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Alcatel Buys Lucent; Now What?
By Mark Evans | April 2, 2006
The speculation is over: Alcatel and Lucent have officially merged (unofficially Alcatel is buying Lucent given its shareholders will have 60% of the new entity) to create a $25-billion wireline, wireless and services behemoth. Patricia Russo will become CEO while Serge Tchuruk will be non-executive chairman. AlcaCent also plans to eliminate 8,800 jobs, or 10% of the workforce, to reduce annual costs by $1.7-billion. So can we now launch the consolidation frenzy within the $336-billion equipment industry? How long before Siemens or Nokia pursue Nortel, or Huawei takes a run at Juniper? For several years, the telecom equipment market has been waiting - desperately needing? - consoliation among the large players amid fierce competition, soft margins and a dwindling customer base. Perhaps fewer players is what's needed to restore some sense of fiscal health. Check out Om Malik's post on the potential deals on the horizon. That said, Nortel CEO Mike Z. is likely trying to stay out of the M&A fray given he just took the helm and has yet to demonstrate his turnaround and growth skills. If Nortel is going to be taken out, it will likely be an offer Mike Z. and the board can't refuse. IP Democracy has a post looking at how French ownership of Lucent's Bell Labs could be an issue given Bell Labs does sensitive research for the U.S. military and security agencies.
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Topics: M&A |
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