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UK's GEC buys Fore

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Fore Systems is set to become a wholly owned subsidiary of General Electric Company (GEC) after the networking company agreed to be acquired for $4.2 billion ($2.8 billion). GEC offered to buy FORE at an agreed price of $35 per share -—a premium of 43 per cent above the closing price of Fore's stock last Friday. Not only does this acquisition strengthen GEC's presence in the US, the world's biggest market for telecomms equipment, it also gives the company access to the high growth enterprise data networking market, which is becoming increasingly integrated with the carrier market. Tom Gill will continue as Fore Systems' CEO and President, and will report directly to George Simpson, CE of GEC. Fore Systems will operate as a wholly owned subsidiary of GEC and continue to trade under its own name. "This acquisition reinforces our position as a leading supplier of voice and data networking technology," said Simpson. "The purchase of Fore Systems provides us with access to new markets and new customers and extends our product portfolio into the increasingly important ATM and IP switching sector." Fore Systems reported sales of $632 million for the year to 31 March 1999 -- an increase of 35 per cent on the year before. Operating income before interest, taxes and non-recurring items was $55.4 million in 1999 -- up 48 per cent from $37.5 million in 1998. As of 31 March 1999, Fore Systems had net assets of $680 million including cash and short term investments of $361 million. ®

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