US Internet networking giant Cisco is reported to be considering a £12 billion buy-out of British telecoms equipment maker Marconi.
It's believed that Cisco, at one time the world's biggest company, wants to boost its presence in Europe.
But the buy-out has reportedly been put on hold until the British firm has completed its restructuring programme.
Cisco's chief executive Mr John Chambers is said to have told advisers to delay making an approach, according to the Sunday Businessnewspaper.
Cisco has been hit by the downturn in the US economy and last month reported a big drop in revenues, posting its first quarterly loss in 11 years.
Marconi has also been hit by a sharp slowdown in the global market for telecoms equipment.
It is reorganising its business into three divisions and cutting 3,000 jobs worldwide as it sells network factories under an outsourcing deal.
The company, which was formed two years ago when industrial giant GEC sold its defence division to BAE Systems, reported an 8 per cent increase in profits last month.
Cisco has also been linked with a possible take-over of Alcatel, the French telecom equipment maker, which last week failed in its merger bit with troubled US rival Lucent.
PA