2 Aug 02. Marconi plc (Nasdaq: MONI; London) announced it has completed the sale of its Strategic Communications business (Marconi Mobile Holdings SpA) to Finmeccanica SpA (Milan: SIFI) for approximately £387m (€614m).
The completed sale is not conditional on any approvals or consents. The
proceeds, received today in the form of cash and in debt assumed by
Finmeccanica, have had the effect of reducing Marconi’s net debt.
Mike Parton, Marconi chief executive, said: “We have achieved a very positive outcome for Marconi and for Strategic Communications. Finmeccanica will be an excellent home for the business, its customers, management and employees.”
Strategic Communications designs, manufactures and supplies communications and information systems, primarily for defense and security applications, including ground, naval, avionic communications/command and control systems. The company
employs approximately 4,000 people in Italy, UK, Germany and Turkey and, in the financial year ended 31 March 2002, had sales of approximately £308m (€502m).
In the year-ended 31 March 2002, the Strategic Communications business made an operating contribution to Marconi plc’s profits, before exceptional items, of approximately £30m (€49m). At the same date the business had net assets of approximately £201m (€328m).
The sale of Marconi Mobile Holdings SpA does not include Marconi’s Public Mobile Radio and Private Mobile Radio business units, which were demerged from Marconi Mobile Holdings before today’s sale.
Finmeccanica also announced that it had bought satellite company Telespazio
Telespazio’s parent company, Telecom Italia (Milan:TIT.MI – News), said in a
statement Finmeccanica had acquired its satellite unit for €240m
($237m), resulting in a €38m net gain for the telecoms group. Telecom Italia said it had also sold to Finmeccanica €5.0m worth of real estate linked to the satellite unit. It said the total value of the joint sale, €245m , would be used entirely to cut the group’s debt. At the end of June Telecom Italia’s debt mountain stood at €21.106bn.
“The two acquisitions are aimed at consolidating the group’s activities in the defence and aerospace sectors and to strengthen Finmeccanica’s competitive position as a leader in Italy and a top player in Europe,” Finmeccanica said in a statement.
Analysts have welcomed the sale of Marconi Strategic Communications Group, which earlier this year had been tagged for a flotation.
Robin Hardy, an analyst at WestLB Panmure in London, said a sale was preferable to a public share offering of the strategic communications business, which he estimated would have valued the business at £300m in the current market.
The sale of Strategic Communications was part of Marconi’s effort to pay down debt by selling divisions which are not involved in its core business of supplying equipment for high-speed fixed-line data networks.
Finmeccanica SpA (I.MEC) will focus on its core defense business over the next three years and reduce its dependence on the performance of STMicroelectronics NV (STM), Chairman and co-Chief Executive Pier Francesco Guarguaglini told an Italian paper.
Guargualiani, who took over at the engineering and defense company in April, told financial daily Il Sole 24 Ore in an interview published Tuesday that he wants Finmeccanica to become a world leader in helicopters and submarine weapons.
“We’re working on a new strategic plan which aims to strengthen Finmeccanica in defense,” Guargualini said.
“At the end of this strategic plan, defense will acquire more importance within the group and our dependence on STM will therefore be reduced,” he said, adding this would take around three years.
Finmeccanica’s share price correlates closely with that of STMicro, the world’s No. 3 chip maker, because its 18% holding in STMicro forms a large portion of Finmeccanica’s overall valuation.
Guargualini said Finmeccanica wouldn’t se