Ericsson to buy most of Marconi for $2.1B
Nancy Gohring writes in InfoWorld:
Telefonaktiebolaget LM Ericsson on Tuesday said it agreed to buy parts of struggling telecommunications equipment vendor Marconi for £1.2 billion ($2.1 billion).
As wireless networks continue to boost data throughput rates, the back-end supporting wired networks must continue to grow, said Carl-Henric Svanberg, president and chief executive officer of Ericsson. With this acquisition, Ericsson will be able to supply the equipment that can help operators increase capacity on their wired networks.
As part of the deal, Ericsson will get Marconi's optical networking equipment, broadband access products, and softswitch products as well as research and development operations. Ericsson is also buying Marconi's radio access business. Combined, the parts of Marconi that Ericsson is buying account for 75 percent of Marconi's income. Ericsson is also acquiring the Marconi brand.
Ericsson expects that the acquisition will add £1 billion in sales but likely won't positively affect Ericsson's bottom line until 2007.
posted by Fergie @ 10/25/2005 08:00:00 AM
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