GEC to seek US share listing and name change

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The Independent Online
GEC IS to seek a US share listing this autumn and change its name, probably to Marconi, once the pounds 7bn disposal of its defence electronics business to British Aerospace is complete.

Lord Simpson, GEC's chief executive, also said that the group still had enough firepower to fund a further pounds 2bn worth of acquisitions, although the scale of its deal-making would be much reduced in the coming year.

In the last six months GEC has spent $6.5bn buying two US telecom equipment companies, Fore Systems and Reltec, in a bid to transform itself into a high-technology communications and information systems group.

GEC is likely to focus on expanding its Marconi systems division and is looking to buy a US healthcare information systems business.

Lord Simpson did not rule out further acquisitions in telecoms in areas such as wireless and access technology, but he indicated that GEC was not interested in bidding for Robert Bosch's telecoms equipment business.

GEC is hopeful of government approval for the BAe deal early next month, paving the way for GEC to complete the demerger in September and seek a US listing. The demerger will reduce the value of "new GEC" to about pounds 10bn.

The welter of deals will leave GEC with pounds 3.3bn of net debt and a workforce reduced from 127,000 to 42,000, of which a third will be engineers, scientists and technologists.

Lord Simpson denied that GEC intended to ask a group of senior Fore executives to hand back $23m and said a $1bn lawsuit brought against it in the US on behalf of Fore shareholders was "of doubtful merit and would be defended vigorously".

Pre-tax profits last year rose from pounds 579m to pounds 1.5bn, swollen by pounds 775 of disposal gains. On a pro-forma basis, the businesses that make up new GEC made operating profits of pounds 578m on sales of pounds 4.7bn.

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