Marconi agrees Ericsson deal

Telecomworldwire, Oct 25, 2005

TELECOMWORLDWIRE-25 October 2005-Marconi agrees Ericsson deal(C)1994-2005 M2 COMMUNICATIONS LTD http://www.m2.com

The Board of Marconi Corporation plc (Nasdaq:MRCIY), a telecomms equipment company, has announced that it has agreed the proposed disposal of Marconi's telecommunications equipment and international services business for around GBP1200m to Ericsson, a communications company.

Under the deal, Marconi will be renamed 'telent plc' - telent is a services provider for enterprise customers and telecomms operators and will be Ericsson's preferred UK services partner.

Marconi will retain its net cash at 31 December 2005 - its net cash was GBP275m at 30 September 2005 - and shareholders are expected to receive GBP275 per ordinary share in the first quarter of 2006. Marconi shareholders will continue to own 100% of telent plc equity and responsibility for the UK Pension Plan will be retained by telent. A cash injection of GBP185m is planned for the UK Pension Plan, with GBP490m to be held in an escrow arrangement for the UK Pension Plan's potential benefit.

The disposal is conditional upon - shareholder approval being obtained by Marconi at an Extraordinary General Meeting expected to be held on or near 21 December 2005 and; clearance for the transaction being granted from certain competition authorities. The disposal is expected to complete by the 31 January 2006, although 1 January 2006 is the effective date of completion under the Memorandum of Agreement.

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