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Global Crossing To Pay $1.65 Billion for Racal Telecom

Global Crossing, which is building a worldwide IP-based fibre optic network, has reached an agreement to acquire Racal Telecom for £1 billion ($1.65 billion) in cash.

The acquisition is intended to strengthen Global Crossing's business in Europe, especially in the UK, adding the very extensive IP-capabilities of Racal Telecom to complement Global Crossing's worldwide reach.

"Racal Telecom's extensive network adds to Global Crossing's existing UK operations and soon to be completed pan-European network, and represents an exceptional opportunity to accelerate our development of the world's first global independent telecommunications company," said Bob Annunziata, CEO of Global Crossing.

"The customer-focused business and skilled workforce that Racal Telecom provides will create a platform for us in Europe from which we can offer businesses the full benefits of Global Crossing's worldwide operations."

Racal Telecom brings a secure network of 7,300 route kilometres of fibre laid alongside railway lines, reaching more than 2,000 cities and towns across the UK. It has 20 ATM data switches, 4 AXE-10 voice switches, a frame relay network across Europe and the largest X25 network in the UK.

"Racal has invested over £400 million in the past few years to create the UK's broadest IP-centric network in the UK," said Lodwrick Cook, KBE, co-chairman of Global Crossing.

"This network puts us close to the customer with the capabilities they require. Our data-centric global network also positions us well to provide the backbone for the new third-generation mobile operators, soon to be licensed."

The deal further strengthens Global Crossing's increasing grip on the world's newest communications systems. The Bermuda-headquartered company already operates the largest fleet of cable laying and maintenance vessels, while its fibre optic network extends to 88,100 announced route miles connecting five continents.