GEC ramped up its networking business last week with the acquisition of ATM switch specialist Fore.
As predicted in PC Week on 20 April, GEC snapped up Fore as part of its aggressive plans to beef up its telecoms division. GEC paid approximately $4.2 billion (#2.6 billion) for the networking equipment manufacturer.
Fore will boost GEC's existing networking line-up, which includes access equipment vendor Reltec, purchased last month for $2.1 billion (#1.3 billion).
Fore makes giant backbone switches that carry voice and data traffic across the Internet. The company also manufactures intelligent routing switches, ATM WAN multiplexers and management software.
Operating as a wholly owned subsidiary, Fore will give GEC a better foothold in the carrier and enterprise markets as well as providing ATM and IP switching.
GEC divested Marconi, its defence arm, to British Aerospace in January as part of the plan to refocus on the telecoms and networking business.
That sale gave GEC a #5 billion pot of cash to make such acquisitions, most of which has now been spent on the purchase of Fore and Reltec.
With the consolidation of the networking market over the past few years, which has seen Lucent buy Ascend, Nortel buy Bay Networks and Alcatel take over Xylan, there are now very few smaller data networking companies left on the market.
Potential takeover targets remaining include Cabletron and Newbridge Networks.
GEC's share price jumped 5% on the news, while Fore's share price leaped 36%.
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