Saturday, April 1, 2006

Alcatel and Lucent Merger Seeks Global Scale

Alcatel and Lucent Technologies confirmed their plans to merge, creating a global communications solutions provider with US$25 billion in annual sales and a broad product portfolio in wireless and wireline and networking. The companies said the merger was driven by the opportunity to create a truly global company with deep relationships with every major service provider. They also pointed to the ongoing consolidations amongst global service providers.



Key points of the deal include:

  • Alcatel shareholders will own approximately 60 percent of the combined company and Lucent shareholders will own approximately 40 percent of the combined company.


  • Lucent shareowners will receive 0.1952 of an ADS (American Depositary Share) representing ordinary shares of Alcatel (as the combined company) for every common share of Lucent that they currently hold.


  • The combined company will be incorporated in France and based in Paris


  • The name of the combined company will be determined at a later date


  • The merger is expected to yield operational cost savings of US$1.7 billion within 3 years by consolidating support functions, optimizing the supply chain and procurement structure, leveraging R&D and services across a larger base, and reducing the combined worldwide workforce by approximately 10 percent.


  • As of December 31, 2005, the combined companies had about 88,000 employees.


  • The merger also will result in approximately EUR 1.4 billion (USD1.7 billion) in new cash restructuring charges, with the charges to be recorded primarily in the first year.


  • The major growth areas for the combined company include 3G Mobility, Triple Play and IPTV, Global Services and Support, the IMS Network Transformation.


  • Based on calendar 2005 sales, the combined company will have revenues of approximately EUR 21 billion (USD25 billion), divided almost evenly among North America, Europe and the rest of the world.


  • The R&D of the company would include 26,100 employees (15,600 from Alcatel and 10,500 from Lucent) and encompass approximately 25,000 patents.


  • The combined company intends to form a separate, independent U.S. subsidiary holding certain contracts with U.S. government agencies. This subsidiary would be separately managed by a board, to be composed of three independent U.S. citizens acceptable to the U.S. government.


  • Management structure: Serge Tchuruk will be non-Executive Chairman. The combined company will be headed by Patricia Russo, CEO, and will also consist of Mike Quigley, COO; Frank D'Amelio, Senior EVP, who will oversee the integration and the operations; Jean-Pascal Beaufret, CFO; Etienne Fouques, EVP, who will supervise the emerging countries strategy; and Claire Pedini, Senior VP, Human Resources.


  • The merger is subject to customary regulatory and governmental reviews in the United States, Europe and elsewhere, as well as the approval by shareholders of both companies and other customary conditions.
http://www.alcatel.comhttp://www.lucent.com















































































































Alcatel's
Prior Acquisitions
Native
Networks

Optical Ethernet

$55 million in cash

Mar 05
Right
Vision
Software-based
Internet appliances that provide Internet access, email and Web
applications, as well as security and simplified management
capabilitie

not disclosed

Nov 04
Spatial
Wireless
a
multi-standard mobile softswitch
US$250
million in stock

Sep 04
eDial SIP-based
platform and applications for conferencing of voice, data and video
US$27
million in stock and cash

Sep 04
WaterCove
Networks
GPRS
Gateway Support Node

not disclosed

Jan 04
TiMetra IP/MPLS
edge routers

$150 million in stock

May 03



Telera

VoiceXML platform
for making Web content accessible via telephone

$136 million
in stock

May 02
iMagicTV Multi-channel
digital television over broadband
US$30
million

Feb 03

Astral Point
Communications

10 Gbps-capable
SONET metro networking platform

Euro 153
million (US$136 million) in stock

Jan 02

Kymata

planar
technology for high-end passive optical components,
including


Euro 134
million (US$117 million) in stock

Jul 01
Innovative
Fibers
optical
filters, including Fiber Bragg Gratings, a passive optical component
used in DWDM systems
$175
million
Jul
00
Newbridge
Networks
ATM,
IP and LMDS data networking platforms
$7.1
billion in stock
Feb
00
Genesys
Telecommunications Laboratories
call
center solutions
$1.5
billion in stock
Sep
99
Internet
Devices Inc.
IP
VPN solutions
$180
million in cash
Jun
99
Xylan LAN/WAN
switches
$2 billion
in cash
Mar 99
Assured
Access
remote
access concentrators
$350
million in cash
Mar 99
Packet
Engines
Layer 3
Gigabit Ethernet switches
$315
million in cash
Oct 98
DSC
Communications
digital
loop carriers and transmission systems,
$4.4
billion in stock
Jun 98

 




















































































Selected
list of Past Lucent Acquisitions
Riverstone Ethernet
routers/switches
$207
million
Mar
06
Telica softswitches $295
million
May
04
SpringTide
Networks
IP
Services switch supporting VPNs, managed firewalls, voice and
multimedia services
$1.3
billion
Jul
00
Chromatis Networks Metropolis system that multiplexes
TDM, ATM, and
IP services over a single wavelength
$4.5 billion May
00
Nexabit
Networks
Terabit
class IP core switch/router
$900 million in stock Jun
99
Ascend
Communications
WAN
switching and access
$20
billion in stock
Jan
99
Kenan
Systems
billing
software systems
$1.4
billion in stock
Jan
99
Yurie
Systems 
ATM
access equipment
$1
billion in cash
April
98
HP's
Fixed Wireless Broadband Unit
LMDS undisclosed Feb
98
Prominet Gigabit
Ethernet
$200
million in stock
Dec
97
Livingston
Enterprises 
remote
access equipment
$650
million in stock
Oct
97
Octel
Communications
voice
mail systems
$1.8
billion in cash
July
97
Agile
Networks
VLAN
technology
undisclosed Oct
96

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