the UK, evolved into Siemens GEC Communication Systems, which in 1998 merged with Siemens Business Communication Systems to form the largest division of Siemens AG: Siemens Communications. In August 1998, GEC acquired Siemens' 40% stake in GPT (at this point only existing as a legal entity), and merged GPT with the telecoms units of its other subsidiaries – Marconi SpA, GEC Hong Kong, and ATC South Africa – to form Marconi Communications. Marconi (1999–2005) In December 1999, GEC's defence arm, Marconi Electronic Systems, was sold to British Aerospace, forming BAE Systems. The remainder of GEC was renamed Marconi, and Marconi Communications became its principal subsidiary. Following the announcement of the Marconi Electronic Systems demerger on 19 January 1999, GEC focused on the booming telecoms sector. It purchased two American equipment-makers to complement its existing telecommunications businesses, RELTEC Corporation (March 1999) and FORE Systems (April 1999). Both acquisitions occurred during the peak of the dot-com bubble. The £2.8bn price for FORE Systems and the £1.3n spent on RELTEC took a heavy toll on Marconi following the bursting of the bubble in 2000/2001. In the first half of 2001, some of Marconi's major competitors such as Lucent Technologies and Alcatel had issued profit warnings, citing a large drop in orders from large telecoms groups. Marconi executives meanwhile reassured investors; the Financial Times judged they were "either failing to see the warning signs, or ignoring them." However, in late June and early July it became evident that group sales had suffered a massive decline and by 3 July it was clear that a profits warning was inevitable. This was complicated by the fact that Marconi was to announce the sale of its medical unit to Philips for $1.1 billion. The company's shares would have to be suspended so that investors could not trade its shares without full information. At 7.26am on Wednesday 4 July the Philips transaction was announced, and 15 minutes later Marconi announced the suspension of its shares. Following a contentious board meeting that evening, Marconi announced 4,000 job cuts, a 15% drop in sales forecasts, and a 50% fall in operating profit to March 2002. When trading resumed the following day, the share price dropped 54%. This valued the company at £2.8 billion, compared to £35.5 billion in September 2000. John Mayo, the deputy chief executive, was dismissed as a result. A second profits warning in September 2001 led to