BUSINESS
Bull divides in two in search for profit
01-12-2000
by Aoidin Scully
Troubled French Computer Group Bull has announced it is to divide into two in a bid to return to profitability.
The company is to sell EUR400 million worth of assets in 2001 and cut 1,800 jobs over the next 18 months.
The company would not confirm whether the assets disposal will include Bull Cara's operations in Ireland but, as reported in October by ElectricNews.Net, a strongly interested buyer is eyeing the Irish operation. Bull Cara employs over 300 people in Ireland and incorporates Bull Information Systems and Cara Data Processing; it is believed that a sale of one of these entities is likely to be completed before Christmas.
The split, scheduled to take place on 1 January 2001, would see two "autonomous entities" formed: a single Services organisation incorporating Consulting & Systems Integration and Outsourcing & Support Services, as well as an Infrastructure & Systems division. The French Government, Motorola, NEC and France Telecom own just over 17 percent each of Bull.
With the Services subsidiary, which Bull wishes to create before 30 June next year, the company hopes to "position Bull as an European leader in this market and facilitate partnership opportunities with other Services companies." Similarly, the Server subsidiary will "accelerate the search for specialised partners for the development of its business as a supplier of IT systems and infrastructures," the Group believes.
According to the Financial Times, Bull has been looking to form a server alliance for over a year, while insisting that it should keep majority control in that business.
"It was very hard to find a partner for Bull as a whole and perhaps the split will make that easier," said Dov Levy, an analyst at Credit Lyonnais Securities.
Last February, when Bull reported a 1999 net loss of EUR288 million, its Chairman, Guy de Panafieu, forecast the company would be profitable this year and was "ready to grasp the opportunities created by the new economy."
However, at a recent Board meeting, the company warned that "despite an improvement compared to the first half, the second half results are anticipated to be significantly negative."
De Panafieu attributed this to the continuing weakness of the European server market, particularly in France, and said that the pick-up in orders over the last few months for all the Group's businesses arrived too late to generate growth in revenue and margins for 2000.
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