BT Group has reached a definitive agreement to acquire managed network communications services firm Infonet Services. The $965m cash purchase is expected to be completed in the first half of 2005.
Initial reaction from industry experts was favourable. Julian Hewett, chief analyst at Ovum, said: "We're positive about this move. In Ovum's opinion, neither BT Global Services nor Infonet has adequate scale as a global networking player.
"Both organisations have been loss-making, but together they should have sufficient scale to generate a profit. This will certainly improve BT's position in the Americas and Asia Pacific.
"We're also pleased to see that BT is boosting an area of its core networking competence, rather than taking a more risky step in [say] the international IT services market."
Jose A Collazo, chief executive at Infonet, described the move to join BT Global Services as "great news" for Infonet's customers, employees and partners.
"Our combination with BT will improve our ability to supply mission-critical services to our customers by bringing a commitment to the long-term development of IP-based services backed by financial strength and true global scale," he said.
BT chief executive Ben Verwaayen added: "This is another milestone in BT's transformation into a leading global provider of IT and networking services."
A special committee of the board of Infonet has recommended approval, and the boards of BT and Infonet have approved the transaction.
But the deal remains subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act, foreign antitrust clearance, other regulatory approvals, the approval of the stockholders of Infonet and other customary closing conditions.
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