San Jose, Calif.--Cisco Systems has agreed to acquire privately held Cerent Corp., Petaluma, Calif., and Monterey Networks, Richardson, Texas, for a combined $7.4 billion in Cisco stock. With the acquisitions, Cisco is making its first move into the optical transport market. Both Cerent's and Monterey's products and services help technology providers make the migration from traditional circuit-based networks to cell- and packet-based networks. Under the Cerent agreement, 100 million shares of Cisco stock will be exchanged for all outstanding shares, options and warrants of Cerent not currently owned by Cisco; based on Wednesday's closing Cisco stock price of $68.63, the stock would have a value of $6.9 billion. The Monterey agreement stipulates that 7.3 million shares of Cisco will be exchanged for all outstanding shares, options, and warrants of Monterey not currently owned by Cisco; the stock exchanged would have a value of $500 million.