MURRAY HILL, N.J., Jan. 13 /PRNewswire/ -- In its boldest move yet to
address high-growth opportunities in data networking, Lucent Technologies
today announced that it has signed a definitive agreement to merge with Ascend
Communications. Under terms of the agreement, which was approved by each
company's board of directors, each share of Ascend will be converted into
0.825 shares of Lucent. Based on yesterday's Lucent stock closing price of
$107-7/8, the transaction would be valued at about $20 billion.
The transaction is expected to be completed during Lucent's third fiscal
quarter, which ends June 30, 1999, and will be accounted for as a pooling of
interests. Lucent expects the merger to be neutral to earnings in fiscal 1999
and accretive beginning in fiscal 2000, the first full year of combined
operation.
"This merger positions Lucent to be a clear leader in communications
networking and will have a significant, positive impact on enhancing
shareholder value," said Rich McGinn, chairman and chief executive officer of
Lucent Technologies.
"Virtually every major service provider worldwide is making decisions on
how to engineer and deploy its new or evolving network for data, voice, fax
and video services," McGinn continued. "On the short list of companies that
service providers want to work with, Lucent and Ascend together will lead the
pack. This merger makes our portfolio broader and more powerful, and gives us
the edge as we develop the next generation of networks."
Based in Alameda, Calif., Ascend Communications is the leading provider of
wide area network (WAN) core switching and access data networking equipment
for telecommunications carriers, Internet service providers, corporations and
government users worldwide.
"As successful as Ascend is as a stand-alone company, this merger takes us
to a higher level," said Mory Ejabat, Ascend president and chief executive
officer. "Lucent enables us to give customers a more robust, end-to-end
solution, and it complements Ascend's market-leading technology. The merger
will give our people the chance to join an industry leader that has been
driving change across the full range of communications networking
technologies.
"This deal is a perfect fit," added Ejabat. "Lucent and Ascend already
have a strong track record of smoothly teaming together on customer
opportunities, and the Ascend ATM Core Switch is already a critical component
of Lucent's data networking portfolio."
Broadband Networks Group formed
Concurrent with the merger, Lucent is establishing a Broadband Networks
Group to be led by Dan Stanzione, Lucent's chief operating officer and group
president. The new group will consist of the Ascend organization and Lucent's
Data Networking Systems, Optical Networking and Communications Software
groups. This new unit will be focused on delivering broadband, multiservice
networks. Bell Labs will continue to report to Stanzione.
Ascend's CEO Mory Ejabat will stay with Lucent for a transition period to
assure a successful integration of the businesses.
"You have to be able to deliver a total communications networking
capability to be successful with demanding service provider customers who
operate large, complex networks that simply cannot break," Stanzione said.
"That means a company not only has to be a leader in data networking, but also
must be capable of delivering optical networking, software and services
solutions all working seamlessly together. Lucent -- together with Ascend --
will be the company best suited to deliver such a total communications
networking solution.
"While we're adding powerful new technology in this merger, the most
important piece is the addition of Ascend's talent," said Stanzione. "No one
understands the challenges of integrating voice, data, video and fax services
better than the Lucent and Ascend teams. With the backing of Bell Labs and
the outstanding Ascend people, we will be the architects and builders of a new
generation of networks."
Founded in 1989, Ascend Communications is a global leader in building
carrier and ISP networks, providing enterprise connections to these public
networks, and in providing enterprise WANs. Today, the majority of leading
carriers offer Internet access using Ascend equipment. Industry researchers
rate Ascend as No. 1 in providing remote access, frame relay and ATM equipment
to carriers worldwide.
The company's blue-chip customer base includes AT&T, Bell Atlantic, GTE,
Level3, MCI/Worldcom, PSINet, Qwest, Sprint, Williams and Winstar; and
internationally, BT, Deutsche Telekom, France Telecom, NTT, Telecom Italia and
TelMex.
The merger is subject to approval by Ascend shareholders as well as other
customary legal requirements.
Merger builds on Lucent data networking strategy
In the last two years, Lucent Technologies has taken a number of steps to
address its data networking opportunity: the acquisition of 11 companies in
strategic data networking technologies; the internal development of an
enhanced portfolio of intelligent switching, access and network management
products, with more than 30 new products introduced in 1998 alone; and a
number of strategic partnerships and agreements addressing sales and
distribution channels.
As a part of its data networking portfolio, Lucent also offers
professional support services capabilities through its NetCare(R) Data
Services, including a broad set of consulting, integration, management and
maintenance services for multivendor data and video networks, voice systems
and networks, and call centers.
For more information on Ascend, browse the company's home page at
ascend.com.
Lucent Technologies designs, builds and delivers a wide range of public
and private networks, communications systems and software, business telephone
systems and microelectronics components. Bell Labs is the research and
development arm for the company. More information about Lucent Technologies,
headquartered in Murray Hill, N.J., is available on its web site at
lucent.com. |
