Ericsson in talks to buy Marconi -sources
The Financial Mail newspaper said in an unsourced report on Sunday that Ericsson saw a total valuation for Marconi of up to 1.3 billion pounds, roughly twice its current market value
Sun Oct 9, 2005 4:51 PM BST
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LONDON (Reuters) - Swedish telecoms equipment maker Ericsson (ERICb.ST: Quote, Profile, Research) is in talks to buy rival Marconi (MONI.L: Quote, Profile, Research) and a deal could be announced within weeks, people familiar with the negotiations said on Sunday.
The Financial Mail newspaper said in an unsourced report on Sunday that Ericsson saw a total valuation for Marconi of up to 1.3 billion pounds, roughly twice its current market value.
Marconi, which nearly collapsed in the 2001 telecoms industry meltdown, declined to comment.
Marconi received a major blow in April after BT Group (BT.L: Quote, Profile, Research) cut the group out of its 10 billion-pound network upgrade plan. It has since announced plans to cut 800 jobs and promised to look at all of its strategic options.
The possible deal comes amid a flurry of activity in the telecoms sector as chief executives get back into buying mode after years of restructuring.
Last week, British cable operator NTL (NTLI.O: Quote, Profile, Research) agreed to a long-awaited deal to buy smaller rival Telewest (TLWT.O: Quote, Profile, Research) for $6 billion (3.4 billion pounds).
In July, France Telecom (FTE.PA: Quote, Profile, Research) grabbed control of Amena in a deal valuing Spain's third-ranked mobile phone group at 10.6 billion euros (6.8 billion pounds).
The Financial Mail said the possible Ericsson-Marconi deal was put together with investment banks Morgan Stanley, JP Morgan and Lazard advising Marconi, while Enskilda acted for Ericsson.
A report in the Observer newspaper said British parliamentarians were demanding that the government intervene in a possible bid for Marconi by China's Huawei Technologies (HWT.UL: Quote, Profile, Research), due to fears that the company was too closely associated with the Chinese government.
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