Harmonic Agrees to Acquire C-Cube

Harmonic Inc., a maker of fiber-optic equipment that speeds up cable TV systems for Internet use, agreed to buy C-Cube Microsystems Inc. for $1.7 billion in stock to expand into video compression.

Harmonic would pay 0.5427 share of its stock for each share of C-Cube, which first must sell its semiconductor business or spin it off to shareholders. That values the remainder of C-Cube at $32.49 a share. On Nasdaq, shares of Milpitas, Calif.-based C-Cube rose $1.19 to close at $40.38, and shares of Sunnyvale, Calif.-based Harmonic declined $5 to close at $59.88.

The market for video compression is a potential growth area as networks become fast enough to carry movies on demand and other sophisticated video services.