Alcatel, Lucent Get Final Approval, Plan to Begin Integration Efforts

Alcatel and Lucent Technologies Inc. announced over the weekend they have received approval from the Committee on Foreign Investment in the United States (CFIUS), to proceed with their proposed merger, removing the final step to the deal, which is expected to close Nov. 30.

The two announced plans to merge and reduce staff on April 2, but have yet to name the new firm.

CFIUS prepared a recommendation on the merger transaction to the President of the United States in the final phase of the approval process and the President has accepted the CFIUS recommendation that he not suspend or prohibit the proposed transaction.

That’s provided that, in time periods specified, the companies execute a National Security Agreement and Special Security Agreement to which they have agreed with U.S. Government agencies. Alcatel and Lucent say they will execute the agreements within the specified time periods upon which they previously agreed.

Serge Tchuruk, Chairman and CEO of Alcatel, will be the nonexecutive chairman of the merged firm, while Lucent Chairman and CEO Patricia Russo will be CEO, with the merged company based in Paris. The duo had said the firm would feature equal board representation from both companies in what it called a merger of equals.

"We are committed to moving forward aggressively after closing and quickly combining our operations and integrating our corporate cultures to ensure that we capture the full benefits of this combination for our customers, our shareowners and our employees," Serge Tchuruk pledged in April.

The duo said that cost synergies expected over a three-year period will total $1.7 billion and include a 10 percent staff reduction. They’ve yet to project how long the integration process will take.

The merged company is expected by analysts to benefit from Lucent’s experience in wireless and with IMS, and from its integration services. It’s expected also to benefit from Alcatel’s work with high-profile IPTV efforts and its broadband networking wares.

The duo said last spring the combined company, based on calendar 2005 sales, will have revenue of approximately $25 billion, divided almost evenly among North America, Europe and the rest of the world. As of Dec. 31, 2005, the combined companies had approximately 88,000 employees.

Alcatel www.alcatel.com
Lucent Technologies Inc. www.lucent.com

Share this article: Email, Slashdot, Digg, Del.icio.us, Yahoo!MyWeb, Windows Live Favorites, Furl
Add this article feed to: RSS, My Yahoo, Newsgator, Bloglines