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. Last Updated: 07/27/2016

Global Crossing Buys U.K. Cable Unit

NEW YORK -- Global Crossing Ltd., a telecommunications company building undersea and land-based fiber optic networks, said over the weekend that it would buy Global Marine, the cable installation unit of Britain's Cable & Wireless PLC, in a deal valued at pounds 550 million ($885 million).

Hamilton, Bermuda-based Global Crossing said Sunday that it decided to buy the unit because it estimated it would have had to pay another company $80 million to $100 million annually to install its expanding undersea fiber optic network.

Global Crossing said the purchase price consisted of cash and debt, but it did not reveal the amount of debt. Company officials could not be reached for comment Sunday. The New York Times reported in its Monday electronic edition that the deal included $160 million in debt.

Global Crossing said Global Marine is expected to generate $100 million in cash flow in its current fiscal year and described it as the world's largest undersea cable installation and maintenance company, with a client list that included AT&T, British Telecom and Deutsche Telekom.

William Carter Jr., president of Global Crossing Co. and formerly the head of AT&T's submarine systems division, will take the helm as chairman of Global Marine, the company said.

"This acquisition increases Global Crossing's ability to control the installation and maintenance of our global undersea network, making us even more cost effective, while ensuring the highest quality service to our customers," Carter said in a statement.

The deal marks the second major acquisition that Global Crossing has made in recent months. On March 17, it announced it was buying the larger Frontier Corp., a local and long-distance carrier, for $62 a share or $11.2 billion in stock. That acquisition allowed Global Crossing to gain a foothold in the United States.

The company also grabbed headlines when, in February, Bob Annunziata resigned as president of AT&T's $22 billion business services division to become Global Crossing's chief executive.

Annunziata had just returned to AT&T after a 15-year hiatus, when the United States' No. 1 long-distance carrier bought the company he founded, Teleport Communications Group, for about $12 billion. He had overseen the AT&T business division since September.

The Wall Street Journal reported on March 19 that former U.S President George Bush owned Global Crossing stock worth $14.4 million, shares he received in lieu of a fee after he made a speech on behalf of the company.

In his statement, Annunziata described Carter as the ideal person to take the helm of Global Crossing. He would "take full advantage of the many opportunities for profitable growth as demand for global bandwidth explodes."

Global Crossing said a $10 billion market exists for cable deployment, powered by the demand for services related to data, voice, video and Internet connectivity.