Ericsson to buy Marconi for GBP1.2 billion

Swedish telecoms vendor Ericsson has agreed to purchase its smaller UK rival Marconi in a deal worth GBP1.2 billion (USD2.16 billion), including GBP700 million in pensions liabilities. Ericcson will pay Marconi investors GBP2.75 a share for the company in the first quarter of 2006, as it looks to ramp up its fixed line infrastructure business. The deal follows reports in August that Chinese equipment manufacturer Huawei was holding discussions with Marconi concerning a possible GBP560 million takeover. Marconi was effectively put up for sale in April, when it failed to land a crucial GBP10 billion contract with its biggest customer BT.