Ericsson buys Marconi
The #1 manufacturer of wireless telephone equipment, Sweden's Telefon AB L.M. Ericsson has announced it will buy most of UK-based Marconi Corp.'s assets for around $2.1 billion. The purchase includes Marconi's telephone equipment division as well as its international service division.
The purchase will reinforce Ericsson's dominant position in wireless equipment with a solid position in fixed-line equipment as well. This make sense as the two worlds, once rivals, are now coming close together, and service providers are offering a mix of wired and wireless service to the same customers.
Marconi, a company with a 120-year history, will be renamed as Telent and be reduced to a small, localized UK firm concentrating on maintenance contracts.. As The Scotsman ("Marconi era ends as Ericsson buys firm for £1.2bn", 10/26/2005) points out,
The deal all but marks the end of a company that - as General Electric - was once at the heart of industrial Britain.
The British General Electric (GEC) was riding high with a flurry of acquisitions until the dotcom bubble. It has since sold off its defense assets to BAE, and now is losing its remaining communications holdings.
The news caused concern in Britain over the difficulty the UK has competing the modern world economy. As an article in The Guardian ("Ericsson deal closes Marconi's final chapter", 10/26/2005) remarks:
The sale of Marconi, the rump of what was once Britain's leading industrial group, GEC, marks yet another sad episode in British manufacturing's efforts to place itself at the cutting edge of the knowledge economy.
