The original bid was made in August 2000, but since then the collapse in the telecoms market and the need for consolidation has forced down supplier values. Both companies, which make components used in mobile base stations, have suffered from a fall-off in demand for their products, and are currently running at a loss.
For the nine month period to September 30, 2002, LGP made a net loss of SEK16m ($1.8m) on revenue of SEK966m ($111.7m). For the same period, Allgon reported a net loss of SEK155m ($18m), on revenue of SEK1.05bn ($122.2m). The merger is expected to create annual cost savings of approximately SEK75m ($8.6m). The new group will employ 1,400 people in 13 countries, with pro forma sales of SEK2.5bn ($289m).
The merger is to be implemented through an exchange of shares, which will see Allgon’s current shareholders holding 40.4% of the new company.
Source: Computerwire
