British electronics giant GEC has purchased networking equipment vendor Reltec, giving it a footing in North America and enabling it to offer broadband communications equipment.
GEC will purchase Reltec for $29.50 per share in cash, valuing the deal at $2.1 billion. GEC's offer represents a premium of 36 per cent on Reltec's closing price on Friday.
Reltec's speciality is providing broadband access products for "last mile" connections, enabling local operators to offer data, video and voice services to residential and business subscribers.
GEC is already a telecomms equipment player through Coventry based Marconi Communications, in which it has a controlling interest.
"The acquisition is a further step in GEC's transformation and confirms our commitment to the development of Marconi Communications," said Lord Simpson, chief executive of GEC.
The acquisition also gives GEC and Marconi access to North America, said Simpson.
"This acquisition provides access to the important North American market and to Reltec's blue chip customers. It also reinforces our position in the high growth transmission and access segment of the communications equipment market," he said.
Reltec, based in Cleveland, Ohio, has approximately 6,600 employees worldwide, mainly based in the US. Reltec's key US customers include Ameritech, AT&T, Bell Atlantic, BellSouth, GTE, Level 3, SBC Communications, Sprint, US West, and MCI WorldCom.
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