GEC Fore-sees ?2.8bn US telecoms acquisition

GEC Fore-sees ?2.8bn US telecoms acquisition
Alex Mayhew-Smith GEC has taken a further step in its transformation into a telecoms firm with the ?2.8bn acquisition of US Internet switching equipment company Fore Systems. The acquisition confirms GEC’s profile as a telecommunications specialist. “This acquisition reinforces our position as a leading supplier of voice and data networking technology,” claimed George Simpson, GEC’s chief executive. “The purchase of Fore Systems provides us with access to new markets and new customers and extends our product portfolio into the increasingly important ATM and IP switching sector,” he added. Pittsburgh-based Fore Systems’ products include ATM and Ethernet switches, adaptor cards, multiplexing and inter-networking products. The acquisition will be financed with cash from GEC’s huge reserves and existing bank facilities, and the company will be run as a separate unit within GEC. Fore had a turnover of $632m in the year to March 31, 1999 and will take the US share of GEC’s turnover to 65 per cent. The addition of Fore Systems to the company is the realisation of Simpson’s plan to transform GEC away from the defence dominated, diversified group it was a year ago. Once the ?7bn sale of its Marconi defence arm to British Aerospace (BAe) is complete, GEC will have honed its interests into the high-tech, high margin and high growth business outlined by Simpson last year. Analysts speculate that GEC’s next move will be into Europe to expand further its profile as a telecoms company, and financed by the proceeds of the defence arm sale to BAe.


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