Singapore: More on the Merger
Lucent CEO Patricia Russo and her Alcatel counterpart Serge Tchuruk shake hands during a press conference in Paris.
>> Lucent, Alcatel Combine To Create Telecom Equipment Giant
Todayonline.com
December 2, 2006
todayonline.com
Alcatel-Lucent, a telecoms equipment giant valued at 21.5 billion euros (27 billion dollars), began life after the merger of French group Alcatel and its former US rival Lucent.
The group will be second only to US-based Cisco Systems in the field of telecoms equipment but will also compete with Ericcson of Sweden and the future combination of Finnish and German groups Nokia and Siemens.
Lucent chief executive Patricia Russo, who has become the chief executive of the combined entity and thus the first woman to head a company listed on the Paris CAC 40 stock exchange, said the merger would create a strong global player.
Trading in shares of Alcatel-Lucent, formally created by the finalization on Thursday of the merger between the two companies, began on the Paris bourse and the New York Stock Exchange on Friday.
Alcatel and Lucent were engaged in similar activities providing equipment for fixed and mobile phones, and their merger creates a world leader in telecommunications at a time of widespread consolidation among operators.
While Lucent is active mainly on the US market Alcatel focuses its operations on Europe and Asia.
Alcatel has greater weight than Lucent in the combined entity, which is based and legally registered in Paris. Alcatel shareholders now hold 60 percent of the company and Lucent shareholders 40 percent.
The two groups at the end of 2005 had a combined workforce of about 88,000 people. But with the merger an estimated 8,800 jobs are to be eliminated, the companies have said.
The tie-up is expected to result in cost savings of 1.4 billion euros a year at the end of three years, notably in administration, logistics, purchasing and research and development.
The chairman of Alcatel, Serge Tchuruk, has become the merged group's non-executive chairman.
The merger project was announced at the end of March. Tchuruk at the time argued that Alcatel and Lucent were "complementary" and that the telecom equipment sector was in need of consolidation.
An earlier merger attempt failed in 2001.
The equipment-making arm of American Telephone and Telegraph that broke off and became independent in 1996, Lucent grew rapidly in the late 1990s until the technology bubble burst in 2002 when it almost went bankrupt.
It has survived through thousands of layoffs and drastic budget cuts.
Alcatel was also hard hit by the bursting of the Internet and high-tech bubble. — AFP ###
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