Europe gives the nod to Alcatel/Lucent merger

The European Commission (EC), having concluded that “the transaction will not significantly impede effective competition in the European Union”, has granted permission for the merger of Alcatel and Lucent to go ahead.~ ~ Although the deal is being presented to the world as a “marriage of equals”, in point of fact it is anything but. Lucent Technologies of New Jersey in the US, is being bought for some US$14 billion by Alcatel of France. The proposed acquisition has already won the approval of the competition authorities in America. Lucent shareholders get their chance to vote on the proposal on September 7.~ ~ When the deal is done, Alcatel will have a controlling 60 per cent interest in the new company.

This will have revenues of $25 billion a year, putting it on a par with Cisco Systems, and it is expected that its sheer marketing clout and economies of scale will allow the new entity to negotiate advantageous deals with its suppliers.~ ~ Alcatel, which has a very strong position in the DSL sector seems set to gain the most from the merger by leveraging Lucent’s equally strong position in wireless technology and playing on the big contracts Lucent already has with blue-chip companies such as Verizon. It will also get Bell Labs, Lucent’s world famous and indeed, revered, research organisation.~ ~ Both the companies have already announced that they will be cutting 10 per cent of their combined work force, which equates to some 8,800 job losses.~ ~ Alcatel’s current chairman and CEO, Serge Tchuruk, who has been head of the company for the past 11 years and is due to retire in the fairly near future, will, for a while at least, be the non-executive chairman of the new enterprise. Mr. Tchuruk speaks good English, as do all the top management at Alcatel. At one time he was even prepared to make the ultimate sacrifice a Frenchman can make and leave Paris to work in the gastronomic wasteland that is New Jesrey.~ ~ Now though, such a move will not be necessary as the new company is to be headquartered in the Frencgh capital. However, few in the higher echelons of Lucent speak anything other than American English, including Patricia Russo, currently Lucent’s chief executive, and soon to be boss of the combined company.~ ~ Word has it that Ms. Russo is taking French lessons but no one at Lucent will say how well she is getting on with the language of diplomacy and lurve. ~ ~