Ericsson, Marconi proposed transaction tops 1.2 billion pounds

The final winner emerged three month later after the proposed disposal of Marconi's telecommunications sector was announced. Ericsson made the announcement yesterday that it has already signed an agreement with Marconi on Oct. 25 mergering Marconi's 1.2-billion-pound telecommunication business as well as 75 percent of Marconi's business and assets.

Ericsson's acquisition of Marconi also indicated Huawei, which had once planned to purchase Marconi, has withdrawn from the competition. It is said that Huawei has offered an acquisition price of 682 million pounds, lower than Ericsson's quoted price.

Tu Min, chief of public relations with Ericsson China noted that they has not yet received notice from Swedish headquarter to make final decision over Marconi China and other branches during the acquisition. If everything goes smoothly, Ericsson China will accept those employees working with Marconi China merged.

Wang Yuquan, an expert on telecommunication held that it is wise for Huawei to withdraw when facing the 1.2-billion-pound quoted price by rival Ericsson. "The gross sales volume of Huawei in 2004 totaled 46.2 billion yuan, with business turnover from overseas taking up 2.28 billion US dollars. If Huawei offered 1.2 billion pounds (equivalent to 2.1 billion US dollars), the acquisition of Marconi would cost it one year's overseas business turnover. It is really a huge burden for Huawei," added Wang.

By People's Daily Online