SUBMARINE TELECOMS INDUSTRY REPORT – SECTION 3.4: RECENT MERGERS, ACQUISITIONS AND INDUSTRY ACTIVITIES

3.4.1 Alcatel Submarine Networks

In October of 2018, French optical transports solutions firm Ekinops confirmed that it was holding preliminary talks with Nokia about the possible acquisition of Alcatel Submarine Networks (ASN).

There have been no further public announcements made since.

3.4.2 Global Cloud Xchange

On September 16, 2019 Global Cloud Xchange, a subsidiary of Reliance Communications (RCom), filed for Chapter 11 bankruptcy after missing payments of around $350 million. RCom has already pledged to raise around $3.1 billion through the sale of non-core assets to alleviate its levels of debt.

On September 25, 2019, Bill Barney stepped down as CEO of RCom to focus on the restructuring of Global Cloud Xchange. He remains the CEO of Global Cloud Xchange.

3.4.3 Global Marine Systems Limited

On October 22, 2018 HC2 Holdings announced that it was exploring strategic alternatives, including a potential sale, for its Global Marine Subsidiary. As part of the process, Global Marine engaged Deutsche Bank Securities Inc. and ABN AMRO Bank N.V. as joint advisors to explore strategic alternatives for the business.

There have been no further public announcements made since.

3.4.4 Huawei

In June of 2019, Huawei Technologies announced plans to sell its submarine cable business – Huawei Marine – after the company was blacklisted by the United States as a security risk in the ongoing trade dispute with China. Hengtong Optic-Electric Co Ltd signed a letter of intent with Huawei Technologies to buy its 51 percent stake in Huawei Marine.

3.4.5 Nexans

On January 24, 2019 Nexans announced a restructuring of its European operations. The goal of this restructuring is to resize and refocus the organization on its core Business Groups to reduce complexity and increase cost effectiveness.

The restructuring project affects 939 positions and will see the creation of 296 jobs. The main impact would be in Germany, France, Switzerland and, to a lesser extent, Belgium, Norway and Italy.

3.4.6 Padtec

On January 22, 2019, IPG Photonics Corporation announced that it had signed a definitive agreement to acquire the submarine networks division of Padtec SA, a communications equipment company based in Brazil.

3.4.7 SubCom

On November 5, 2018 Cerberus Capital Management completed its acquisition of TE SubCom and rebranded the company to SubCom. David Coughlan was appointed as CEO of the new company.

3.4.8 Submarine Telecoms Forum, Inc.

On August 1, 2019, SubTel Forum was officially awarded the certification of Accredited Provider of Continuing Education and Training, a process that was first started some two and a half years earlier. They have partnered with Offshore Analysis & Research Solutions (OARS) to develop the training program. OARS, founded in 2007, is a staffing and training company survey consulting and data services company based in Houston, Texas. They specialize in offshore project services with a long history in oil & gas, submarine telecom, renewables, and hydrography.

SubTel Forum and OARS are developing a rigorous training program designed to standardize the approach and reporting of client representation during the implementation of submarine cable systems. The program is set to be released in early 2020.

3.4.9 United States Cable Security Fleet

On July 12, 2019, the U.S. House of Representatives passed the National Defense Authorization Act for Fiscal Year 2020 (H.R. 2500) which would reauthorize the existing Maritime Security Program and newly authorize similar programs for tank vessels and cable vessels.

H.R. 2500 would also authorize two new programs patterned on MSP – one for tank vessels, the “Tanker Security Fleet,” and one for cable vessels, the “Cable Security Fleet.” Both programs appear to respond to concerns that there is a risk to national security because of a lack of U.S.-flag vessels to transport fuel and to repair submarine telecommunications cables.

The Cable Security Fleet was added as an amendment to H.R. 2500 by voice vote and was sponsored by Rep. Rob Wittman. The amendment would permit enrollment of two vessels commencing in fiscal year 2021 to be paid $5 million per year. Unlike MSP and the Tanker Security Fleet, persons qualified as “section 2” U.S. citizens (i.e. persons eligible to register a vessel in the United States at least majority-owned by U.S. citizens) would have a preference where vessels of equal military utility are offered. Like the tanker program, cable vessels would not have their annual stipend reduced when under charter to the U.S. Government. Unlike the tanker program (and MSP), vessels enrolled in the program will have U.S. domestic trading privileges (i.e. “Jones Act” privileges) when operating pursuant to a national security call-up.

3.4.10 WFN Strategies

In May 2019, U.S. Secretary of Commerce Wilbur Ross presented WFN Strategies with the President’s “E” Award for Exports at a ceremony in Washington, D.C. In total, Secretary Ross honored 48 U.S. companies with the President’s “E” Award, the highest recognition any U.S. entity can receive for making a significant contribution to the expansion of U.S. exports.

Hengtong Marine - Connecting the World, Connecting The Future