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Mergers and Acquistions News

Categories: Telecoms, Software

June 30th 2011, 18:02PM

Firms in the telecommunications sector looked to further enhance their service capabilities this month, with major operators acquiring smaller firms in the industry.

Mobile network operator Ericsson revealed that it will pay $1.15 billion (£702.4 million) in cash for US telecommunications group Telecordia.

The Swedish firm has forecast that phone users will require an increasing amount of data services in the future and hopes the newly acquired Telecordia will allow it to cope with this expected "explosion of data".

Hans Vestberg, chief executive of Ericsson, said: "We will definitely be a leader in many of the different domains here. We see this as one of the areas which has portfolio momentum."

Earlier in the month, Russian telecommunications group Vimpelcom agreed to acquire 90 per cent of shares in Russian mobile phone operator New Telephone Company (NTC).

Although the price of the deal is not confirmed, New Telephone Company has an enterprise value of $420 million (£256 million).

NTC provides voice and data services in the Primorskiy region of Russia and its base in the east of the country will allow Vimpelcom to increase its market share in the area.

Furthermore, mobile phone giant Nokia is currently locked in talks with a number of parties over the sale of its stake in Nokia Siemens Networks (NSN).

Although, US private equity firms Kohlberg Kravis Roberts & Co and TPG have cooled their interest in the stake, Nokia has confirmed that other businesses are still in the running.

NSN was set up by Nokia and German firm Siemens in 2007, as the two giants merged their businesses on a 50-50 ownership basis in what has turned out to be a disappointing venture for both companies.

Meanwhile, internet giant Google has ramped up its acquisition plans over the past month.
The firm revealed that it plans to buy online advertising company AdMeld in order to boost its market share for graphical design adverts.
Google, which did not disclose the financial details of the deal, will integrate the AdMeld software with its DoubleClick feature.

The search engine specialist is hoping that the acquisition will help it to enjoy a larger share of the $200 billion (£124 billion) display advert industry.
Google chief Eric Schmidt also revealed this month that the company is on the lookout for more display ad acquisitions.

Speaking at the Cannes Lion advertising festival, Mr Schmidt revealed that it would target firms which specialise in handling display ads such as banners and video.

He said: "It would be good to have more diversified revenue. I would argue that we're doing really well there.

"We started off with largely text ads, and now we have this display business, which is going to end up being a $10 billion, $20 billion kind of business. It will be very large."

Neal Mohan, vice president of display advertising for Google, claimed that the deal could help boost the growth of the display marketing sector. ADNFCR-1833-ID-800608092-ADNFCR

 

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