Logitech International SA (LOGI) dropped its plans to acquire Plantronics Inc. (PLT) over price issues, according to a report by Reuters. Both companies held discussions and although the initial price was $2.2 billion, Logitech was said to have offered more than $3 billion. Logitech decided to abandon the proposal after failing to reach an agreement on the final price.
Logitech manufactures keyboards and other computer accessories and has a market value of $5.6 billion. This acquisition would have been Logitech’s biggest one so far and would have helped in expanding its business into other product offerings. Cloud computing has been gaining momentum and this has benefited Logitech’s computer peripherals business.
During its most recent quarter, Logitech posted a 9% increase in sales and a 15% increase in EPS. The company saw healthy growth in its gaming, video collaboration and PC peripherals businesses.
Plantronics, a maker of headsets and other audio communication devices, will now focus on solidifying its performance as a standalone company. In its most recent quarter, Plantronics generated $483 million in net revenues, which benefited from the Polycom acquisition that was completed in July.
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Both Logitech and Plantronics have been facing tough competition from several major technology companies like Cisco (CSCO) and Microsoft (MSFT). The deal would have helped both companies in broadening their product offerings and in lowering manufacturing costs.
Logitech’s stock was up 2.6% in premarket trading on Monday while Plantronics’ shares dropped over 6%.