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Alcatel Lucent merger on the cards?

Telecoms equipment manufacturers Lucent and Alcatel are thought to be in the advanced stages of discussions over a possible merger between the two companies, with an announcement expected soon on the deal.

Telecommunications equipment manufacturers Lucent and Alcatel are believed to be in talks over a possible merger, according to Reuters. An announcement is expected tomorrow over the deal which, although described as a merger, would see Alcatel coming to the rescuer of struggling Lucent, that has lost $4.7 billion in its first half year.
Alcatel would acquire Lucent for no premium, and would likely be the dominant partner in any merger.

Alcatel would benefit from a raised profile in North America from the deal, although both companies have a very product range. Up to 20,000 jobs would be cut in the merger as the companies tried to control operating costs of around $4 billion per year.

At present the negotiating teams of both companies are thought to be considering management configuration issues and possible regulatory sticking points. Inparticular, Lucent Bell Labs does research work for the US government, so any move to foreign ownership could be blocked.

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