Have you seen this?
GEC in the middle of divestment till November - company to be renamed Marconi and will focus on communication. Rest of company to merge with British Aerospace.
*****************************************************************
11 October 1999
Not for release or distribution into Canada, Australia or Japan
The General Electric Company, p.l.c. ("GEC")
GEC to be Renamed Marconi
Meetings Convened to Approve Merger
of MES with British Aerospace
The GEC group is to be renamed Marconi following the proposed separation and merger of its international aerospace,
naval shipbuilding, defence electronics and defence systems business, Marconi Electronic Systems ("MES"), with
British Aerospace ("BAe").
Following the implementation of the proposals, Marconi will be a major international group focused on high growth
communications markets and selective markets for high technology systems. To reflect this change in strategic
direction, it is intended that the new holding company for the group will be named Marconi plc.
It is expected that documents relating to the proposed separation and the merger of MES with BAe will be distributed
to GEC shareholders today.
It is expected that Marconi plc will be listed on the London Stock Exchange and will be a constituent of the FTSE-100
index within the Information Technology sub-sector. Marconi plc also intends to seek a listing in the United States next
year.
The Marconi Group will consist of three businesses:
COMMUNICATIONS
The Communications businesses are focused on the supply of communications and data networking equipment and
solutions internationally. Marconi's strategy is to combine Marconi Communications' expertise in public networks with
Fore Systems' experience with internet service providers and in private corporate networks to deliver solutions for the
development of broadband networks which offer internet, voice, video, multimedia and private data services.
SYSTEMS
The Systems businesses apply advanced electronic and information technology solutions in a range of industries with
good growth prospects around the world. Marconi intends to bring new technologies to market quickly and effectively
by drawing upon the resources, knowledge and proprietary intellectual property available to it throughout the Marconi
Group.
CAPITAL
Capital will be used as a vehicle for the development of high technology start-up and early stage investments to
support the Marconi growth objectives for the future. Capital's portfolio includes a number of businesses with
attractive returns on capital that do not necessarily fit the high technology and high growth models that have been
established in Communications and Systems.
The documents posted to GEC shareholders convene a Court Meeting and Extraordinary General Meeting of GEC for
3 November 1999 to approve the proposals. Completion of the proposals remains conditional on, amongst other
things, US regulatory clearance. An indicative completion date of 29 November 1999 has been proposed. Based upon
this completion date, dealings in Marconi plc shares on the London Stock Exchange are expected to commence on 30
November 1999.
Chief Executive, George Simpson, said:
" Today this deal may seem to be all about spinning off of a defence business. In the future, people will look back
and remember this as the moment a major communications systems group was born".
Notes to Editors
Key financial data
The Marconi Group had 1999 pro forma turnover (including full-year contributions from Reltec Corporation and Fore
Systems) of £5,108m, and pro forma operating profit (before exceptional items and goodwill amortisation) of £596m.
Year to 31 March 1999 (pro forma(1))
£M
Turnover(2)
Operating profit(3)
Communications
2,876
383
Systems
1,501
151
Capital
772
78
Other
(41)
(16)
Total
5,108
596
(1) includes full-year contributions from Reltec and Fore
(2) includes share of joint ventures
(3) before exceptional items and goodwill amortisation
History and development
In the past two years, GEC has undergone a radical transformation to become a major competitor in high growth
communications markets and high technology.
During this period, a number of non-core assets have been divested and the stake in Alstom has been reduced to 24
percent through an international public offering.
In the second half of 1998, GEC conducted a detailed review of the future of its aerospace, naval shipbuilding,
defence electronics and defence systems business, Marconi Electronic Systems (MES). On 19 January 1999 the
group announced its plans to separate MES from the rest of its activities and merge MES with British Aerospace.
GEC has moved quickly to build a communications business with pro forma sales for the year ended 31 March 1999
of approaching £3 billion. In April 1999, GEC acquired Reltec Corporation, giving it a stronger presence in North
America. In June 1999, Fore Systems, a leader in high performance broadband switching equipment, was acquired. In
August 1999, GEC acquired RDC Communications, an Israeli company specialising in wireless networking solutions.
Marconi plc - Visual Identity
Marconi plc will be the name for the holding company of the communications and high technology group following the
proposed separation of MES.
The new name and logo of Marconi reflect the high technology focus and international presence of the group. The
name Marconi also reflects the pioneering work of Guglielmo Marconi who invented the wireless and paved the way for
all modern communications upon which the world relies. The new company has inherited not only Marconi's business,
founded in Chelmsford in 1897, but his innovative philosophy in communications and technology.
|
