GEC seals Siemens joint telecoms deal

The network of commercial partnerships between General Electric Company of the UK and Siemens, the German electrical engineering giant, was strengthened yesterday with the formation of a new telecommunications company, writes Chris Godsmark.

The jointly owned group, Siemens GEC Communications, will take over existing telephony operations of GPT, the group which traced its history back to the 1989 takeover of Plessey. Siemens and GEC announced in June 1996 their intention to form a new group to manage their interests in private communications.

It will also combine Siemens Business Communications, formed last year when Mercury Communications, the main UK subisidary of Cable & Wireless sold 75 per cent of its business telephony equipment division to Siemens, reducing its shareholding to 25 per cent.

GPT is the UK's largest manufacturer of telecommunications equipment and a leading supplier of the hardware used in private company phone networks. It will specialise in developing large private systems include video-conferencing and computerised switchboards.

The new company will employ around 3,000 staff and have annual sales of pounds 265m. Neither Siemens, nor GEC, has disclosed a value for the total deal.

The formation of Siemens GEC Communications marks another step in the transformation of GEC under its new managing director, George Simpson, who joined the group from Lucas in September last year, repacing its long-standing head, Lord Weinstock.

Mr Simpson has already stamped his mark on GEC by announcing a sweeping reorganisation its internal operating structure, replacing the network of businesses into main operating divisions, each under a separate managing director.