Feeds

Ericsson buys Marconi

£1.2bn for assets and name

Reducing security risks from open source software

Ericsson is paying £1.2bn for the name and most of the assets of Marconi.

Marconi shareholders will receive 275p per share and keep ownership of Telent plc. Ericsson's chairman has reportedly said job cuts of up to 20 per cent will be unavoidable.

Ericsson gets Marconi trade marks, its optical networks business, the majority of its Access Networks business, its data networks and services business in North America and services business in the Middle East.

The remnants of the firm will be renamed Telent and focus on services for telcos and enterprises - it will be Ericsson's preferred partner in the UK. It will stay on the London Stock Exchange and will keep the UK telecoms business, UK and German services business and System X narrowband digital switches and the payphones business.

Marconi has been looking for a suitor since BT decided not to list it as a supplier for its next generation network.

John Devaney, Marconi chairman, said: "Over a period of several years we have had conversations with a number of potential partners regarding the necessary consolidation in our industry...The transaction delivers value to shareholders...also enables us to take steps towards resolving our UK pension plan issue."

Telent will be responsible for pension payments and will keep almost £500m in an escrow account to cover liabilities. Marconi will keep net cash of some £275m. Marconi said it was focussed on protecting the 69,000 UK pension holders - it is contributing £185m.

For the year ended 31 March 2005 Telent would have made sales of £336m and an adjusted operating profit of £37m. But as a result of the deal Telent will be left with more costs and it currently benefits from sales of legacy kit which is likely to decline over time.

The deal needs the usual regulatory approval and will be put before shareholders at an Extraordinary General Meeting on 21 December.

Ericsson shares rose on the news.

Gugliemo Marconi filed the first patent for communication using Hertzian waves in 1896. The Marconi Wireless Telegraph company was founded in 1900 - in 1901 it acheived the first transatlantic transmission.

More details and webcast available here.®

Mobile application security vulnerability report

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple ran off to IBM
But never fear fanbois, you're still lapping up iPhones, Macs
Nadella: Apps must run on ALL WINDOWS – PCs, slabs and mobes
Phone egg, meet desktop chicken - your mother
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
Samsung threatens to cut ties with supplier over child labour allegations
Vows to uphold 'zero tolerance' policy on underage workers
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Reducing security risks from open source software
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.