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The General Electric Company to buy Nokia's SDH / DWDM transport equipment business
November 01, 1999
Includes OEM agreement for the supply of SDH / DWDM products to Nokia
Nokia and Marconi Communications (Marconi), a subsidiary of the General Electric Company, p.l.c. (GEC), have signed an agreement according to which Marconi will purchase Nokia's SDH / DWDM (Synchronous Digital Hierarchy / Dense Wave Division Multiplexing) transport equipment business. Marconi will pay Finnish Marks 430 million (£46 million) in cash on completion. An additional subsequent payment, of up to Finnish Marks 192 million (£21 million), is anticipated dependent on the future performance of the business, resulting in a potential maximum total payment of Finnish Marks 622 million (£67 million).
The business to be transferred to Marconi incorporates Nokia's existing SDH and DWDM transport product range and the brand name Synfonet. Key customers for the business are major telecommunications companies throughout the world, such as cellular operators, dedicated network companies and advanced fixed line operators, including operators in fast growing Asian markets.
As part of the acquisition, approximately 120 Nokia personnel currently working at a research and development unit based in Cambridge in the UK will transfer to Marconi to ensure continued development and smooth transition of the product offering. This research and development team will complement Marconi's strong existing resources. Personnel engaged in SDH / DWDM related research and development activities in other Nokia units, will all have new jobs in Nokia's other activities.
Nokia to sign OEM agreement with Marconi continues to sell SDH / DWDM solutions as part of total systems offering
Marconi and Nokia also announce the signing of a related OEM agreement, under which Marconi will supply Nokia with SDH / DWDM products. Under the agreement, Nokia will continue to supply SDH / DWDM products and customer services to certain customers as part of its full telecommunications system offering.
The acquisition and the OEM agreement together strengthen Marconi's market leading position in SDH products and provide additional sales channels for telecommunications equipment.
The agreements allow Nokia to focus on its selected core business areas and segments.
Nokia and Marconi will cooperate fully in discussions with all customers affected by the changes.
Mike Parton, Chief Executive of Marconi Communications, said: "The acquisition of this business brings Marconi new customers and provides us with exciting opportunities for growth. The transfer of Nokia's UK research and development personnel will further reinforce our position at the forefront of technological development."
Kari Suneli, Senior Vice President, Broadband Systems, Nokia Networks, said "Marconi has a market leading position in the transport business. This partnership will enhance Nokia's full system capabilities by broadening our SDH product offering to our system customers in a more cost-effective way and ensuring a natural development path towards future solutions in this important product area. Our aim is to guarantee the best possible support for our customers and a smooth development of the existing Synfonet network."
The acquisition is conditional, inter alia, upon required regulatory approvals. Assuming regulatory approvals are received, it is anticipated that the acquisition will complete during December, 1999.
Note to Editors:
Optical fibre based networks can move information much more quickly than conventional copper wire networks. For this reason, fibre-based infrastructure will play a key role in developing high-capacity broadband networks which will be used to deliver fast Internet access and high speed digital data transfer, as well as a wide range of new multimedia applications such as full-motion video, audio clips and real-time videoconferencing.
SDH is a flexible high-speed transmission system that allows networks to be managed and reconfigured remotely via sophisticated software. DWDM is an advanced photonics system that greatly increases the amount of information that can be carried by each fibre optic cable. SDH transmission systems (and their US equivalent, SONET, or Synchronous Optical Network) can move data at high speeds over both copper and fibre optic networks.
Marconi Communications, a wholly owned subsidiary of GEC, is a world leader in smart broadband optical networks, access equipment, switching technology for the Internet and network integration. GEC's acquisition of US-based FORE Systems has positioned the group as a leading player in the New Public Network and enterprise markets, in addition to its already established market leadership in the carrier and operators sphere. It has sales to more than 140 countries and a major presence in Europe, the USA, South Africa and the Asia-Pacific Region.
Nokia is paving the way to the mobile information society with its innovative products and solutions. Nokia is the leading mobile phone supplier and a leading supplier of mobile, fixed and IP networks including related services. It also supplies multimedia terminals and computer displays. In 1998, net sales totalled EUR 13.3 billion (USD 15.7 billion). Headquartered in Finland, Nokia is listed on the New York (NOK), Helsinki, Stockholm, London, Frankfurt and Paris stock exchanges.
Contact information:
GEC / Marconi
Alasdair Jeffrey (Investor Relations)
Tel: +44 171 306 1330
Martin Sixsmith (Media Relations)
Tel: +44 171 306 1383
www.gec.com / www.marconicomms.com
CSFB (adviser to GEC / Marconi)
Ben Mingay
Tel: +44 171 888 8888
Nokia Networks
Arja Suominen (Communications)
Tel. (Int.) + 358 9 5113 8193
Fax (Int.) + 358 9 5113 8199
www.nokia.com
e-mail:nokia.networks@nokia.com
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