Ericsson is to buy out Marconi’s units covering optical networks, broadband and fixed radio access network, softswitch, data networking equipment and service businesses, telecommunication service activities and the Marconi trademark, associated brand names and intellectual property rights for SKr16.8 billion ($2.1 billion). Marconi is an attractive prospect for the Swedish vendor as its transmission offerings, particularly in optical systems, can be combined with Ericsson’s microwave radio position. On completion of the deal, Ericsson will pay Marconi the SKr16.8 billion in cash, subject to certain closing agreements. The deal does not cover Marconi’s headquarters and certain businesses in the UK and Germany. Marconi’s pension plan is not included in the agreement. Ericsson expects the deal to contribute SKr14 billion in sales and have a neutral effect on its EPS in 2006, with a positive contribution following in 2007.
