Siemens AG is thought to be planning to swap its British defense arm, Siemens-Plessey, for the 60% controlling stake held by GEC Plc in the telephone-exchange maker GEC-Plessey Telecommunications Ltd, known as GPT. According to the London Sunday Times, analysts and bankers are saying that the swap, along with a large cash payment, is currently the subject of negotiations, as GEC concludes a strategic review of the company’s operations. GEC’s stake in GPT is valued at around $1.83bn, while Siemens-Plessey is thought to be worth much less, at around $500m. But Siemens now sees its core business as telecommunications. Siemens put its defense business up for sale back in March (CI No 3,118) and analysts say that there are now four bidders: GEC; British Aerospace Plc in partnership with Daimler-Benz Aerospace; Thomson-CSF SA; and Alcatel Alsthom SA. GEC is said to be the favorite because of its GPT stake. Siemens has owned its 40% of GPT since it and GEC acquired Plessey back in 1989.
