Ericsson 'in talks to buy Marconi'

Having lost out to Ericsson in the race to build BT's new network, Marconi could now be taken over by the Swedish firm

Swedish telecoms giant Ericsson is in takeover talks with British rival Marconi, according to reports.

Marconi is effectively up for sale, having failed to secure a contract to provide the intelligence for BT's 21st Century Network (21CN). The Financial Mail  reported on Sunday that Ericsson could pay up to £700m for Marconi, which makes a range of telecommunications products.

Both companies have declined to comment on the report.

Marconi's failure to win a stake in the construction of 21CN was a shock, and forced the company to cut 800 jobs. Ironically, Ericsson was the company Marconi lost out to when BT Ericsson's network intelligence products instead — partly, it is thought, because Ericsson significantly undercut Marconi's own offer.

China's Huawei, which also won a chunk of the 21CN business, was at one time the favourite to take over Marconi. However, it has been reported that some UK politicians have lobbied against this deal, amid concerns that Huawei is closely linked to the Chinese government.