AT&T; Unit to Buy Philips' Wireless Arm

From Bloomberg Business News

AT&T; Corp. said its AT&T; Network Systems unit will buy Philips Electronics' wireless phone equipment businesses based in France and Germany.

Financial details were not disclosed. The companies said they expect to complete the agreement in early 1996.

The planned purchase would broaden AT&T;'s presence in the European phone market, where it formed an alliance last year with Unisource, a union of phone companies in the Netherlands, Spain, Sweden and Switzerland. It would also strengthen Network Systems' operations as AT&T; prepares to sell the unit to the public under plans to split into three companies.

"AT&T; is trying to fill all of their product gaps. They want to own [wireless] equipment from soup to nuts--everything from switches to handsets," said Albert Lin, wireless equipment analyst at Cowen & Co.

The businesses include a global work force of about 3,500, sales organizations in 25 countries and technology for mobile phone antennas and microwave transmitters.

Four Philips Communications Systems units are being sold: Cellular Infrastructure Systems, Managed Transport Networks, Microwave Transmission and Access, and Transmission.

The units include Paris-based Telecommunications Radioelectriques et Telephoniques, known as TRT, and Nuremburg, Germany-based unit PKI. Philips will remain the official owner of PKI.

Philips is selling the assets to concentrate on products for personal communications services, the next generation of wireless communications. Philips will make and market cellular and cordless telephones, faxes and pagers, which PKI also makes.

In New York Stock Exchange trading, AT&T; shares were off 75 cents to close at $64.38. Philips shares were up 38 cents at $36.13.

Under AT&T;'s September announcement to split into three companies, it will sell a 15% stake in Network Systems to the public in the first half of 1996.

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