Cisco to buy set-top box business in China

* Deal valued at up to $44.5 mln

* Parent company DVN listed in HK, operations in China

* Deal to help Cisco compete in China cable market -exec

(Changes dateline, adds byline and Cisco executive comments)

By Ritsuko Ando

NEW YORK, Nov 2 (Reuters) - Cisco Systems Inc (CSCO.O: Quote, Profile, Research) said on Monday it has agreed to buy the set-top box business of Hong Kong-based DVN (Holdings) Ltd (0500.HK: Quote, Profile, Research) for as much as $44.5 million, as the world's top network equipment maker continues its acquisition spree.

The move, Cisco's first acquisition aimed at the Chinese market, also shows the company stepping up investment in a fast-growing market where it faces competition from rivals like Huawei Technologies Co Ltd [HWT.UL]. DVN sells digital broadcasting equipment and services in China.

Cisco said that China has the most cable subscribers in the world. About one third of 160 million to 170 millions are using digital cable, and the government has mandated that all users shift to digital set-top boxes by 2015, it said.

"That presents for Cisco and other competitors in the market a very, very compelling market opportunity," said Hilton Romanski, vice president of corporate development for Cisco.