Ericsson in merger talks with networking firms
By ZDNN
June 19, 1998 7:41 AM PT
NEW YORK -- Ericsson AB of Sweden is in acquisition talks with three U.S. telecommunications networking companies and looking at seven more, the electronic edition of the Wall Street Journal reported Friday.
"We're in negotiations with three companies, each worth several hundred million dollars," Anders Igel, executive vice president at Ericsson in charge of its telecommunications business, told the Journal in an interview.
Ericsson, a telecommunications equipment maker, is looking at 10 companies overall, but Igel told the Journal: "We don't know the results yet," adding that the deals may yet collapse.
Rumours of an Ericsson acquisition surfaced earlier this week after its rival Northern Telecom Ltd. agreed to buy Bay Networks Inc. for $7.7 billion.
Ericsson officials told the Journal that they are more likely to pursue less-expensive start-ups, rather than large equipment makers.
"Recently, there have been big acquisitions in Silicon Valley that were overpriced," Sven-Christer Nilsson, Ericsson's chief executive officer, is quoted as saying in reference to the Nortel/Bay deal.
"We have certain acquisition targets, but the price has to be right," he told the paper.
"We don't exclude making a major acquisition. We have the checkbook to do it," Igel told the paper, referring to the $1.5 billion to $2.0 billion in cash that Ericsson is expected to have a the end of this year.
Updated June 19, 1998
7:58 AM PT
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