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Alcatel-Lucent Merger Complete

December 01, 2006 — CIO —

Alcatel-Lucent, a global communications giant with combined annual revenue of more than 18 billion euros (US$24 billion), will debut Friday after a sometimes rocky engagement between Alcatel and Lucent Technologies.

The deal closed Thursday, about eight months after it was announced and following national security concerns, investor lawsuits and one close shareholder vote. On Friday, the company is set to begin trading on the Euronext Paris exchange and the New York Stock Exchange under the ticker symbol ALU.

Both companies were among the largest suppliers of wired and wireless infrastructure, and the combined entity boasts impressive statistics: 79,000 employees in 130 countries, about 23,000 of whom work in research and development, a services team of more than 18,000, and customer relationships with the 100 largest service providers in the world. The consolidation comes as carriers, the consumers of telecommunications gear, also combine into fewer and bigger entities.

The new company will be incorporated in France and based in Paris but run by Chief Executive Officer Patricia Russo, the American outgoing chief of Lucent. Alcatel head Serge Tchuruk is a non-executive chairman of the board. Both were appointed Thursday. Bell Labs, Lucent’s venerable research unit, will remain in New Jersey, and a special business will be set up to handle sensitive U.S. government contracts. Alcatel will sell its satellite business to ease national security concerns in France.

The deal came under fire from some investment firms and shareholders. In September, Lucent settled two proposed class-action lawsuits by investors that threatened to delay its shareholder vote, and the deal then passed with less than 52 percent of the vote.

The last key hurdle was approval by the U.S. Committee on Foreign Investment In the U.S. (CFIUS), which earlier this month signed off on the deal on the condition that the companies execute national security agreements with certain U.S. government agencies.

Alcatel-Lucent expects to gain significant savings within three years from cutting about 9,000 jobs, consolidating support functions, optimizing its supply and procurement system, and leveraging its research and services operations across a larger base.

The company will discuss the news on a webcast on Friday at 1 p.m. Central European Time (noon GMT).

-Stephen Lawson, IDG News Service (San Francisco Bureau)

Related Links:

• Alcatel-Lucent Merger OK’d by Shareholders
  
• Alcatel-Lucent Deal Faces Legal Test
  
• E.U. Clears Alcatel-Lucent Merger

Check out our CIO News Alerts and Tech Informer pages for more updated news coverage.

 

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