acquisition (here)

English translation: taking over/buying other companies

13:03 Feb 22, 2005

English language (monolingual) [PRO]
Bus/Financial - Telecom(munications)

English term or phrase: acquisition (here)

in this paragraph:

Mr Hellström also denied that the company was planning any big acquisitions. Ericsson is likely to win support for the issue, after its recent move to defuse a potential rebellion over voting rights. It has promised to examine the case for reducing the wide voting differential between A shares and B shares from the current 1,000-1 to 10-1.

This is the whole text:

Ericsson, the world's largest mobile telephone equipment company, warned yesterday of a risk that there would be no improvement in market conditions next year.

The comments by Kurt Hellström, chief executive of the Swedish group, extended the gloom that has engulfed the telecoms industry in the past 18 months. The company's shares hit their lowest level since September 1996 ahead of a meeting to ask shareholders for SKr30bn ($3.1bn) - equivalent to about 18 per cent of its current market value - to see it through the downturn.

Mr Hellström will tell shareholders tomorrow that the mobile telecoms sector's outlook has shown no improvement as the drought in orders from cash-strapped operators continues. "We don't think the market has become worse but the downturn has been prolonged. We have to face the possibility that next year doesn't turn upwards," he told the Financial Times.

He said this was a "conservative" scenario and the group was still counting on returning to profit "some time next year" after two years of losses. But he added that short-term market turmoil should not obscure the long-term growth prospects for the sector.

Operators urgently needed to invest because "the quality of networks is degenerating almost everywhere, and particularly in western Europe". He was also optimistic about the potential for 3G services, predicting that in 2005 there would be "massive use of 3G".

Mr Hellström said Ericsson would use the rights issue proceeds to strengthen its balance sheet and ensure adequate working capital for when market conditions improved. "This is not about converting black holes. We will cover any losses from savings and cost-cutting".

The company said in April it would cut a further 20,000 jobs, taking the total number of cuts announced since the start of last year to 42,000.

Mr Hellström also denied that the company was planning any big acquisitions. Ericsson is likely to win support for the issue, after its recent move to defuse a potential rebellion over voting rights. It has promised to examine the case for reducing the wide voting differential between A shares and B shares from the current 1,000-1 to 10-1.

The move would reduce the influence of its two biggest shareholders, Investor, controlled by the Wallenberg family, and Industrivärden, an investment group linked to Svenska Handelsbanken. The issue, scheduled for the third quarter, has still to be priced.

Ericsson shares fell 4 per cent to SKr20.8 yesterday after a profits warning from Singapore's Flextronics, an outsourcing specialist involved in the production of many of Ericsson's handsets. The shares are more than 90 per cent below their SKr230 peak in March 2000.

lafresita (X) KudoZ activity Questions: 779 (1 open) (1 without valid answers) (9 closed without grading) Answers: 1541 United Kingdom
Local time: 09:02

Selected answer:taking over/buying other companies

Explanation:
denied that they plan to acquire other big companies

Selected response from:

Edith Kelly
Switzerland
Local time: 10:02

Grading comment

Dziekuje!
4 KudoZ points were awarded for this answer

SUMMARY OF ALL EXPLANATIONS PROVIDED

4 +2

taking over/buying other companies

Edith Kelly

Answers

2 mins confidence:

peer agreement (net): +2

taking over/buying other companies

Explanation:
denied that they plan to acquire other big companies

Edith Kelly
Switzerland
Local time: 10:02
Native speaker of:

German,

English
PRO pts in category: 4

Grading comment

Dziekuje!

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