GPT buyout boosts telecoms

GPT buyout boosts telecoms
Richard Wilson An immediate boost in UK telecoms investment will follow GEC’s buyout of Siemens from the GPT joint venture. GEC has taken full control of telecoms maker GPT after buying out partner Siemens for ?700m. Siemens and GEC both hint that the joint venture was restricting their separate plans for the UK market. Both firms plan to increase investment in their separate UK public network equipment businesses. GEC’s managing director George Simpson surprised everyone by openly criticising the eight year old joint venture with Siemens. “We had a fundamentally flawed joint venture which constrained GPT’s growth,” he said, and immediately announced that R&D spending at GPT should increase from 13 to 20 per cent of turnover. Siemens’ UK chief executive, Alan Wood said: “We now have direct access to customers with our products. There were frustrations in the past.” Siemens will invest in a new public networks subsidiary competing with GPT for business from BT and 200 UK operators. “We have earmarked ?100m to build up our public telecoms activities in the UK,” said Wood. Siemens swaps its 40 per share of GPT in return for GEC’s 50 per cent stake in Siemens GEC Communications System (the separate business systems joint venture), along with an additional ?610m payment from GEC. SGCS’s ?90m price tag gives a ?700m value on the GPT stake. GEC will combine GPT with its smaller telecoms operation in Italy, renaming the group Marconi Telecommunications. Siemens will create two new UK telecom networks businesses. Last year GPT had pre-tax profits of ?172m from sales of ?1.2bn. GEC has appointed Mike Parton from its industrial group to be the new managing director at GPT.


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