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Lucent/Alcatel reportedly near deal

Mon, 05/28/2001 - 8:00pm
Anne Kerven

Lucent Technologies and Alcatel are expected to announce a merger today, where Alcatel will purchase Lucent for $23.4 billion in stock, Reuters reports. The transaction has not been confirmed by either company, but details are emerging via unnamed sources.

The merger would exclude Lucent's share of Agere Systems Inc. For its part, Alcatel will offer 0.2435 shares for each Lucent share, and Alcatel shareholders would own about 58 percent of the combined company, The Wall Street Journal reports.

The transaction would include Bell Labs, something observers say would draw scrutiny of government agencies over national security issues.

If the merger occurrs, the process will likely be overseen by former Bell Labs engineer and present Alcatel COO Krish Prabhu, Bloomberg reports. Likewise, Lucent's Optical Fiber Solutions President Denys Gounot was COO of Alcatel Cable.

Lucent reported more than $4 billion in losses in its first two quarters of 2001, and has announced several cost-cutting measures. Eighteen months ago, it was valued at $270 billion while Alcatel came in at $41 billion. Today, Alcatel's market value is $35 billion and Lucent's, $32 billion, Bloomberg reports.

Alcatel spokesman Brian Murphy had no comment. "It's still a rumor," he tells CEDaily. Lucent spokesman John Skalko also declined to comment.

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