Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education



Front Page

World

UK

UK Politics

Business

Sci/Tech

Health

Education

Sport

Entertainment

Talking Point

In Depth

On Air

Archive
Feedback
Low Graphics
Help

Monday, April 26, 1999 Published at 16:11 GMT 17:11 UK


Business: The Company File

GEC spends billions on US Internet group

GEC is shedding its defence heritage

The British electronics and telecoms giant GEC is buying a US Internet equipment business for $4.5bn (£2.8bn).

The acquisition is part of its drive to embrace the fast growing new media as its seeks to reinvent itself following the sale of its defence electronics business.

GEC is also keen to consolidate its position in the US telecommunications industry - which is by far the largest market for Internet equipment.


[ image: GEC hopes the deal will bring its US Internet business to the fore]
GEC hopes the deal will bring its US Internet business to the fore
GEC is paying $35 a share for US group Fore Systems, an Internet and technology equipment supplier. It supplies state of the art Internet hardware which can be used to switch data from overloaded lines to less congested ones.

The deal pleased the London stock market with shares in GEC climbing 4% after it was announced.

"We will now be in a position to capture the full benefits of the impact of the explosive growth of Internet and other data traffic on the demand for communications equipment and systems," said George Simpson, Chief Executive of GEC.

"The market's bullish on it because they've done a deal at last and the market likes activity," said one leading engineering analyst.

"Also this takes them into new Internet and data transfer technology and away from the old technology. That's a good move," he added.

Spending spree

The deal is the second large acquisition GEC has made since it announced the £7.7bn sale of its defence electronics business to British Aerospace.

The acquisition fits with GEC's £1.3bn deal to buy Reltec, a company which supplies the data to Internet users.

It also compliments its existing Marconi Communications high volume cable operating division.

GEC, the bulk of whose activities now go under the Marconi banner, said it plans to finance the deal with cash resources and bank facilities.



Advanced options | Search tips




Back to top | BBC News Home | BBC Homepage | ©


The Company File Contents


Relevant Stories

02 Mar 99 | The Company File
GEC pounces on US telecoms firm

25 Feb 99 | The Company File
Arms sales fuel BAe's profits

12 Feb 99 | The Company File
EU threatens defence merger





Internet Links


GEC

Fore Systems


The BBC is not responsible for the content of external internet sites.




In this section

Microsoft trial mediator welcomed

Vodafone takeover battle heats up

Christmas turkey strike vote

NatWest bid timetable frozen

France faces EU action over electricity

Pace enters US cable heartland

Mannesmann fights back

Storehouse splits up Mothercare and Bhs

The rapid rise of Vodafone

The hidden shopping bills

Europe's top net stock

Safeway faces cash demand probe

Mitchell intervenes to help shipyard

New factory creates 500 jobs

Drugs company announces 300 jobs

BT speeds internet access

ICL creates 1,000 UK jobs

National Power splits in two

NTT to slash workforce

Scoot links up with Vivendi

New freedom for Post Office

Insolvent firms to get breathing space

Airtours profits jump 12%

Freeserve shares surge

LVMH buys UK auction house

Rover - a car firm's troubles