Lucent and Alcatel Talks Said to Be Near Final Stage
By ANDREW ROSS SORKIN and SIMON ROMERO
erger talks between Alcatel of France and Lucent Technologies moved into their final stages yesterday as executives from the two communication equipment makers convened in Paris to negotiate formal details of the transaction, executives close to the discussions said.
In the surest sign yet that a decision on the $34 billion merger may be reached soon, executives close to the talks now said that they were aiming to reach an agreement by next week. But the executives cautioned that both companies could still decide to abandon the deal.
Alcatel is in talks to acquire Lucent in a transaction that would be presented as a merger of equals, the executives said. Alcatel is not expected to pay much more for Lucent than its market value, the executives said. They said they were discussing a "no premium" deal in which Alcatel would officially be the buyer by issuing its shares to Lucent, but each side would have equal representation in management.
Discussions about a sale of Lucent to Alcatel grew out of talks over the sale of Lucent's fiber optic cable business, which it hopes to sell for more than $5 billion to help reduce its debt.
Investors Seem Wary on Alcatel-Lucent Deal (May 24, 2001)
Alcatel's Global Evolution to North America and Lucent (May 21, 2001)
Lucent and Alcatel Said to Re-assess Possible Deal (May 19, 2001)
Alcatel Said to Be in Talks to Buy Lucent (May 18, 2001)
Get Stock Quotes Look Up Symbols
Separate symbols with a space.
Portfolio | Stock Markets | Mutual Funds | Bonds | Currencies | Bank Rates | Industries
Executives close to the talks said that Lucent still planned to proceed with the sale of the fiber optic business, even to another buyer.
Skepticism over the impact of a potential deal between the two companies continued to weigh on the share prices of both Alcatel and Lucent yesterday.
Alcatel's American depository receipts fell 13 cents, to $29.46, and Lucent's stock shed 13 cents, to $9.53. Since news that the companies were advancing merger negotiations was learned a week ago, Alcatel shares have fallen 8 percent while Lucent has declined 3 percent.
Concern over the short-term effects of a deal surrounds its potential to dilute shareholdings in Alcatel and deprive Lucent's shareholders of the potential of near-term gains if a merger came to fruition. But other analyses have appeared that support a deal.
If Alcatel and Lucent were to merge, the combined company could gain some geographical advantages, for instance, allowing Alcatel to expand in the United States and Japan, where Lucent is stronger, and Lucent to grow in China, where Alcatel has extensive dealings, according to a report by Global Equities, a Paris- based investment adviser.
The companies could also complement each other with their offerings of mobile communications equipment. Alcatel is stronger in Europe, where the global system for mobile communications, or G.S.M., wireless standard has almost completely blanketed the Continent, while Lucent has more success selling code division multiple access, or C.D.M.A., technology in the United States, China and South Korea.
Still, concern persists over Alcatel's ability efficiently to absorb Lucent, which has more than 90,000 employees, compared with Alcatel's 120,000. There is also the question of the companies' different cultures, one grounded in America's entrepreneurial and research traditions, the other in a new-found corporate vibrancy that has pushed several French concerns to the forefront of the media and communications industries. |
