What growth is all about:
Alcatel and Lucent reach deal on merger
By Vikas Bajaj The New York Times
MONDAY, APRIL 3, 2006
NEW YORK Almost five years after Alcatel of France and Lucent Technologies called off a merger over disagreements about how to split control of the new company, the two telecommunications equipment makers announced Sunday that they had reached a $13.4 billion deal that fully addresses those concerns.
The merger would create a French-American company with revenue of $25 billion, 88,000 employees and phone customers across the world. About 9,000 jobs would be cut in the merger.
The deal is considered a response to the increasing competition Western telecommunications companies are facing from low-cost Asian manufacturers and the growing size and purchasing power of a few large phone companies. If Alcatel and Lucent are successful at combining their far-flung operations, which analysts say will be a significant challenge, it could prompt competitors like Ericsson, Nortel and Siemens to consider mergers and acquisitions to keep up.
The combined entity, which has yet to be named, will be based in Paris, where Alcatel has its headquarters, but Lucent's Bell Labs will remain in Murray Hill, New Jersey. Serge Tchuruk, Alcatel's chairman and chief executive, will be the nonexecutive chairman; Patricia Russo, Lucent's chairman and chief executive, will be chief executive.
Lucent shareholders will receive 0.1952 share of Alcatel's American depository receipts, which trade on the New York Stock Exchange, for each of their shares and will own a total of 40 percent of the combined company. Alcatel shareholders will own 60 percent.
Executives of the companies said that over the next three years they would lay off about 10 percent of their combined staff, accounting for more than half of the $1.7 billion a year the companies estimated the merger would save. The companies did not provide a geographic breakdown of the job cuts, but they said they would be "fair and balanced."
[...]
iht.com |
