BICC is attempting to rescue its troubled German cable operations by forming a 50:50 joint venture with NKF, the Dutch cable group. The merger of both companies' energy and metallic telephone cables businesses in Germany will involve 600 job losses, half the combined workforce, and will cost BICC pounds 15m.
Analysts said the move would improve efficiency and reduce costs in the highly competitive German cables market. BICC and NKF have been suffering from falling prices and overcapacity in Germany. Relief that BICC was taking action boosted the group's share price by 8p to 177.5p. However, some analysts were disappointed the company had not struck a deal with a bigger, more pan-European player. One said: "This should help ease the pain in Germany, but it does not go far enough."
BICC reported a near halving of cables profits in Europe when it published its interim results last week. Then, the group announced another 350 job losses at its Italian operations.BICC has cut its German workforce to 700 from more than 2,000 over the past two years.