Marconi Communications, the former telecommunications arm of the General Electric Company plc (GEC), was founded in August 1998 through the amalgamation of GEC Plessey Telecommunications (GPT) with other GEC subsidiaries: Marconi SpA, GEC Hong Kong, and ATC South Africa.
|Predecessor||GEC Plessey Telecommunications (GPT)|
Marconi Corporation plc
In December 1999, it became the principal subsidiary of Marconi plc, which was formed by the renaming of the entity left out of GEC, when GEC's defence arm, Marconi Electronic Systems, was merged with British Aerospace to form BAE Systems. Marconi plc was restructured to Marconi Corporation plc in May 2003.
During the mid-1990s, its prominent predecessor company, GPT, gradually disappeared. Through a series of mergers, divestments and restructures in 1997-1998, GPT was amalgamated with two major companies: Marconi Communications and Siemens Communications (in 2008, Siemens Enterprise Communications).
On 23 January 2006, Ericsson acquired a majority of Marconi Communications' parent company, Marconi Corporation plc. The remainder of Marconi Corporation plc was renamed Telent plc.
Companies with "Marconi" in their name can trace their origins through a complex history of mergers, takeovers and divisions, to the 1963-established Marconi Company Ltd, founded in 1897 as the Wireless Telegraph & Signal Company by Guglielmo Marconi. The operations of Marconi amalgamated into GEC in 1968, when GEC acquired the parent company of Marconi, English Electric.
Background: acquisition of Plessey and GPT (1986-1997)
The evolution of Marconi Communications traces to 1986, when The General Electric Company (GEC) attempted a takeover of Plessey, a British-based international electronics, defence and telecommunications company founded in 1917. The takeover bid was barred by regulatory authorities. As an amicable solution, GEC and Plessey merged their telecommunications businesses on 1 April 1988 as GEC Plessey Telecommunications (GPT). GPT was a world leader in many fields, for example synchronous digital hierarchy technology, and this brought together the two companies responsible for developing and building the System X telephone exchange, which was supposed to make selling System X simpler.
In 1989, GEC and the German conglomerate Siemens AG acquired the Plessey Company through their joint holding company, GEC Siemens plc. While most of Plessey's assets were divided between the companies (see: Plessey#Break-up of the business), GPT remained a joint venture, with a 60/40 shareholding between GEC and Siemens, respectively. GEC Plessey Telecommunications officially renamed itself "GPT", which would continue to exist merely as a legal entity.
During the mid-1990s, the name GPT gradually disappeared in the UK. By October 1997 the joint venture, through a series of Siemens mergers and acquisitions in the UK, evolved into 'Siemens GEC Communication Systems', which in 1998 merged with Siemens Business Communication Systems to form the largest division of Siemens AG - Siemens Communications. In August 1998, GEC acquired the remaining 40% stake in GPT, held by its partner, Siemens.
GPT to Marconi Communications and Siemens Communications (1998-2006)
The part of GPT which evolved into Siemens Communications in 1998 would eventually become Siemens Enterprise Communications in 2008. The GEC acquired part of GPT in August 1998, which became Marconi Communications, which would be amalgamated into Ericsson when it acquired majority of Marconi Communications' parent company, Marconi Corporation plc, in 2005. The remainder of Marconi Corporation plc was renamed Telent plc. The chain of events is as follows:
Marconi Communications, and break up (1998-2005)
In August 1998 GEC acquired Siemens' 40% stake in GPT (at this point only existing as a legal entity), and merged GPT with the telecoms units of its other subsidiaries, Marconi SpA, GEC Hong Kong, and ATC South Africa, to form Marconi Communications.
In December 1999, GEC's defence arm, Marconi Electronic Systems, was amalgamated with British Aerospace to form BAE Systems. The entity left out of GEC was renamed Marconi plc, and Marconi Communications became its principal subsidiary.
Marconi plc decided to focus on the then-booming telecoms sector, and bought two American equipment-makers, RELTEC Corporation (March 1999) and FORE Systems (April 1999), to complement businesses of its subsidiary, Marconi Communications. Both acquisitions occurred during the peak of the dot-com bubble. The £2.8bn (US$4.5bn) ($6.9 billion today) price tag for FORE Systems and the £1.3n spent on RELTEC, took a heavy toll on Marconi following the "burst of the dot-com bubble" in 2000/2001. In July 2001, Marconi plc suffered a 54% drop in its share price following suspension of trading of its shares, a profits warning and redundancies. On 19 May 2003, Marconi plc underwent a major restructuring into Marconi Corporation plc, advised by Lazard and Morgan Stanley. Marconi shareholders received 1 Marconi Corporation share for every 559 Marconi shares. In a debt-for-equity swap, the firm’s creditors received 99.5% of the new company’s shares.
In 2005, the company failed to secure any part of BT's 21st Century Network (21CN) programme. Various bids were received for the business, including one by Huawei Technologies, with whom Marconi already had a joint venture. The fact that Marconi Corporation plc received no major 21CN contract was a surprise to commentators, and sent the company's shares tumbling. An example of analysis before BT announced the winners of contracts is Dresdner Kleinwort Wasserstein's: "[Marconi is] so advanced with its products and so entrenched with BT Group PLC that its selection looks certain."
Until the collapse of the Marconi group in 2005-2006, the company was a major supplier of asynchronous transfer mode, gigabit Ethernet, and Internet protocol products. The majority of Marconi Corporation's businesses (including Marconi Communications) were sold to Ericsson in 2005, and the remainder was renamed Telent plc. On 27 October 2006, the company wound up voluntarily.
GPT to Siemens Communications (1998-2006)
By 1997 the GPT name disappeared in UK, and the company was known by Siemens GEC Communication Systems (SGCS). The following year, SGCS merged with SBCS (Siemens Business Communication Systems) to form Siemens' biggest division, Siemens Information and Communication Networks division, later to be commonly known as Siemens Communications (Siemens COM). Siemens COM division was formed on 1 October 1998 as part of major restructuring and recombining of the Siemens information and communication activities.
In 2002, Siemens COM was divided into two major business units - one for mobile networks and fixed networks, and the other for Enterprise business units. On 1 October 2006, Siemens AG decided to divide Siemens Communications into two companies - Siemens Networks GmbH & Co. KG, and Siemens Enterprise Communications GmbH & Co. KG. The carrier business (mobile networks, fixed networks, carrier services) became Siemens Networks GmbH & Co. KG, which later merged with Nokia to form Nokia Siemens Networks LLC.
Siemens Enterprise Communications GmbH & Co. KG was demerged out of the enterprise division. Two years later, in October 2008, its operations were amalgamated into a new entity, Siemens Enterprise Communications, a joint venture formed between Siemens AG (49%) and the Gores Group (51%) to create a collaboration across wireless, fixed and enterprise networks.
The three Enterprise Technology Centers were based in San Jose, California; Vienna, Virginia; and Israel. The San Jose Technology Center, which had been responsible for management of Marconi's gigabit Ethernet solutions, broadened its research focus to include development of application-oriented platforms, connection-oriented uplinks between connection and connectionless networks, deep packet inspection solutions, and predictable quality of service. The center in Israel concentrated its research and development on AI-based network behavior and the Virginia center focused on AI-based network management.
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