Cisco has agreed to acquire Starent Networks in a deal worth some $2.9 billion ($35 per share -- a 20% premium). Starent's technology allows mobile operators to deliver multimedia services like TV, VoIP, photos, video, and games to mobile devices. Cisco hopes the buyout will better prepare it to take on the ever-increasing demand for high-speed mobile Internet. The company predicts that by 2013 about 60% of the data traveling across mobile networks will be from videos.

Both companies hope to close the deal in the first half of 2010 upon regulatory approval and other typical closing conditions, at which point Starent will become Cisco's new Mobile Internet Technology Group, headed by Starent's president and CEO Ashraf Dahod. The companies will operate as separate entities until they finalize the deal.

This acquisition follows Cisco's move on October 1 to purchase Tandberg, a maker of videoconferencing systems, for an equally pricey $3 billion.