IT Giants Alcatel and Lucent in Merger Talks

By NO BYLINE

A FRESH wave of consolidation in the IT sector was on the cards today as industry giants Alcatel and Lucent Technologies said they were discussing a potential merger.

The two equipment providers to the IT and telecoms sectors confirmed they were in talks but added that there was no guarantee a deal would go ahead.

Between them, Alcatel, which is headquartered in France, and United States-based Lucent employ almost 90,000 staff and boast revenues of more than GBP 12 billion. Analysts said a tie-up could be worth as much as GBP 20bn and trigger further consolidation in the IT and telecoms systems sector.

Issuing a joint statement, the companies said: “We can confirm that Lucent and Alcatel are engaged in discussions about a potential merger of equals.

“There can be no assurances that any agreement will be reached or that a transaction will be consummated.”

The companies broke off earlier merger talks in 2001 after smaller Lucent balked at the idea of a takeover, rather than a merger of equals.

At the time, Alcatel was interested in Lucent’s fibre optic business. Lucent had initially agreed to hold a 42-per cent ownership stake in the combined company, with Alcatel having majority control.

Market watchers said any new deal would offer Alcatel greater scope for expansion in the United States, while giving Lucent the chance to explore more opportunities in Europe.