To all - Motorola and Lucent news today ...
(I guess I have no qualms about "lifting" a straight news story; but I "draw the line" when it is something unique to a newspaper).
December 21, 1998
Motorola to Buy Lucent Technologies'
Consumer Wireless-Phone Operations
By REBECCA BLUMENSTEIN and QUENTIN HARDY
Staff Reporters of THE WALL STREET JOURNAL
NEW YORK -- Motorola Inc. expects to announce Monday that it is
purchasing the consumer wireless-phone operations of Lucent Technologies
Inc.
Both companies confirmed the expected deal, but wouldn't disclose terms.
Analysts estimate the value at $100 million to $200 million.
The agreement is strategic to both companies. For Lucent, it allows the
telecommunications-equipment maker to begin shedding the businesses it
wants to exit after the dissolution in October of its unsuccessful joint venture
with Philips Electronics NV.
Lucent, based in Murray Hill, N.J., said at the
time it was taking a $110 million charge to put all
of its remaining consumer phone-equipment
operations up for sale; the charge was offset by
a one-time gain.
Lucent is still looking for a buyer for its corded or wired telephone operations,
say officials, who stress the company remains committed to being a major
supplier of wireless infrastructure.
For Motorola, acquiring Lucent's wireless handset operations -- primarily the
research and development of handsets -- gives Motorola a needed push in the
advancement of its business. Handsets are the phones consumers use to make
wireless calls. Lucent has a widespread capability in digital wireless
communications, and observers say Motorola can use the know-how of
Lucent's engineers. Motorola was a dominant manufacturer of analog phones,
but has been late to push sales of digital phones and is now aggressively
looking for ways to use the technology on new products.
"It's a win for Lucent and for Motorola," said James Parmelee, an analyst with
Credit Suisse First Boston. "And it allows Lucent to seamlessly divest a
business they have wanted to get rid of."
People close to the situation say that while the deal includes a laboratory in
Piscataway, N.J., it is essentially a bid for the expertise of about 300 highly
regarded Lucent engineers. In fact, the entire deal was contingent on the
engineers becoming Motorola employees. "The facility will be operated as a
state of the art Motorola design center," said a spokesman.
Fred Kuznick, a Motorola executive vice president, said the purchase signifies
the company's "strong commitment to technological innovation."
The joint venture with Philips marks a rare disappointment for Lucent. The
partnership, in which Lucent owned 40% and Philips 60%, intended to become
a world leader in the competitive cellular-telephone business. But it was
expected to lose about $500 million this year on sales of $2.5 billion.
Copyright © 1998 Dow Jones & Company, Inc. All Rights Reserved.
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