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Reports: Alcatel/Lucent Deal Nears

French press reports suggest that the pending merger of Alcatel (NYSE: ALA; Paris: CGEP:PA) and Lucent Technologies Inc. (NYSE: LU) is close to being finalized, with today's Alcatel board meeting one of the final processes. (See Lucent, Alcatel Rekindle the Flame and Alcatel, Thomson in M&A Spotlight.)

Newspaper Le Figaro reports the deal is in its final stages, with Lucent's CEO Pat Russo set to take the helm of the resulting Paris-based company, which would have equal board representation from the two companies. (See Lucent & Alcatel: Quigley or Russo?.)

Those details match the views of a Light Reading source close to the French company, who believes Alcatel board approval for the deal is a formality. He also believes Russo's leading rival for the combined company's top executive post -- Alcatel's current president Mike Quigley -- will not be proposed by his boss and current CEO, Serge Tchuruk, following a meltdown in their working relationship.

Tchuruk -- who could soon be known as Serge the Merge -- is due to step down as Alcatel CEO in June and had previously proposed Quigley as his successor.

Fellow French newspaper Les Echos believes an announcement will be made before le weekend, and reported that Lucent's board is also due to meet today.

Alcatel says there's no update from today's board meeting as yet. A Lucent spokesman said the company does not comment on board proceedings.

The prospect of such a mega-merger, which would create a company with annual revenues of more than $25 billion, has led to rampant speculation about the knock-on impact on the rest of the industry, and other potential vendor consolidation. (See IPOs & M&A: London Gossip and Alcatel/Lucent: The Domino Factor).

The industry consensus is that the current engagement will result in a transatlantic marriage. Early results from the current Light Reading poll, Merger Mania, shows that more than 75 percent of readers reckon Alcatel and Lucent will tie the knot.

Investors, though, have remained relatively calm. Since talks between the two companies was formally announced late last week, Alcatel's share price has shifted little, and this morning stands at €12.87, just €0.02 ahead of last Thursday's closing price on the Paris exchange.

Lucent's stock, however, closed yesterday at $3.04, up 22 cents, up more than 7 percent from its closing price of $2.82 last Thursday, though the stock spiked as high as $3.14 earlier this week.

The report in Le Figaro also suggests that the two companies have worked out a way to dispel any security concerns that the French and U.S. governments might have about a merger, with the newspaper suggesting that a separate, all-U.S. board could be appointed to run Lucent's Bell Labs , which performs national security and defense department research and development.

On Alcatel's side, the French company is expected to offer its satellite subsidiary to French defense firm Thales SA (Paris: TCFP.PA) in return for a bigger stake (up to 30 percent) than Alcatel's current 9.5 percent holding.

— Ray Le Maistre, International News Editor, Light Reading

Stevery 12/5/2012 | 3:59:26 AM
re: Reports: Alcatel/Lucent Deal Nears Mike Quigley will not be proposed [for CEO] by his boss and current CEO, Serge Tchuruk, following a meltdown in their working relationship.

Lemme guess about the recent meltdown--

Serge: Pat might be the CEO.
Mike: Hahahahaha.
Serge: No, really.


who could soon be known as Serge the Merge

"Splurge" was the rhyme that came to my mind.
Mark Sullivan 12/5/2012 | 3:59:25 AM
re: Reports: Alcatel/Lucent Deal Nears That's awfully funny. And probably true.
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