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Alcatel to buy Lucent?

Thu, 05/17/2001 - 8:00pm
Anne Kerven

Will Alcatel SA buy Lucent Technologies Inc. or not?

For the second time in a month, talk is thick about Alcatel's interest in buying Lucent — this time for $40 billion, mostly in stock, which is higher than Lucent's $33.5 billion present value, The New York Times reports.

"I can't get into a conversation with you on this because we don't comment on these kinds of rumors," Lucent spokeswoman Mary Lou Ambrus tells CEDaily.

Alcatel Americas spokesman Brian Murphy has read the same articles, but, "We are not commenting on rumors or speculation," he says.

But Alcatel's shares fell early today after the news, Reuters reports, and analysts say Alcatel investors would not be happy with the deal, particularly after it purchased Newbridge Networks Corp. last year for $7.1 billion. Observers say a sale would dilute shareholdings, and it would be tough to integrate the companies.

Previous talk of a merger in April ultimately fell through for several reasons, including regulatory issues and Lucent's valuation.

But it was a point of contention between Lucent's former CFO, Deborah Hopkins, and its new CEO Henry Schacht, according to The Wall Street Journal. Hopkins wanted to sell the company piecemeal, while Schacht favored the merger and met with Alcatel CEO Serge Tchuruk — sans Hopkins.

Hopkins left Lucent earlier this month to spend more time with her children before deciding what to do next.

If the deal occurs, it would be in early June and reports say its likelihood is about 50–50.

If it doesn't occur, Alcatel is still an interested bidder in Lucent's fiber optic division, observers say.

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