Marconi closes Brazil (Splice) purchase
Marconi closes $170M Splice deal
By Mike Kepp in Rio de Janeiro
reporters@thedailydeal.com
British telecommunications equipment maker Marconi plc finalized the purchase Thursday of the fiber-optic transmission arm of Splice do Brasil Telec e Eletronica SA, a Brazilian telecom equipment maker, for up to $169 million.
Earlier this month, Marconi agreed to pay $64 million for Splice Transmissao, a division of Splice that makes fiber-optic transmission equipment using Marconi technology. The British company said Thursday it would pay another $105 million over three years, depending on whether the new company reaches performance targets.
The two companies said there were no outside financial advisers for the deal.
Marconi decided to buy Splice Transmissao to establish a stronger presence in Brazil, the largest telecom market in Latin America, said Paulo Roberto Freitas de Carvalho, Splice do Brasil's director of new business, at a ceremony to close the deal.
"The acquisition is in line with Marconi's buying telecom and telecom equipment companies worldwide in the past few years," he said. Marconi, he added, was "consolidating its energies in this sector, now its core business, and reducing its energies in defense-related areas."
With the acquisition, Marconi will make fiber-optic transmission equipment in Brazil and distribute it to Splice Transmissao's clients, mainly the big fixed-line phone companies in Brazil. They include Embratel SA, the international carrier, Brasil Telecom SA, a southern region operator, and Telemar SA, a northeastern region operator.
Splice do Brasil will continue to make non-fiber-optic equipment, such as pay telephones and switching terminals, and will continue to provide telecom services, including such turnkey projects as setting up telecom utilities for small municipalities.
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