Alcatel, Thomson in M&A Spotlight

The board of Alcatel (NYSE: ALA; Paris: CGEP:PA) will meet this Thursday to discuss its potential "merger of equals" with U.S. firm Lucent Technologies Inc. (NYSE: LU), the company confirmed this morning.

The duo confirmed late last week that they're discussing a potential marriage that would create an industry giant with annual revenues of more than $25 billion a year. (See Lucent, Alcatel Rekindle the Flame, Alcatel/Lucent: The Domino Factor, and Lucent & Alcatel: Quigley or Russo?)

But Alcatel isn't the only French telecom player under the M&A spotlight at present. Thomson S.A. (NYSE: TMS; Euronext Paris: 18453), which has built a growing presence in the telecom equipment market through acquisitions and set-top box and home gateway developments, is rumored to be in line for a private equity takeover bid. (See Thomson Buys IPTV Player, Thomson Buys Cirpack, and BT Gets a Gateway.)

According to French and British media reports, a consortium of private equity players, including Silver Lake Partners , is lining up a $6 billion bid for the firm, which derives most of its revenues from electronic goods for the media industry and residential market. According to Reuters, Thomson has no comment on the reports "at this stage."

The company, which recently launched a number of new telecom products at the recent CeBIT tradeshow, believes it's on course to generate €1 billion in revenues from its telecom group, which now includes softswitching and IPTV middleware, in 2006. (See Cisco, Nortel: CeBIT No-Shows.)

— Ray Le Maistre, International News Editor, Light Reading