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Thomson makes a play for Alcatel's DSL unit

Wed, 06/06/2001 - 8:00pm
Anne Kerven

Thomson Multimedia will acquire Alcatel SA's DSL modem business unit for $386.6 million, Alcatel reports. In the stock transaction, Thomson will buy the unit in exchange for 9.5 million new shares at $40.68 a share, or 48 euros per share. The deal will give Alcatel a 9.1 percent stake in Thomson.

The companies expect definitive agreements by the end of June and a closed deal by the end of the year.

Alcatel says the move is in line with its announced refocus on networking solutions, as opposed to DSL. For its part, Thomson adds to its strategy to reinforce its relationships with major telecom operators and move its products beyond voice and toward video, it says.

Unit sales of $188.2 million are expected to double in 2001 and Thomson picks up the 28 percent market share Alcatel reported in first quarter 2001.

The agreement also includes a joint promotion of DSL solutions with Alcatel's equipment and Thomson's DSL modems. Thomson will get a three-year, royalty-free right to use Alcatel's brand.

Thomson will include the unit in a new Broadband Access Products division in its CP Division. Product lines will target satellite, cable, telco and terrestrial network operators.

Enrique Rodriguez will oversee BAP and the DSL unit will be managed by its existing team.

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