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January 25, 1987


By CBR Staff Writer

While France continues to put off the thorny decision on which foreign multinational should be allowed to acquire Compagnie Generale des Constructions Telephoniques, Compania Telefonica Nacional de Espana SA is putting pressure on the new Alcatel NV CGE-ITT conglomerate by inviting two of the contenders for CGCT, Ericsson and AT&T-Philips Telecommunications, in for talks on the future of one of the two troubled Spanish ITT subsidiaries that have gone into Alcatel. According to the Wall Street Journal, the Swedish and the Americo-Dutch concerns have each been invited to make proposals for rescuing Marconi Espana SA, the former ITT manufacturing unit mainly involved in defence electronics in which Telefonica has an indirect minority stake through its 21% of Standard Electrica SA. Telefonica already has joint ventures with AT&T on semiconductor manufacture, and with Ericsson on telephone equipment. Meantime, over in France, Northern Telecom sees the postponement of a decision on the future of CGCT as an opportunity to reassert its interest in the state-owned company. A decision on how much the government wants for CGCT is now due to be made by the end of this month, and the current deadline for a decision on which foreigner will win the prize is set for March. According to the Financial Times, the French Industry Ministry and the Direction Generale de Telecommunications both favour AT&T-Philips, while the Finance Ministry and the Prime Minister’s office are still split between the US and West Germany. The return of Northern Telecom for talks further muddies the water, and will encourage other contenders who have been shown the door once, including Ericsson and Plessey, to come back for another crack at CGCT.

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