EU OKs Ericsson To Buy Most Of Marconi Assets
BRUSSELS -(Dow Jones)- The European Commission Tuesday cleared Swedish telecommunications equipment manufacturer L.M. Ericsson to buy most of the assets of Marconi PLC, a U.K. peer.
Ericsson will pay roughly SEK16.8 billion (EUR1.8 billion) for most of the telecommunications equipment businesses operated by Marconi, as well as the Marconi trademark. The assets represent about 75% of Marconi's turnover.
The Commission's investigation found there were sufficient competitors to prevent the newly merged company from dominating the market.
Ericsson is the world's largest mobile systems supplier and a leading telecommunications equipment and service provider. It produces mobile phones and related devices through its joint venture Sony Ericsson. Roughly 1,000 networks in more than a 100 countries use Ericsson equipment.
Marconi, which came close to collapse five years ago, also operates in the telecommunications sector, designing, manufacturing and supplying equipment. The company has more than 9,000 employees and most of its business is conducted in the U.K., Italy, Germany and the U.S.
After the sale the remainder of the Marconi will be renamed telent PLC and will retain its U.K. listing
Ericsson has said it is mostly interested in integrating Marconi's transmission networks into its operations to increase its broadband handling capacity.
Ericsson Chief Executive Carl-Henric Svanberg has said restructuring and job losses are inevitable at the Marconi business. He estimates around 1,000 job could be cut out of the 6,500 staff included in the takeover.
In 2004, Ericsson had sales of SEK132 billion (EUR14 billion) while Marconi reported sales of GBP934 million in the fiscal year to March 31.
-By Alejandro Perez, Dow Jones Newswires; +322 741 1357; alejandro.perez@dowjones.com
(END) Dow Jones Newswires"
Posted to the site on 20th December 2005
