End of era as US firm buys Marconi rump

More than a century of proud British history in the telecommunications industry is about to come to an end. The company formerly known as Marconi has agreed to sell what remains of the business to a US private equity group.

Last year, Marconi sold its hardware manufacturing business to Ericsson for £1.2bn, leaving a rump that provided a range of telecoms services which was renamed Telent.

Telent agreed a deal to sell out to Fortress Investment Group yesterday for £346m or 529.5p a share.

Marconi's stock market value - it was listed as the General Electric Company in 1900 - peaked at £35bn.

The transaction will result in another bumper pay day for Mike Parton, the chief executive, who will not remain with the business under its new ownership. He will see more than half the 1 million share options he holds vest as a result of the deal, providing him with more than £2.6m. He will also get about £500,000 as a pay-off for the loss of his job.

Last year, Mr Parton earned £619,000 and banked a further £2m by selling the free shares he was awarded as part of a restructuring of a nearly bankrupt Marconi in 2003.

After the Ericsson deal, the future of the remaining business was complicated by the fact that it had a huge pension fund which, although fully funded, made the Telent business vulnerable to swings in the economy and the markets. Telent tried and failed to sell the pension fund, which has assets and liabilities of £2.7bn, with 64,000 members.

Mr Parton said: "We talked to everybody who was anybody in the last six months and we have an offer for the company we believe is fair value. It's a £300m business with a £3bn pension fund and that's a material consideration."

The General Electric Company started in 1886 as a maker of electrical equipment such as bells and telephones.

The business later expanded, making a huge range of products. Under Arnold Weinstock, who joined GEC as the managing director in 1963, it expanded further, buying the radio and electronics maker Marconi in 1968.

George Simpson replaced Lord Weinstock in 1996. He sold GEC's defence business to British Aerospace and spent $6bn (£3.2bn) buying the US telecoms equipment makers in 1999, changing the company's name to Marconi to emphasise the new communications focus.

However, when the telecoms market collapsed in early 2000, Marconi was faced with plummeting revenues and was accused of having overspent on acquisitions.

The beginning of the end came in April last year when Marconi failed to clinch any part of a £10bn technology-upgrade contract with BT.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

Day In a Page

Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones
Theme parks continue to draw in thrill-seekers despite the risks - so why are we so addicted?

Why are we addicted to theme parks?

Now that Banksy has unveiled his own dystopian version, Christopher Beanland considers the ups and downs of our endless quest for amusement
Tourism in Iran: The country will soon be opening up again after years of isolation

Iran is opening up again to tourists

After years of isolation, Iran is reopening its embassies abroad. Soon, there'll be the chance for the adventurous to holiday there
10 best PS4 games

10 best PS4 games

Can’t wait for the new round of blockbusters due out this autumn? We played through last year’s offering
Transfer window: Ten things we learnt

Ten things we learnt from the transfer window

Record-breaking spending shows FFP restraint no longer applies
Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

‘Can we really just turn away?’

Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

Nine of Syria and Iraq's 10 world heritage sites are in danger...

... and not just because of Isis vandalism
Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

Girl on a Plane

An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
Why Frederick Forsyth's spying days could spell disaster for today's journalists

Why Frederick Forsyth's spying days could spell disaster for today's journalists

The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent