Lucent and Alcatel in merger talks

24 Mar 2006

Communications equipment giant Lucent confirmed this morning that it is in talks with French firm Alcatel about a potential US$34bn merger.

In a statement Lucent said: “We can confirm that Lucent and Alcatel are engaged in discussions about a potential merger of equals that is intended to be priced at market.

“There can be no assurances that any agreement will be reached or that a transaction will be consummated. We will have no further comment until an agreement is reached or the discussions are terminated.”

If a merger did go ahead both companies would have a combined market capitalisation of US$33.7bn (€28bn) and combined annual sales of US$25.3bn (€21bn).

A combined Lucent/Alcatel would be bigger than Cisco Systems and ideally placed to tackle opportunities in the ‘triple play’ market for broadband, voice and IP television services.

This is not the first time the two companies considered merging. They broke off talks in 2001 when Lucent balked at the idea of an Alcatel takeover. However, lately Lucent has been discussing the potential of a “merger of equals.”

By John Kennedy