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Alcatel, Lucent Negotiating on Possible Merger

Posted on: Saturday, 25 March 2006, 09:00 CST

Alcatel, Lucent negotiating on possible merger

PARIS, March 24 (Xinhua) -- French telecom technology provider Alcatel and U.S. telecom equipment maker Lucent Technologies are currently holding talks over a potential merger, the two companies announced on Friday.

Lucent and Alcatel are discussing a possible merger of equals that is intended to be priced at market, said a joint statement issued by the two companies.

The trans-Atlantic consolidation would have a market value of 27 billion euros (33 billion U.S. dollars), with Alcatel worth about 16.5 billion euros (20 billion dollars) and Lucent 10.5 billion euros (12.6 billion dollars), according to their closings late Thursday on the New York Stock Exchange.

A combination with Lucent would allow Alcatel to expand its presence in the U.S. market and could trigger a new wave of consolidation among companies that make equipment for phone companies.

Lucent's leadership in wireless technology would strengthen Alcatel's leadership in digital subscriber line, equipment used by phone companies.

For Lucent, a combination with Alcatel could represent a fresh start. It has gone through a remarkable boom-and-bust cycle and is recovering from the dot-com collapse.

As the world's largest provider of broadband Internet equipment, Alcatel had sales of nearly 13 billion euros (16 billion dollars) in 2005, with about half of them in Europe.

The company aims to capitalize on demand for so-called triple- play services -- telephone, Internet and TV -- in the United States and Europe and to win more mobile phone contracts in emerging markets.

Source: Xinhua News Agency - CEIS

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