A Russian nuclear agency that does business with Iran has agreed to buy the Israeli technology company ECI Telecom for $5 billion, according to reports in the Russian newspaper Izvestia.
Rosatom, the State Atomic Energy Corporation that has hundreds of subsidiaries and scientific projects under its wing, reportedly wants to make telecommunications technology based on ECI technology. The $5 billion price tag, Izvestia reports, includes the cost of moving ECI's operations to Russia.
ECI declined to confirm or deny the report on Wednesday.
It seems the negotiations between Shaul Shani, ECI's controlling shareholder, and Rosatom have been going on for two years. At the time the press reported that Shani was trying to sell ECI to Russia.
"Possibly the negotiations have advanced and a deal will be closed, or not," a Rosatom source told Izvestia, adding that he thought the chance of closing a deal were 50%. Negotiations with Russians usually take a long time, he said.
Rosatom isn't picking and choosing from among ECI's operations: If a deal is done, said the source, the whole operation would be moved to Russia lock, stock and barrel.
The proposed deal has been brought before Russian President Dmitry Medvedev, who is expected to give his blessing.
Rosatom manages all nuclear assets of the Russian Federation, including civilian and strategic nuclear capacity. It is also responsible for Russia's nuclear undertakings internationally. Russia and Iran signed a civilian energy agreement in 1992, and in 1995 the two countries signed a deal for the construction of a nuclear plant at Bushehr. That too is Rosatom's responsibility.
ECI has been reinvented a few times since its establishment in 1961. In the 1990s it developed data-compressing technology for data transfer over telephone lines. In the latter part of that decade the company assumed enormous proportions, boasting revenues of a billion dollars a year and a workforce of 6,000. Listed for trading on Nasdaq, its value reached $3.5 billion.
In 2007 ECI was acquired by Shaul Shani's Swarth group together with the London-based Ashmore group, which took it private.
The new owners have not divulged ECI's performance since then, but it is known that ECI currently has 2,600 employees, 1,600 of whom work in Israel.
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