Santa Cruz, California-based Plantronics, which was founded in 1961, makes unified communications systems, wireless headsets, conferencing systems, and some software, which it sells to businesses and consumers.

Private equity firm Siris Capital Group owns 16 percent of Plantronics, making it its largest shareholder.

Logitech International reported sales of $691 million (+9 percent) with operating income of $65 million in the second quarter of fiscal year 2019. Logitech achieved double-digit growth in both Gaming and Video Collaboration and solid growth in PC Peripherals categories.

Plantronics posted revenue of $483 million in the second quarter ended September 30, 2018, growing over 100 percent from the prior year as a result of the Polycom acquisition. Gross margin was 31.6 percent compared with 51.2 percent. Operating loss was $86 million compared with operating profit of $30.2 million.