Ericsson, the Swedish group, is talking to Marconi Corp's advisers about a possible deal to buy the UK telecommunications equipment maker. Marconi has been talking to a number of possible suitors since their shares slumped following the loss of a critical contract with BT to Ericsson on price.
Marconi has been struggling to complete a deal with another buyer due to concerns over national security surrounding Marconi's defence contracts and their pension fund deficits.
But, Marconi could be a reasonable strategic fit for Ericsson, who is trying to develop BT as key strategic account. And they should be able to strike a hard bargain with Marconi shareholders.