City welcomes GEC's $2bn US telecoms deal

City welcomes GEC’s $2bn US telecoms deal
Richard Wilson
City investors have reacted positively to GEC’s $2bn acquisition of US telecoms equipment manufacturer Reltec.
A four per cent increase in the company’s share price on Monday, when the deal was announced, was followed by a similar rise yesterday.
The reaction of one analyst was typical: “It looks a good deal to us and the market likes it. It should help GEC become more focused on the higher growth, telecommunications side of the business.”
The addition of Reltec’s $1bn revenues will swell the importance of telecoms businesses to the “new-look” GEC. Following the sale of the Marconi defence business to British Aerospace in January, turnover from telecoms businesses Marconi Communications, and now Reltec, will represent approaching 60 per cent of GEC’s group turnover.

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