Italian State Telecommunications Giant STET and Siemens AG Unveil $2-Billion Telephone Equipment Deal

Strategic Insights -

Italian state telecommunications giant STET and German electronics group Siemens AG have unveiled a deal to create a telephone equipment company expected to have annual revenue of about $2 billion (U.S.). This announcement ends months of speculation over STET's foreign partner in its bid to become a major equipment maker. The deal, reached on Saturday, marks the end of STET's relationship with American Telephone and Telegraph Co. of New York and sets the stage for a new partnership with Siemens Telecommunicazioni SpA, the Italian subsidiary of Siemens AG.

Key Takeaways:

  • STET and Siemens AG have formed a joint venture to create a telephone equipment company with expected annual revenue of $2 billion.
  • The new company will be a 50-50 partnership between STET and Siemens AG, with Siemens injecting an undisclosed amount of cash into the business.
  • The joint venture marks the end of STET's relationship with AT&T, which will sell back its 20% stake in Italtel.
  • STET's new company is expected to export 40% of its output by 1996.
  • The partnership between STET and Siemens AG is the second major development in the Italian telecommunications industry in seven days, following the merger of five domestic telephone and satellite companies to form Telecom Italia SpA.
  • The merger of Telecom Italia SpA is expected to be completed by August 1995.

Statistics:

  • $2 billion: The expected annual revenue of the new telephone equipment company.
  • 50%: The ownership share of both STET and Siemens AG in the new company.
  • 20%: The stake in Italtel held by AT&T, which will be sold back to STET.
  • 40%: The percentage of output expected to be exported by the new company by 1996.
  • 45%: The expected global market share of the merged Telecom Italia SpA (Source: Reuters).

Sources:

  • Reuters News Agency
  • La Repubblica (Italy)