Beat me to it Yeadon, here's the story ...
Alcatel to Acquire Xylan, Creating New Leader in Voice and Data Solutions for Enterprise and Service Provider Networks
BusinessWire, Tuesday, March 02, 1999 at 01:12
(Published on Monday, March 01, 1999 at 00:53)
PARIS/CALABASAS, Calif.--(BUSINESS WIRE)--March 2, 1999--To
extend its technology lead in the fast growing market for voice and
data networks, Alcatel (NYSE:ALA) today announced it has entered into
a definitive agreement to acquire Xylan Corporation (NASDAQ:XYLN) for
$37 a share. The transaction is valued at approximately $2.0 billion.
This acquisition will be made by a cash tender offer for all
outstanding shares. The tender offer will commence by Monday, March 8
and will be scheduled to expire 20 business days thereafter.
Completion of the acquisition is subject to 90% of the shares being
tendered, the expiration or termination of applicable waiting periods
under applicable antitrust laws, and other customary conditions. All
shares not purchased in the tender offer will be acquired by merger
for cash at the same price per share. The deal is expected to be
completed in the beginning of April 1999. The Boards of Directors of
both companies have unanimously approved the acquisition, and the
Xylan Board of Directors has recommended that Xylan's shareholders
accept Alcatel's all-cash tender offer.
"Alcatel has devised and is implementing a comprehensive strategy
to become a key worldwide player in the Internet field, capitalizing
on its leadership position in major telecommunications markets and
technologies. This strategy encompasses the targeted acquisitions of
leading IP-focused companies, leveraging Alcatel's strengths to
leapfrog competition. A major step is the acquisition of Xylan, a
long-time partner, which I am happy to announce today," said Serge
Tchuruk, Chairman and CEO of Alcatel. "The combined Alcatel/Xylan
strengths in voice and data networking for enterprises will constitute
a very powerful force in world corporate markets. In addition, Xylan
technologies for carriers' data networks will remarkably complement
other actions underway to build a leading Alcatel offering for
converged voice/data carriers' networks."
Xylan provides Alcatel with a superior portfolio of data
switching equipment and a fast-growing position in the enterprise data
market, where Xylan is developing well above market trends. The
combined Alcatel/Xylan product offering will surpass competition in
the enterprise market, both in terms of performance and spread of
functionalities. Xylan's strong inroads in the carriers' markets, in
particular, managed LAN services and the forthcoming traffic
aggregation equipment, will substantially enhance solutions developed
by Alcatel for service providers.
"In the face of industry giants, Xylan has grown beyond anyone's
expectations over the last five years because we've offered the best
technology available. The synergies from combining that technology
with Alcatel's resources will provide a dramatic boost to Xylan's
future success," said Steve Kim, president and chief executive officer
of Xylan.
"We are very pleased to expand the partnership we began four
years ago with Xylan. Alcatel has delivered Xylan products throughout
the world and is one of Xylan's leading partners," said Olivier
Houssin, executive vice president of Alcatel Telecom. "We are
confident that we will be able to effectively integrate Xylan into the
Alcatel organization and rapidly bring its products to an expanded
market. In particular, it is our plan to continue to sell Xylan
products through their existing distribution channels. In addition,
the Xylan acquisition gives Alcatel access to the enterprise market in
the U.S. and will allow our Group to play a leading role in the
integrated voice/data private networking market in North America."
A new center for Alcatel enterprise data networking
Xylan will become the center of competence for all of Alcatel's
enterprise data networking solutions. Xylan's expertise will be
combined with Alcatel's leadership in enterprise voice networks to
provide converged voice/data solutions.
Alcatel recently announced its 4400 IP PCX (private
communications exchange), a full-blown IP-based communication
platform, which includes voice application servers, unified messaging,
Web-enabled call centers, IP telephones, and other applications.
Combining this with Xylan's best-of-breed enterprise switching systems
gives Alcatel the power to deliver a complete integrated solution.
Adds depth to service provider networks
Xylan will also provide key additions to Alcatel's IP and ATM
solutions for service providers, focusing on Internet access, DSL data
services, cable modem data services, and multi-service virtual private
networks.
Xylan is currently working with more than 100 carrier customers,
including BellSouth and Bell Atlantic, Teleport, and Rhythms in the
U.S., MetroNet in Canada, Telewest in the U.K., and Telia in Sweden.
Together, Xylan and Alcatel will leverage Alcatel's presence in the
carrier marketplace and Xylan's unique intelligent edge switches to
offer unmatched service provider solutions.
About Alcatel
A world leader in telecommunications systems and equipment as
well as related cables and components activities, Alcatel operates in
over 130 countries. Alcatel provides complete solutions and services
to operators, service providers, enterprises and consumers, ranging
from backbone networks to user's terminals. For more information,
visit the Alcatel web at www.alcatel.com.
About Xylan
Xylan has been the fastest growing internetworking company in the
history of the industry, acquiring more than 4,000 customers and
growing total revenues to $348 million in just five years. In each of
the last two years, the company has grown approximately 65%,
outstripping the growth of the data networking market. More
information about Xylan and its products is available at
www.xylan.com.
This document may include forward-looking statements within the
meaning of Safe Harbor provisions of the U.S. federal securities laws.
These statements are based on current expectations, estimates and
projections about the general economy and Alcatel's and Xylan's lines
of business and are generally identifiable by statements containing
words such as "expects," "believes," "estimates," or similar
expressions. Statements related to the future performance involve
certain assumptions, risks and uncertainties, many of which are beyond
the control of Alcatel or Xylan, and include, among others, foreign
and domestic product and price competition, cost effectiveness,
changes in governmental regulations, general economic and market
conditions in various geographic areas, interest rates and the
availability of capital. Although Alcatel and Xylan believe their
respective expectations reflected in any such forward-looking
statements are based upon reasonable assumptions, they can give no
assurance that those expectations will be achieved.
CONTACT: Alcatel, Paris
Christophe Lachnitt,
Tel: +33 (0)1 40 76 12 19
christophe.lachnitt@alcatel.fr
or
Niall Hickey
Tel: +33 (0)1 40 76 11 56
niall.hickey@alcatel.fr
or
Investor Relations
Claire Pedini
Tel: +33 (0)1 40 76 13 93
Claire.pedini@alcatel.fr
or
Charlotte Laurent-Ottomane
Tel: +33 (0)1 40 76 13 30
Charlotte.Laurent-Ottomane@alcatel.fr
or
Stephane Mermet
Tel: + 33 (0)1 40 76 16 04
Stephane.mermet@alcatel.fr
or
Michael Haase (US)
Tel: +1 972 519 68 55
mhaase@usa.alcatel.com
or
Xylan contacts
David Rodewald
Tel: +1 818 878 49 76
drodewald@xylan.com
KEYWORD: CALIFORNIA
INDUSTRY KEYWORD: INTERACTIVE/MULTIMEDIA/INTERNET
COMPUTERS/ELECTRONICS TELECOMMUNICATIONS COMED MERGERS/ACQ
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