BT buys Infonet

BT is to acquire Infonet, a provider of international managed voice and data network services, in a $965m deal that will strengthen its presence in the US and Asia Pacific.

BT is to acquire Infonet, a provider of international managed voice and data network services, in a $965m (£520m) deal.

Infonet has local operations in 70 countries and 1,800 multinational customers. As well as its European business, it has a market presence in the Americas, a key market for global IP-based services, with $182m in sales and customers such as DHL and Nestle. Infonet’s revenue in this region grew last year by more than 30%.

The Infonet acquisition also strengthens BT’s existing operations in the expanding economies of the Asia Pacific region. Its customers in these markets include Siemens, Nokia, Bayer AG International, IBM and Hilton International.

Commenting on the deal, BT chief executive Ben Verwaayen said: ‘This is another milestone in BT’s transformation into a leading global provider of IT and networking services. It is our goal to be the first choice for multi-site organisations around the world as they address their increasingly complex communications needs.’

BT expects to realise cost savings too. It says that it can save money through the elimination of overlapping network leasing, operating and maintenance costs, and the reduction of Infonet’s in-country access costs through BT’s scale and purchasing power. These savings, it says, are expected to reduce the annual cash costs of the combined businesses by $150m (£80m) in the third year following the acquisition, which is expected to take place in early 2005.

In addition to the acquisition, BT is to enter into a strategic relationship with KDDI (a major distributor of Infonet services) to address network-centric outsourcing opportunities for BT customers in Japan, and also for KDDI customers outside Japan.

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