Shareholders of Alcatel and Lucent Technologies approved the companies’ merger plans Thursday, clearing one of the last hurdles to a mammoth consolidation in the communications equipment business.
The merger scraped by at Lucent’s special shareholder meeting Thursday in Wilmington, Del. It required 50 percent of the vote and received 51.97 percent, according to spokesman John Skalko. Alcatel, meeting in Paris, required a two-thirds vote of shareholders. The approval margin there was not immediately available.
The two networking and telecommunications equipment manufacturers announced their intention to merge in April. The combined entity will have annual revenue of about 21 billion euros (US$25 billion), based on the companies’ 2005 financial results.
Lucent Chief Executive Officer Patricia Russo will become CEO of the combined company, which is to be called Alcatel Lucent, while Alcatel CEO Serge Tchuruk will become a nonexecutive chairman. Lucent, based in Murray Hill, N.J., is incorporated in Delaware. The merged company will be based in Paris, Alcatel’s hometown.
Alcatel and Lucent expect that the merged entity will make annual cost savings of about 1.4 billion euros, about half of that from job cuts. They plan to cut 9,000 from their combined payroll of 88,000.
The U.S. Federal Trade Commission approved the deal in June, and the European Commission gave its consent in July.
The largest remaining obstacle is convincing the Committee on Foreign Investment in the United States that the deal presents no threat to national security. To allay such fears, Lucent will set up a separate subsidiary run by U.S. citizens to handle sensitive R&D work for the U.S. government, while in France, Alcatel agreed to sell its satellite business to French aerospace electronics group Thales for similar reasons.
–Stephen Lawson and Peter Sayer, IDG News Service (San Francisco Bureau)
Check out our CIO News Alerts and Tech Informer pages for more updated news coverage.