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. Last Updated: 07/27/2016

GEC Buys Internet Firm

LONDON -- Britain's General Electric Co. continued its headlong rush to reinvent itself as a telecoms equipment giant Monday with a $4.5 billion deal to buy U.S. Internet telecoms specialist Fore Systems Inc.

GEC said it has agreed to pay $35 a share in cash for the Pittsburgh-based Internet switching equipment specialist, which employs 2,000 people.

The price was a 43 percent premium to Fore's closing price last week, although GEC said Fore's $361 million of cash reduces the net price to just under $4.14 billion. GEC said it plans to finance the deal with cash resources and bank facilities and it would be broadly earnings neutral in the year to March 31, 2000, and positive thereafter.

"We will now be in a position to capture the full benefits of the impact of the explosive growth of Internet and other data traffic on the demand for communications equipment and systems," said George Simpson, GEC's chief executive.

Fore reported operating profits increased 48 percent to $55.4 million from the year ended to March 31.