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New R&D subsidiary

As part of its proposed merger with Alcatel, Lucent Technologies will establish a separate subsidiary to perform research and development work for the American government that is of a sensitive nature.

As part of its proposed merger with Alcatel, Lucent Technologies will establish a separate subsidiary to perform research and development work for the American government that is of a sensitive nature.

Both Lucent and Alcatel are trusted, experienced contractors in the defense and national security community, and understand the sensitivity and requirements regarding certain classified type of work. Consequently, the combined company will form a separate, independent U.S. subsidiary under Bell Labs for certain contracts with U.S. government agencies to ensure that this type of work continues to be performed in the U.S. with the proper safeguards in place.

While most of the research and development work done by Bell Labs today is commercial, it does some classified work for the U.S. government. A board that will be composed of three independent U.S. citizens acceptable to the U.S. government will separately manage this subsidiary. The combined company also will adhere to other appropriate safeguards to protect sensitive work product. This type of structure is routinely used to protect sensitive government programs in the course of merger transactions involving a non-U.S. party.

Bell Labs President Jeong Kim, a former nuclear submarine officer in the U.S. Navy, will continue to lead Bell Labs. Bell Labs, Lucent’s research facility, will remain based in New Jersey. “We will implement the combination between Lucent and Alcatel with U.S. national interests as one of our critical priorities so that we can continue to assure protection of our classified work for the U.S. government,” says Patricia Russo, who will serve as CEO of the combined company after the merger and currently is CEO and chairperson of Lucent.

The company has asked three experienced members of the national security community to serve on the independent subsidiary’s board, although their appointment will be subject to U.S. government approval.

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