London-based General Electric Co. (GEC) has agreed to purchase Cleveland, Ohio-based networking equipment vendor, Reltec for $2.1 billion.
The purchase price includes an assumed debt of $361 million, at an agreed share price of $29.50 in cash-which is a premium of 36% over Reltec's closing price on Friday Feb. 26, the companies said in a statement. The agreement also involves the controlling shareholders Kohlberg Kravis Roberts & Co., who have agreed to tender their 81.5% stake in Reltec.
Reltec supplies broadband-access equipment for next generation digital loop carriers and fiber-to-the-curb systems. Its customers include AT&T, Bell Atlantic, MCI WorldCom and other telcos in the U.S. In 1998 the company reported $1.06 billion in revenue.
GEC, the electronics and communications giant, will pair its telecommunications division, Marconi Communications, with Reltec. GEC bought the company in order to gain access to Reltec's customer base in the U.S., the companies said.
GEC is unrelated to the U.S.-based General Electric Co.
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