Marconi to pay out GBP577.5 million to shareholders following Ericsson deal

28 Nov 2005

UK equipment vendor Marconi says that it plans to return GBP577.5 million (USD986 million) to its shareholders via a special dividend and share consolidation following the completion of its takeover by Ericsson of Sweden. Last month Ericsson agreed to purchase the bulk of Marconi’s assets in a deal worth GBP1.2 billion (USD2.16 billion), including GBP700 million in pensions liabilities. Under the deal, Ericsson will acquire Marconi’s optical networks operations, the bulk of its network access business, its data networks operations and international services operations. The remaining parts of the business will continue to operate under the new company name Telent. Marconi will pay out GBP2.75 a share once the deal is complete. Every seven existing Marconi shares will be consolidated into two new Telent shares to keep the share price stable following the dividend payment.

Last week Marconi reported it had returned to profit in its fiscal second half of the year, recording a GBP4 million (USD6.9 million) pre-tax profit in the three months to 30 September, compared to a loss of GBP12 million in the corresponding period of last year. Revenues rose 2% year-on-year to GBP312 million in the quarter, but remained flat at GBP597 million for the first half of the fiscal year.

United Kingdom