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Technology Stocks : Alcatel (ALA) and France -- Ignore unavailable to you. Want to Upgrade?

To: Steve Fancy who wrote (2522)	10/4/2000 5:27:06 PM
From: Steve Fancy	Respond to of 3891

Alcatel completes its acquisition of Tele Danmark's marine division; Alcatel strengthens its unique marine installation and maintenance services for submarine networks BusinessWire, 10/4/2000 16:41 PARIS--(BUSINESS WIRE)--Oct. 4, 2000--Alcatel, the world leader in optical networking, today reported the completion of Alcatel's previously announced acquisition of Tele Danmark's marine division. Through this acquisition, Alcatel reinforces its marine capabilities for submarine networks by managing five cable vessels. Thus, Alcatel is in a position to offer unique installation and maintenance services to its customers. Thanks to this acquisition, Alcatel handles five state-of-the-art vessels ideally suited to different kinds of submarine network operations, covering both cable installation and system maintenance. Based in Copenhagen, Denmark, and staffed with approximately two hundred people, this unit will become the key submarine network maintenance management center of Alcatel. "The acquisition of Tele Danmark's Marine division shows Alcatel's willingness to directly manage its own fleet comprising of state-of-the-art cable vessels with a highly qualified crew," said Jean Godeluck, President, Alcatel's submarine network activity. "This will allow us to provide our customers with exclusive installation and maintenance services. This strategy has already proved successful with the contract awarded to us by 360networks for the maintenance of the 360americas network. The integration of the Tele Danmark's marine division provides us with a highly experienced team in the field of marine activities, a key asset in today's submarine network market to be able to serve our customers in due time and with the highest level of quality." Involved in installation and maintenance of submarine fiber optic cables since 1853, the marine division of Alcatel's submarine network activity benefits from an expertise demonstrated by its comprehensive track record and an operational excellence well recognized in the industry. Working worldwide, today's Alcatel fleet comprises of eleven cable vessels. Two additional ships will be delivered during the first semester of 2001, confirming the expansion of the Alcatel's specialist fleet. About Alcatel In November 1999, RHK, a leading telecommunications analyst firm, said that Alcatel holds a 23% share - the number one position - of the world's total transport market, which comprises submarine and terrestrial transmission systems. RHK noted that Alcatel's market-leading 37% market share in the submarine networks segment helped secure the top position in the total transport market. In addition, RHK found that Alcatel commands a 37% share of the digital cross-connect systems (DCS) segment. Cross-connect systems contain the enabling technology for operators to offer high bandwidth services. Alcatel is also cited as the global leader in terms of DWDM market share for the global market encompassing both terrestrial and submarine applications. Alcatel is the world leader in delivering full turnkey submarine network solutions and services. Alcatel leads this industry in terms of: - having the highest sold capacity up to 5.12 Tbit/s for the long-haul systems and 3.6 Tbit/s for the short-haul ones, using the latest DWDM technology; - having the largest manufacturing capacity at 85,000 km per year strategically located around the Globe; - managing 11 dedicated purposed-designed vessels for a tight control on the delivery schedule, including marine maintenance. Current contracts, worth US$ 4.5+ billion, include the most advanced undersea networks in the world today: Atlantica-1 and FLAG Atlantic-1 systems in the Atlantic, the FLAG Pacifc-1, Japan-US and Southern Cross transpacific systems, and the MAC and MAYA-1 systems in the Americas and the SAT-3 around Africa. Alcatel builds next generation networks, delivering integrated end-to-end voice and data networking solutions to established and new carriers, as well as enterprises and consumers worldwide. With 120,000 employees and sales of EURO 23 billion in 1999, Alcatel operates in more than 130 countries. For more information, visit Alcatel on the Internet: alcatel.com CONTACT: Alcatel Press Pascale Strubel, +33 (0)1 40 76 12 69 pascale.strubel@alcatel.fr Sophie Pepe, +33 (0)1 55 51 63 57 sophie.pepe@asn.alcatel.co.uk

To: Steve Fancy who wrote (2522)	10/5/2000 5:15:46 AM
From: elmatador	Read Replies (1) \| Respond to of 3891

FT: "...Alcatel will have to pay rich premia. It risks creating an undervalued acquisition currency that may not be a match for real equity..." Lex: Alcatel Published: October 4 2000 20:22GMT \| Last Updated: October 4 2000 20:29GMT The crossing of the Atlantic by the tracking stock phenomenon is not a cause for rejoicing. Alcatel is creating the first European tracker for its high-growth optical components division, to create a acquisition currency. Investors might have preferred an equity spin-off. True, Alcatel has a stronger case than most for choosing this route. Alcatel Optronics needs to play a more aggressive role in the consolidation of an industry whose annual sales are forecast to quadruple to $23bn between 1999 and 2003. But components supply for optical communications systems, where Alcatel is a world leader, is so constrained that owning a supplier is itself a competitive advantage. Components are also the source of much innovation in optical systems. So Alcatel needs to keep control - and a partial equity spin-off followed by acquisitions could have diluted its stake below 50 per cent. A tracking stock is an attempt to square the circle. But the problem with tracking stocks - which confer ownership of cash flows but not underlying assets - is that they typically trade at a discount. Wednesday's E8.1bn-E9.5bn (£4.9bn-£5.70bn) valuation represents just 12-14 times forward revenues, half the multiple enjoyed by JDS Uniphase, the biggest standalone optical components maker, and a fraction of some counterparts' 50-60 times multiples. This is deliberately conservative, and investors may seize the chance to hold scarce optical paper. But to buy other components groups, Alcatel will have to pay rich premia. It risks creating an undervalued acquisition currency that may not be a match for real equity.