Marconi To Sell Some Mfg Ops To Jabil Circuit For $390M
Dow Jones Newswires -- January 11, 2001
ST. PETERSBURG, Fla. -- Jabil Circuit Inc. (JBL) agreed to buy some of Marconi PLC's (MONI) manufacturing
operations in the U.S., U.K., Italy and Germany for about $390 million, subject to pre-closing adjustments.
In a press release Thursday, the companies said Jabil Circuit will purchase five operations of Marconi PLC's
Marconi Communications unit.
Jabil Circuit will also sign a three-year product supply agreement to manufacture existing and new products for
Marconi. The companies estimated that the agreement will result in revenue of more than $4 billion over the
three years.
Jabil Circuit and Marconi have had a manufacturing relationship for several years. Under the new three-year
agreement, Jabil Circuit will provide Marconi with electronic manufacturing services, including printed circuit
board assembly and repair services.
Up to 2900 Marconi employees in Bedford, Texas; Liverpool and Coventry, U.K,; Marcianise, Italy; and
Offenburg, Germany, will progressively transfer to Jabil Circuit. No involuntary job losses are expected and
existing employment rights will be protected, the companies said.
The transaction is intended to be implemented by the middle of 2001.
As reported Oct. 5, London-based telecommunications equipment maker Marconi said it accelerated the
implementation of its new supply chain strategy, with the aim of increasing outsourced manufacturing of its
equipment.
The company said at the time that it had begun discussions with several global contract manufacturers on the
transfer of various operations and on increasing the proportion of outsourced telecommunications equipment
manufacturing.
On Thursday, Marconi reiterated that outsourcing manufacturing to Jabil Circuits will enable Marconi to respond
more quickly to customer needs, technology changes and growth opportunities.
The transaction will enable Marconi to enhance its supply chain activities around final product assembly and
customer configuration in the U.S., U.K., Italy, Ireland and Germany, the company said.
Jabil Circuit shares, listed on the New York Stock Exchange, closed Thursday at $27.75, up $4.06 or 17.2%, on
volume of 8.57 million shares. Average daily volume is 2.97 million shares. The company reported revenue of
$3.56 billion for the year ended Aug. 31, 2000.
Marconi's American Depositary Shares, which began trading on Nasdaq in October, closed Thursday at $20.94,
unchanged from the previous day. For the six months ended Sept. 30, Marconi had revenue of 3.19 billion British
pounds. |
