updated 8/8/2005 9:41:05 AM ET 2005-08-08T13:41:05

Huawei Technologies Co., China's biggest maker of telecommunications equipment, is considering buying Britain's Marconi Corp. PLC in the latest foreign takeover bid by a Chinese company, news reports said.

The deal could be worth 560 million British pounds, or $1 billion, the Sunday Times of London reported. The talks also were reported by the Financial Times, which said analysts don't believe Marconi can survive as an independent company.

Marconi shares surged 17 percent on the reports, rising 45 pence to 312 pence ($5.55) on the London Stock Exchange.

The news comes less than a week after state-controlled Chinese oil company CNOOC Ltd. gave up its $18.5 billion bid for U.S. oil and gas producer Unocal Corp.

Chinese companies have launched a series of takeover bids abroad as they try to establish a role among leading global players in industries ranging from computers to energy.

Huawei didn't respond Monday to requests for comment faxed to its headquarters in the southern Chinese city of Shenzhen.

Marconi said in a statement issued through the London Stock Exchange that it was pursuing "all strategic options," including talks with others about "potential business combinations."

The statement didn't give any other details and cautioned that the talks were "at a preliminary stage and there can be no assurance that an offer will ultimately take place."

Marconi, named for the Italian inventor of radio, once was one of Britain's industrial giants.

The company effectively put itself up for sale in May after losing out on a 10 billion pound ($5.7 billion) contract to build a new network for British Telecom, its biggest customer, according to the Financial Times.

Huawei was one of eight companies selected by BT on the network contract, according to the Financial Times.

Marconi and Huawei signed a partnership deal in May under which the British firm will market Huawei's network technology in Europe while the Chinese company sells Marconi's wireless equipment in Asia, according to the Sunday Times.

Founded by the Chinese military to produce high-tech communications gear, Huawei has expanded rapidly into civilian telecoms, selling low-cost equipment in other developing countries.

It has tried with only mixed success to break into the United States and other developed markets.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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