GEC acquires Fore Systems for $US4.5b
- 05 May, 1999 13:05
British electronics and communications giant General Electric PLC (GEC) has agreed to purchase Fore Systems in a $US4.5 billion cash deal.
Company officials announced last week a US subsidiary of GEC, Acquisition Corp, will offer $US35 per share for Fore Systems, according to the merger agreement.
The acquisition will enable GEC to enhance its Marconi Communications call centre, which will be integrated with Fore System's ATM (Asynchronous Transfer Mode) and IP (Internet Protocol) switching, George Simpson, GEC's chief executive officer, said in a statement.
GEC plans to merge Acquisition and Fore Systems into a subsidiary, which will offer a wide range of products and technologies that are scaled to suit companies, a GEC spokesperson said.
The combined company will provide users with integrated high-speed data, voice and video services, said Thomas Gill, president and chief executive officer of Fore Systems.
The Fore Systems acquisition will also provide GEC Group with a stronger US presence and access to the enterprise data networking market, GEC said.
Alex Turkington, Fore Systems' APAC head, said he anticipates the company will still be able to operate as a "free-standing subsidiary", in much the same way as Marconi Communications.
Turkington reports it will be "business as usual" at Fore until the deal is completed in around 90 days.
Meanwhile, he said the closure of Fore Systems' Melbourne office is part of Fore's global restructuring and is not linked to the GEC buyout.
Fore's Australian operation is largely supported in the channel through integrators such as NetStar.
NetStar's business development manager, Mitch Radomir, was surprised by the news, describing the deal as a "real dark horse.
"I think it's going to be very hard for them to find some synergies," he said of the two companies.
The GEC deal follows recent speculation that Ericsson was interested in acquiring Fore, but an Ericsson official denied the claims.