This looks like a good deal, although it would have been better if it had included the enterprise unit as well. Even at the same price (which is what had been rumored last June/July when the sale was first talked about). The cash is much needed. It is about one quarter of their current market value!
They should just spin off enterprise. Just give it to the unions if necessary. I don't think it actually makes any money, in fact it loses money. If the unions want their jobs so much, let them run it. Maybe Alcatel can take a minority position in the spin-off, let the unions have the rest. But with zero liability if the unions screw it up. I am all for unions if they are responsible to the business; there is nothing like a large ownership stake to make that happen.
Alcatel-Lucent Gets $1.5 Billion Genesys Bid From Permira
October 19, 2011, 8:08 AM EDT
businessweek.com
By Matthew Campbell
(Updates with presidential elections in sixth paragraph.)
Oct. 19 (Bloomberg) -- Alcatel-Lucent SA received a $1.5 billion binding offer for its Genesys call-center software unit from Permira Advisers LLP, capping a three-month review of its enterprise business.
France’s largest telecommunications equipment supplier expects to close a deal to sell Genesys late this year or in early 2012. Alcatel-Lucent said today it will retain the rest of its enterprise division after French labor unions said its sale could trigger domestic job losses.
Chief Executive Officer Ben Verwaayen is nearing the end of a three-year turnaround plan for Alcatel-Lucent, which has struggled to turn a profit since its creation through the 2006 merger of France’s Alcatel SA and Lucent Technologies of the U.S. Since he joined Alcatel-Lucent in 2008 from London-based BT Plc, Verwaayen has unloaded assets including its vacuum technology unit and a stake in aerospace supplier Thales SA, before beginning a review of options for its enterprise business in July.
Alcatel-Lucent fell 4.9 percent to 2.02 euros in Paris trading as of 1:43 p.m., valuing the company at about 4.7 billion euros. The company missed sales estimates in the second quarter, sending its shares down the most in almost three years. They have lost more than four-fifths of their value since the end of 2006.
Political Risks
Alcatel-Lucent said today that keeping and strengthening the enterprise business, which has significant facilities in France, “serves Alcatel-Lucent and our customers best,” and that it and Genesys, based in Daly City, California, will continue to co-operate.
Some potential bidders viewed an acquisition of the entire unit as politically risky in the run-up to the French presidential elections set for April 2012, a person familiar with the situation said last week.
In July the CFDT, CFE-CGC, and CGT trade-union federations demanded assurances from Industry Minister Eric Besson that jobs and benefits would be preserved in the event of a sale.
In its networking business, Alcatel-Lucent is contending with increasing competition from China’s Huawei Technologies Co. and ZTE Corp., along with traditional rivals including Ericsson AB. At the same time, consolidation among mobile network operators, like the 2009 merger of Deutsche Telekom AG and France Telecom’s U.K. units, may reduce network spending growth by eliminating duplication even as data consumption surges with the spread of devices such as Apple Inc.’s iPhone.
--Editors: Chris V. Nicholson, Julie Alnwick |
