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Electronics Production | October 25, 2005

Ericsson to buy key assets of Marconi

Ericsson today announces that it has reached an agreement with Marconi Corporation plc to acquire the parts of Marconi's telecommunications business that are strategically important to Ericsson.

The agreement adds sales to Ericsson of approximately SEK 14.0 b. (GBP 1.0 b.), acquisition price SEK 16.8 b. (GBP 1.2 b.) The deal is expected tol contribute positively to EPS from 2007, neutral effect in 2006. Headquarters and certain businesses in UK and Germany are not part of the acquisition. Marconi's UK pension plan is not part of the acquisition Carl-Henric Svanberg, President and CEO of Ericsson, said: "The acquisition of the Marconi businesses has a compelling strategic logic and is a robust financial case. As fixed and mobile services converge, our customers will substantially benefit from this powerful combination." Marconi's competitive transmission offerings, especially in optical systems, will combine with Ericsson's strong microwave radio position and worldwide sales organization to create a solid foundation for growth. Telecom operators' focus on next generation IP based networks is sharpening. Ericsson is determined to secure a leading position in this fast emerging field. This will require R&D investments as well as bolt-on acquisitions. Ericsson's fixed network business combined with Marconi's broadband access offering and Marconi's long-standing relationships with leading fixed operators will reinforce Ericsson's market position. Ericsson will acquire assets representing about 75 percent of Marconi's turnover: * Marconi's optical networking business * Marconi's broadband and fixed radio access network business * Marconi's softswitch business * Marconi's data networking equipment and services businesses * Marconi's relevant telecommunications services activities * The Marconi trademark, associated brand names and IPR
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